Police Reform and Social Responsibility Bill

My Lords, I am grateful. This has been a very constructive debate on a very important part of this legislation. In her opening remarks, the noble Baroness, Lady Henig, mentioned the corporation sole, and I shall begin by setting out where the Government are coming from on this. As Members of the Committee will know, a corporation is a body that has its own legal personality distinct from that of its members. This means that a corporation can own property, enter into contracts and take part in legal proceedings in its own capacity and that its assets, rights and liabilities are those of the corporation rather than the members. Typically, corporations have more than one member. Such corporations are called corporations aggregate. Local authorities are a typical example. However, a corporation can consist of only one person: the corporation sole. The sovereign is a corporation sole, as are various ecclesiastical figures, such as bishops, and various other public offices have been created corporations sole by legislation, such as the Treasury Solicitor, the Information Commissioner and the Children’s Commissioner, so this is not something completely new that has been contrived for the purposes of this legislation. The amendments concerning this part of the Bill and particularly concerning the chief officer’s status as a corporation sole remove or limit the status to apply to employment matters. They also remove the chief officer’s ability to enter into other contracts and agreements, including the ability to borrow money and sell property. The Government are clear about the need to establish chief constables as corporations sole. This legal status will allow them to employ staff in their official capacity and thus have greater control over running their forces. We believe that it is a very important move for chief constables to be able to have that more direct link with the employment of the police. I accept what noble Lords have said about the status of existing police officers who are not employed as such by any one particular body. It is quite right that that has been mentioned. But this does not in any way detract from the oath that they take or from their status. They would go into a direct employment situation as far as the chief constable is concerned. My noble friend Lord Carlile of Berriew clearly set out what I thought was exactly spot on as to why we want to do this. In terms of the increased capacity that the chief constable would have, particularly in the employment field, we want to ensure that a PCC is also enabled to focus on accountability rather than on running the force. Those two roles are quite distinct. We believe that the corporation sole allows the chief constable to fulfil that clearly defined role. The legal status that allows them to employ staff in their official capacity is very important in its vital function in the context of providing greater autonomy over the day-to-day management of the force. It is at the heart of clear operational independence, about which a lot has been said in our deliberations so far. This clearly, we believe, would contribute to it. However, noble Lords have raised issues that are of concern and I hope that I can reassure them. As currently drafted, there are parts of this part of the Bill that we intend to change. Perhaps I may set them out. The noble Lord, Lord Stevens of Kirkwhelpington, and my noble friend Lady Harris raised the concern that chief officers will have significant powers to enter into contracts and agreements. It is our intention to consider this further. We will consider laying amendments which would prevent the chief constable from borrowing money and require him or her to obtain permission from the police and crime commissioner before entering into any contract other than a contract of employment. I hope that noble Lords will accept that we have already revisited this. They have made some important points around this aspect and at later stages of the Bill we will bring forward government amendments to try to correct this. The amendments tabled by my noble friends Lady Hamwee and Lord Shipley and the noble Baroness, Lady Henig, would mean that, while the chief police officer would be able to appoint a chief finance officer, they would not be required to do so. Nor would they be required to appoint someone suitably qualified to hold that role. Currently, the Bill will require each chief police officer to appoint a chief finance officer of the force and require that person to be a member of a chartered financial institute. This is not about gathering chums around; it is about making sure that there is proper professional support for the role. I understand that the requirement for separate chief finance officers reporting to the chief police officer and the police and crime commissioner may on the face of it seem like duplication. Several Members of your Lordships’ House have mentioned that tonight but I stress that this is not the case. The noble Lord, Lord Dear, made the point that there is a situation here with the police authority and the chief constable. The Bill makes key changes to the current system of financial governance for the police, flowing from the fact that it will be the chief police officers who employ the police staff currently employed by police authorities. The Bill provides for chief police officers to be corporation sole so that they can do this in their official capacity. As two distinct bodies both legally capable of holding moneys and entering into contracts, it is right and proper that chief police officers and police and crime commissioners both have suitably qualified people responsible for the propriety and efficiency of their financial affairs. The provisions in the Bill set up two distinct bodies whose financial responsibilities will have to be formal, clear and accountable in law and to the public. I want to clarify any confusion between the role of the two. The chief finance officer to the force will be primarily involved in the propriety of operational spending and employment. The PCC’s chief financial officer will have the overall oversight of spending, including grant-making functions. I can confirm that there is no reason why there cannot be group audits of these two functions. I turn to the question of the cost of having two finance officers. As has already been mentioned, forces already have finance directors, so this is not that great a change. I stress here that it is the Government’s intention that each chief finance officer be responsible for their corporation sole for ensuring the proper management of the corporation’s financial affairs. This is the duty that Section 151 of the Local Government Act 1972 places on a local authority, which is extended to all police authorities by Section 112 of the Local Government Finance Act 1988. Therefore, it simply cannot be appropriate for a chief officer to have a discretion as to whether to have a chief finance officer with these important statutory duties. It is necessary for a safeguard to be in place which ensures that if the chief officer were to make, or plan to make, an illegal or unlawful transaction, then the chief finance officer would be bound by the legislation to which I have referred to make a report to the chief officer informing them of their view, and copy this to the accountable authority. In this case, the authority would be the PCC. I therefore respectfully ask that noble Lords who have tabled these amendments consider not pressing them.