My Lords, all these amendments are about overview and scrutiny and the accountability of combined authorities. Making overview and scrutiny as strong and effective as possible is a priority for us. I was pleased in Committee by how clear it was that this is a shared priority across this House. The government amendments reflect the discussions I had with noble Lords from across the House, and I am grateful to them all for the expertise and experience that they brought to the discussions. Effective scrutiny not only ensures better decision-taking by those exercising new devolved powers but can be the safeguard against one-party states developing, and so prevent the loss of public confidence in the process of devolution.
Before discussing the various substantive issues on overview and scrutiny that have been raised, I turn first to government Amendment 81, which provides that any orders made under the powers in the new Schedule 5A to the 2009 Act will be subject to the affirmative parliamentary procedure, rather than negative. The Delegated Powers and Regulatory Reform Committee recommended this, and we accept the recommendation.
Before turning to the detail of scrutiny arrangements, I shall address Amendment 34A, which would require the combined authority to appoint an audit committee and for that audit committee to have an independent chair. In the case of local authorities, and indeed in the case of such existing combined authorities as the Greater Manchester Combined Authority, the audit committee is appointed by the authority. Audit committees usually comprise senior non-executive members of the authority and, where this is the local choice, may also include one or more independent members. We recognise
the importance of audit committees. The role of that committee in any authority includes supporting the authority’s chief financial officer, the Section 151 officer. It is an integral part of the financial controls and internal checks of the organisation.
Without this amendment, the approach would be to allow combined authorities to appoint, as they see fit, audit committees drawn from the membership of the authority and, where they consider appropriate, include independent members. I am sure that none of us wants unnecessary prescription. However, I can see the case for a combined authority, given its particular structure, which may or may not include a mayor, to be required to have an audit committee appointed by the authority. I can also see the case that it might be appropriate for such a committee to have one or more independent members. I am not persuaded that it would be right to prescribe in every circumstance that the chair of the committee should be an independent member. Accordingly, I am prepared to consider the issue further for Third Reading, have discussions with noble Lords and, if appropriate, return with an amendment on this at Third Reading.
I will return at the end to questions asked by noble Lords. Turning now to the substantive issues, I first address the question of call-in. Government Amendments 38, 41 and 49 and Amendments 39 and 40 relate to this. The government amendments aim to strengthen the power of call-in for overview and scrutiny committees of combined authorities. With these amendments, combined authorities and their overview and scrutiny committees will be able to set up and operate effective and proportionate call-in arrangements. These come into play when there is a real need, but equally they cannot become a mechanism for delaying or for impeding the efficient conduct of business. Crucially, the call-in arrangements in any authority will be a local matter for the authority and its scrutiny committees to decide and agree.
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Amendment 38 gives a strong foundation for call-in by providing that the overview and scrutiny committee has the power to direct the combined authority not to implement a decision called in while it is under review.
Amendment 41 provides that the overview and scrutiny committee must publish the arrangements of all procedures for call-in that it has agreed with the combined authority. This approach in handling the arrangements developed and agreed locally means that there can be a genuine local ownership of the call-in arrangements so that these become part of the local culture of effective scrutiny.
Amendment 49—this might assist the noble Lord, Lord Shipley—allows the Secretary of State to make provision about the length of time for which a decision can be called in. This is to provide a safeguard so that, whatever the local agreed arrangements are, call-in cannot be either for too short a period to be effective or so long that it delays the implementation of decisions for an unnecessarily long time.
Amendments 39 and 40, tabled by the noble Lord, Lord Shipley, and the noble Baroness, Lady Pinnock, would give the overview and scrutiny committee the
power to call in a decision and require a delay in implementation for further public consultation to be carried out. I do not believe we can go along with this step. I do not think a delay in implementation should be contingent on public consultation. I think the noble Lord, Lord McKenzie, also alluded to his concerns on this aspect.
The next substantive aspect of overview and scrutiny that I would like to address is that of the powers and operation of scrutiny. The Government are committed to ensuring strong and effective scrutiny in combined authorities. Accordingly, we intend to make an order under paragraph 3(2)(g) of new Schedule 5A which would ensure that, like members of overview and scrutiny committees of a council operating executive arrangements, the members of the scrutiny committee for the combined authority will have access to documents containing exempt or confidential information that relates to a decision it is reviewing.
Amendments 44 to 48, 50 and 55 are also focused on enhancing the information requirements for overview and scrutiny committees, but I do not believe they are necessary or appropriate. Amendment 44 would allow the power to be given to an overview and scrutiny committee by order to compel other bodies to provide information. This is unnecessary because the power in paragraph 3(2)(g) already allows the Secretary of State to include in an order details of information that must be disclosed by “other persons”. In addition, giving a blanket power to the overview and scrutiny committee to do this risks creating undue additional burdens on businesses and public authorities.
