House of Commons Hansard Debates for 16 Jun 1994

Clause 10 --

Community Councils for Groups of Communities

Amendment made : No. 49, in page 8, line 3, at end insert

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( ) An order under this section shall make such provision as appears to the council making it to be necessary for the application to the communities included in the group of all or any of the provisions of section 79 of the Charities Act 1993 (parochial charities) and of any of the provisions of this Act with respect to the custody of community documents, so as to preserve the separate rights of each community.'.-- [Sir Wyn Roberts.]

Clause 17 --

General Provision for Transfer of Functions

Amendments made : No. 50, in page 13, line 20, leave out to the contrary'.

No. 103, in page 13, line 22, leave out express'.

No. 51, in page 13, line 27, leave out the appropriate' and insert a'.

No. 52, in page 13, line 32, leave out the appropriate' and insert a'.

No. 53, in page 13, line 34, leave out from Where' to that', in line 36, and insert

in relation to any relevant legislative provision, any question arises as to which new principal area is the appropriate new principal area for the purposes of that provision'.-- [Sir Wyn Roberts.]

Clause 25 --

Services

Mr. Paul Murphy (Torfaen) : I beg to move amendment No. 4, in page 19, leave out lines 21 to 45.

Madam Deputy Speaker (Dame Janet Fookes) : With this it will be convenient to discuss also the following amendments : No. 3, in clause 26, page 20, line 23, after 1996', insert and

No. 9, in page 20, line 26, at end insert

(3A) A council's service delivery plan shall be published in English and in Welsh.'.

Mr. Murphy : I hope that these amendments will not occupy the House for long.

The three amendments which lie in my and my hon. Friends' names refer to cross-border trading or tendering, to clause 25, which we discussed at some length in Committee, and to service delivery plans. I refer to the arguments that the Government made in Committee. We said then, and we say today, that the Opposition agree with the idea of cross-border trading or tendering. We believe that there is an opportunity for different local authorities in Wales, not only to trade with one another, but to give one another their skills and the expertise that all our local authorities in the Principality have established over many years. In Committee, Ministers said that they would reconsider the operation of clause 25.

Our reservations about the clause were twofold. First, we thought that the geographical restrictions that the Government were to impose on cross- border trading were too restrictive. We said that if it were possible, for example, for the skills in Anglesey to be used by a council in south Wales, that should be a reality. I believe that it was the Parliamentary Under- Secretary of State who said that he would re-examine those geographical limitations.

The other limitations, which may be more serious, referred to those parts of the clause which, in turn, refer to compulsory competitive tendering. Effectively, those

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sections say that cross-border trading cannot operate if the services concerned are covered by the Government's regulations regarding compulsory competitive tendering.

There are two problems. The first is that, as recently as this week, the Parliamentary Under-Secretary of State for the Environment, the hon. Member for Banbury (Mr. Baldry), in reply to a written question, said :

"Compulsory competitive tendering is being extended to six professional support services, in a phased programme--legal services, professional construction and property services, IT, finance, personnel, and corporate and administrative services."--[ Official Report , 14 June 1994 ; Vol. 113, c. 346 .]

Some of those are the very services which, we believe, could be offered by one local authority to another.

Mr. David Hanson (Delyn) : Is my hon. Friend aware that on 27 April 1994 the very same Parliamentary Under-Secretary of State for the Environment said at a seminar that he believed that it should be possible for cross-border tendering to take place ? I should be interested to hear later whether the Parliamentary Under-Secretary of State for Wales agrees with that presumption, which has already been put forward by the Department of the Environment at that conference.

8.15 pm

Mr. Murphy : I hope that in reply the Minister will take those facts into account because they seem to be contradictory. I hope that the Parliamentary Under-Secretary of State for the Environment was right and that cross-border trading could operate in the sectors that I mentioned.

The other aspect of CCT that is affected by clause 25 is that of the areas that are already covered by compulsory competitive tendering. The most significant one is that which refers to the highways functions of our present county councils. The Minister will recall that, in Committee, he and his right hon. Friend the Secretary of State jointly announced eight what they called "centres of excellence" in Wales. Those would relate to the highway functions, and they would also have taken over much of the work of highway DLOs in Wales, which are currently run by our county councils. The Government agree--and we agree with the Government--that they are centres of excellence.

