House of Commons Hansard Debates for 16 Apr 1993

Column 1065

we all know that socialists are supposed to oppose housing associations. Not one Conservative councillor has thrown in the towel, but two socialist councillors have already done so.

I pay tribute to the work that the new Conservative council is now doing. The leader of the council has announced that from now all services will be tested in the market because we owe it to people to provide high quality services at a competitive price. As a result, in years to come, when people outside the House report on political matters, I trust that they will be able to state that the new Conservative-controlled Basildon district council has led the country in a successful and beneficial partnership between the public and private sectors.

1.22 pm

Mr. John Denham (Southampton, Itchen) : The debate has been interesting, if only because we now know that the hon. Member for Basildon (Mr. Amess) has not put his telephone number in the telephone directory as I assume that the rest of us have done so that our constituents can ring us up without having to hunt to find the number.

The debate has, in many ways, been bizarre as the Government have set out their agenda in the belief that the central issue in the provision of local government services is the extent to which those services are privatised. The Government are following an agenda which, although it has important elements, does not include the central issue in the provision of local services by local, democratically controlled councils.

The myth has been constructed--although it has been shot down many times by Opposition contributions--that the idea of partnership between local government and the private sector is opposed and resisted by and alien to Labour local authorities. That is not true. Looking around my constituency, one sees a wide range of appropriate partnerships operating between Southampton city council and the city of Southampton. The waterfront has been opened up, and the town quay and Ocean Village have been created. That scheme involved co-operation between the private and public sector ; private housing and commercial development have been carried out by the private sector, and social housing has been provided by the council with the housing associations.

The regional film theatre is to be provided by the council, the private sector and other public bodies. An agreement will soon be signed by a private sector company for a new development with an ice rink and a swimming pool. The finest art gallery outside London, certainly in the south-east of England, has been refurbished as a result of a public sector partnership between the city council and the county council as it is not a profit-making exercise. Partnerships with housing associations and in some cases with private developers have meant that in the past year some projects that I set in train as chair of the housing committee will result in the creation of 250 new family homes.

Those are just a few examples. Since 1985, Southampton Labour council has been acting in a way that is far more typical of the far-sighted and forward-looking role of local authorities than the myths produced by Conservative Members today. The council chooses whether it is more appropriate for the private

Column 1066

sector or the public sector to provide a service. The one issue that strongly divides us is the idea that wage cutting should be a basic element in the approach to the delivery of local government services. When I was the chair of housing in Southampton, I was pleased that the vast majority of building maintenance work in council housing was won by the in-house bid, but I was not pleased with the fact that for skilled tradesmen in those services it was likely to lead to a loss in income and benefits worth about £1,500 a year in order to retain their jobs.

The hon. Member for Teignbridge (Mr. Nicholls), who spoke earlier in the debate, came along with a walletful of consultancies. No doubt he believes that his reward for those consultancies is the right to reduce the income of craftsmen who work for Southampton city council by £1,500 a year. Some of us believe--this may be a fundamental divide--that a moral issue is involved : that it is not moral to drive down the level of wages to whatever can be undercut by the private sector. That aside, it is clear that Labour-controlled councils work well in partnership with the private sector.

I said at the outset, however, that I do not regard that as the fundamental issue when it comes to the provision of local government services. The consumers of those services do not care very much who provides the services. They care about the quality of the services provided. They also care about whether they have access to those services when they need them. The one issue that has not been mentioned by any Conservative Member is what sort of services people get and whether they can get access to them.

A ridiculous and ludicrous situation is developing, in which an elderly lady who goes to her local social services department to find out whether she can have the services of a home carer now finds that performance marks are set down as to how long she will have to wait before she is interviewed, how quickly her letter should be answered and how soon the interview should take place, but that no standards at all are set as to whether she should obtain the services of a home carer.

As for real access to services, we find that there are enormous differences when it comes to the provision of services by local authorities throughout the country. For convenience, I have chosen to compare the performance of the bleak coastland strip of southern England from Dorset to Kent--solidly Conservative controlled--with the Labour-controlled shire counties. What a remarkable picture it presents. We must assume that in those Tory- controlled authorities the Tory philosophy that we have heard about this morning is being pursued to its fullest extent, that the full economic benefit of that approach has been gained and that better services are provided. In fact, that is not so.

It is not that there are huge differences in need between the north and the south. Unemployment is marginally higher in the north, though not greatly. Income is somewhat lower in the Labour-controlled shire counties and there are more people on low incomes in the Labour-controlled shire counties. However, when one allows for the cost of living, which is generally higher in the south, the differences are not so great. Yet despite the similarities between those areas there are enormous differences in the spread and availability of services.

