House of Commons Hansard Debates for 24 Feb 1994

Column 462

spending increases on housing and health and attacks us when we try to bring spending under control, for example because of the growth in legal aid.

Let me explain how the hon. Gentleman has once again got himself into such an absurd position. The motion deplores the increase in spending by quangos. There are two definitions of quangos. The proper and strict one was first invented by Sir Leo Pliatzky in his review in 1979. He said that it was odd to use the American term "quango", which means quasi-autonomous non-governmental organisation, to describe organisations that--according to the central part of the criticism of the hon. Member for Oldham, West--were essentially governmental. He proposed a change of name to non-departmental public bodies, which makes more sense although it is less easy to pronounce. He found that there were 2,167 such organisations in 1979. The number has now fallen to 1,389. That is an achievement of which my hon. Friends can be, and are, proud, although there is much more to do. It is helpful of the hon. Member for Oldham, West to allow me to remind the House of that 36 per cent. drop in NDPBs since 1979 and I thank him.

Mr. David Hanson (Delyn) : By how much have the costs of public bodies increased since 1979 ? I understand that those costs have grossly increased, although the figures quoted by the Secretary of State are correct.

Mr. Waldegrave : The hon. Gentleman is helpful because I was just coming to that argument. I shall give him and the hon. Member for Oldham, West their due. It is true that expenditure has increased and when one considers the statistics the cause is overwhelmingly clear. There was an increased spend by the Housing Corporation of £785 million--about 50 per cent.--and by Scottish Homes of £108 million in 1992-93 over 1991- 92. Those are major providers of social housing, via such means as housing associations. The Housing Corporation figures include the widely welcomed £577 million package, which helped housing associations to buy thousands of empty properties to house homeless families. Is the hon. Member for Oldham, West against that ? Surely he is not. He wanted far more expenditure by what he would call a quango.

Mr. Matthew Taylor (Truro) : The Minister rightly said that housing association expenditure has increased, but that has been paralleled by even larger cuts in local authority expenditure. Instead of locally elected and accountable councillors making decisions on expenditure, unelected appointees are making them. The Minister is advancing the Opposition's argument and not the Government's.

Mr. Waldegrave : The Government have defended their overt policy that the shift to locally based housing associations should be made. In many parts of the country, the Liberal Democrat party has supported us in that policy. It has many distinguished

representatives on those housing associations. We have made no secret of the fact that we believe that tenants obtain a better service from housing associations than from making even larger the huge publicly owned tenancies of local authorities in Leeds, Bristol or any of the great cities. It is right that we should be boosting the Housing Corporation.

Let us return to the figures. There has been another salient growth in spend with the Legal Aid Board and its

Column 463

parallel, the Scottish Legal Aid Board. Together, they grew by £250 million in 1992-93 over 1991-92. That is the other great increase in recent times.

Mr. Jack Straw (Blackburn) : The right hon. Gentleman discloses his intense defensiveness about the issue by evading the central charge made by my hon. Friend the Member for Oldham, West (Mr. Meacher). That charge did not involve the Legal Aid Board or housing associations--he never mentioned them. He said that major spending powers in the transport, the higher education, the grant-maintained schools, the further education and, above all, the health and training sectors had been shifted from the elected state to the unelected state. At today's prices, there has been £24,000 million of spending per year in those sectors since 1979. Will the right hon. Gentleman justify that extraordinary shift in power from the elected state and elected local people to unelected appointees of central Government ?

Mr. Waldegrave : The hon. Gentleman will hear such a definition. I started my speech with the proper definition of NDPBs. I shall deal with the wider definition in a moment, although he should know better than to say that the health service has never been responsible to locally elected members. It had a few locally elected people in it, but the great debate between Morrison and Bevan at its foundation was that it should not be controlled by locally elected members. Bevan and Cripps won that debate and so the health service was never controlled by locally elected people.

