House of Commons Hansard Debates for 20 Jan 1992

Mr. Wilshire : I know Professor Stewart well, and I have great respect for him. Does the hon. Lady accept that his point, and my point, that needs extend beyond local government services is a key to the issues that we are debating? People need their dustbins emptied, and they need grocery shops, doctors, schools, fire brigades and solicitors. Needs go much further than the argument that the hon. Lady is deploying. Sensible local government and the Conservative Government are concerned about the needs of all people, not just the services that local government provides.

Ms. Primarolo : I tried to indicate that local authorities should have power to co-operate beyond their boundaries and not assume that they are totally self-sufficient. I do not subscribe to the view that we should regard local authorities as public utilities from which people demand exactly what they want. What is missing from the debate that the Government have engendered is the idea that participation in a democracy also requires responsibilities in the provision of services. We are talking about much more than ringing up and demanding that our dustbins are emptied. The debate is about participating in the decisions that are made in the area in which one lives.

Better local government means improving access to services and learning from the public, which is something that Governments find difficult if not nigh on impossible sometimes. It means listening to people and communicating with them about both the services and the standards that they demand. It means extending choice and involving people in decision-making. It means working with people

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to provide responsive services. If Conservative Members think that such things are not already happening in local authorities, then, as the hon. Member for Eastbourne (Mr. Bellotti) said about schools, I can say only that they cannot have paid much attention to or visited many local authorities. We need responsive authorities that are accountable to the communities that they represent.

We need to look at the very structure of local government and at why so many women are excluded from participating in it. We need to discover ways of devolving decision-making to ensure that more women can become representatives and locally elected councillors and get involved in the wider debate about local democracy.

Sir Anthony Durant : I have been listening closely to the hon. Lady and agree with much of what she has said, but she has not said whether she favours retaining Avon or wants to get rid of it. She said that "Avon calling" is the only toast that she can think of, so would she prefer Bristol to be the most important authority? I should be interested to know her view.

Ms. Primarolo : I have already said that I favour a unitary authority. I have been trying to say that, before we decide a structure, we must know what we expect that structure to do and how we expect it to meet the hopes and aspirations of the people whom it seeks to represent and who have expressed their views. However, none of that has been taken on board in the criteria that have been set for the commission. The crucial issue of fiscal control in a local authority also determines whether the services that that authority wants to deliver can be delivered.

I should like to demonstrate the sort of things that are happening now in local authorities. As a former councillor, I know that many local authorities have what are called "performance review committees". The Government seem to think that they are the only ones who think about performance and review, but Bristol city council has a core strategy for its performance review committee, which is a sub-committee of its policy and resources committee. It has called the objectives that it seeks to achieve the "six Es for good local government". They are economy, efficiency, effectiveness, equity, empowerment and environment. The council talks about making sure that the community has a representative voice to speak for Bristol and the interests of its people. It talks about encouraging and expanding democracy in Bristol by maximising participation in public life and extending community empowerment. Its objectives refer to accessibility, communication and research into identifying needs. It talks about how to maximise the use of council resources and about how to employ external resources in co-operation. It refers to providing high-quality services and facilities where resources are available. It strives to eliminate disadvantage, discrimination and deprivation. Bristol city council also talks about a corporate management style and about behaving as a model employer.

As we enter a period of local government reorganisation and review with the establishment of the commission, we should be laying down clearly exactly what we believe local government should be about. We must decide

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whether it should be simply an outpost of central Government, doing whatever it is told, or an integral and important part of local democracy.

Local government is about services. It should not be used as a basis for ad hoc competition--which is what the Government have sought--because that simply enhances and entrenches inequalities ; it does not eradicate them. Local government should reflect local needs. It should be about ensuring that people control their lives. It is interesting to note that the Government would not extend these proposals to British Gas, British Telecom, the electricity companies, the water industry, the Bank of England, the judiciary or even Government Departments. Imagine if they were subjected to the constraints now facing local councillors in terms of their financial duties and the Government's ability to surcharge them.

The Government are about destroying local government and local democracy and replacing it with pathetic charters that promise everything but guarantee nothing, while isolating people from power and ensuring that they cannot participate in the decisions that govern their lives.

We are facing a golden opportunity that should not be missed. The commission should be given a wider brief to state clearly what is meant by local democracy, how people can be encouraged to participate in it, and how local government can discharge its duties locally. 7.6 pm

Mr. Ken Hargreaves (Hyndburn) : I shall concentrate my brief remarks on part II. We are a conservative nation, with the word "conservative" spelt, I hope, with a capital "c," but certainly with a small "c" : we do not like change. That is certainly true of people in the north-west where the local government changes of 1974 were, and to a large extent still are, resented by many people. The move from small urban authorities to large authorities was generally not welcomed. It was accepted only because the new authorities that were eventually established could have been even larger.

