Machinery of Government - establishment of Scrutiny Panels and Public Accounts Committee (P.79-2003) - amendments

STATES OF JERSEY

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MACHINERY OF GOVERNMENT: ESTABLISHMENT OF SCRUTINY PANELS AND PUBLIC ACCOUNTS COMMITTEE (P.79/2003) – AMENDMENTS

Lodged au Greffe on 24th June 2003 by Senator S. Syvret

STATES GREFFE

MACHINERY OF GOVERNMENT: ESTABLISHMENT OF SCRUTINY PANELS AND PUBLIC ACCOUNTS COMMITTEE (P.79/2003) – AMENDMENTS

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(1 ) A ft er paragraph (b)(iv) insert the following sub-paragraph –

(v ) t o ca ll in decisions of the Executive and review such decisions, and report thereon to the

States and Executive;

a n d r e n u m b e r subsequent sub-paragraphs of paragraph  (b) accordingly.

( 2 ) I n paragraph (h)(iii) delete the words and, in particular, no later than 12 months after the

establishment of the Scrutiny Panels, to make recommendations on the desirability or otherwise of introducing a mechanism to enable the call-in' of Executive decisions'.

SENATOR S. SYVRET

REPORT

The move to executive government will, by definition, involve many more decisions being taken in an Executive' manner. Whilst Committees of the States make executive decisions at present, there can be little doubt the powers and responsibilities of the Council of Ministers and individual Ministers will lead to many more decisions being taken without the present broad involvement of other States Members in Committees. It appears from the comments of the Privileges and Procedures Committee that they concluded a call-in' mechanism was, on balance, not desirable as it may slow down the processes of government, in any event could be introduced at a later date if it was proved necessary, and may lead to disillusionment because of an ultimate lack of power to overturn the decision. These arguments are not plausible.

I include for convenience an extract and an Appendix from the Privileges and Procedures Committee's report below. In the Committee's section on call-in' much reference is made to how those examining local government have found that pre-decision scrutiny is actually of greater effect and importance than call-in'. That may well be so, but the arguments for a call-in' mechanism do not depend on imagining it to be a substitute for pre-decision scrutiny. They are different processes for different circumstances. Whilst it is refreshing to finally see in print a confession that the new system of government is in fact highly analogous to the Local Government Act 2000, we are not in fact a Local Authority. We are a parliament with law-making, tax-raising powers and the ability to make decisions of immense consequence to our community. One of the main arguments for the new system of government was that peoples should not be concerned about the great centralisation of power and creation of enhanced executive powers, because highly effective checks and balances would be included in the non-executive function. We now see, as I feared all along, the first signs of reneging on those promises.

The report of the PPC asserts, somewhat disingenuously, that as call-in' would not, ultimately, have the power to overturn decisions, its very existence might lead to disillusionment on the part of scrutinising members. This is simply not so. As already observed, call-in' is not in any way a replacement for good pre-decision scrutiny, during which most non-executive input will take place. Call-in' is, however, an important check and balance by which executive decisions may be checked, exposed to the scrutiny process and reported upon. It is true that, of itself, call-in' would not have the power to overturn bad decisions, but it would produce a record of the call-in' of the decision and whether the decision was well made, debatable or plain wrong. By such records would those exercising executive power be held accountable.

We are in a period of experiment with new systems of government. Our present adventure involves a great, centralised concentration of power. If we are serious about the need for checks and balances it is now that we must include all such powers. Should call-in' prove unnecessary or unworkable, a proposal to amend or remove it can be introduced in the future. But as we are experimenting with a new system, we must surely err on the side of caution and introduce greater safeguards at this stage, rather than too few with the view that we could remedy the situation at a later date.

I agree with the view that pre-decision scrutiny must be the main focus of non-executive work. If scrutiny is working well there ought to be little need for the frequent use of call-in', so I do not envisage it as a day-to-day occurrence. But it must be there as a safeguard. Appendix 4 of the PPC report (included below at Appendix Two explains how call-in' could work. Included in the explanation are clear time limits for the process, so we can see that the view that call-in' would lead to significant delays is not particularly convincing.

If the Assembly does not include call-in' at this stage, the fears that many people had concerning the difficulty in holding the Executive to account, will be realised.

If call-in' is added to the terms of reference of the Scrutiny Panels there will inevitably be some resource implications in relation to each decision that is called in, but I believe that call-in' would simply be undertaken within the level of resources already identified for the scrutiny function.