Let us take, for example, a basic grassroots service--the availability of home carers for the elderly. We find that in that bleak grey Tory coastland of southern England there are eight hours of home carer time per 1,000 elderly

Column 1067

people per week, compared with 14.3 hours of home carer time per 1, 000 elderly people per week in the Labour- controlled shire counties. Only 4 per cent. of pensioners in those Tory- controlled southern counties have any access to a home carer, while 10 per cent. in Labour-controlled local authorities have access to a home carer.

Mr. Carrington : In the borough of Hammersmith and Fulham in which my constituency is situated--a Labour-controlled council--the council has a policy that denies access to sheltered housing to elderly people, no matter how poor and with no matter how little equity, solely on the ground that they live in their own accommodation and are owner-occupiers. Does the hon. Gentleman think that that is the right policy for that council to pursue?

Mr. Denham : I would not presume to comment on an allegation made about a local authority of which I have no knowledge. I have given a straightforward comparison--like for like--between local authorities with similar numbers of elderly people. Some are Conservative controlled and some are Labour controlled. On that straightforward comparison, elderly people in Labour-controlled shire councils have more than twice the chance of receiving home carer support to enable them to live in their own homes than they have under Tory councils. If the Government believe that they have the key to the delivery of local government services, those figures need to be explained. They are simply explained by saying that Labour councils care a good deal more about elderly people in their areas, which is also reflected in more economic comparisons. Figures that I was able to obtain 18 months or two years ago show that the price of meals on wheels in those Tory southern heartland councils was £1.36 and in the Labour- controlled shire councils it was 89p. The burden then falls heavily on Labour-controlled district councils such as Southampton, to compensate for the neglect and incompetence of Tory county councils, to reduce the price of meals on wheels.

I have been able to find no significant difference in the needs of mobility and accessibility between people living in the Labour-controlled shire counties and those on the southern Tory strip. Yet in Labour-controlled authorities the average per capita support for public transport is £3.54 per head, while in the Tory-controlled area it is £2 per head. That is an example of public sector and private sector integration. Bus deregulation is now not a matter of looking after one's own bus service, but a matter of how much the public sector puts in to provide a decent transport system. There is far more commitment to public transport and mobility in Labour-controlled areas. That means that there are more buses and people are better able to travel and get around.

Another area where it is easy to measure need is the provision of nursery education. In the child neglect capital of the south, 5 per cent. of under- fives are in nursery education, but in

Labour-controlled shire counties 35 per cent. are in nursery schools or nursery classes. What is the explanation for that appalling neglect of young children and their education in the Tory south of England? It has nothing to do with arguments about ideologies and public and private sector partnership. As the Minister said earlier, the Government determine the level of service. On service after service, Tory local councils offer a poor level

Column 1068

of service and few young children and elderly people have access to a decent service. That issue is much more important than which local authority services are privatised.

I can find no evidence of the apparent savings from privatisation being fed back into the system. One would have expected that the authorities that have done the most to privatise would have fed the money back into extending services to more people who need them, but there is no evidence of that.

I am the first to accept that pupil-teacher ratios are not an accurate estimate of educational value--and neither is testing. The only question is value added in education. The Government provide no measure of value added in education, but the pupil-teacher ratio is better in the Labour- controlled shires than in the south. I could go through many other issues, but I will not do so as I know that other hon. Members wish to speak. The point is clear, however : it is not sufficient to have an in-principle ideological discussion about the extent of privatisation of local government services. The only question that matters to people outside is whether they will have access to the service that they need and whether it will be well provided. All the evidence shows that the answer is more likley to be no in a Tory-run county than in a Labour-run county. That is what the May elections will be all about.

1.33 pm

Mr. John Marshall (Hendon, South) : I have listened with some interest to the hon. Members for Lancshire, West (Mr. Pickthall) and for Southampton, Itchen (Mr. Denham). The hon. Member for Itchen talked about poor levels of service. One of the services that the parents, children and charge payers expect of a local authority is the provision of a decent and successful education. The hon. Gentleman could have told the House which local authorities produce good A-level results and which produce poor results. I was interested to hear that he objected to the fact that the Government do not produce tables of value added in education. However, they produce tables of school results, but the hon. Gentleman did not show much enthusiasm.

Mr. Denham : There is a great difference between the results of testing, which have built into them influences such as social class and parental income, and value added, which measures the extent to which a child gains from school. A-level results and results of other testing, which do not take value added into account, are very misleading.

Mr. Marshall : Parents want good GCSE and A-level results for their children because they provide the opportunity for their children to enter further, higher and university education. It is noticeable that the local authorities that produce good results are Conservative councils and those that produce bad results are Labour councils. It is no use the hon. Gentleman saying that one local authority spends more than another on education, because we all know which local education authority spent more than any other ; the late and unlamented Inner London education authority spent a great deal, but produced some of the worst examination results. It did not care a tinker's cuss for standards, allowed schools such as Highbury

Column 1069

Grove school in Islington to go downhill, and forgot that parents sent children to school so that they could go on to higher and university education.

