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Regional and Urban Policy

3.30 pm

The Secretary of State for the Environment (Mr. John Selwyn Gummer) : It is widely agreed that there is considerable scope locally to bring Government programmes and Departments together. They should be more responsive to local needs and acceptable to local people. We acknowledged that in our manifesto. Today, I am announcing changes to bring that about through a new single budget and new integrated regional offices in England. This signals an important shift from the centre to the localities.

I am making this announcement on behalf of my right hon. Friends the Secretary of State for Transport, the Secretary of State for Education and the President of the Board of Trade, and my right hon. and learned Friend the Secretary of State for the Home Department. From April next year, we are establishing a new single budget for regeneration and development. It will combine 20 separate programmes worth, on current plans, some £1.4 billion. Continuing commitments under those programmes will be met.

We intend to consult widely about how the budget will work in each locality and how bidding arrangements will operate, but in most cases we expect that bids will come from partnerships within the local community and that local authorities and training and enterprise councils will take the lead in assembling partnerships and putting forward bids. However, we want to encourage local innovation and imagination, so there is no intention of excluding other bodies from promoting bids.

The budget will mean that priorities are set locally in the light of local needs, not in Whitehall. It will give local authorities, businesses and local communities real influence over spending priorities. The budget will help to mobilise public-sector money and will complement the provision of business support services. It will support measures to improve education and training, tackle crime, meet ethnic minority needs and improve rundown housing. Those measures will be combined in a comprehensive way to meet local needs.

I shall be accountable to Parliament for the budget. I and colleagues will sit on a new ministerial committee for regeneration which will oversee the budget. At the same time as introducing the budget, we shall bring together the existing regional offices of the Department of Transport, the Department of Trade and Industry, the Department of Employment and the Department of the Environment. We will therefore meet the widespread demand that there should be a single point of contact for local authorities, businesses and local communities. That will provide a better service without increasing the power or cost of central Government one iota. In fact, there should be some room for savings in overhead costs.

The new integrated offices will administer the single budget and will be responsible for the other departmental programmes that, at present, are operated by individual regional offices. Ministerial responsibility to Parliament for programmes not in the single budget will be unchanged.

Each office will be headed by a senior regional director, who will be accountable to the relevant Secretary of State for programmes carried out by his office, and to me for the single budget.


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With the new offices, the Government's response to the needs of localities will be better informed. The various elements--housing, training, business support and transport--will be considered together, and local priorities emphasised in the advice that is given to Ministers. Local needs, rather than departmental interests, will be the prime consideration.

As the hon. Member for Blackburn (Mr. Straw) has now heard me talk about the new budget and offices, he will be less inclined to accuse me of a sinister act of centralisation. He will see that we are devolving responsibility from Whitehall. We are cutting back red tape and bureaucracy. We are making it easier for local people, business men, local authorities and training and enterprise councils to talk to Government.

Training and enterprise councils will be key private-sector partners with the new offices for the full range of regeneration and economic development activities in their localities. To help with that, a team of sponsor Ministers will continue their links with our major cities and other areas. They will support regeneration initiatives, advise the new offices and raise local issues in Whitehall. I have placed a copy of the revised list of sponsor Ministers in the Library.

I am issuing a challenge to the civic and business leaders of our three greatest cities of international standing--London, Birmingham and Manchester.

Mr. Bob Cryer (Bradford, South) : What about Bradford?

Mr. Gummer : They were chosen simply because they happen to be the largest cities in England.

I want the civic and business leaders to get together with their private and public-sector partners to define their vision and to set up what practical steps can be taken to build on the strengths of their areas and on the things that they believe most command their areas.

This is not some arid planning exercise or an open invitation to bid for more resources. Central and local government, as well as the private sector, will continue to spend large sums of money in the cities.

City pride is about making the most of the investment and providing a lasting foundation for growth. I am sure that London, Birmingham and Manchester will rise to the challenge. We will concentrate first on those cities to pilot city pride, but if other cities want to adopt the approach, I would not want to dissuade them.

We have already achieved great successes. Initiatives such as city challenge and my right hon. Friend the President of the Board of Trade's new business link scheme have shown what can be accomplished when local authorities, businesses, local communities and voluntary groups work together. I am pleased to see that, at least in one respect, the Labour party's plan for London underlines the fact that it has taken over some of the Government's belief in partnerships. The TECs have brought about the most significant partnership between Government and industry for decades.