Hyndburn, for example, is made up of the former urban districts of Oswaldtwistle, Clayton-le-Moors, Rishton, Great Harwood, the parish council of Altham, and of Accrington non-county borough. Despite the fact that the people of those districts had much in common and that, with the exception of Great Harwood, they comprised a parliamentary constituency, there were many misgivings about the changes. It has taken 17 years of dedicated hard work, not least by the mayors of the new borough, to make Hyndburn acceptable to the majority of its residents. Even now, however, a sizeable minority still yearn for the pre-1974 days. The changes that are now being considered are, therefore, a matter of concern and interest to them.

In all their local government reforms, the Government have always placed much emphasis on accountability. I believe that accountability is greatest when the unit of local government is closest to the people and when people are represented by someone they know, someone whom they see around as they go about their daily lives, someone who lives among them and who knows the area. That is why I support the abolition of the county councils.

If asked, the majority of people would be unable to name their county councillors. They rarely see them and there is little coverage of their activities in the local press. Indeed, press coverage of the activities of the county councils, which account for 88 per cent. of local

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government expenditure, is sparse. It could almost be said that the publicity that is given to district and to county council matters in the press is in inverse proportion to the amount of money that the two types of authority spend. Consequently, at county council elections, people do not vote according to the achievements or otherwise of that council but use the occasion to pass judgment on the Government of the day. If local government is to be accountable, it must be local.

When the latest proposals to change local government were announced, I was concerned that we might see an unseemly scrabble, with existing districts seeking to extend their boundaries, especially in east Lancashire, with Blackburn wanting to take over Hyndburn or at least part of it, and with Burnley looking covetously at Pendle. That has not happened. Existing districts throughout Lancashire have acted responsibly and have considered the options open to them seriously and in detail.

Along with the hon. Members for Burnley (Mr. Pike) and for Ribble Valley (Mr. Carr), and my hon. Friends the Members for Pendle (Mr. Lee) and for Rossendale and Darwen (Mr. Trippier), I recently met the leaders and chief executives of the six district councils of east Lancashire. They told us that all the 14 district councils of Lancashire were committed to becoming unitary authorities on their existing boundaries. I and my colleagues were happy to give our support to that case because we are acutely aware of the sense of community that the districts represent.

In my constituency of Hyndburn the council carried out a survey in which all electors were asked questions about what they wanted from local government in the future. The outcome was a ringing declaration of support for the council's case which, needless to say, has all-party support. Let me give some idea of how local people feel. When asked whether a single council providing all services would be more or less responsive to their needs, 60 per cent. said that it would be more responsive. When asked whether that single council should be at county or district level, 71 per cent. preferred the district. When asked whether the local authority should remain at its present size, 72 per cent. said yes and only 12 per cent. opted for a larger council.

The survey also consulted all companies in Hyndburn which employ 20 or more people. Of those, 84 per cent. wanted a unitary authority and 87 per cent. wanted the authority to be based on the district, not the county. In addition, a meeting of religious leaders of Christian denominations and the Muslim community from the whole constituency voted unanimously that Hyndburn was the right size for the unitary authority. I regard that as significant, because clearly those people had no political axe to grind.

I am pleased that my hon. Friend the Minister for Local Government and Inner Cities has emphasised that the aim of the Bill is to ensure that the new structure of local government reflects the identities and interests of local communities. As a life-long resident of east Lancashire, I know how strong are the ties that bind local people together. We are fiercely proud of our history, our civic traditions and the contribution that we have made to the nation's well-being, first through the cotton industry and, more recently, through the multitude of new businesses that have grown up since cotton's demise.

I am pleased that the Government have made it clear that any change must be worthwhile and must not be made merely for the sake of it. I was pleased to hear my right

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hon. Friend the Secretary of State say today that local opinions would be listened to, for it would be disastrous if the Government and the commission thought that they could draw neat circles on the map and lump two or three existing districts together for administrative convenience. Lancashire people are not prepared to be pawns in someone else's game. Only they know what is good for them. The poll that I quoted showed clearly what the majority of people want. They want to be rid of a high-spending county council, and they want unitary authorities based on existing districts.

7.12 pm

Mr. Eric Martlew (Carlisle) : It saddens me to have to speak in the debate. We are discussing the Bill because the Government got it wrong again on local government. They did so on the poll tax and quickly changed their minds. On this matter, it has taken them 20 years to change their minds. The trouble is that they have not told us what they want to do. They have told us that they got it wrong in 1972, but not what we can have. We could have unitary authorities based on the district or the county, or a two-tier system. One could have any one of three there. It does not make any sense.