The hon. Member for Lancashire, West talked about the Government reducing local authorities' democratic control. The Conservative party should take no lessons from the Labour party. It was a Labour Government who imposed on local authorities the obligation to destroy grammar schools, regardless of the wishes of parents and teachers and of the standards achieved in those schools. Under the Shirley Williams Act, there were no parental ballots on getting rid of grammar schools ; it was done by diktat of the Labour Government. The reason why there are still some grammar schools is that some courageous Conservative councillors were willing to cause delays because they knew that Baroness Thatcher would give them the freedom to retain those centres of educational excellence.

How dare a Labour Member talk about democratic control when the previous Labour Government restricted the right of local authorities to sell council houses? How can a Labour Member talk about creating greater economic activity when the Labour party is committed to reintroducing a Greater London council ? The GLC was guilty of waste, extravagance, duplication and delay.

When the hon. Member for Brent, East (Mr. Livingstone) was leader of the GLC, the disagreement between it and the borough councils destroyed tens of thousands of jobs in London. When he was in control of the GLC, I was a local councillor in Ealing. My council applied to the GLC for permission to create a pedestrian crossing. It took the GLC 13 months to give us the permission and took us 13 days to create the crossing. No one should say that the GLC, or the son of GLC, would generate economic activity ; it would generate only delay, waste and extravagance in London.

The hon. Member for Lancashire, West also spoke about the desirability of tendering but said that compulsory competitive tendering was wrong. That is absurd, because we all know what happened in the days before CCT. It was sometimes difficult to get Conservative councils to go out to tender and it was impossible to get Labour councils to go out to tender. Does the hon. Member for Lancashire, West believe that if there were no compulsory competitive tendering the good people of Haringey would go out to tender, that Camden council would go out to tender or that Islington council, of which you were once a distinguished member, Mr. Deputy Speaker, would go out to tender ? Of course they would not. Competitive tendering is anathema to the socialists of those councils which just do not believe in it.

It is true that under CCT the hours that people work have sometimes been cut. Let us consider what happened before CCT. When I was chairman of the local services committee in Ealing, I went round to look at people at work. From midday onwards, although the workers knew that we were coming, we could not find them. The excuse given was that they must have gone on to the next job. If they had gone on to the next job, I suspect that it was being done in the private sector rather than in the local authority sector because we could not find them. We all know what happened. One did not see a refuse collector in London after midday before compulsory competitive tendering.

Column 1070

There is no doubt that people were paid for a 38-hour week, but they certainly were not working one before CCT.

There has been a sea change in the attitude of local authorities to the private sector. In the 1960s and early 1970s, local authorities would say that they believed in the private sector, as shown by the fact that they rented out a kiosk in the park or on the beach in the summer. Local authorities were quite unwilling to do anything to generate savings through competitive tendering in their major activities. They always claimed that there could be no improvement in the quality of service. It was claimed by council after council that there could be no savings.

I heard, as I am sure the Minister heard, the odd Conservative councillor in the 1970s say, "We are not putting that out to tender because we shall not save any money." That is the arrogance of monopolies throughout the ages. It was believed that, because a particular service had been run in a particular way by a certain council for 20 years, there was no scope for providing a better service or a more economic service. Events have proved those absurd claims to be false.

I pay tribute first to Wandsworth council, the local authority in London which did most to popularise competitive tendering. I also pay tribute to my hon. Friend the Member for Welwyn Hatfield (Mr. Evans), because in his business career before he came to the House he was one of those who showed up the incompetence of direct labour organisations and the benefits that could come from compulsory competitive tendering. I also pay tribute to the former Prime Minister, Baroness Thatcher, because she was the national politician who did most to popularise competitive tendering and to point out that socialism did not work in the town hall, just as it did not work nationally or internationally.

All my experiences in local government in Aberdeen and in Ealing suggest that competitive tendering is the only way to get a decent service. I discovered that early on when I was a member of Aberdeen council and we managed to get a motion through our watch committee saying that we should go out to tender for a demolition job. We did so, having been told by Labour members on the council that we were wasting our time and that there would be no saving. When the tenders came in, we realised that the lowest tender, from an outside contractor, would lead to a saving of 40 per cent. What did Labour members of the city council do? Did they say, "Well done, we shall take that cheaper contract"? Of course they did not. They voted for the higher contract. As an Aberdeen ratepayer, I wrote to the then Secretary of State for Scotland, Willie Ross. I am glad to say that he wrote back saying that he had instructed the council to accept the lowest tender, showing that there were some sensible socialists even in those days.

I later became chairman of the finance committee in Ealing. We had two boasts in Ealing : that we had the lowest rates in west London, and that the quality of our services persuaded the then Leader of the Opposition, the right hon. Member for Islwyn (Mr. Kinnock), to leave Liberal Richmond and to come to live in Conservative Ealing. We discovered that, whenever we went out to tender, there were dramatic savings to be made to the benefit of ratepayers. Compulsory compeitive tendering has resulted in a huge reduction in costs. All the surveys show that, because of CCT, local government services are less expensive in real terms than they were five, six or seven years ago.