The single budget and integrated regional offices will make Government more accessible and responsive. We shall be altering the balance from the centre to the localities. That will give new opportunities for partnerships to create prosperity and to build on local strengths.


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Mr. Jack Straw (Blackburn) : We welcome any measures that improve the relationship between central and local government. We, and Labour local councils, will strive hard to ensure that these arrangements work.

But the Secretary of State must surely understand that after 14 years-- during which 144 separate Acts of Parliament have removed one power after another and have taken control of £24 billion of public spending from democratic local government to unaccountable quangos and Government offices and during which time Government have taken control of every council budget --councils and the communities who elect them are right to be highly sceptical about the Government's motives.

In his press statement, the Secretary of State said that these were

"sweeping measures to shift power from Whitehall to local communities."

If that is, at long last, an admission by the Secretary of State that he and his colleagues have, over the past 14 years, centralised on a scale unknown in western Europe, we shall be the first to cheer. However, does the Secretary of State not understand that, if his words are to have any meaning, universal budget capping must be removed, the right of councils to spend their £5,000 million of capital receipts--their money, but locked in a bank by Government order--must be reinstated, and the vast and growing network of quangos packed with Tory placemen, and the odd Tory placewoman, has to be dismantled? Is it not true that the Secretary of State's announcement highlights the democratic deficit that is undermining the whole of our political system?

Does the Secretary of State agree with the following words from a pamphlet published several years ago, dealing with the case for elected regional government :

"The decision makers who are handling regional problems are not answerable to any elected representatives A democracy is not healthy if large geographical areas or important sections of opinion feel that the Government is remote or not open to question"? The writer suggested that the answer was "elected regional authorities". Would the Secretary of State like to know that those words were written by the then secretary of the Birmingham Bow Group and prospective Conservative candidate for Rushcliffe, now the Chancellor of the Exchequer? He wrote them in a fine pamphlet ; his advice then was right, but his current view is wrong.

At the Conservative party conference last month, the Secretary of State said that he would

"consult Londoners on what they want for their city".

Is he therefore going to listen to the compelling evidence published today which shows that four out of five Londoners want an elected strategic authority for their city?

On the new budget arrangements, the Secretary of State had some carefully crafted words about the cash available. He said that the programmes were

"worth on current plans some £1.4 billion. Continuing commitments under these programmes will be met".

What is the value of those "continuing commitments"? Is it less than the £1.4 billion to which his statement refers? Do "current plans" mean those published last autumn or those that will be announced on 30 November? Can he give any guarantee that the current plans for 1994-95 will not be cut in the Budget? For example, is the £813 million, which was earmarked for the inner cities next year in this year's annual report from the Department of the Environment, to be maintained as part of the overall budget?


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Does the Secretary of State recognise that city pride and the new regeneration budget announced today are the 22nd repackaging of inner-city and urban aid programmes, from urban capital partnerships to city action teams, enterprise zones, urban programme schemes and long-forgotten business breakfasts? Does he accept that, as the packages get ever glossier, the money gets ever smaller? Bitter experience has taught us that what starts as fanfare always end as thin fare. [ Hon. Members :-- "Oh."] It is true.

Will the Secretary of State confirm that housing investment, already down from £8 billion in 1979 to £3.5 billion this year, has been cut again and that councils will be forced to shed thousands more jobs as a consequence of the Secretary of State's reported surrender to the Chief Secretary in the latest spending round? Does he not recognise that the effectiveness of the Government's urban and regional policy will be judged not by today's announcement but by whether, at long last, the Government are to back their rhetoric by giving the necessary resources and powers to councils so that they can create a better quality of life for the communities they serve?

Mr. Gummer : I thank the hon. Gentleman for his earliest words, which were more supportive than anything I have heard him say on radio or television. However, he then went on to say much of what he said on radio and television, so I have checked up on some of his comments.

I was interested to hear the hon. Gentleman refer to quangos, because he announced today the creation of the Thames Park authority, a new accountable police authority, a strategic health authority, a cultural education commission, a London film commission, a new development agency, a royal docks agency and a register of private landlords. He did all that today. The hon. Gentleman cannot teach anyone about concern for quangos.

What I have announced today is not a new body. It brings together the civil servants who already provide Government services in the regions so that they can provide those services more effectively and so that they can be influenced more directly by the borough councils, county councils and district councils. They are brought together in such a way that they can make decisions about the priorities locally, instead of being forced to keep the budget apart as a result of decisions that are taken centrally.