In response to my intervention, the Secretary of State blamed the Labour Government of 1974 to 1979 for not changing the structure. What a cheek! What would have happened if, in 1974, soon after the reorganisation, we had reorganised again? We had to let the system settle down. We had to suck it and see. By the end of the term of office of the Labour Government, we had decided that the system needed to be changed. Then the Conservative Government came to power and did nothing about it. They left us for almost two decades with a mess.

I feel sorry for councillors of all political persuasions, who have been struggling on since 1974 with a system that does not work. It was introduced by the Conservatives, despite Labour Members telling the Government that it would not work. Since I entered the House in 1977 I have been shocked at the way in which the Conservatives denigrate local councillors. It is an absolute disgrace. Often they denigrate councillors of their own political persuasion. There is an arrogance about the Conservatives. They think that they know what is right and what will happen. I suspect that if we read the fine print of the Bill we would find somewhere a provision to enable the Secretary of State for the Environment to appoint the mayor of Carlisle. That is how extreme the Conservatives are in destroying local democracy. They do not give a fig about what councillors think.

It is important for a political party to control the local council which can stand up to the national Government. We need checks and balances. If the Conservatives are in power, the only way to check their abuse of power is to have Labour councils. That is why the Conservatives have tried to shackle Labour councils over the years. There is some anxiety that we do not know when the local government reorganisation will happen. Will the commission start in Cornwall and work up to Cumbria, or start in Cumbria and work down to the Isle of Wight and Southend ? We are not told. We are told that the reorganisation will not be uniform and will not take place on one date, such as 1 April 1994. It is a timetable for chaos.

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The Government's proposals will be a fiasco if the Government have the opportunity to implement them. At any one time some councils will be getting ready to change, others will already have changed and others will not know what is to happen to them. How will it be possible to appoint officers to those councils ? Will the best officers settle for an authority of which the structure is already settled ? Will they wait in an area which may no longer exist ? How will it be possible to hold local elections in such areas ? We need annual elections, but will councillors wait about to see whether their authority will be dissolved ? It will not work.

Many Conservative Members have spoken about their experience in local government, so I suppose that I might also parade my campaign medals. I served on a county borough for two years before it was abolished. I served until 1988 on a county council and for two years had the pleasure to be the chairman of that council. My right hon. Friend the Member for Halton (Mr. Oakes)--his constituency is basically Widnes, with bits added on--said that people born in Cumbria were proud to be called Cumbrians. That is all right if one comes from Cumberland, but not if one comes from Westmorland or the furthest parts of Lancashire. Down there we are still proud to be called Lancastrians. It would be nonsensical to give any serious thought to unitary authorities based on counties the size of Cumbria.

We have heard a great deal about whether education or social services could be administered by district authorities. It would depend on the size of the authority. No one has suggested for one moment that housing could be run by a county council. We all see housing as a service which must be near the people. That would be difficult to achieve in a large county council.

The Government appear to be giving the nod to unitary authorities. I said that it would be a fiasco if all the councils did not change on a certain date. I hope that if the Government look to unitary authorities to set the lead they will consider the historic cities which have perhaps 800 years history of looking after themselves and controlling the way in which they develop. In two decades that tradition and that expertise have not been lost. I am sure that the councils of the historic cities could very quickly become all-purpose authorities. I come from the historic city of Carlisle, which has had a royal charter for 800 years. I hope that if it is decided to go for unitary authorities in my area that fact will be taken into account. Here again, we are talking about compulsory competitive tendering. This is an aspect of the Bill that concerns me deeply. In my maiden speech in the House in 1987 I said that one would find it easy to save money if one were to cut wages and holiday entitlement, get rid of entitlement to sick pay and do away with pension provision. That is not a measure of efficiency, although perhaps it is a measure of meanness which will be easily recognised by Conservative Members, who do not care what price the workers have to pay so long as the poll tax payers or ratepayers--or whatever they are--have to pay less. It is not difficult to have that kind of efficiency in services if one is prepared to create a pool of unemployed people willing to take jobs at any wage better than the dole that the current Government provide. That is what this is all about. It is not about efficiency ; it is about cutting costs.

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That is one of the reasons for the Conservatives' strong objection to our plan for a minimum wage. If the minimum wage were set at £3.40 an hour many of the cowboys who are running the services would have to increase the wages that they pay. Thus they would not be able to compete with local authorities and would go out of business. Of course, in many areas that will not happen as the local government structure has been destroyed. In many areas it would be impossible for refuse collection to be carried out by local authorities because all the wagons have been sold off. People will end up paying more to private contractors when those contractors get away with paying low wages.

Under other provisions of the Bill the same thing will be done to white- collar services. I do not understand. No one would run a private business like this. No one would suggest that the personnel function of a multinational company should be tampered with to the extent of 25 per cent., as is proposed in the Bill. [Interruption.] On that point I am prepared to give way to any hon. Member.