Column 1071

Moreover, a much better service is being provided for the benefit of charge payers. Penalty clauses are always attached when a service goes out to tender so that if the service is not carried out, the contractor does not get the money. Under the previous system, the direct labour department did not always deliver the goods or collect the refuse, but it still got paid. The refuse collector was paid however good or however poor the job he did and, all too often, the job was second rate. Private contractors are also more alert to the possibilities of using a facility for the benefit of individuals than the old local authority manager was.

I welcome some of the developments that have taken place in recent months. In Berkshire--a county which some of us may get to know somewhat better in the weeks to 6 May--compulsory competitive tendering is about to save ratepayers £1.3 million as a result of a £30 million deal that the authority has done with Baptis, the Glasgow civil engineering company. The Government have recognised that the most efficient way of providing gipsy sites is through private enterprise rather than through the public sector. I warmly welcome that and I also welcome the fact that the Government have recognised the validity of the claim that I have been making for a long time--that boroughs such as Barnet should not be compelled by Government diktat to provide a gipsy site. There is nowhere in the London borough of Barnet suitable for a gipsy site.

We have seen advice from the Chartered Institute of Public Finance and Accountancy--a completely unbiased body--that private contractors are now obtaining a much higher percentage of new contracts. Some 68 per cent. of the local authority contracts going out to tender now go to private contractors rather than the direct labour department. Throughout the world, people are recognising that privatisation and competitive tendering are the real engines of economic progress. It is a great tragedy that there is one place in the world where that has not yet come home, and that is on the Labour Benches. It is because of the different attitudes of political parties to private enterprise, standards and quality of service that there is such a discrepancy between the council tax in band G, at the higher end of the scale, in the London borough of Barnet, where it is £915, and in the London borough of Haringey, just over the road, where it is £1,211--nearly £300, or 30 per cent., more. Yet in the London borough of Barnet services are very much better because the council believes in co-operation with the private sector. In Brent Cross, it can boast the most modern shopping centre in London. It was developed in the 1970s by local government and the private sector in co-operation and, because it is managed by the private sector, it is popular, successful and profitable--three categories of service which the Labour party has never yet understood.

1.48 pm

Mr. Jim Dowd (Lewisham, West) : Alhough I have been here since 9.30, I am sure that it will come as a relief to some hon. Members to learn that I propose to limit my remarks to 10 minutes so as to allow other hon. Members the opportunity to speak.

I echo what my hon. Friend the Member for Lancashire, West (Mr. Pickthall) said about the damage that has been done to the relationship between local authorities and the private sector, and between local

Column 1072

authorities and the Government, as a result of the almost irrational and certainly ideologically rooted hostility on the Conservative Benches towards local authorities and public sector undertakings in particular. The comments of the hon. Member for Hendon, South (Mr. Marshall) were as clear an example of that as one could possibly imagine.

It is almost like the Orwellian image of "public sector bad, private sector good", as though the Conservative Benches are staffed by pigs that have finally learnt to walk on their hind legs. The reality of co-operation between local authorities and the private sector--and the Government, as the debate relates to co-operation between the public and private sectors, and the relationship with the Government is a very important part of that-- is as old as local authorities themselves.

The role of local authorities as contractors dates back many years. The introduction of a degree of compulsion, obsessively driven by the Conservative party in recent years, is merely another development of that. If that had been introduced in an even-handed and reasonable way, such great damage would not have been caused to local authorities. It was introduced with just one purpose in mind : to take services out of the control of local authorities. The idea was not to improve the level of service and value for money, but to remove the services from local authority control.

If we need evidence of that, we need only consider the comments of the hon. Member for Beckenham (Mr. Merchant), who recounted a list of the services that the London borough of Bromley had put out to the private sector. He wore that list as a badge of pride, but he did not reflect on the quality of those services. He did not say whether they were good, bad or indifferent. He believed that getting services out to the private sector was a good in and of itself. I believe that that serves the people of Bromley particularly badly. As I said to the hon. Member in an intervention, because of that ideologically blinded and dogmatic approach, the fraud squad has taken a deep interest in some of the manoeuvrings--I put it no higher than that--of elected Tory councillors in Bromley in attempting to discharge themselves of their responsibilities with regard to the provision of social services homes.

I wish to refer briefly to Lewisham, which is next door to Bromley. Lewisham is an inner London borough--unlike leafy Bromley, which is the richest local authority in Britain with the highest per capita income of any local authority. We to the north in Lewisham are not so fortunate, having a similar population in about one third of the area in which Bromley luxuriates. Bromley truly is a leafy suburb. I wish to make my position perfectly clear. Having been a member of Lewisham council for 19 years, I am not entirely objective in my assessment of what has happened in those years, but I believe that what I say will stand up to examination.

