Police Reform and Social Responsibility Bill

My Lords, I am going to speak to 24 amendments in this group that stand in my name and one to which I have added my name. First, I want to address Amendments 41 and 64A but I am also going to put forward some alternative proposals that are set out in Amendments 42, 46 and 64C and need to be taken together. These broadly relate to my concerns about using the construct of a corporation sole within which to encompass the functions of a chief officer of police and the Commissioner of the Metropolitan Police. I am then going to talk about Amendments 66A, 67, 67A, 67B and 234A to 234Q, and also say a little about Amendment 44 in this group, which I support although I did not put my name to it. These all relate to concerns I have regarding the creation of two chief finance officers and auditable bodies for one police fund. I apologise to the House as I will go into some detail and also for trying to put my own construction on this idea of corporation sole. I cannot claim to be an expert but looking around the Chamber there may be noble Lords who are more expert than me in this area, who might perhaps allay some of my concerns—or possibly add to them, I do not know. I start off with my concerns regarding corporation sole. I am extremely uncomfortable with this idea. Chief officers, to me, are meant to be police officers, not corporations or commercial enterprises. Amendments 41 and 64A remove the status of corporation sole from chief officers and the Metropolitan Police Commissioner, while Amendments 42, 46 and 64C limit the scope of the status of a chief officer and the Metropolitan Police Commissioner as a corporation sole for the purpose of employment of staff only. I start by probing what this construct of a corporation sole means in practice and what the implications are for corporate governance of policing and the accountability of chief police officers. As I have already said, I am not a lawyer and I do not know a great deal about corporation sole, but even the name seems to be a contradiction in terms: a corporation suggests a collective body but sole most certainly does not. Putting aside for a moment what is said in the Bill about the accountability of chief officers of police, the very name corporation sole suggests that the incumbent is accountable to him or herself. What laws set rules about corporate governance within corporations sole? What general powers and duties do these laws give the incumbent and what do they say about the accountability of the incumbent for those powers and duties? Do any of those laws or any other common practice within corporations sole conflict with what is being proposed in this Bill, whether in relation to the powers and duties of chief officers, the corporate governance regime of policing, or the accountability and operational responsibility of chief officers? I am concerned that this construct creates technical difficulties in other areas of the Bill, for instance by creating two auditable bodies for one police fund—which are the subject of other amendments—or additional bureaucracy and expense in relation to transfer schemes. It might also create other intended consequences of which we are not yet aware. I am having a very hard time seeing what the benefits of this extra difficulty and expense will be. I shall briefly explain how things work at the moment. The governing body is the police authority, which holds all the assets, funding and land for the police force. It is also the employer of all police staff. The chief officer has operational independence and also has direction and control of all police staff and officers. As an aside, I think it worthy of note that police officers are not employed by either the authority or the force but hold warrants from the Crown, and this will not change under the proposed new arrangements. The police authority then delegates functions to the chief officer so that he or she can manage the force and police funding on a daily basis. The delegation framework is a flexible document that can contain freedoms or restrictions on the functions delegated according to what is appropriate to the context. Typically, a scheme of delegation would contain limits, for instance, on the value of contracts that a chief police officer could sign before he must refer it to the authority for approval. This enables the authority to give chief officers freedom to exercise their professionalism, unless they give cause for concern, but also enables the authority to have the final say, as the governing body, about how public money is spent. It seems to me that this current practice is both more flexible in practice and more robust in terms of corporate governance and accountability than the artificial construct of corporations sole. I am completely unclear, for instance, how this new arrangement will enable funding to be passed from the elected policing body to the chief constable or Metropolitan Police Commissioner to manage the police force yet still give enough traction to the elected policing body to determine how that money should be spent. How can a corporation have any influence over how its money is spent once it has been given to another corporation? Surely the money passes out of its jurisdiction and control. I ask the Government to explain how this arrangement fulfils the policy intent and why the existing arrangement, whereby the chief officer has operational independence, command and control of police staff and delegated functions, is inadequate. Frankly, I have to say that I think that the Government have tied themselves in several knots in an effort first to create powerful individuals, in the form of police and crime commissioners, and then to set about limiting the powers of the police and crime commissioners for fear that they will have created a monster. One way in which the Government have done that is by creating equally powerful chief police officers; another way has been to deprive the police and crime commissioners of the powers and duties that police authorities currently have as employers of all police staff. This brings me on to my alternative amendments, Amendments 42 and 64C. It is clear that the Bill intends that employment responsibilities for police staff should be passed to chief officers, but it is less clear whether that also includes powers for chief officers to enter into contracts, borrow money and so forth, and the extent to which chief officers will need the permission of the police and crime commissioner, or the equivalent in