Mr. David Nicholson : The issue of scrutiny and accountability, which was raised by the hon. Member for Blackburn (Mr. Straw), is most important to the debate. Does my right hon. Friend agree that a number of those services are subject to scrutiny by, in particular, Select Committees such as the Public Accounts Committee and the Select Committee on the Parliamentary Commissioner of Administration, on both of which I have served ? Several other of their members are present in the Chamber. Those Committees have uncovered abuses in certain organisations such as the Welsh Development Agency. The Select Committee on the Parliamentary Commissioner of Administration grills health trusts and others about individual abuses. Will my right hon. Friend speculate on what would happen to the NHS, especially in inner London, if it were controlled by local authorities ?

Mr. Waldegrave : The arguments against that and for politicising local health decisions were well made all those years ago by Aneurin Bevan and remain valid today. He was right.

I mentioned the figures for the Legal Aid Board. My noble and learned Friend the Lord Chancellor has made himself extremely unpopular with sections of the legal profession by seeking to control the exponential growth in expenditure in that sector. Will the hon. Member for Oldham, West support us in that battle ? Of course not. The hon. Member for Brent, South (Mr. Boateng) said that he would fight the changes tooth and nail. The hon. Member for Oldham, West wants far more funds for legal aid and far more expenditure by what he would call a quango. He does not seem to have produced a very powerful argument.

There is a second, more current and rather bogus definition of quangos, to which the hon. Member for Blackburn (Mr. Straw) referred. It was first used by The

Column 464

Guardian and was quoted without attribution by the hon. Member for Oldham, West. It includes many additional definitions besides the Pliatzky definition.

I shall explain The Guardian thesis for my hon. Friends who have not read the original article. It claims that there will be about 7, 700 quangos by 1996, spending £54 billion--I think that that was the figure. There are various gradations in between, some of which were quoted by the hon. Member for Blackburn and some by the hon. Member for Oldham, West. It reached that figure by including the national health service, assuming that all hospitals will be trusts and by including, among other things, training and enterprise councils and local enterprise companies, which are in the private sector, and police authorities.

The Labour motion deplores an increase, therefore, in health, training and police expenditure. If the hon. Member for Oldham, West goes on like that, he will shortly be suing someone for claiming that he is in favour of the control of public expenditure. My party has increased expenditure on the police and health service since it was elected. Those were our pledges and we have kept them.

The inclusion of trust hospitals and district health authorities as quangos enables me to turn the hon. Member's argument against him in another important respect. The health service reforms make local health appointments far more visible than they were before. People know who chairs and serves on the local hospital board, as they did with teaching hospitals until the reforms of 1974.

Several hon. Members rose

Mr. Waldegrave : I shall complete my argument before giving way again.

District authority chairmen too have a high profile, seeking to analyse the health needs of their localities and to spend public money to meet those needs.

Mr. John Denham (Southampton, Itchen) : As we are talking about health service appointments, does the Minister recall that when he was a Minister at the Department of Health he appointed Sir Robin Buchanan, who was then the chair of Wessex regional health authority, to be the chair of the NHS Supplies Authority ? Does he also recall that a year before making that appointment he had received a confidential auditors' report criticising contracts that had been negotiated by Sir Robin Buchanan in Wessex ? Why did he then make that appointment ? Was it because Sir Robin Buchanan had been a long-serving member of the Conservative party and a Conservative councillor and protecting his position was more important than acting on the information that the Minister then had and that the House now has only as a result of the Public Accounts Committee inquiry ?

Mr. Waldegrave : Of course not. It was because Sir Robin Buchanan was judged to be the best person for the task. It would have been quite wrong to have criticised him before any auditors' report had been undertaken or received. From time to time Ministers receive allegations of all kinds, but it would have been quite wrong to have judged him before the Public Accounts Committee had looked into the case.

Regional chairmen and boards also have a high public profile. They are indeed appointed. However, the hon. Member for Blackburn argues that there are more such appointments now than before the reforms. The exact

Column 465

opposite is the truth. There are now 3,500 such appointments as opposed to 6,500 appointments before. Let me remind the House why. Under the 1974 system, there were three administrative tiers before reaching the hospital. [Interruption.] It was indeed set up by the last Tory Government. It was a bipartisan system, not opposed by the Labour party, but I am not defending it. We have reformed it and rightly so. The 1974 system had three administrative tiers--there were regions, there were areas, which we abolished in 1982, there were districts and there were very large family practitioner committees. That is why the total of appointed people amounted to 6,500, or 3,000 more than in the reformed system.