Mr. Wilshire : Surely the hon. Gentleman has heard of consultants. Firms, large and small, the length and breadth of this country and of every other country bring in experts to deal with specific matters.

Mr. Martlew : If the hon. Gentleman is talking about the personnel function let me tell him that I used to be the personnel manager of the largest boot company in the world. I can assure him that that company was very efficient and that it did not farm out its personnel function to private contractors. It knew that if it were to do so it would not get as good a service and that the cost would be twice as high.

Now there is talk of CCT in legal and financial services. Has any hon. Member ever spent a morning talking to a solicitor or an accountant? Any who has will know that a month later, when the bill arrives, it looks as if the discussion lasted a fortnight. The provision of services in this way is by no means cheaper. One could spend the equivalent of a year's poll tax in a morning's consultation with a solicitor.

Mr. Dalyell : Last week I spent a morning with Mr. Alex Linkston and Mr. John Spraggon, who are senior officials of West Lothian district council, and with Councillors Graeme Morrice, Jimmy McGinley and Jim Clark. We were dealing partly with precisely the enormously difficult issue of legal services. The people to whom I spoke are concerned about the fact that low tenders received from firms paying lower-than-minimum wages would be absolutely false in the event of the introduction of a minimum wage or a decent wage. This is exactly the point that my hon. Friend is making.

Mr. Wilshire rose --

Mr. Martlew : I will give way to the hon. Gentleman.

Mr. Deputy Speaker (Mr. Harold Walker) : Order. Later perhaps, but we do not have intervention upon intervention.

Mr. Martlew : Let me return to the main theme. Privatisation of this kind will not result in a saving of money. We know that professionals such as architects, lawyers and accountants are probably the most expensive people in the world to employ by the hour. Any councillor who has ever been involved in a dispute about a legal

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ruling will know that the chief executive says that it may be necessary to get an opinion from Queen's counsel and that, in that event, the council has to consider whether a supplementary estimate is necessary to pay the QC's bill. Once the professional essence of local government has been destroyed it will not be recoverable, and the councils will be ripped off by the private sector.

All this is nonsensical. The Secretary of State, referring to our objections to compulsory tendering, said that what we were in favour of amounted to jobs for the boys. If I have ever seen anything that amounts to jobs for the boys this is it. It is jobs for the boys in the Law Society and the Rotary club, and my constituents and their constituents will pay. It has nothing to do with efficiency, but everything to do with the fact that the Conservative Government do not understand local government and, therefore, fear it. The Conservatives are not fit to pass any laws on local government, as is evident to anybody who looks at their record. Let us consider the poll tax, of which the Minister for Local Government and Inner Cities, who is on the Government Front Bench at present, was a great advocate. That is not mentioned these days, but it is a fact. The right hon. Member for Worcester (Mr. Walker), who piloted the Local Government Act 1972 through the House, should have had the decency to come here today to hear his own side denigrate that Act. Conservative Members do not understand it, are afraid of it and will try to destroy it.

This Bill has nothing to do with improvement. It will only create confusion and low morale in local government. Having talked to many local government people at the weekend, I know that morale has never been lower. The Government are creating uncertainty. There will be many early retirements, as there were the last time. It will cost the councils a fortune. In addition, the former officers will reappear as consultants earning twice as much as they did previously. Let us vote against the Bill because it fails to provide for democratic local government to take us into the 21st century.

7.27 pm

Mr. Douglas French (Gloucester) : I congratulate my right hon. Friend the Secretary of State on the introduction of this Bill. I welcome very much the citizens charter and the financial accountability measures contained in part I.

Like several other hon. Members, I want to address my remarks to part II-- in particular, clauses 13 and 14, which establish the local government commission and give it power to recommend single-tier authorities in place of the two-tier authorities, having had regard, as is specified in clause 13(5),

"to the identities and interests of local communities". The intention is to secure effective and convenient local government, rather than, as the hon. Member for Bristol, South (Ms. Primarolo) tried to argue, to destroy local government.

The Bill makes one thing very clear indeed : there is absolutely no intention to indicate a preference for districts over counties or for counties over districts. It seems to me that that is fundamental to the content of the Bill, and people who seek to read some political point into it are barking up the wrong tree.

