Localism Bill

My Lords, this little group of amendments raises some important and fundamental issues relating to the community right to challenge. I shall speak also to Amendment 197DA. I think that there is also a Labour amendment in the group. We are back in the Alice in Wonderland world of relevant bodies, relevant authorities and relevant services. Amendment 197CA would leave out the provision that two or more employees of a relevant authority—a local authority—can be specified as a relevant body, in other words, a body which can challenge to run a service. The Bill defines ““relevant body”” as, "““a voluntary or community body, … a body of persons or a trust which is established for charitable purposes only, … a parish council, … in relation to a relevant authority, two or more employees of that authority, or … such other person or body as may be specified by the Secretary of State””." The term ““two or more employees”” of a relevant authority does not seem to fit in with that list of defined bodies. One assumes that the other bodies defined by the Secretary of State will be community bodies. Employees are different. That is not to say that there are not circumstances in which employees can, and indeed ought to, take over responsibility for the running of services on behalf of the principal council. Many of us would like to see far more organisations such as mutuals and co-operatives, which provide what, in a long lifetime ago in the Young Liberals, we used to call worker control—my noble friend Lord Tope remembers all that. Employee bodies or groups of employees taking over the running of services in a co-operative way is a perfectly valid and desirable way in which, in appropriate circumstances, public services can be run. They may be arm’s-length or more than arm's-length bodies. However, it is our view that if the Government are interested in that—they have given some indication that they may be—that should be addressed as a separate issue. It is not the same as allowing a couple or half a dozen employees to go off on their own initiative and to do their own thing regardless of what the rest of the staff think. The Labour amendment in this group suggests that any such initiative should have the support of at least half the employees. On the face of it, that seems sensible. There is concern that a small number of employees could act as a proxy for commercial companies coming in on the back of the provision. In our discussion with Ministers and civil servants, we have been given many assurances that safeguards are set out in the Bill to avoid that happening. The Ministers we have talked to have been absolutely clear that they do not see that as desirable, that it ought not to happen and that it can be prevented. I am asking my noble friend today not just for a statement that the safeguards are there but for a clear explanation on the record of how local authorities will be able to prevent that possible abuse. It is possible, as Ministers have told us, that that is unlikely to happen very often, but that is not a reason for not taking action to prevent it. As for the process in which the community right to challenge will take place, I am widening the debate slightly to avoid saying quite so much on the next group of amendments. The first process is that a relevant body has to be approved by the council. If it is a parish council, it is automatic. If it is a community or voluntary body, the principal council will have to approve it as being a relevant body. The second part of the process is that a relevant body may make an expression of interest to run a service and the principal council has to decide whether to accept that expression of interest. So long as it fits the rules and regulations, it will not be able to reasonably refuse it. The third part of the exercise is that, having accepted an expression of interest, the principal council has to carry out a procurement exercise. The concern that a lot of us now have is not about the processes in this Bill for approving a relevant body, which are full of all kinds of safeguards, with the possible exception of the provision relating to employees. We are not too concerned about the process of accepting an expression of interest, which again seems to have a number of safeguards written into it. It is in the procurement exercise where the problems seem to lie. Once the expression of interest is accepted, the procurement exercise comes into effect automatically. It seems to us that safeguards against abuse of the process are crucial. Amendment 197DA is a different amendment. In Clause 69(8), ““community body”” is defined as, "““a body that carries on activities primarily for the benefit of the community””." This amendment would add on the end of that, "““and is actively engaged in doing so in the area in which the relevant service is being provided””." The amendment restricts the definition of a community body to a body which is active in the community referred to. It restricts it to local bodies or to wider bodies which are already active in the area. Otherwise, it would be wide open, for example, to a large national charity that has no presence whatever in an area to move in and try to take over services. If it is about community bodies, surely it is about bodies which are already active in that community. I look forward to the Minister’s comments on that and in particular to his explanation of how the safeguards will apply to prevent abuse, particularly of a small number of employees putting in a bid for a service. Also, in general, what safeguards will there be against large commercial companies using this operation to sweep up services, which is what Ministers are repeatedly telling us they do not intend to happen?