When the Institute of Local Government reviewed well-managed local authorities recently--I am sure that the Minister and his Department have a copy of the report--it identified Lewisham as the only London borough worthy of inclusion in the top 16 well-managed authorities. In fact, Lewisham was one of the top six well-managed authorities in Britain. In part, that is probably why in recent years the Labour majority in Lewisham has been higher than it has ever been. Lewisham council has the largest Labour group in London. We also have the largest political group of any kind. Conservative

Column 1073

representation is down to a mere half dozen, and I believe that the borough council elections next year could erode that even further. I look on that with one joyful eye and one tearful eye. I suppose that I am a "Pymist" in these matters. I believe that local authorities need a degree of balance. All democratic institutions require that balance. The fear of losing office keeps our politicians straight--or straightish, shall we say. I believe that what we are trying to do in political terms is often best examined through the eyes of those who do not agree with us. While we may never convert them, if we can at least substantiate in our own minds the validity of what we are doing, I believe that we are at least discharging our responsibilities properly.

Lewisham is committed to a lead role in urban regeneration in the borough and the partnership includes other public sector bodies, voluntary bodies and private sector interests. In an intervention in the speech by the hon. Member for Beckenham I mentioned one of those projects--Beckenham Place park. I accept that the issue is highly controversial, but there are many such issues to be resolved and I appreciate the strength of feeling in the area. The scheme was undertaken in the full knowledge that Lewisham council was obliged to secure the future of that park but did not have the resources to do so on its own. The expenditure over the coming years is immense and the only way to protect that valuable public asset was through a partnership with a private sector organisation. Whether that is the right path and whether the scheme will make progress remains to be seen, but the partnership with the private organisation was a responsible and reasonable action by the local authority. Unfortunately, the partnership approach is undermined by the proliferation of central Government and arm's-length agencies. Inner London probably has more of those than any other area of the country. Their remit is prescribed by the Government irrespective of the needs of the locality, and that is a cause for concern. There is an apparent lack of central co-ordination of initiatives, which results in both gaps and overlaps between the agencies. That is also perceived as part of the attack on local democracy and the increasing centralisation of power about which my hon. Friends have spoken in detail.

Lewisham council, with its extensive knowledge of the economic, social and environmental profile and the needs and opportunities in its area, is the only body with the legitimacy to determine those priorities, co-ordinate the work of the agencies and decide how best to augment services and quality of life for people in the area. The plethora of initiatives for distinct topical issues such as community safety, employment and enterprise development in the borough and their high public profile couXEI could go into detail about what is being attempted in Lewisham town centre, which is one of London's major regional and strategic centres. To a large extent, its future has been assured, despite the recession, largely due to the council's decision to dispose of its freeholding of the centre and go into partnership with a private company to secure the future of that centre. That raised a considerable amount of money which the council was able to redeploy

Column 1074

through a sharp--and, I hasten to add, highly legal--manoeuvre. I use the word "sharp" in its prudent sense. We were able to build a new town hall on a site acquired in the mid-1960s for precisely that purpose. The net result is that without costing the poll tax payers of Lewisham a penny they are now saving £2 million in revenue because of the savings from rents and other costs that we do not need to pay for expensive office space. Even in an unfashionable corner of London such as Lewisham, office accommodation is extremely expensive. We achieved much through Deptford city challenge, although city challenge is a double- edged sword. Lewisham was one of the pacemaker authorities in city challenge and one of only two authorities in London to secure the first wave partnership. It was not said then that that expenditure was instead of urban programme money--it was always trailed as being additional. Unfortunately, we are now losing out because all Lewisham's urban partnership bids have been lost. That is not supporting the partnership in the way that the local authority has a right to expect. In the first year, Deptford city challenge is over-programmed by about £300,000. We were originally told by the Minister's Department that that would be met from underspend in other city challenge enterprises, but we have now been told that the money will be taken from year five--if the city challenge programme reaches year five.

The local authority in Lewisham is undertaking many other aspects of development into which I will not go because of the time. It is not simply a question of deciding who does what. As hon. Members on both sides of the House have said, it is a question of seeing who does what best. That mixture is critical in providing value for money and the quality of life that all citizens in all local authority areas have every right to expect.

1.59 pm

Mr. Matthew Carrington (Fulham) : Underlining this morning's debate is a question about the fundamental role of local authorities--whether they should be enablers or providers of services. What is clearly emerging is that local authorities should be enablers of services because only then can they make sure that the quality, the value for money and the level of services given buy the providers reach what is deemed and needed by people living in their areas.

It is essential that local authorities recognise that their primary purpose is to ensure that the money that they get in, both from council tax payers and from central Government, is spent in the most effective manner, to provide the highest quality of service in the way required by those who live in the area. There is a fundamental contradiction, in that if councils provide services themselves, their ability to demand quality of that service is severely eroded. I should like to see compulsory competitive tendering moving the next stage forward--from some services to all services being contracted out--and the removal from councils of the power to provide any services, leaving them only with the power to commission services from outside bodies. Unless councils do that, they cannot demand the necessary quality and level of services, or get the value for money, that they require.