When the Labour party was in power so long ago, it had exactly the same problem, but it did nothing about it. Labour accepted that departmental divisions were more important than local needs. We are insisting that local needs come first, and that is what the proposal will achieve.

The other change is a matter of considerable importance. Those who bid for help with projects for which they have enthusiastic support will no longer have to ensure that their projects fit the various departmental programmes. They can present their projects, and if they fit the needs of the area, they will receive the support, irrespective of the programme from which it comes. That makes a considerable difference.

The hon. Member for Blackburn (Mr. Straw) asked a question about regional government. I have not had the pleasure of reading the early contribution to this debate by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). However, I have had the pleasure


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of talking to him about the matter. His view is very clear. He wants a lively local government system which is close to the people who pay for it and vote for it.

My right hon. and learned Friend the Member for Rushcliffe does not want-- and nor do I--regional government, which is an entirely fictitious concept, to cover the overweening devolution plans of the Labour party and to excuse the problem of what has properly been called the "Dalyell" difficulty. In the latter case, people vote in Scotland for their own projects and then come to the imperial Paliament, as it was once called, and make decisions on behalf of other people who have no say in those decisions. That is what the Labour party is trying to cover up. Anyone who lives in East Anglia and believes that there is a connection between Norfolk and Thurrock has not lived in any part of that area.

The hon. Gentleman referred to my "carefully crafted" words. They were carefully crafted and, if I may say so, they were better crafted than the last joke that we heard from the hon. Member for Blackburn. They were carefully crafted to say that this is a decision about improving the way in which we provide services. Even if I receive more money next year, less money next year or the same amount, it will be important to provide the best value for the money that I receive. The problem with the Labour party is that it prefers to have twice as much money half as well spent. Labour would consider that a victory.

Labour does not understand that we need to achieve 100p value for every £1 that we spend. That would be true if we had twice as much to spend, half as much to spend or any amount of money to spend. The money would be better spent.

Finally-- [Interruption.] I think that you will agree, Madam Speaker, that the hon. Member for Blackburn asked many questions. With regard to his last question, I promise to consult Londoners on the 22nd of this month. There will be a major consultation exercise which will be open to all Londoners so that they can identify their priorities and say what they are proud about in London. They will be able to say what they would like to see changed. We will take that into account as we will listen to Londoners, instead of inventing a series of new taxes for Londoners, which is what the hon. Member for Blackburn would provide.

Sir Peter Emery (Honiton) : Does my right hon. Friend accept that any policy designed for rejuvenation, as he has outlined in his statement, should be welcomed on both sides of the House? The emphasis on local needs, paying particular attention to local views and local government, is also something that most of us would wish to welcome.

However, can my right hon. Friend deny that the regional office for the south-west will be in Bristol? Does he think it sensible that half of London should be a region controlled by Bristol? If he wishes to have the regional headquarters in Bristol, a third of the south-west is further away from Bristol than London is. If he is to emphasise the local side, he must come down to a regional centre--

Mr. David Harris (St. Ives) : In Cornwall.

Sir Peter Emery : Even Cornwall would be acceptable, but perhaps Plymouth or Exeter would be more appropriate for the south-west. Without such a regional centre, my


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right hon. Friend's views on that aspect of local government will not ring quite as true in the south-west as we would want them to.

Mr. Gummer : I thank my right hon. Friend for his general comments. At the moment, the majority of the regional offices are in Bristol. It is my intention to keep them there in the integrated regional office. The offices that currently exist in Plymouth and Penzance will remain there. It is not a question of taking away those offices ; there is no question of that. But I acknowledge the problem of the south-west, which is the difficulty of finding the right centre. My hon. Friend will remember that, when I was Minister of Agriculture, I spent considerable time trying to get that right, and I retained--with great difficulty--the office in Cornwall to ensure that we were properly represented. When I assure my right hon. Friend that I shall be happy to see whether there is a better answer, he will understand that I mean that, and that they are not merely words.

Mr. Simon Hughes (Southwark and Bermondsey) : After 14 years and a manifesto commitment, some co-ordinated regional urban policy is better than none. But are not six locally linked Whitehall Departments no substitute for one democratic town hall with adequate finance? Is not the reality that, sadly, this--apart from the sting of the "Tale of Three Cities" at the end, which is rather selective and unfair to all the cities in the country--is a tale told by no democratic Minister, with Government Departments still full of civil servants, above all, signifying no more democracy, no more money and local people having no more ability to choose their local priorities through locally accountable democratic representatives?