My right hon. Friend, in his opening remarks, and my noble Friend the Baroness Blatch, in her speech in another place, made it clear that there was a presumption in favour

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of unitary authorities but that in those places where the arguments appeared to favour the continuation of two authorities that was a perfectly satisfactory solution. In other words, the proposal being put forward by my right hon. Friend the Member for Selby (Mr. Alison)--that in some circumstances there would be no change--is a positive and acceptable decision. I very much support that approach. The proposals before the House are of particular relevance to a certain group of local authorities. I refer to those cities which formed the historic cities group following the consultative document on the structure of local government published in April 1991. The participating cities are Cambridge, Canterbury, Carlisle--we have heard from the hon. Member for Carlisle (Mr. Martlew)--Chester, Exeter, Lincoln, Norwich, Oxford, Worcester, York and the great city that I have the honour to represent, Gloucester. Hon. Members will notice that those cities display a cross-party political complexion and that the hon. Members representing those cities show some variations in their enthusiasm for the Bill's proposals, although, having spoken to all of them, I have gauged that there is broadly a majority in favour of the Bill.

The councils running those authorities have chosen to join the historic cities group because they see much greater opportunity for securing an effective and convenient local government with unitary status than without it. That is the aim of the Bill. Therefore, as my right hon. Friend the Member for Southend, West (Mr. Channon) said, it is surprising that the hon. Member for Dagenham (Mr. Gould) expressed himself so firmly against the proposals for unitary status. As has been said, he will find that a number of councillors representing the Labour party do not agree with his views. All those historic cities, with the possible exception of one, had county borough status up to 1974, so they have had extensive experience of running their own affairs. As long ago as 1483, my city of Gloucester received a charter to run its own affairs, and it continued to do so successfully until 1974.

Many other cities may equally make out a strong case for unitary status but were not county boroughs before 1974 and nobody is suggesting that county borough status should be a necessary qualification for a city to achieve unitary status now. It is only that the existence of previous county borough status is likely to result in the criteria that the local government commission will be looking at being more readily, easily and obviously satisfied. The local government commission will be called upon to consider the identities and interests of local communities--what I would describe as civic and community loyalties. In other words, it will find out to where and to what group the residents living in that area look. It is, dare I say it, the local government equivalent of what my right hon. Friend the Member for Chingford (Mr. Tebbit) once described--thereby attracting a great deal of criticism--as the cricket test. Where do loyalties lie? If people live and work and have the centre of their lives in a great historic city such as Gloucester, they are more likely to feel that that city will represent, and protect where necessary, their interests. However well meaning and diligent a councillor living in a rural hinterland may be, he cannot hope to understand the wishes of people who live in the city as well as they do themselves. He has chosen to live in the countryside, and that is what he knows about.

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Historic cities have an intensely and characteristically strong community identity. They are an integral and highly important part of the country's national heritage, with civic traditions stretching back many years. Local people look to the city for local identity and community loyalty. Therefore, it is logical and appropriate that the city to which they look should be responsible for delivering the services that affect their lives.

One factor that welds together their loyalty is historic tradition. When the Bill was debated in the other place, my predecessor, the Baroness Oppenheim-Barnes, argued that historic tradition should be taken into account by the local government commission when it assessed the suitability of an area and of an authority for unitary status. I entirely agree with that argument. Historical tradition means awareness of, adherence to and respect for the long-established customs and practices of a community.

When the local government commission considers the identities and interests of local communities, it could scarcely ignore the historical tradition altogether, but precisely because some candidate authorities will not have any historical tradition worth mentioning, I should like to see the words "historical tradition" included in the Bill as one of the factors that it should take into account. It is very important that the commission fully appreciates the extent to which historical tradition is an ingredient in community identity in these cities.

I was pleased to see that this theme was acknowledged by the Government in the debate in the other place and is likely to figure prominently in the guidance given to the commission. The draft guidelines published in November refer to taking into account the history of an area. That is a step in the right direction, although the history of an area is not quite the same as its historical tradition.

In my authority, there are many examples of problems caused by division of responsibilities between the city of Gloucester and the county council of Gloucestershire. Despite all the efforts of the county council and those who work for it, who I am sure do their best, they are cast in an impossible role.

Let me give some examples. There has recently been a dispute over the planning permission for a major new building--a magistrates court--to be located in the centre of Gloucester. This received planning approval by the county despite the fact that the plans had been condemned by the Royal Fine Art Commission, English Heritage and Gloucester Civic Trust as unsuitable. The popular view in the city was that the proposed building was inappropriate for the site for which it was planned, which abutted the narrow streets of a mediaeval planned city. However, this factor did not sway the planning authorities on the county council and as a result that application is to go to a public inquiry.

Another example is social services. Three years ago, there was a particularly tragic case in Gloucester of a deaf-blind adult, Beverley Lewis, who was found dead in circumstances of neglect. There was a strong feeling within the city that the social services department of the county had been predominantly oriented towards a rural, affluent country area, and had not been sufficiently tuned in to the far different difficulties of a close urban environment. Another example is education. Over many years, there has been widespread dissatisfaction with the county

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education authority, which has not always promoted the best interests of the city schools. Such schools should be administered by people who know and feel for them rather than by people who are remote from them.

