CHECK AGAINST DELIVERY Lord Jeremy Beecham, Shadow Local Government Minister Speech to Second Reading of the Local

Audit & Accountability Bill 22 May 2013 It is nearly three years since the Government announced its intention of abolishing the Audit Commission. Characteristically in yet another demonstration of its contempt for the Parliamentary process it has effectively achieved its objective by virtue of pre-legislative implementation of a policy which it has not deigned to submit to Parliamentary scrutiny. Parliament was not invited to the bedside of this apparently terminally ill patient, we have merely been called upon to act as pallbearers at its interment. I had my differences with the Commission during the 25 years in which I served as Vice Chairman and Chairman, successively, of the Association of Metropolitan Authorities and the Local Government Association, not least over its propensity to reach for a headline when publishing its reports. Yet it played an important part in highlighting issues of efficiency, effectiveness and good governance which played a significant part in making local government the most efficient part of the public sector. I recall that in his second incarnation as SoS for the Environment Lord Heseltine invited me to become a member of the Commission. I declined because I thought there might be a conflict with my role of Chair of the AMA, though the offer was useful in rebutting claims from Conservative councillors in Newcastle that I was the Leader of a profligate council. Latterly the Commission had responsibility for health, as well as local government, precisely what was needed given the overlap of responsibilities now recognised with the return to local government of responsibility for public health removed in Sir Keith Josephs 1973 reorganisation of the NHS, and the provisions of the Health and Social Care Bill now being launched in this House. So why has this legacy of the Thatcher era, one of its more benign bequests, been abandoned? The answer seems to be embodied in the person of the Secretary of State. Members will be familiar with the distressing condition known as obsessive compulsive disorder. Mr Pickles seems to be afflicted with a kindred but more destructive condition, obsessive compulsion disorder. In addition to a long-standing obsession with the Commission which appears to date back to his brief period as Leader of Bradford City Council , this Bill reflects two other symptoms, the power to direct councils to comply with directions in a code of practice on local authority publicity, which he has already restricted to four publications a year, and changes to the council tax referendum process , on which he is so keen , to include levy making bodies, but in this case with the added ingredient of retrospection. Cl 39. ss 14-16: allow the SoS to determine a category of authority on the basis of whether its relevant basic amount of council tax for 2013-14 would have been excessive if the relevant basic amount in that and 2012-13 had been calculated in accordance with the newly amended legislation. In short, and I continue to quote, this explicitly allows the SoS to consider the impact of previous levy increases when setting referendums for 2014-15. I have drawn the attention of Baroness Jay as Chair of the Constitutional Committee to this flagrant departure from normal, and good, practice. The effect of the provision of course could involve councils, and therefore council tax payers, in considerable expense in holding a referendum not on

their own budget, but that of another body over which they have no direct control. It could also lead to some authorities covered by a single levy making body being required to hold a referendum, and some not, depending, how close their own council tax rate was to the threshold. The idiosyncratic nature of the SoS was well illustrated earlier this year when he denounced councils for setting council tax just under the referendum threshold as if they were somehow cheating the system, and he seemed to threaten to the lower the threshold accordingly next year. So go over the threshold and you have to have a referendum, go just under it and youll have one next year! Will the Minister say whether there is any truth in the rumour that the next threshold will be a 0% increase? The proposal about publicity is equally objectionable. The original restrictions were based on the specious grounds that council newspapers or publications were somehow putting the local press out of business. This ignores the reality that all the print media are suffering from a combination of factors, including the growth of online media and of free newspapers often published by the press itself, social media, and of local radio, and of course a decline in advertising in part as a result of the recession. Coverage of local government affairs has declined hugely in the last twenty years and the number of journalists cut. And the local press benefits hugely from council advertising, to the extent of some 45m per annum, even without one of the unlamented feature of the Audit Commission, the requirement imposed by the last Government to publish annually performance indicators in a paid for newspaper not something that led to a significant increase in sales! It is, I suppose, possible for some publications to stray into the political arena, but there are mechanisms to challenge such inappropriate behaviour without the SoS acting as a censor. And when will the government stop civil servants acting as spokesmen from using the personal pronoun when defending government policies? Mr Pickles often talks of his early flirtation with communism. It appears he has not shed his belief in democratic centralism. I suppose we should be grateful that he has not required councils to act on his other obsessions, such as weekly bin-collections or sacking chief executives, banning biscuits from council meetings or whatever else would appeal to the Tory front organisation the Taxpayers Alliance, Ukip, or the right wing press. And as a final reference to the cavalier approach so often adopted by the Government as a whole, and Mr Pickles in particular, I remind the House that neither of these two measures, on referendums and publications, were included in the draft bill which was considered by the AdHoc Draft Bill Committee in the HoC. Once again extraneous and controversial measures have been spatchcocked into a bill at short notice. The Governments contempt for due process could not be more clear. Turning to the more prosaic and technical parts of the bill, so lucidly analysed by Lord Mckenzie I regret the diminished capacity for value for money studies and the quality and improvement agendas which the Audit Commission was so effective in promoting . The National Audit Office will conduct only 6 value for money studies a year, and those will essentially be directed at the impact of central government spending, The Commission conducted 16 across the whole field. The potential of Total Place, or community budgeting as it has now been re-branded, will not be exploited fully on that partial basis, especially, I repeat , in the health and social care fields.

Health will now potentially have a separate field of auditors, although the same firm might end up auditing the CCG and the local Council, presumably with different staff. The notion that the LGA will be able in some to replace the Commissions work and sustain its improvement programme is illusory. The LGA itself has been a target of the SoSs obsessions. He has cut its funding, top-sliced from revenue support grant, from 41.3m to 25.5m, or 38% with significant implications for the staffing and capacity to represent the sector and enhance its effectiveness. Interestingly the sum virtually equates to the budget cut inflicted on the LGA. As Lord Mckenzie has pointed out the privatisation of district audit and the new tendering system leaves a handful of large accountancy firms, many of whom have other services to sell to the councils they are auditing, with an effective oligopoly of the audit role, at least in the larger councils. There will be a requirement to retender every five years, but it would be better if the requirement was to change auditors every five years to ensure that the relationship does not get too close. This is, in many respects a bad, indeed unworthy, bill. I hope that all who proclaim themselves localists, who wish to promote informed debate and decision making at a local and national level, and who are concerned at the manner and form in which this legislation comes to us, will combine to improve it. ENDS