EXTRACT FROM P.79/2002

25. C all-in' of Executive decisions

1. T heCommitteehasthoroughly researched theoperationof the call-in' mechanismwhich has been an innovation in the local governmentmodernisationprogramme in theUnitedKingdom.Afterconsiderable thought theCommittee has decided topropose that a call-in' mechanism should not be includedas part of the initial proposals although the matter shouldbe kept under review in the first year of operation of the new system ofgovernment and theChairmen'sCommittee will be charged bythe States, as setout in paragraph (h)(iii) of the proposition, to report to the Privileges and Procedures Committee on the operation of the scrutiny function and to make recommendations for change as appropriate and, in particular, no later than 12 months after the establishment of the Scrutiny Panels, to make recommendations on the desirability or otherwise of introducing a mechanism to enable the call-in' of Executive decisions'.
2. In essence, a call-in' mechanism would give Scrutiny Panels the ability todelaytheimplementationof key decisions' taken by the Executive, if it wasfelt that thedecisioninquestion was inconsistent with approved policies or strategies, appropriate consultation had not taken place or some relevant consideration had been overlooked. Further details onhow a call-in' mechanismcould operate are setout in Appendix Four.
3. T he principal concern of the PPC is that the introduction of call-in' could simplyleadto disillusionment on the part ofnon-Executivemembersasthemechanismwould, effectively, bewithout any realpower. The Councilof Ministers, or individualmembersof the Executive,couldbeaskedto reconsider decisions but could not, becauseof the legalpower vested in Ministers, be requiredtochange a decision. This could lead to frustration and criticism similar to that whichhas been voicedwhen the recommendationsof Boardsof Administrative AppealorCommitteesof Inquiry are ignoredbyCommitteesat the present time. Thereis therefore a danger that call-in' could be very resource intensive with few tangible and useful results.Inevidencegiven to a HouseofCommonsSelect Committee the LabourGrouponEssex CountyCouncil stated "Our experience over the last few months makes us conclude that the call-in' procedure is failing in its primary role of holding the executive to account () For example the cost of call-ins at Essex has been considerable, with little outcome to show for that financial expenditure". The Committee'sresearchto date has led ittoconclude that thebenefits of call-in' are notyetproven.
4. T heoperation of call-in', in dealing with controversial issues, wasconsideredby the House ofCommons Transport, LocalGovernmentand the Regions Select Committee in its fourteenth reportof the 2001-2002 session, entitled How the LocalGovernmentAct 2000 isWorking'. It noted the followingsubmission from the Liberal DemocratGroup at the LocalGovernmentAssociation(LGA12) –

T h o se   th  a  t   feel their scrutiny committees have a real influence tend to be from those authorities

where a substantial amount of pre-decision scrutiny is taking place Making all the information available to scrutiny members, members of the public and stakeholder organisations well in advance of a decision being taken is a key part of effective pre-decision scrutiny and ensures they are able to participate, object or submit alternative proposals.'

T h e  S elect Committee comment was as follows:

It   is   th e r e fo re surprising that Government guidance on overview and scrutiny under executive arrangements is dominated by provisions for the call-in' of a decision after it has been made and before it is implemented. Councils should give emphasis to a high quality pre, rather than post, decision scrutiny of controversial matters.'

5. T heCommittee'sresearchhas also shown that manyU.K.local authorities were wary of this innovation in the early days,concerned that it wouldbeover-usedand bring the decisionmaking to a halt.In a paper

for the Local Government Association A Hard Nut to Crack: Making Overview and Scrutiny Work' (April,

2001) Stephanie Snape and Frances Taylor commented: it will be a challenge for all authorities to develop the right balanceToo hostile and adversarial, and the Executive will simply refuse to co- operate, producing dangerous, damaging divisions within an authority. But too cosy and cordial, and overview and scrutiny will have failed to undertake its critical friend' role.

