Local Democracy, Economic Development and Construction Bill [HL]

Let me say generally on consultation that it is the Government’s policy, as the noble Lord will be aware, to distil the results and publish them. We do not typically publish all the responses verbatim, but seek faithfully to represent the spread of views. Clearly the time between the conclusion of the consultation and the need to make progress on the amendments has been relatively short. I acknowledge that, but I hang on to my point, which is that nothing here requires local authorities to enter into mutual insurance arrangements. This is an enabling, permissive provision that provides the framework within which they can do it. It is important that that framework is provided, in part for the reasons touched on by the noble Baroness. The judgment in the LAML case was that local authorities, notwithstanding the well-being power, did not have the vires to enter into the arrangements that they did. We know that mutual insurance arrangements, properly conducted, can be very beneficial to local authorities. If they have a chance of getting better value from their insurance arrangements—often, mutual insurance arrangements also drive good risk management behaviour—that seems to me to be all to the good. As for the role of the RDAs, I do not fully understand the noble Lord’s point. RDAs will not be qualifying authorities able to enter into mutual insurance arrangements. The point that I made when moving the amendment was that we would envisage that mutual insurance arrangements would be regulated by the FSA, as are all other insurance companies. That is the quality and regulatory issue about which we should be concerned. The noble Baroness referred to the judgment in the LAML case, which had to be addressed. Of course there are wider, serious issues around competence, although it could be labelled in another way. We have been clear in our support for councils that want to undertake innovative activity to drive efficiency and to act in their interests and the interests of local communities. The aim is something that we share. We have taken seriously the LAML judgment that suggests the existence of a general power, but it would not have altered the findings. This is why in this case to ensure that local authorities are able to undertake mutual instance, a specific enabling power is needed, and we have used the opportunity of the Bill to drive that forward. In our recent consultation, we asked councils to identify where there are similar complex arrangements, other than mutual insurance, which are potentially out of the scope of the existing powers, and we are committed to following up on any issues raised. We will consider if there are cases in which a general power may provide reassurance for local government. I am sure that the debate about the general power of competence will not go away, but it is better that this debate is on wider issues rather than specifically mutual insurance.