We now have the trusts, we have the regions, shortly to be brought down from 14 to eight and then--I hope and if the House

agrees--abolished. We do not have areas because we have abolished them already. We are amalgamating districts into larger units. For example, in my area, the Bristol and District purchasing authority is one unit instead of three and we are doing the same for family health authorities, which are already smaller than the old FPCs. The net result is fewer appointments than there were in the unreformed system.

Mr. Gerry Steinberg (City of Durham) : Will the Minister comment on his point about open government in terms of appointments to trusts ? Three trusts have just been set up in my constituency : the acute hospital trust, the ambulance trust and the community care trust. Appointments have been made to those trusts. When I asked the chairmen of each of those trusts who had been nominated for appointment to those trusts, they refused to give me the names and said that it was none of my business. The only information that they were prepared to give me was that they had made decisions on the appointments to two of those trusts. They were not prepared to say who else had been nominated or how they had selected from the nominations.

Mr. Waldegrave : In a wide range of posts it is standard procedure not to publish the names of those who fail to be appointed. It would have been standard procedure for most appointments under the last Labour Government. It is of course necessary to know who is appointed, but that policy is quite right for those who may have applied in confidence.

Mr. Michael Fabricant (Mid-Staffordshire) : Is my right hon. Friend aware that in Lichfield there are many more members of the Royal National Lifeboat Institution, the girl guides, the boys brigade, the boy scouts and the Women's Royal Voluntary Service who belong to the Conservative party than are members of the local Labour party ? [ Hon. Members-- : How do you know ?] I know because I go to the events because I am a good constituency Member. Does my right hon. Friend suppose that it is due to corruption in those organisations, or is it because more Conservatives are concerned with the community and volunteer to join such organisations ?

Mr. Waldegrave : I know my hon. Friend to be a good constituency Member, but I had better not get too involved with the girl guides in Lichfield.

Column 466

Mr. Richards : The central point raised by the hon. Member for Blackburn (Mr. Straw) is that he objects to Government appointees. Is my right hon. Friend aware that in the run-up to the last general election, the hon. Member for Alyn and Deeside (Mr. Jones), who was the Opposition spokesman on Welsh affairs, had drawn up a list of Labour party supporters that he intended to appoint to quangos in Wales ? The hon. Member for Alyn and Deeside has been challenged on that many times, as has the right hon. Member for Islwyn (Mr. Kinnock), who was then the Leader of the Opposition. Neither the hon. Gentleman nor the right hon. Gentleman has denied that that list was drawn up.

Mr. Waldegrave : Were the Labour party to set out to persuade the House that it had never used political patronage in Wales, I do not think that it would get very far. The truth is that the old health service structure was far more replete with what The Guardian describes as quangos than the new structure.

Before we get on to the accountability argument, I should explain to my hon. Friends that we have not forgotten Margaret Thatcher's warning that

"there will always be pressure for new bodies"

and her promise that

"we shall be robust in resisting them"

-- and so we have.

Since 1979, there has been a 36 per cent. reduction in NDPBs from about 2,100 to under 1,400. Among those abolished in the past few years alone, I choose at random the Open university visiting committee, the National Dock Labour Board, the Bureau of Hygiene and Tropical Diseases Managing Committee, the National Economic Development Office, the clothing and allied products industry training board and the Agricultural Statistics Consultative Committee.

Looking at Labour Members while I read out those lists, I felt a certain sense of indignation among the Opposition. The Labour party grieves for NEDO. [Interruption.] I was able to predict the hon. Gentleman's words. Did not the hon. Gentleman oppose the abolition of NEDO ?

Mr. Meacher : Yes.