6. T heCommittee's overall conclusion is experience in theU.K.to date has been somewhatinconclusive. In some local authorities call-in' appears to operate in a positive waywhereas in others it is regardedas being of marginal benefit. The Committee has given detailed consideration to the finely balanced arguments on both sides and considers that scrutiny will be considerably more effective, and more satisfying forthose involved in it, if it sets its own priorities for reviewsand investigations rather than constantly lookingagainatdecisionsmadeby the Executive. Itisalso likely that the Executivewillbe more responsive to reports from Scrutiny Panels when they are related to issues chosen by thePanels rather than if reports are simply requests for the Executive to reconsider decisions already taken.The Committee is proposing a system of scrutinywherenon-Executivememberscanfeel they have a positive and effective role to play anddoes not, at present, think that the operationof call-in' would necessarily meet this objective.
7. T heCommitteebelieves that scrutiny will be at its most effective when the Scrutiny Panels set their own priorities and decide to investigate issues in a proactive and novel way. Theintroductionof a call-in' mechanismcouldhamper this effectiveness.There will bemanydecisionstakeneach year by Ministers and bytheCouncil of Ministersand a system of call-in' might require Scrutiny Panels to considerlong lists of thesedecisionson a daily basis to ascertain whetheror not the decisionsshouldbe called in. This could lead the Scrutiny Panels tobeextremelyreactive to the Executive'sagenda and the Panelscould spend a disproportionate amount of time investigating decisions being made by the Executive. The Committee would nevertheless stress that it believes that it will be important for all non-Executive membersto have access to full information aboutdecisionsbeingtaken so that those involved in the scrutiny function canmonitor the actions oftheExecutive.
8. In reaching its decision the Committee has been conscious that call-in' is very much a feature of local government, not used at the House ofCommonsor parliaments withdelegatedpowers such as Scotland, and the Committee can find no evidence that it exists in any national parliaments. The Committee believes that the States of Jersey have more in common with thesenational parliaments than with local authorities especially once the new system ofgovernment is introduced and a clear distinctionbetween the legislature and the Executive is createdfor the first time. Jersey isnot a local authority, andto introduce a mechanism that could leadto a perception that the Island was, couldbe inappropriate at a time when the Island's policy istoassert a greater, if limited, international personality.
9. In manyU.K.local authorities all key decisions wouldbe taken by the Council as a whole whereas in Jersey legal authority for decisionswillbevested in individual Ministers, meaning that a complex system of publishing decisions would need to be researched by Scrutiny Panels and others to identify any decisions capable ofbeing called in.Althoughit is important that theExecutive is subject to adequate checks and balances this must be weighed against the fact that the Committee's research, asdescribed elsewhere in this report, has shown that oneofthemost effective ways to kill' scrutiny is toburden Panels with too much information and to recreate a traditional Committee systemwhere long agendas are imposed on Panels rather than allowing Panelsto create theirown priorities.
10. The States have agreed to move forward to a new ministerial form ofgovernment.Oneof the reasons for doing this is to enable decisions to bemade in a more timely and effective way than through the present Committee system. Itisclear that someof the benefits ofthenew system could be lost ifdecisionmaking was subject to call-in' which would prevent decisions being implemented for a minimum of some 2 to 3 weeks.Thenewsystemofgovernment will require a degree of trust between the Executive and thenon- Executive and the introduction of call-in' could beseentosuggestthat, not only will the Executivenot be trusted, but that the political system to control theExecutive is not trusted.
11. The Committee is conscious that Scrutiny Panels will wish to remain free to choose issues for

investigation and comment on the full range of the Executive's policies. The existence of a call-in' mechanism

could, paradoxically, hamper the Scrutiny Panels' ability to do this. If a decision was not called in, the Executive could, at a later date, claim that the decision had already had the tacit approval of the relevant Scrutiny Panel and of other non-Executive members, being able to argue, with some justification, that if the Scrutiny Panel had had any concerns about the decision it should have called it in.

12. Procedures under the new system ofgovernment will inevitably need to beamendedand adapted in the light of experience.TheCommitteeis hopeful that a genuine spirit ofco-operation will existbetween the Executive and the Scrutiny Panels, notwithstanding the tensions that will inevitably, and quiteproperly, exist on occasions. The new system ofgovernment will notbe able to operate properlyif there is not cooperation andtrust between the membersoftheExecutiveand other membersofthe States. If the Executive operatesin an open and transparent manner,ensuring that majordecisions are notified publicly before they are made so that comments can bereceived from Scrutiny Panelsand others, the Committee does not believe that a system of call-in' will be required. However the Committee accepts that for some membersof the States this is an issue ofsome concern as they believe that the new system ofgovernment may beinvesting too muchpowerinthe Executive. It is for this reason that theCommittee is proposing that this matter should be reviewed in 12 months time as, by then, it shouldbepossibleto make a preliminary assessmentofwhether the broad thrust of scrutiny, together with the traditionalpowers still exercisable bymembers, will make call-in' unnecessary.Asnotedabove the Chairmenof the Scrutiny Panels will beaskedto bring forward recommendations after the new system has been operating for 12 months. If, in the light of the their recommendations, it is clear that more formal methods of intervening in the decision-making process are required, it will be open to the non-Executivemembers, who will, it should be remembered, always, numerically, be in the majority, to bring forward a proposition tointroduce a call-in' mechanismat a later date.