In many areas, we are moving towards a requirement that local authorities contract out. In many sectors, that contracting out could go one stage further. We are starting

Column 1075

to see that happen in, for example, the accountancy function, which is a natural sector for which local authorities can buy in outside expertise and thereby give a higher quality of service. There are many other sectors.

The fact that what we are looking at is the level of services that local authorities provide and the level at which they do compulsory competitive tendering should not blind us to the great weakness of the present system. Some local authorities so skew the tendering process that they ensure that any realistic outside provider of services cannot conceivably comply with the contract conditions that they insist on setting.

Let me give at least one example--I could give many more, but time is short --from the borough of Hammersmith and Fulham, in which my constituency is situated. When it gave out the contract details for providing school meals within the education service, the specification for the quality of food was admirably, but also unreasonably, high. It defined such detail as the thickness of the skin of the lemons that were to be provided by the catering service and set out the criterion that the bananas to be provided were to have no brown marks on them. I dare say that you, Mr. Deputy Speaker, regularly shop for bananas, as all of us do, and will recognise how difficult it is to purchase bananas that have no brown marks on their skin. Needless to say, no private contractors have felt able to meet the requirements of the contract conditions. Needless to say also, the in-house tender from the council won the contract.

That raises the next question, which you, Mr. Deputy Speaker, will already be asking as you are well ahead of me in the argument : how does the in- house council contractor meet the stringent conditions? The answer is that no one knows, because no one checks. The council would make detailed checks of any outside contractor's performance of his contract conditions, but, if it were checking its own work force to see whether it was complying with contract conditions, the tendency would be to be a little more tolerant and to consider that there are certain matters that need a certain time--six months, a year, two years, until the next election, perhaps well beyond it- -to put right. So conditions will not be so toughly enforced for the in- house service. That also leads to fraud and corruption.

There are severe question marks over what is going on in the engineering and borough highways departments of Hammersmith and Fulham council. It may or may not be fraud. The departments are certainly loss making. But the council's toleration of a department making severe losses in providing services is much greater than it would be if an outside contractor said that it wanted to increase the price of the contract because it was making losses in providing the service.

When a council attempts to provide services and police them, it faces a conflict of interest which it is impossible to resolve. The only way round that conflict of interest is to make councils contract out all services. That cannot happen immediately because the private sector cannot provide those services immediately. However, in time it will be possible to provide those services. I hope that the Government and, in particular, my hon. Friend the Minister will look hard at encouraging and forcing councils to contract out more services. That is the only way in which, in time, we shall achieve a better, higher quality local government service.

Column 1076

2.6 pm

Mr. Harry Barnes (Derbyshire, North-East) : As I may be the last Member to speak before the Front-Bench replies, I remind the House of the subject of today's debate : the partnership between the public and private sectors in delivering local government services. All the speeches that we have heard from the Conservative Benches have stressed not the need for partnership between the public and private sector but the notion that the private sector should take over from the public sector. Conservative Members said that enabling authorities should allow private bodies to operate in local areas. They said that compulsory competitive tendering should be used to push more services into private provision. They said that the boundaries of public provision should be pushed back even further. There is a different approach, however. My hon. Friend the Member for York (Mr. Bayley) discussed developments in partnership between public and private sectors, but that has been missed by Conservative Members and particularly by the Minister, who gave us an ideological tour when he introduced the debate, stressing special examples of what was important about private provision and giving us all the pluses in the development of 19th and 20th century capitalism. The Minister spoke about the development of the railways and said how important that private development was. However, it was all one-sided. He told us what had been achieved by capitalism but nothing about the problems that had been created. The vast problems of exploitation, deprivation and unemployment had to be handled by the public sector, which had to come in to correct what unrestrained private enterprise had done. The Government's arguments push us all the time towards unrestrained private sector activity in which the role of local councillors is limited. Their role is not to be involved in the running of services or in co-operating with the private sector.

Mr. Redwood : The hon. Gentleman heard only half of my speech. I made it clear that there was a vital role for local and central government. I made it clear that some people need protecting. They need services and help from the Government against the background of market capitalism. I wish that the hon. Gentleman would recognise that there was balance in my speech. I identified the role of both the government and the private sector.

Mr. Barnes : I listened to all of the speeches from the Conservative Benches, including that of the Minister. Apart from a discussion about bananas and Basildon, all the stress was placed on the importance of the private sector coming into local government. Thatcherism has produced the notion that anything can be privatised because public money will be made available for private services in what was previously the public sphere.

Indeed, the importance of such markets is stressed continuously by Conservative Members--except when it comes to the markets in ideas, discussions and arguments with the electorate, which are pushed to one side. In the argument about the opting out of schools, local authorities, trade unions and others are constrained in what they can say because otherwise it is held to be misleading information. The Government want to put only one side of the argument when people are making up their minds.