Mr. Waldegrave : Thank you very much. Did not the hon. Gentleman strongly oppose the abolition of the National Dock Labour Board ? The Labour party grieves for those relics of the corporate state ; it opposed their abolition. In 1992, the Opposition made it quite clear that if they were elected there would be a wild increase in the number of quangos, because they would set up new ones. They mentioned 17 different types of quangos in their 1992 manifesto, such as the cultural education commission, the regional development agencies, the national investment bank--I think that I know the noble Lord who might have been the chairman of that--the endless wages councils and so on. Since the election, the proposed quangos are still breeding--the cultural education commission has now produced a cultural education partnership. The Labour party is, and always has been, the party of corporatism and has a nerve to use the arguments that we have heard today.

Mr. Meacher : The Minister has been sitting up far too late in bed reading frightening fairy tales about the huge numbers of quangos. The real point that he has not addressed has nothing to do with the numbers. First, it concerns the switch from advisory bodies--many of which

Column 467

we are perfectly happy to see go--to major executive functions which were previously held by local government. Secondly, spending has gone through the roof--it is taxpayers' money unaccountably spent--and, thirdly, membership is no longer balanced but overwhelmingly partisan in favour of the Tory party.

Mr. Waldegrave : I am delighted with the hon. Gentleman's description of the last Labour manifesto as a frightening fairy tale. It is a pretty good definition.

I have already shown how the expansion in expenditure is overwhelmingly because of the increased health service spend, of which we are proud, and I shall return to accountability in a moment. In the health service under the present system there is a far more open and accountable structure of decision-taking than before. There is now a proper analysis of the health status of local populations. [Interruption.] Before Opposition Members say, "Nonsense", they should read their own party's document which entirely accepts the new structure of purchaser and provider that we have established. I am glad about that because their representative at the last election was much more equivocal about it.

Several hon. Members rose

Mr. Waldegrave : I shall give way once more.

Mr. Terry Davis (Birmingham, Hodge Hill) : On the specific and important point about availability of information to the public, and the example of the health service that the right hon. Gentleman gave, is not it a fact that whichever Government were in power before, under the previous system, information about the finances of local health authorities was available to anyone who was interested ? Under the new system with hospital trusts, that information is not available. If anybody, including hon. Members, asks for details about the business plans or accounts of hospitals, it is not given to them.

Mr. Waldegrave : The hon. Gentleman, who is an expert on those matters, knows well that the trust hospitals produce annual reports, which have to be published. The district health authorities produce far more useable and interesting information, because it is now based on the analysis of health need set against the funds that are available to them. For the first time in the history of the health service, a proper debate about health priorities can now be had.

Mr. Davis : The right hon. Gentleman, undoubtedly inadvertently and through ignorance, is misleading the House. We are talking not about analyses of public health but about the financial figures. Is the right hon. Gentleman telling the House that if any hon. Member approaches a hospital trust in future and says that the right hon. Gentleman has given authority for that information to be made available, it will be ? I assure him that in the past it has not been, and I and many of my hon. Friends have been refused that information by hospitals trusts.

Mr. Waldegrave : What I said is perfectly true. Hospital trusts must produce an annual report and must have a meeting at which they are cross- examined about it. Let me develop the argument a little further. A good report has been put out today by the King's Fund. Accountability in the health service is now far clearer than it was before : we now have providers who are in the job of analysing

Column 468

health need, providers who can compete to produce health care most efficiently, of the highest quality and with the best value for money.

Mr. Straw : I want to support the point that was raised by my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis). First, it is no good the Minister quoting the King's Fund report, because it is damning about the experience of trusts. Secondly, is the right hon. Gentleman aware --to give one example of the now-private running of what used to be the public's health service--that I asked the East Lancashire health consortium, which is about to become the East Lancashire purchasing authority, for its costings and also why it had moved the authority's headquarters to a business park in the borough of Pendle--straightforward questions. Had that same decision been made by a local authority, or previously by a health authority, those figures would have been available on the record. That information has been refused to me. Why ?

Mr. Waldegrave : The hon. Member for Birmingham, Hodge Hill (Mr. Davis) asked whether trusts give a proper account of their spending to the House and to local electors. The answer is yes. I shall look into the specific case that the hon. Member for Blackburn raises, because I accept his basic premise that there is no reason for secrecy in those matters. The hon. Gentleman then rather shot himself in the foot by saying that the King's Fund report criticised the reforms. I happen to have it before me, because I thought that he might make that mistake. Its conclusion is this :

"The research shows"

these are Professors Ray Robinson and Julian LeGrand, who presided over a wide group of other researchers--

"that systems have now been put in place which offer the potential for real gains over the next few years."