Mr. Gummer : The hon. Gentleman misses the point altogether. These are Whitehall offices that have been there even since the long time ago that his party was in office. [Interruption.] Some of them have been here as long as that. It may have been when horses and carts were used, but the offices were there.

The hon. Gentleman must remember that, even with such a preposterous concept of regional government, national policies would have to be delivered. Surely one does that better by co-ordinating them more sensibly, and by having more influence from the locally elected people, as well as local business and local voluntary organisations. That is why this has been widely welcomed by local authorities not in the hands of the Conservative party.

Sir Anthony Durant (Reading, West) : Is my right hon. Friend aware that his regional office for the Berkshire area is also in Bristol? There is also a good Department of Trade and Industry office in Reading. Will he consider moving one of his offices to Reading and amalgamating a number of offices there?

Mr. Gummer : My hon. Friend is right. There is a DTI area office in Reading. There are offices in a number of other towns. We shall seek by consultation to find the place most accessible to the largest number of people, particularly to the local authorities, business interests and the voluntary bodies.

Mr. Gerald Kaufman (Manchester, Gorton) : My constituents in inner- city Manchester will welcome any action that improves their lot. However, when the


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Secretary of State says that local needs come first, has he any idea of the needs of my constituents, many thousands of whom live in deep poverty? They suffer such unemployment that, in parts of my constituency, there is male unemployment of 32 per cent. The right hon. Gentleman talks about existing programmes, but what benefits will my constituents gain from the urban programme which buoyed them up under a Labour Government?

The right hon. Gentleman says that his plans are designed to meet ethnic needs. I represent a large number of people from ethnic minorities and want to know how the right hon. Gentleman can claim to meet ethnic needs when, at the same time, the Government are massacring section 11 funding, about which my constituents write to me all the time. My constituents live in deep poverty ; what assurance can the right hon. Gentleman give me that his plans will be more than a shiny veneer on top of the deprivation in which thousands of people live in inner-city Manchester?

Mr. Gummer : I assure the right hon. Gentleman that I understand many of the problems of Manchester, as I have visited it often and spent much time talking to the Labour leader of Manchester city council, which covers part of the area more colloquially called Manchester--beyond which are many other districts of equal need. The plan is designed to bring the programmes together and make it easier to focus the response to meet the specific needs of Manchester. The right hon. Gentleman will probably find that the problems of the ethnic minorities in Manchester may lead to a greater proportion of the budget being used on that sector ; there may be other districts where the need is not so great.

The right hon. Gentleman--I say this with care--should reflect that the Government have put great resources into inner cities, and their efforts dwarf some of the poor efforts made by him and his right hon. and hon. Friends when they were in power. It would be more responsible of the right hon. Gentleman to acknowledge what we have done, even if he wants to ask for more.

Mr. Richard Tracey (Surbiton) : We will need time to digest my right hon. Friend's statement in full. It is pleasing to hear him say that there will be full consultation on future progress. Does he agree that, particularly in London, the greatest priority within the consultation should be given to the 32 London boroughs? The London unitary authorities are the model of local government and unitary authorities in the rest of the country. Will he take the opportunity this afternoon to say that there is absolutely no chance of returning to a single London authority, which would be--as it was

before--disastrous?

Mr. Gummer : The London boroughs are a very proper way of democratically representing the people of London. There is no need for an over-arching authority in London. The reason for that is simple : London is a collection of different communities that are gathered together in different groups for different purposes. When we talk about the Thames, we must talk about the communities that stretch far beyond the Greater London area ; otherwise we would not be dealing effectively with the Thames. If we want to talk about the problems of London theatres, we need deal only with that part of London that lies in part of the London boroughs of Camden and Westminster and a bit of the borough of Lambeth. The variable geography of London means that it is better to deal with it in that way.


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I hope that my hon. Friend has read the reported statements of the Labour party. If he has, he will see that not only does it propose that we should have an over-arching body, but it dictates--there is no choice--that half of the democratically elected people should be men and half should be women. It also proposes handing back independent grant-maintained schools to the educational expertise of Lambeth, Southwark, Camden, and Hammersmith and Fulham. Is that giving people a decently run education system ?