Amendment 45 would amend paragraph 3(2)(f) of new Schedule 5A so that the Secretary of State must, when making an order about the publication of reports or recommendations of an overview and scrutiny committee, or of the responses by the combined authority, require the overview and scrutiny committee to publish these.
Amendment 55 would remove the provision which allows the Government to provide for exempt or confidential information to be removed from reports, recommendations or responses when they are published.
Amendments 46, 47, 48 and 50 would amend paragraph 3(2)(g), which allows provision to be made in secondary legislation about information which must, or must not, be disclosed to an overview and scrutiny committee by the authority or by other persons. The amendments would require any order under this paragraph to require a local authority in all cases to disclose information to a scrutiny committee.
The Bill provides that the Secretary of State may make provision in secondary legislation for the publication of reports et cetera and for information to be disclosed to an overview and scrutiny committee. It is sensible that the principles of exempt and confidential information continue to apply. These principles require an authority to protect confidential information, such as information prohibited from being disclosed by a court order. The principles also protect exempt information—for example, information about the investigation of a crime—unless it is in the public interest to disclose it. Rather than encouraging the openness which they seem to intend, the amendments could produce the opposite effect
and inhibit the overview and scrutiny committee in its work. Where authorities and scrutiny committees are forced to publish all reports in full, they may feel unable to write on sensitive matters which should rightly be considered.
Opposition Amendments 35 and 37 would widen the scope of scrutiny so that a committee may review decisions under consideration. In strict terms, while a decision is under consideration, there is nothing to review. However, I understand and indeed support the wish for overview and scrutiny committees not only to be involved after the event but to play a role in earlier stages of shaping policy. The Bill satisfies this by allowing the scrutiny committee to make reports and recommendations proactively about anything that affects the authority’s area or its inhabitants, as provided for in paragraphs 1(2)(c) and 1(3)(c) of new Schedule 5A. Hence, Amendments 35 and 37 are not necessary.
I turn to amendments relating to the membership of overview and scrutiny committees and who should be their chair. On membership, government Amendments 42, 51 and 56 make provision further to guarantee the independence and appropriate balance of the membership of all overview and scrutiny committees of all combined authorities.
Amendment 51 provides that the majority of members of an overview and scrutiny committee must be members of the constituent councils of the combined authority area. In practice, nearly all members will be from constituent councils, but there may of course be independent members—as I will touch on in relation to the chair—or members in different roles as decided locally. Overview and scrutiny committees will have the power to co-opt non-voting members as they see fit.
As to the political balance of an overview and scrutiny committee, the Government are committed to ensuring in every case an appropriate political balance. Accordingly, the Government’s firm intention is to provide by order under paragraph 3(2)(a) of new Schedule 5A that the political balance of any overview and scrutiny committee must align with the political balance of the elected members of the constituent councils, a matter which we discussed the other day. As a consequence, government Amendment 42 removes paragraph 2(4)(b), thereby removing the requirement for the committee to be politically balanced in relation to the combined authority membership. This amendment is vital to ensuring that we avoid everywhere the one-party state that noble Lords have mentioned in debates and achieve a truly politically balanced membership across the combined authority area.
Amendments 53 and 57 seek to provide that the membership of an overview and scrutiny committee is politically balanced, reflecting seats held by constituent councils in the combined authority area. While we understand and broadly share these aims, we believe that the approach which we are adopting of delivering and specifying political balance through an order is the right approach which will enable genuine political balance, in every circumstance, to be delivered.
As to the chair of an overview and scrutiny committee, government Amendments 52 and 56 make provision, again, to ensure the independence of an overview and
scrutiny committee. Amendment 52 would provide on the face of the Bill that the chair of an overview and scrutiny committee for a combined authority must be one of two categories of person: either an independent person; or, in the case of a mayoral combined authority, a member of a constituent authority who is not of the same political party as the mayor or, in the case of a non-mayoral combined authority, a member of a constituent authority who is not of the same political party as the biggest party of the combined authority. The definition of independent will be provided in secondary legislation and ensure that any such person is recruited by the combined authority through open and fair processes. In the case of any particular combined authority, an order can specify what option for the scrutiny committee chair—independent person or constituent council member—is to be adopted. Alternatively, this can be left as a matter for local choice, to be exercised at any time the authority sees fit. Government Amendment 56 provides the appropriate definitions. I believe that these amendments deliver the intention that the noble Lords, Lord Shipley and Lord Scriven, sought to achieve in Amendment 54.