That shows that the reforms are well based

Mr. Nick Raynsford (Greenwich) rose

Dr. Lynne Jones (Birmingham, Selly Oak) rose

Mr. Waldegrave : I shall give way to the hon. Gentleman.

Mr. Raynsford : I am grateful to the Minister. As we are now dealing with information, and he has an obvious concern about the openness of Government, does he think it right that, on an issue of grave public concern, involving a highly publicised case of an 80-year-old woman who was lost in my district general hospital, a question that I asked back in November of last year about staffing levels in the hospital at that time has not been answered, despite seven repeated requests from my office to the chairman of the health care trust ? Is it right and proper that someone in that position, responsible for managing a body with huge influence over the health care of people in the district, should refuse and decline to answer a simple straightforward question about staffing levels at a time when a serious problem occurred in the hospital ?

Mr. Waldegrave : I am surprised by that, and that the hon. Gentleman has not tabled a question to my right hon. Friend the Secretary of State for Health, who I am sure would have answered the question as she is responsible for the health service, as her predecessors would have been under the previous system.

The hon. Member for Oldham, West mentioned agencies and included them among quangos. He should

Column 469

know, and does know, I am sure, that agencies remain properly and fully members of the civil service. Their heads and staff are members of the civil service. If it is proper, they are privatised. The hon. Gentleman therefore need have no fear that accountability there has changed. I know that the right hon. Member for Manchester, Gorton (Mr. Kaufman) objects to the idea that he should have answers in the first instance from the heads of the agencies and prefers to get answers in every case from the Minister responsible. That is his right. If he insists on that, that will be done. I believe that many hon. Members

Mr. Gerald Kaufman (Manchester, Gorton) rose

Mr. Waldegrave : I did say that I would give way no more, but I have mentioned the right hon. Gentleman.

Mr. Kaufman : Will the Minister give a categorical assurance therefore that when I seek an answer from a Minister and refuse to accept an answer from a chief executive of a next steps or other agency, my wishes will be abided by and a Minister will reply to me ? If he gives that assurance, that would be an important statement.

Mr. Waldegrave : In the first instance, the Minister will be likely- -although not in every case--to refer the matter to the chief executive. If the right hon. Gentleman is dissatisfied with the reply, he has the absolute right to return to the Minister. The Minister remains accountable.

Mr. Kaufman rose

Mr. Waldegrave : No, I must press on. The right hon. Gentleman will have an opportunity to make a speech.

The motion deals with management by contract and contracting out. That seems to me to be an odd matter for the Labour party to criticise when the hon. Member for Blackburn is on the Front Bench, because he is on record as roundly and strongly endorsing last year the concept of compulsory competitive tendering. In Tribune , he said :

"There is a wide acceptance that the division between contractor and provider that CCT has produced has been sensible ... I have seen the case for CCT for the provision of basic services."

That piece of the motion seems to fall on the evidence of the hon. Gentleman. Many other Labour Members who are familiar with local government would endorse what he said on that occasion.

The second argument raised against the reforms that move central Government and local government towards the enabling role, and away from always seeking to provide everything that is needed, is that standards of propriety will fall and that the public service ethic--in the good sense-- will be damaged. I refute that most strongly.

Mr. Straw : Will the Minister give way on that point ?

Mr. Waldegrave : I do not think that the hon. Gentleman was even listening when I referred to him before. [Hon. Members :-- "Yes, he was."] I do not think that he was. It is not fair that he should try to intervene, because when I read out quite a long passage by him, he was not even listening.