Yet another example is the highly dubious roads and traffic planning situation. Here again, the interests of the city and the county do not always come together in a convenient and sensible way. Nor does the existence of two authorities make the preservation of heritage any easier, and the preservation of heritage is of prime importance in any historic city.

In about the past 12 months Gloucester has won four national awards, including those for the best tourist destination and the best practice for regeneration. The best practice award was given to the Gloucester docks development scheme, which is now attracting over 1 million visitors a year. This achievement, which is very much to the credit of the city council, was not made any easier by the overlapping responsibilities of the city and the county. In some instances there was a duplication of responsibilities involving the management and provision of tourist attractions. There were complications over museums, libraries and historic buildings, and the services that go with them. Unitary status would avoid that type of problem.

Mr. O'Brien : The hon. Gentleman is giving examples of the various services that could be carried out by a unitary authority. Education and social services are reasonably straightforward, but he referred to planning. How does he see unitary and strategic planning procedures being carried out under the present proposals?

Mr. French : My example was of a building which was to be erected within the city of Gloucester, not in the county. It was to be used largely by those living in the city. It was to be seen every day by those people. Yet it was proposed that it be built to a design which was widely regarded as unacceptable to the people in the city. I am endeavouring to argue that decisions that so closely affect one community should not be significantly determined by those who live somewhere else.

When it comes to planning there has, of course, to be consideration of factors that are part of the wider strategic plan. That consideration applies especially to transport and roads. There has to be a broader plan and broader decision-making on the zoning of certain areas. The establishment of a unitary authority does not mean that that authority will consider factors that relate only and specifically to the geographical area over which it has control. Any unitary authority will have to bear in mind also the broader strategic balance. I see no difficulty in that.

Mr. O'Brien : The Bill does not bring clarity to any of the issues raised by the hon. Gentleman, especially that of strategic planning. It does not tell us where functions will lie. If he agrees that there is a need for that identification, will he press the Secretary of State to ensure that it is included in the Bill?

Mr. French : The Bill will establish a local government commission, which will be provided with guidelines to determine the work that it does. Within those guidelines several factors have to be taken into account. If the commission follows the guidelines as set out--no doubt

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they will be refined, but we have a draft set --it seems to be highly likely that it will need to take into account the very point which the hon. Gentleman is making.

I shall complete the examples that I was giving earlier. There is confusion over local taxation as a result of the presence of two authorities. Perhaps the prime example is the community charge. Although the city council had the responsibility of collecting the charge, the county was to spend the overwhelming majority of the moneys. It was not clear to the residents of the city where their money was going. Nor was it clear, unless they examined the small print on their bills and the accompanying literature, how the money was spent. That clouds accountability between county and district. As my hon. Friend the Member for Reading, West (Sir A. Durant) said, people do not know who does what. I say that people do not know who spends what or who receives what from funds raised locally. Why is the situation now different from how it was viewed in 1974? There is a difference for the fundamental reason that has been mentioned earlier, which is that local authorities now are much more enabling authorities than they were before. It is not necessary now for local authorities to be responsible for providing every service themselves.

Notwithstanding the argument that has taken place during the debate over the cost of consultants, the fact remains that it is now possible to deliver virtually every service that a resident within a certain area requires even when the population of the area is extremely small. As the role of an enabling authority is now understood and is being practised, the size of the authority, even if it is a small one, does not stand in the way of it achieving unitary status. There will be--I expect this to happen-- some examples where unitary status in respect of certain services is not regarded as practical. In that event, joint arrangements can be organised with a lead authority.

The second difference between now and 1974--this is apart from the growth in understanding of the enabling role--is that cities have generally become much more involved in a wider range of local issues. As my hon. Friend the Member for Spelthorne (Mr. Wilshire) said, they are meeting the needs of people and not merely providing services. This is clear in Gloucester, where the local authority plays a part in economic development, tourism, leisure, pedestrianisation plans and conservation. It is now involved in many areas with which it would not have been concerned previously. It is artificial, highly bureaucratic and impossible to try to separate some of the responsibilities and functions that cities perform well from those which they are not allowed to perform at all without having first consulted the county council and obtained its agreement. Responsibilities and functions should be brought together. Where unitary status is ultimately decided upon, I believe that local government will be more efficient, more effective and more economical and that there will be less duplication, confusion and delay and an end to divided responsibilities that lead to buck passing. Successful democracy requires accountability, which the Bill seeks to strengthen, and that requires people to know where responsibility lies. There must be clear and simple lines of communication and decision making. I think that the Bill and the proposed commission will deliver that, and the sooner the better.

