My Lords, I am pleased to have added my name to this amendment in the name of the noble Baroness, Lady Noakes. I would like to start by thanking my noble friend the Minister for all the hard work she has done to bring us this far, and for her sympathetic approach to the House. I would also like to thank her for something that I had not expected to see on the part of the Government. The process of drafting legislation is normally arcane and obscure—it is carried out by civil servants and parliamentary draftsmen before anything ever reaches us. But in this case, in this rare Bill, we have actually seen the legislation being drafted, and redrafted, and redrafted further, time and time again, as it progresses with literally hundreds of government amendments. It has been very difficult to follow what is going on, but illuminating as to how laws are actually made—something which I think Bismarck said the public “should never see”, if that is helpful advice to my noble friend.
In Committee, I gave an example of how the Teckal exemption works and how I had experienced it myself during my many years in local government. The Teckal exemption is the EU legal name for the vertical exemption, where local authorities or public bodies come together in order to establish a subsidiary, controlled entity; and there are rules and limits as to what it can do outside—percentages of work and effort and so on—that show whether it qualifies for that exemption so that the local authorities in question do not have to tender it publicly.
There are further examples that I did not mention in relation to horizontal relations between public bodies and local authorities. I find myself, quite by chance, sitting within a foot or two of the noble Lord, Lord Greenhalgh, who had the privilege and honour of being the leader of Hammersmith and Fulham Council in the past, when I had a modest role to play at an adjacent local authority. One of the things we did was to come together to share many of our services, between ourselves and in some cases with a third local authority.
That was an example of horizontal collaboration so that, for example, highway services, library services and things of that sort became shared. I simply say to my noble friend that I think this collaboration would be ruled out under the reasonableness test. Let us say that you are a local authority wishing to share services—or contract services, in some cases—with the local authority to your west. It is, of course, reasonable that the local authority to your east—assuming that you are not entirely surrounded by one local authority—could equally well provide those services. This is not simply about the private sector being an alternative to collaboration; it would be reasonable for another local
authority to provide those services rather than this one. If that was the case, you would be stymied; you would not be able to do it without having a tendering process.
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The clause is so badly drafted that I think it completely puts an end to horizontal arrangements. My noble friend Lady Noakes has expressed this very well; it is a very simple matter to correct this. It is not the Government’s intention, I am sure, to tie everybody up in knots in this way. It would be very simple for my noble friend on the Front Bench simply to say that my noble friend Lady Noakes has got this absolutely right, and that she will bring forward an amendment in just those terms at Third Reading so that we can solve this and put it to bed.