Mr. George Mudie (Leeds, East) : Will the Secretary of State confirm that the £1.4 billion that he has mentioned contains no new money ? Will he state whether that means that section 11 funding will be restarted after it was disgracefully stopped during this financial year ?

The Secretary of State said that he has chosen the three cities on the grounds of size. Will he have another look at that, and look at the great city of Leeds ? Outside London, Leeds is geographically the biggest city in the country and, outside Birmingham, is the second largest in population. If size is the criterion, will the right hon. Gentleman look again, because he seems to have left out the great city of Leeds by error ?

Mr. Gummer : I had the pleasure of living in Leeds for some years, and I am an enthusiastic supporter of the city. If Leeds feels that it would like to apply itself to the scheme, I would not discourage it. I had to find some way of choosing the three cities for the pilot scheme, but if Leeds comes to me about the scheme I should be happy to look at it.

The hon. Gentleman referred to money, and I say to him that it is about the delivery of service. I will confirm that the amount of money that is available for next year's programmes is £1.4 billion. The hon. Gentleman also referred to section 11 grants. The new system will enable people locally to have real influence on the decisions about whether a larger proportion of the budget might be spent on section 11 purposes.

Mr. Roy Thomason (Bromsgrove) : Will my right hon. Friend confirm that local government has for a long time complained about the opacity of present regional arrangements, and should therefore welcome most strongly the proposals announced today ? Will he also confirm that it should support the concept of one office, one contact point and one set of priorities, and should welcome the opportunities for greater accountability which the new arrangements will create ? That is unlike the Opposition, who seem to dislike all forms of accountability. Will my right hon. Friend also confirm that the arrangements for all the Departments will now been on a conterminous boundary ?

Mr. Gummer : For the first time, there will be conterminous regions for the Departments, and that is a vital change. It has always seemed ridiculous to me that different Departments had different regions. That made any sort of planning almost impossible.

I am sure that the House will agree with the words of the hon. Member for Leicester, East (Mr. Vaz) who said that co-ordination between Departments on urban policy is an idea "whose time has surely come". I am sad that the hon. Gentleman has not carried that information to the hon. Member for Blackburn. There is much in the announcement which has been asked for by politicians from all


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parties. It is a pity that, apart from a slim sentence at the beginning of his speech, the hon. Member for Blackburn could not say that it was a good idea, although the Opposition might have liked it to go further. If he had said that it was a good idea and that the Opposition supported it, I am sure that the public would have believed him much more.

Mr. Robin Corbett (Birmingham, Erdington) : I know that the Secretary of State has just come off the farm. May I tell him that the city of Birmingham has long and deep experience of the council, the private sector, the chamber of commerce and industry working close together to deliver the national exhibition centre, and, more recently, the magnificent international convention centre and national indoor arena?

How will the Secretary of State match his claim that the changes will better recognise local needs and aspirations, when, in fact, the process remains a lottery? Will not one community be bidding against another, and one city or town bidding against the rest?

Mr. Gummer : I am surprised that the hon. Gentleman should say that, because those were not terms used by either the Labour leader of Birmingham or, indeed, her Conservative opponent ; they have welcomed the proposals. The hon. Gentleman will find that there is widespread support for what we are doing, and I do not think that he helps his case by making general comments about one's bucolic past. I want the better delivery of Government services to the people of Britain, much closer to their localities. I want local authorities, business communities and voluntary bodies to be able to influence decisions more effectively ; and I want those decisions made on the basis of need, not departmental desire.

Mr. Hartley Booth (Finchley) : I hope that the Secretary of State realises that there will be a wide welcome for his proposals, not least because they will be seen not to add another tier of government. Moreover, they will not conflict with local government. Some years ago, I came to this place wearing another hat as chairman of the British Urban Regeneration Association, so I know that these proposals deal with a persistent problem. There was always a conflict between Departments in local areas when we were attempting urban regeneration.

I hope that my right hon. Friend also realises that the proposals will be welcomed because, in many areas, not least crime prevention, Government Departments need to get their act together. Finally, they will be welcomed because, unlike the Labour party's nanny state vocabulary describing strategies of the past and proposing new taxes, the Government propose none of that. The proposals achieve what they are meant to achieve without taxes or the nanny state.

Mr. Gummer : I thank my hon. Friend. This is, indeed, the sort of answer that the Audit Commission, the Association of District Councied. It is right not to impose another tier of government or more taxes. We understand today that the Labour party would be liable to produce, if it were ever elected, a tourism tax, an


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entertainment tax, a television tax, an airport tax and a robust and diverse group of new taxes on Londoners. On such a day, the public will once again be pleased to know that they have a Conservative Government.