We referred earlier to the PAC report, which stirred much interest recently. It is sensible report. I welcomed it at the time and welcome it again today. It says :

"Some allege that the drive for economy and efficiency must be held back to some extent because of the need to take specific

Column 470

care with public money. Others argue that if economy and efficiency are to be forcibly pursued then traditional standards must be relaxed. We firmly reject both these claims. The first is often urged by those who do not want to accept the challenge of securing beneficial change. And the second is often put forward by those who do not want to be bothered to observe the right standards of public stewardship. Quite apart from the important moral and other aspects involved we consider that any failure to respect and care for the public money would be a most important cause of a decline in the efficiency of public business"

quite right--

"but there is no reason why a proper concern for the sensible conduct of public business and care for honest handling of public money should not be combined with effective programmes for promoting economy and efficiency."

I quoted that report at length because part of Labour's campaign--we heard it again today from the hon. Member for Oldham, West--is to try to misrepresent it as an attack on our public sector reforms. Nothing in the report does that, as I hope we may hear later.

Mr. Garrett : Will the right hon. Gentleman give way ?

Mr. Waldegrave : I think that I have given way enough. The hon. Gentleman will make his own speech at the end of the debate, in protected time.

On the contrary, the PAC report is a helpful reminder that we must ensure that the more effective audit arrangements that now exist relate properly to the more sophisticated and devolved structures that we now have. The PAC's checklist is helpful, and we shall ensure that all relevant public bodies are fully aware of the points that it has raised.

However, the House should be quite clear on one point. The growth in the authority and reach of our audit system and particularly the growth in value-for-money audit are the direct result of actions taken by the Government. Among others, there were Labour campaigners and I pay tribute to them. It was we who set up the Audit Commission in the Local Government Finance Act 1982 ; it was in 1983 that the National Audit Act was passed, making the Comptroller and Auditor General an Officer of the Parliament and giving him a value-for-money remit. We made a rod for our own backs, but I am proud of that. Mr. Meacher rose

Mr. Waldegrave : No, I will not give way to the hon. Gentleman. We know what he was going to say. The Act was passed under the present Government, having been introduced by my right hon. and noble Friend Lord St John of Fawsley.

I am reminded of a remark made by Harold Macmillan about spies, a subject that we debated the day before yesterday. He said that he hoped MI5 would never catch any more spies so that there would be no more spy scandals. In real life, we want MI5 to catch the spies and in real life we want the Comptroller and Auditor General and the PAC to do their work properly. If they were finding nothing, I would think that they were not fulfilling their duties.

In a public service the size of ours, a real watchdog will always find things if he is any good. That more is found and more pursued now is largely a sign of a more effective watchdog which has enormously developed the concept of value-for-money audit rather than the concept of lowered standards on the part of civil servants--which I refute as a slur on those public servants. Nor do I accept that our fellow citizens who may work for the public as employees of private firms under contract do not accept the duties laid

Column 471

on them properly. It is an insult to them to suggest that. I want to reaffirm that the true public-service ethos of dedication to service needs, equity and honesty, remains the ethos that we require and shall enforce, whether the service is supplied directly by public servants or through a contract, on behalf of the public, with a private firm.

Let me end by replying in kind to the silliest part of the speech of the hon. Member for Oldham, West. He argued that the Conservatives had extended state patronage. Labour, he said, was against the leviathan state. What poppycock! Let me remind the House of a fact that it can add to our near- halving of the number of appointed posts in the national health service. When we came to power, the state had about 7.5 million servants--local government officers, crown servants, nationalised industry employees and so forth. By last year, the figure was below 5.5 million and falling, although I admit that it was still too high.

Mr.Terry Lewis (Worsley) : What about the quangos ?

Mr. Waldegrave : The quangos are included in the figure. As I have said, it was still too high, but it was lower by 2 million than when Labour was in power--with all the associated reduction in patronage that that implies.

Virtually the whole of the great state industrial apparatus, with its hundreds of appointed chairmen and board members, has been returned--with the employees themselves--to the private sector, where such people belong and thrive. The Opposition complain about spending by organisations such as the Legal Aid Board and the Housing Corporation. We have paid for that spending many times over by reducing the amount of state-organised waste in the nationalised industries.

Let us Conservatives celebrate the turnaround from about £2.5 billion of taxpayers' money subsidising waste in old nationalised industries each year

Mr. Meacher rose

Next Section

Home Page