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One or two aspects of the commission's work worry me. It will examine which structure is best for which area. As my right hon. Friend the Member for Southend, West asked towards the beginning of the debate, "What constitutes an area?" When my hon. Friend the Minister for Local Government and Inner Cities replies, I hope that we shall hear more about the definition as he understands it. My second reservation about the commission is that it will have a rolling geographical programme. That suggests a rather leisurely timetable. If the commission's work is allowed to spread over too long a period, it is highly likely to get bogged down and to run into unwelcome difficulties.

My right hon. Friend the Member for Southend, West suggested that the commission might start its work by considering areas of dissatisfaction, and he cited his constituency as one. That is one possible approach, but I suggest another for consideration : the commission should start its work by considering areas that have common characteristics. I suggest that the historic cities are much at the forefront of that category. They have a powerful case, which I think deserves to be heard early in the proceedings. I believe that the commission should consider the most obvious cases first. The commission will need to be firm and efficient in the way in which it conducts its work if the ensuing debate is not to become an unseemly squabble between counties and districts. That must be avoided, or the result will not benefit individual residents--whom this Bill is designed to help--and it will discredit not only central but local government. Local residents would be disadvantaged. The way that the commission conducts itself, the method of operation and the planning of its work are vital to the success of the Bill. I hope that very careful consideration will be given to that.

7.50 pm

Mr. Tam Dalyell (Linlithgow) : The basic lacuna, and a source of great personal sadness for me, is that I never served in local government. I am the first speaker tonight from this side of the House who has not done so. Those who have not served in local government are, in a sense, incomplete in their political education. Therefore, in my almost 30 years in the House this is my maiden speech on local government matters. My reason for speaking is that West Lothian district council is concerned about the Bill. I have a very good relationship with the council. I met senior councillors and officials and listened to what they had to say, and I found their case compelling.

I have given notice to the Scottish Office that I wish to ask the following questions. First, will the Minister confirm that the Government are looking positively and constructively at the de minimis provision being increased from the current £100,000 to £250, 000, as mentioned in the debate on 17 December 1991 ? From the information provided to me, it is clearly counterproductive in terms of value for money to go through the tender procedure for small contracts.

Secondly, in the event of an authority losing a contract resulting in the abolition of the in-house facility, will the Minister confirm that should that authority not be able to obtain satisfactory competitive prices second time around, additional resources will be made available either to fund the higher costs or to re-establish the in-house provision?

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Thirdly, West Lothian has a clear policy of providing quality, customer-driven services to its community. In the event of the authority having misgivings about the capability of the lowest tenderer to maintain a quality service, what remedies are available to it at tender evaluation?

Fourthly, the cost of a performance bond is a real cost to a local authority and is necessary to safeguard customer interests. The Government's proposal to deduct the cost of that from the private contractor bid at tender evaluation is illogical in terms of value for money. Will the Minister reconsider that aspect?

Fifthly, what proposals do the Government have regarding the way in which future work will be packaged? In the provision of quality services, it is essential that work is packaged in a way that facilitates value for money and customer satisfaction, and is not artificially packaged to facilitate commercial considerations. All those points were raised 10 days ago with the Scottish Minister--the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton)--and I today confirmed that I would raise them again in this debate.

I wish to make two other points. The first is the timing of the stages in tendering exercises. West Lothian is a responsible authority and I have worked in harmony with it for 30 years. The timetable proposed would take between eight and 10 months from the date of the initial advertisement to the start of the contract. That would be inappropriate for certain contracts--for example, building works--and there is an argument for setting a de minimis level for such an extended time schedule. For many elements of professional work, speed is of the essence and flexibility for short time scales must be permitted.

The period from announcement to the start of the contract is crucial and it should be kept to the absolute minimum. Otherwise, the council feels that if in-house bids are unsuccessful there will be little motivation to perform well, and the result would be detrimental to the community. Will there be a change to the current tender timetable? If so, the time scale should be restricted to one or two months respectively.

I wish to revert to my comments on the performance bond. The cost of the bond is a real cost to the private contractor, and one that will have to be paid by the client if the contract is awarded externally. The Government's proposal to deduct the cost of the bond from the private contractor's bid would artificially reduce it and could have the effect of the client paying more for the work because of that notional adjustment. That does not equate with the need to obtain best value for money and it should be strongly resisted. I would not have dared to participate in this debate were I not absolutely convinced that it is an argument about value for money. Mr. Linkston, the chief executive of West Lothian, and his colleagues persuaded me that some of the proposals are, in effect--at least, for smaller authorities--against a decent value-for-money concept. The case against compulsory competitive tendering must be strongly put. It is against local democracy. Councils will be denied the right to decide how best to organise and procure professional services. Value for money is not determined by cost alone. Commercial organisations, such as that referred to by my hon. Friend

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the Member for Carlisle (Mr. Martlew), recognise that. I am a member of the all-party retail trade group and we visit large organisations such as Sainsbury and Safeway. They recognise that value for money is not determined by cost alone and they do not appoint on the basis of lowest cost.