Column 1077

The stress on the private replacing the public is wrong. Public services were introduced to correct the results of unrestrained private enterprise. That even happened under the Tory party with education legislation in the 19th century. Old age pensions were introduced by the then Liberal party early in this century, and the welfare state was introduced by the Labour party. None of that was done with the aim of entirely changing the basis of society or doing away with markets ; it was done because it was recognised that other elements had to be included and that there had to be a measure of public responsibility.

There is considerable scope for public provision supplementing private provision. There is a problem with dioxin at Stanton plc in the Staveley area of my constituency--it spills over from the problem in Bolsover. We need a public body, perhaps an environmental protection agency, to draw together all the different threads and to assist the company from which we assume the dioxin comes. There needs also to be assistance for the farmers in the area whose future prospects have been threatened. There are plenty of opportunities for the public sector to work with the private sector to ensure the protection both of jobs and of the community.

The whole notion of civic service, civic duty and civic pride has been hit hard by a mass of Government legislation. We had reached the stage where we almost believed that the Government could not go any further in hammering local authorities. They introduced the poll tax, which was the unfairest tax system ever introduced into a western democratic system. They introduced the nonsense of standard spending assessments, which are still in operation. We thought that that was the end of the road in terms of what the Government could do to local authorities and many of us began to wonder about the role of authorities, which basically were becoming agents carrying out policies determined by central Government, but now it seems that we are to go even further down that road with the notion of enabling authorities.

In Derbyshire, there has been an examination of local authority boundaries, areas and functions, and much of the discussion has centred on what the boundaries should be. The really important discussion, however, is whether local authorities will become just enabling authorities and local councillors will have less and less input into decisions about their areas and thus become less accountable to their electorate. We should be talking about extending democratic provision. Where there are shortcomings in the work of councils, we should insist on improving the democratic arrangements so that people are drawn into the work of the local authority and can influence its decisions. It should not be a matter of the private sector coming into authorities to correct any problems.

I want to deal with the problems being faced in Derbyshire and the terrible system of standard spending assessments. Since that system was introduced, Derbyshire county council has received smaller increases to compensate for inflation than any other shire county. It has received only 60 per cent. of the provision for Berkshire or Hertfordshire. The Minister argues that the reason is that Derbyshire's population has declined while Hertfordshire's has increased, but that is incorrect. Derbyshire's population has grown by a larger percentage than Hertfordshire's over the last two or three years and

Column 1078

bigger increases are projected. The authorities in my constituency--including Chesterfield borough council and North-East Derbyshire district council--are at the bottom end of standard spending assessment and grant provision. There is no reason for that. North -East Derbyshire is 365th out of the 366 district councils in England and Wales.

We know the system is fiddled and we want it altered. It is nonsense to go on as we are when provision needs to be made for that area. No one could describe the authorities concerned as profligate, but they are seriously hit by the present arrangements. Councils in some areas receive two or three times more in standard spending assessment and grant than does Derbyshire. How is any authority expected to manage in those circumstances?

2.16 pm

Mr. Henderson : With the leave of the House, I will comment on some of the arguments made in this interesting debate on a number of important issues affecting communities throughout the country. It is understandable that some hon. Members have had to leave early, and I thank those who informed me that they could not stay for the end of the debate.

The hon. Member for Teignbridge (Mr. Nicholls) fell short of convincing the House that he was objective in his assessment of the delivery of local authority services. If he had paid more attention to the old axiom that people who live in glasshouses should not throw stones, he might have convinced the House of his objectivity. He missed the whole point about local authority services by not paying any attention to the views of communities that are dependent on them.

The hon. Member for Chingford (Mr. Duncan-Smith) also fell into that trap, believing that compulsory competitive tendering could solve all the problems of delivering local authority services when it is clear that even the Audit Commission does not acknowledge that point. Its recent report indicated that some costs increased when compulsory competitive tendering was introduced. If I had more time, I might be tempted to give more details.

I contrast those hon. Gentlemen's remarks with those of my hon. Friends the Members for Ipswich (Mr. Cann) and for Lewisham, West (Mr. Dowd), who have no objection to the delivery of various local government services but want to see even-handedness, quality being brought to the fore, and efficiency improvements not being made at the expense of exploiting many workers who are already low paid. The hon. Member for Beckenham (Mr. Merchant) attempted to admit that ideology had sometimes played more of a part in the argument than might be wise. That was demonstrated in the speech of the hon. Member for Hendon, South (Mr. Marshall), and even more so in that of the hon. Member for Basildon (Mr. Amess).

My hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) emphasised the damage done to democracy by the establishment of unelected quangos operating in areas affecting local authorities. The hon. Member for Scarborough (Mr. Sykes) recounted sitting on his grandfather's knee. He tried to persuade us that he was a generous character who could have appeared in a Hovis commercial, but he only convinced us that he had already played a part in "All Muck and Brass". Certainly the

Column 1079

conciliatory approach that the Minister sometimes attempted to adopt was completely missed by his hon. Friend the Member for Scarborough.

In their excellent speeches, my hon. Friends the Members for York (Mr. Bayley) and for Southampton, Itchen (Mr. Denham) gave prominence to people's choice. The key question in the delivery of local government services is : are people being given the chance to receive what they want at the price that they are prepared to pay ? The hon. Member for Southwark and Bermondsey (Mr. Hughes) said that compulsory capping had often intervened to prevent that.

My argument with the Government is that they tried to use the delivery mechanism as a smokescreen to avoid real debate about the other local government issues. There is no major disagreement on delivery mechanism between the various political parties that have participated in the debate. We all recognise that, in our economy, partnership is crucial in the development of local government services.

Tendering has always taken place and local authorities up and down the country have for many years been involved in tendering services where they believe that they can be better provided on a contracted-out basis than a direct basis. There is every suggestion that that will continue to be so. On a number of occasions, Opposition Members said that tendering itself does not guarantee an improvement in efficiency. I said that good management, whether of direct provision or contracting out, was important for local authorities.

The real issue concerns democracy and local people having the right to determine what happens to them in their communities. It involves local people having the right to determine what level of services they want and how they should be provided. The main issue involves local people having access to what is happening and the results of auditing procedures undertaken on their behalf, and a say in the way in which services are delivered. It involves stressing the importance of community provision, and enhancing individual liberty and opportunity.

Those issues are central to local government and will be to the fore in the campaign between now and the county council elections on 6 May. Those arguments and priorities will ultimately have the support of the British people, which will be shown in the county council elections on 6 May.

2.22 pm

Mr. Redwood : With the leave of the House, may I say that I am grateful to all those whose contributions have produced a good debate on the vital subject of the range of local authority responsibilities and services, and the best means of delivering them.

The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) challenged me on whether I stood by the things that I had written 16 years ago. I was flattered and not a little surprised that the Labour party researches its future policies in my articles written in 1977. I repeat what I said then. The community land legislation was wrong and the Conservative Administration were right to repeal it. Having both a structure and a local plan can be wasteful, which was why we moved to urban development plans in big urban areas and why we are asking whether each shire area needs one or two councils and whether it needs one or two plans. The answer will depend on local circumstances.

Column 1080

I said that housing could often be better provided by institutions and people rather than councils, which has been shown to be true. Most rented housing is made available through housing associations with a mixture of private and public finance. Some councils have stopped owning houses, but they still have excellent housing policies in their areas--often better than those of councils that have clung to the old, outmoded ideas that I was beginning to question as long ago as 1977.

Better recreational facilities can often be provided by using private expense. Local councils may wish to buy season tickets or offer help to individuals or groups who need access to those facilities. They may do better by their local communities organising it in that way than by buying and owning the facility.

Mr. Henderson : Does the Minister stand by his comment in 1977 that all swimming pools should be privatised?

Mr. Redwood : Swimming pools are often better run by the private sector. I hope that many will contract out or market-test the facilities. Many new facilities can be well provided by the private sector. I am keen to encourage it, unlike the hon. Gentleman, who seems to be saying that if something is not provided by the public sector it does not count and it is not a public facility. Those facilities that are provided at private expense are every bit as much public facilities, if open to the public, as are the others. The hon. Gentleman may want all golf courses to be municipally owned. I am happy to have a lot of private sector golf courses open to those who wish to use them.

The hon. Gentleman said that he and his party are still not in sympathy with standard spending assessments. However, both he and his party will, I believe, agree that there needs to be a method of calculating exactly how much grant each local authority receives. I do not think that the Labour party would argue the case that we should just send a fixed amount per head for every person in the country to the different local authority areas. They want a more sophisticated system than that, as well they might, because it tends to be their councils that receive far bigger grants as a result of the sophistication that we have introduced into the system. I say both to the hon. Gentleman and to his hon. Friends who raised the standard spending assessment issue, and also to the hon. Member for Southwark and Bermondsey (Mr. Hughes), representing the Liberal Democrats, that we are now reviewing again this year the principles and the figures used in the SSA calculations. I should be delighted if the Labour party--even, perhaps, the Labour-Liberal alliance, or the Liberal party on its own--could come to an agreed view about how the SSAs should be calculated. We should be prepared to take that view fully into account in our considerations.

I have asked local government, of all parties and of none, to give the Department their best views. Again, I would hope that the local authority associations would try to bring their views closer together. I fear, however, that this year, as in past years, the interests of urban authorities will often be seen to be different from those of rural ones and that the interests of big towns will be seen to be different from those of villages and small towns. Sometimes, Labour authorities have a different view of their interests from Conservative ones, and so forth.

Next Section

Home Page