Mr. Peter Shore (Bethnal Green and Stepney) : The Minister will know something of the problems of the borough of Tower Hamlets. He will know that, in recent weeks, those problems have been enormously compounded by outbreaks of racial violence and by the election of the first British National party candidate to a council anywhere in Britain, in the ward of Millwall. The Minister will also know that these events reflect, perhaps more than anything else, the chronic shortage of social goods in the borough of Tower Hamlets. Is the right hon. Gentleman aware that the crisis in the provision of housing is such that adequate resources should come from his Department? What do these new proposals do to increase the supply of housing at rents that people can afford in Tower Hamlets, which is desperately short of housing and where competition for available housing leads to serious racial dispute and disturbance?

Some of my colleagues have already mentioned section 11 funding. Tower Hamlets is the largest recipient of such funding in the country, because we have a large Bengali population. Section 11 funding, however, is to be cut by one third over the next two years. How can the Minister tell the House that he is doing something about inner cities when he and his predecessors have let them rot?

Mr. Gummer : I am sorry that the right hon. Gentleman should finish his question in that way, because I have been to the very estate where that disgraceful election took place. I noted that the estate which elected the person in question was one in which we are in the course of spending £25 million. I noticed, too, in that same area an entirely new housing estate of high-quality homes for people on low incomes. It has just been completed, and it was the selection of people to go into those homes which caused some of the problems. I noticed at the same time that the London borough of Tower Hamlets has a housing action trust. I noticed that city challenge in the area has been especially focused on Bengalis. So we are doing a whole series of things, and the right hon. Gentleman might have started by saying how pleased he was about that. He might like more, but there is no doubt that we are doing a focused job. It will be easier in the future, with the integrated London office, to ensure that the programmes dealing with Tower Hamlets and its special problems will be more open to pressure of the local authority and more able to meet local needs in the way in which local people want.

I remind the right hon. Member for Bethnal Green and Stepney (Mr. Shore) that, until recently, Tower Hamlets had an uninterrupted history of Labour government, so Labour must accept the very highest fault for the situation that now exists in the London borough of Tower Hamlets. It is no good the right hon. Gentleman blaming this Government when he has served in Governments for many years and, as a Labour Member, has represented an area for which he has not done the best.

Mr. Andrew Rowe (Mid-Kent) : My right hon. Friend will know well that, to local people, one of the most incomprehensible features is the way in which large Government projects can be dreamed up and planned with apparently no concept that they will lay enormous costs on


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the roads programme to serve those projects, especially potential railway stations for example. His announcement is encouraging because in future we may find civil servants in the regions taking into account the total effect on the region's budget, rather than taking the disparate approaches that we have suffered hither to.

Mr. Gummer : That is our purpose.

Mr. Doug Henderson (Newcastle upon Tyne, North) : Will the Secretary of State accept that, on the day that he has announced his plans for London and other parts of the country, it is a mark of defensiveness that he refers in disparaging terms to a draft Labour party document, which was rejected by the policy committee of the Labour party six weeks ago--as he knows? In relation to his own document, will he accept that no amount of reshuffling of desks in Plymouth, in Exeter, in Bristol or in my region, in Newcastle, Durham or Middlesbrough, can compensate other parts of the country for any reduction in resources? Will he accept that many hon. Members on both sides of the House are sceptical of his comment that £1.4 billion is available at the moment? Many believe that that £1.4 billion could be £1.3 billion or £1.2 billion or £1.1 billion by 30 November. Will he give a firm guarantee to the House that that £1.4 billion will be available for economic regeneration on 30 November?

Mr. Gummer : It is a remarkable moment when one discovers that the Labour party's plans for London got such a bad press in half a day that they were withdrawn immediately. That is the kind of U-turn that we have not known before--the U before the turn. The hon. Gentleman admits that, after two years, the Labour party produced a plan for London that was so bad that it was thrown out by the Labour party. I hope that the House will recognise how little it has to offer local government. However much more money I have or however much less money I have, it is much better to get 100p in the pound value than not to get full value for money. Why cannot the Labour party accept that now? Why will it never accept good news? Why does it always want to make people miserable?


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"Competing for Quality"

4.14 pm

The Chancellor of the Duchy of Lancaster (Mr. William Waldegrave) : With permission, Madam Speaker, I should like to make a statement about the progress of the Government's competing for quality programme.