Professional fees are a small percentage of total project costs, and savings in that area can be quickly eclipsed by poor design and inadequate consideration. First cost will predominate ; no recognition will be made of the life cycle cost. Surely any prudent authority must be concerned with life cycle cost. Councillor Graeme Morrice argued at considerable length, and with great persuasiveness, that life cycle costs are all important.

Quality and lowest cost are incompatible. No other country in Europe selects contractors on that basis, so why should we apply that criterion to consultants? The professional institutions--for example, the Royal Institute of British Architects--whose members arguably have most to gain by an increased workload, have firmly and publicly declared against competition. There will be lack of continuity, discontinuity of service delivery and irreversible loss of valuable skills and resources. My hon. Friend the Member for Carlisle, with his great experience as leader of his council, put the irreversible nature of the loss very strongly.

Proactive team work will be precluded. Service issues of confidentiality, propriety and commercial benefit are at stake in relation to policy advice. Substantial increased costs are inevitable in the tendering process, briefing, monitoring and arbitration of claims and disputes. Role separation will result in design and specifications being changed from practice and practitioners from feedback.

Let me say a word about architectural and engineering services. Clarification is required on design and feasibility projects that are carried out in-house, outwith the architectural services department, to ascertain whether such work is excluded from competition. The market place is currently organised on a single-project basis, with professional services procured primarily by individual discipline. Clarification is required as to whether it would be anti-competitive to package work on, first, a full financial-year basis--or on the basis of a longer period-- and, secondly, a multi-disciplinary basis. My friend and political opponent Councillor Jimmy McGinley has made a special study of the effects on the architectural and legal departments. He, too, was entirely able to persuade me that it would be extremely imprudent not to take account of what really happens in council work. The quality and ability of contractors are crucial, and local authorities must be left with maximum flexibility in assessing those qualities and taking them into account.

The professional organisations have already pointed out that lowest price is not an appropriate method of assessing and appointing professional contractors. Applying CCT to professional services introduces serious problems of confidentiality, conflict of interest, indemnity insurance and so forth without a realistic prospect of improved efficiency or cost savings. Those potential problems will make contractor supervision expensive. In recessionary times, professional services in local authorities may seem attractive to the private sector, but the opposite is true in boom times. There will be serious consequences for local authorities.

Efficiency of professional services is best achieved by the introduction of trading accounts for all professional

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units. There is no good reason for applying different rules to architects and property management. Trading accounts and league tables of local authorities--coupled with direct comparison of fees from the private sector--is a much better route to the measurement of efficiency.

Concern for quality is identified in relation to a proposed system of "two envelope" tendering, and a plea to professional institutions to recommend that low measurements of competition be built into the quality threshold. Quality and lowest cost are incompatible. The Government indicate pre- qualification on a quality threshold, but determination on lowest cost. The concept of "two envelope" tendering is related to determination and quality.

I have had my time, and I shall leave it at that, but these are serious questions, posed by practical, serious people.

8.2 pm

Mr. David Atkinson (Bournemouth, East) : I give an unreserved welcome to the proposals in the Bill. They reflect the logical way forward for the development of local government services and structure, taking full account both of the experience and success of compulsory competitive tendering and of the undoubted wish of local people--including my constituents--for the return of unitary authorities.

During the Committee stage of the Local Government Bill 1988, I moved an amendment--it was later withdrawn--to add five services to the seven that, under the Bill, were already subject to CCT. My right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), who was the Minister responsible for piloting the Bill through Committee, pointed out that the amendment was not necessary, because, under the Bill, such extensions would be made later by order. The advantage of this Bill is that it enables us to take full account of the experience of CCT to date.

Fourteen years ago, the country was moving in the opposite direction from that proposed in the Bill. The Labour Government of the day allowed direct labour organisations to provide local government services without a cost- competitive test : it even allowed them to provide other local authorities with such services. Indeed, Labour's 1979 election manifesto anticipated the further expansion of DLOs, in addition to the takeover of local building firms by workers' co-operatives. It was the "winter of discontent" which discredited for all time the notion that public service unions would put patients, and other consumers of services, above their own vested interests. The present Government began to reverse that trend by putting DLOs to the test of competitive tender in building and maintenance in the Local Government, Planning and Land Act 1980. However, the work of pioneering councils such as that of my right hon. Friend the Member for Southend, West (Mr. Channon)--who earlier reminded us graphically of its contribution--was required to prove that the tendering of service provision to private contractors was needed to expose the waste and inefficiencies that had been tolerated by town halls for far too long.

As we now know from research conducted by Birmingham university, the London business school and not least the Audit Commission, CCT works, achieving savings of 20 per cent. or more. More important, however, has been the direct effect that it has had on the entire

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