Local Government and Public Involvement in Health Bill

I am grateful for the opportunity to table these amendments. I beg the indulgence of the hon. Member for North-East Bedfordshire (Alistair Burt) as I try to explain the proposals and to persuade the House that they are wholly desirable. I shall not go into too much detail, because if you thought that some of our previous debates were technical, Madam Deputy Speaker, ““you ain’t seen nothing yet””, as they used to say in westerns. The arrangements for ensuring accountability and propriety in the conduct of local authority companies are set out in part 5 of the Local Government and Housing Act 1989 and in an order made under it—the Local Authorities (Companies) Order 1995. The current controls variously placed on the face of legislation and in the provisions of the order address the accountability, auditing and personnel requirements of a local authority company and are known collectively as the propriety controls. The existing part 5 arrangements are complex, outdated, and cover only companies, which is the essential point. Local authorities operate through entities that are not embraced by the narrow definition of a company provided in part 5. Previously, the capital finance regime for local authority companies relied on part 5 to define the relationship between a local authority and its companies when deciding the borrowing limits for the authority as a whole—not just for the company. Now, under the prudential borrowing regime, introduced by my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), who is not in the Chamber, authorities are free to take on as much debt as they can afford to service from their revenue resources. There are no longer any direct constraints on borrowing by the companies or similar entities that they own.