As the House will know, the aim of this initiative is to introduce competition into the provision of public services. We are asking central Government to operate under disciplines that the private sector has long taken for granted, and which local authorities, through compulsory competitive tendering, have been handling successfully for many years.

For a number of years, there has been a small central Government market testing programme, amounting to little more than £20 million a year. Two years ago, in the White Paper "Competing for Quality", we announced our intention of turning this small programme into something much larger. We wanted a step change in the amount of work that was market-tested. I can now announce that we have achieved that goal. I shall outline the progress that we have made, the savings that have been produced, and the action that we intend to take to increase the scope of market testing over the coming year. The House may recall that, in the "Citizen's Charter First Report", published last November, the Government set themselves the target of reviewing activities worth about £1.5 billion and involving more than 44,000 staff, over the 18-month period from 1 April 1992 to 30 September this year. Those activities have now been intensively examined to see how value for money can best be improved. In some instances, we took a strategic view that, in future, the work in question should be done by the private and not the public sector. In others, we found that the work no longer needed to be done at all. In several cases, we found ways of increasing in-house efficiency without going out to tender. In a host of others, services have now been successfully market tested, with the public and private sectors competing for the work.

I can report to the House that just under £1 billion-worth of this programme is now complete or nearing completion. Specifically, provisional figures show that by the end of September, just under £700 million worth had been achieved. Worth to the value of a further £250 million, approximately, will be achieved shortly, representing tenders involving the Inland Revenue's information technology services. A decision on those will be taken soon. A number of other decisions that were initiated in this first tranche will also be taken in the coming weeks.

As I have said, this £1 billion programme contrasts with the previous annual programme of about £20 million. That represents a remarkable achievement by the market testing units in Departments and the efficiency unit in my Department.

The increase in the size of the market testing programme as such is not the most important matter. What really matters is the scale of the gains in value for money that have been achieved for the taxpayers and users of services. I am delighted to be able to tell the House that, in relation to the £700 million of work completed by the end


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of September, the "competing for quality" programme has already saved approximately £100 million. Not only that, but this benefit will recur year after year.

These savings should be welcome to the House because at the same time Departments are reporting that standards and quality are being maintained or improved. That is what market testing is all about. The House will be interested to learn that in the first year, where in-house teams competed, they won about 57 per cent. by value. That is a clear indication that Departments are giving proper consideration to the merits of both external and in-house teams. I should like to make it clear that some of the very highest quality and most innovative winning bids have come from in-house teams, and I pay tribute to those who have won competitions from inside. None the less, in other cases private sector bids have offered the best quality and value for money. Either way, it is a very great gain that we will now have confidence that the best provider, private or public, will be doing the work.

I turn now to the Government's programme for the next 12 months starting on 1 October. Departments' plans are again ambitious. In addition to any work that is necessary to complete their 1992-93 programmes, they will be looking to market-test work currently worth a total of £800 million, and covering more than 35,000 civil servants.

In staff terms, this 12-month target will be more challenging than the 18- month programme that I have just described. I am confident, however, that further good progress will be made. A

Department-by-Department breakdown of these figures has been placed in the Library, together with a copy of the new monthly "Market Testing Bulletin", which was published for the first time today. I have announced the progress that we have made with market testing, the savings produced, and the scale of our 1993-94 programme. I should also inform the House of the Government's intention of introducing legislation, when a suitable opportunity arises, to remove some of the statutory obstacles to market testing in both central and local government.

As hon. Members may be aware, some statutes are framed so that activities have to be carried out by a Minister. The principle that such activities can be carried out by civil servants on a Minister's behalf is well established. We now propose a common-sense extension of that principle to allow contractors as well as civil servants to carry out such work in appropriate cases.

The aim of our "competing for quality" initiative is simple. It is to ensure that public services are provided in an efficient and cost-effective way. It is an integral part of the citizen's charter : it is improving the quality of our public services. It is improving value for money on behalf of the taxpayer, and it is a policy that other countries are keen to adopt. Market testing is here, and it is working. I hope that all hon. Members will give it their support.

Mr. Michael Meacher (Oldham, West) : Will the right hon. Gentleman confirm that his statement today represents another major step along the road to the dissolution of a national civil service? Is there any limit to that process, or does he simply envisage central Government as a collection of contracts? Will he confirm that he is announcing a further tranche of civil service


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