CALL-IN' OF EXECUTIVE DECISIONS (APPENDIX FOUR OF P.79/2002)

IV.1  A lthough, as set out in Section 25, the PPC has decided not to recommend the immediate introduction of a

call-in' mechanism the Committee believes that it is helpful to set out how such a system could operate if introduced at a later date.

IV.2 I t would almost certainly be necessary to define key decisions' of the Executive which would be those

capable of being called in. These might be ones that involving significant expenditure or savings and/or would be significant in terms of their effect on the community. Typical criteria for a key decision might be that –

• t h e d ecision involved expenditure of over £100,000;

• t h e d ecision appeared to be contrary to one or more of the approved policies or strategies of the States;

• t h e decision appeared to be inconsistent with any form of policy approved by the Council of Ministers;

• t h e decision appeared to be inconsistent with recommendations previously made by a Scrutiny Panel and accepted by the States or the Council of Ministers;

• t h e M inister or the Council of Ministers appeared to have overlooked some relevant and material consideration in arriving at the decision;

• t h e M inister or Council of Ministers appeared to have failed to consult relevant stakeholders or other interested persons before arriving at the decision;

• t h e d ecision in question had already generated particular controversy amongst those likely to be affected by it or, in the opinion of the Scrutiny Panel, was likely to do so;

• t h e d ecision appeared to be particularly novel and therefore likely to set an important precedent. P a n el s would, nevertheless be expected to satisfy themselves that –

• t h e d ecision in question was more than a day to day management or operational decision of the type normally taken by officers' – such a decision should not normally be called in;

• t h a t the request for call-in' was not intended simply to delay or slow down the decision making process;

• t h a t the delay which would ensue as a consequence of calling in the decision in question was unlikely to cause prejudice to the interests of the States of Jersey, the public or third parties; and

• t h e r equest for call-in' might not be dealt with more appropriately in another way, for example through a question, complaint or appeal procedure.

IV.3 I f a call-in' mechanism were introduced the request for call-in' would need to be made within a set period, typically three working days of the decision being recorded and published. It is important to stress

that the fixed period would run from the date of publication of the decision, not from the date it was made, and if there was any delay by the Executive in recording and publishing the decision this would not

prevent call-in' although it would, of course, increase the time between a decision being made and its possible

implementation. It would be vital that all decisions made by Ministers and by the Council of Ministers were correctly recorded and published, with supporting papers and reasons for the decision being made available, so that non-Executive members could consider whether or not a decision met the criteria of a key decision' capable of being called in.

IV.4 O nce a request to call in' a decision had been notified to the Executive a meeting of the relevant Scrutiny

Panel would be held within a set period, typically within eight working days, to consider the matter. The opportunity for any action to be taken would lapse if the meeting was not held within the fixed period.

IV.5 T he members requesting call-in' would be required to prepare a report giving their reasons for taking this

action (in accordance with one or more of the criteria set out for call-in') and the relevant Minister and/or officers would be requested to attend the meeting of the Scrutiny Panel to discuss the matter. All the reports and background papers on which the original decision was based would be available to the Scrutiny Panel and officers who prepared the reports would attend the meeting to provide relevant advice and information.

IV.6  I f the Scrutiny Panel decided to take no action after its initial inquiries, the Executive would be notified

and the decision could be implemented. Alternatively the Scrutiny Panel might decide to ask the Minister or Council of Ministers to reconsider the decision.

IV.7  T he reconsideration would have to take place as soon as possible, as the decision would not be capable of

implementation until the Executive had responded to the Scrutiny Panel. The Chairman of the relevant Scrutiny Panel and/or any other members who made the original request would have the right to be heard to set out the reasons why they believed the decision should be reconsidered.

IV.8 T he Minister concerned, or the Council of Ministers in the case of a Council decision, would decide

whether or not to amend the original decision in the light of the request for reconsideration. The outcome would be notified to the relevant Scrutiny Panel and, as soon as this had been done, the decision, amended or not as the case might be, could be implemented. It is important to stress that the Executive could not be forced to amend the decision and might decide to maintain the original decision notwithstanding the call- in' request. There would be no second round of call-in'.