London, if they wish to do so. I apologise for the lengthy quotation that follows, but this is an extract from what the Policing Minister said to the Public Bill Committee in the other place: "““We recognise the operational independence of chief constables, as we have discussed, and we believe that they should have the professional freedom to employ their force staff directly … we have made it clear that it is the police and crime commissioner who owns the assets and passes them to the chief constable to manage on a day-to-day basis. After all, it is the police and crime commissioner who has the democratic mandate to decide on the advice of the chief constable and on behalf of the people in the force area how their money is to be spent. … the question is whether the provision is too widely drawn. It is intended only to apply to the employment of staff; it is not intended to give a wider power to chief constables on assets … I would, therefore, like to look again at whether we should provide further clarification of the measure. I agree with the general view of the Committee that it is important that we provide clarification where we can. I immediately make it clear that it is absolutely not our intention to cut across the decision that assets will be held by the police and crime commissioner””.—[Official Report, Commons, Police Reform and Social Responsibility Bill Committee, 27/1/11; col. 252.]" It seems to me that no such amendment has been made, so perhaps the noble Baroness could explain why in her response. I am very apprehensive about giving a corporate status to chief officers, but if we must do so because the Government have tied themselves in knots over police and crime commissioners, I am keen to see that such a status is strictly limited and is only for the purposes of employment. There are a number of reasons for doing so. Currently, paragraph 7 of Schedule 2 and paragraph 3 of Schedule 4 enable chief officers, and the Metropolitan Police Commissioner, to own all assets except land. That would include intellectual property, contractual assets, fleet and IT. Those paragraphs also enable chief officers, and the Metropolitan Police Commissioner, to enter into contracts without recourse to the elected policing body—with no limitation at all. That would include multimillion-pound contracts for the provision of services such as IT and the supply of goods, where the chief officer does not acquire ownership of those assets. I am particularly uncomfortable with the current wording in these paragraphs, which provide that a chief officer of police, "““may do anything which is calculated to facilitate, or is conducive or incidental to … entering into contracts and other agreements … acquiring and disposing of property … borrowing money””." Granted, the last two items in that list are subject to the agreement of the relevant police and crime commissioner, but the wording is exceptionally widely drawn. The effect of Amendments 46 and 67B would be to vary and to tighten considerably those incidental powers. If we accept that an elected policing body should have a mandate on behalf of local people to determine how police money is spent—and my earlier quotation suggests that the Government accept that—that is entirely inconsistent with the current wording of the Bill. The corporate status for employment only still leaves significant questions about accountability for how public money is spent as approximately 80 per cent of police budgets are currently spent on people. But it would at least greatly simplify the transfer arrangements envisaged later in the Bill that will pass assets and contracts from police authorities to police and crime commissioners. It would avoid the major expense that would otherwise be incurred in listing and determining the ownership of individual assets; it would also avoid difficult and protracted negotiations about ownership between chief officers and their governing bodies locally, both present and future. These amendments are central to clarifying the respective roles of the elected policing body and the chief officer. The next amendments are concerned with the duplicate chief finance officer roles created by the current drafting of the Bill. Having a chief finance officer for both the force and the police and crime commissioner is a recipe for confusion. Different titles and different status are needed. Amendment 66A proposes a different title of finance director for the Metropolitan Police Service, while Amendments 44 and 67 deal with the key issue of having two statutory finance officers. It is debatable whether the force chief finance officer really needs statutory powers, but phrasing these under the Local Government Finance Act 1988 as currently proposed is unworkable and could be disastrous. The Act requires the chief finance officer to act in the event that a body is about to enter into unlawful expenditure or exceed its available resources. It gives powers to the chief finance officer to stop expenditure in such circumstances. Clearly, this is a power that should rest ultimately with the elected local policing body, or someone who is directly accountable to him or her as the individual responsible to communities for safeguarding how public money is spent. I do not believe that it is a power that should rest with the chief officer or someone who is accountable only to a chief officer. The creation of two statutory chief finance officers would also have the consequence, whether intended or not, of creating two separate auditable bodies. This cannot surely be correct for what is a single police fund. It also raises real concerns about the access that a police and crime commissioner would have to financial information or the ability that they would have to check how money is being spent if it is held in separate corporations sole and subject to a separate audit regime. For this reason, Amendments 234A to 234P remove references to a separate statutory chief finance officer for the force. Lastly, and very importantly, Amendment 234Q removes the current proposed amendment to the Audit Commission Act 1998, which would set up chief constables and the Commissioner of the Metropolitan Police as auditable bodies. The Bill would have the consequence of creating two statutory finance officers and duplicate audit arrangements again for one police fund. That would be a complete waste of resources and blur the lines of accountability. This amendment will, I hope, make it clear that the local elected policing body is the auditable body. I beg to move.