The problem is that if those centres of excellence are unable to take part in cross-authority trading and tendering, their viability would be put at serious risk because they would be restricted to the management of trunk roads, motorway networks and only 35 per cent. of the work within the local authority's boundaries. There is some doubt about whether those centres of excellence of highways provision could then apply.

The Government also said that they would consider the Council of Welsh Districts' safeguards, which were outlined in Committee because obviously, as the Minister said in Committee and might say again this evening, they were worried about the risk that would be accepted by the local authorities were they to undertake cross-border trading. I said in Committee--the CWD indicated its support on that issue--that the district auditor, the work of the council through its committee system, and the Secretary of State's powers under sections 13 and 14 of the Local Government Act 1988 are sufficient safeguards to protect, not only local authorities that engage in trading, but other local authorities.

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I do not think that cross-border trading will harm the viability of our local authorities. It can bring only good to all our authorities in Wales, especially now that they are becoming smaller. We fear that some of the excellent services that are provided, especially by the county councils, should be safeguarded and given to those other local authorities. The last thing that we want is for it to be used as a means simply of privatising more local government services. I do not think that that is under consideration at the moment. What is under consideration is the best delivery of services by the 20-odd--I am not quite sure how many it is now--unitary authorities in Wales. The purpose of amendment No. 3 is to widen the public debate about service delivery plans. The Government--in our view, rightly--are indicating that those plans should be published. We are saying that those published plans could well be the subject of public meetings. At those meetings, the public who are worried about county council services such as adult education and other matters with which the county deals would be safeguarded by the service delivery plans of the new unitary authorities.

It is also important because the service delivery plans should include the safeguards that the Government intend for the voluntary organisations in Wales. We believe that the Government should give proper guidance to the new transitional committees, and that that guidance should contain recommendations for transitional funding for voluntary organisations in Wales. That has been discussed at length in Committee and I do not want to elaborate today.

Those are our arguments. The Government said that they would return to the Floor of the House to answer the arguments that we and the local authority associations had made to them about CCT.

Mr. Hanson : I do not wish to detain the House for long, but I hope that the Parliamentary Under-Secretary of State will answer a couple of arguments.

I shall not revisit the discussion that we had in Committee. There was an extensive discussion about the Government's original intentions for lead authorities, which were outlined in the White Paper and which indicated the possibility of having centres of excellence within local authorities and thereby allowing some cross-border trading. A centre could be established with a lead authority providing a service which other authorities, such as my own county of Clwyd, could buy in to improve their own local services more efficiently and cost-effectively. As a result of the discussions in Committee, the Government agreed to consult various authorities and agencies in Wales on how best to overcome the matter. It was obvious from what Lord Rodger of Earlsferry said in another place that the Government intended that cross-border tendering should no longer be part of the fabric of local authority organisation--for reasons, it appeared to the Committee, of pure dogma. I hope that the Committee convinced the Under-Secretary that the Government's objectives for CCT would not be negated by cross-border tendering because everything that could be done under CCT would remain the same and the protections would be in place, but there would be the opportunity to provide what we believe the Government

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want, which is cost-effective and efficient local services in a number of areas, highways being the one that we discussed most. I want the Under-Secretary now to tell us the results of the consultation. I understand from a parliamentary reply that letters were sent out on 23 May with replies being sought by 7 June. What response did the hon. Gentleman have from local authorities and organisations on the issue of cross-border tendering ? That is relevant to our debate today and I want their responses placed on the record.

The arguments that we advanced in Committee are still valid today. There is no good reason why there should not be cross-border tendering within the new local government structure. The Government have expressed several fears if cross-border tendering is allowed. The first is that the private sector would not be able to take part in certain services in which it is currently involved. That is a fundamentally misconstrued belief. With CCT, anyone who offers a cross-border service, whether from Flintshire, Wrexham or Denbighshire, will do so on the basis that he will win the tender because he has been competitive. Private organisations can still bid for that service and if they are the most cost-effective, the most efficient and in the best interests of the ratepayers, they will win the contract.

Secondly, the Government suggested that the lead authority would place a burden on its own ratepayers. For example, a lead authority such as Flintshire might set up all the infrastructure and expertise in-house to provide a highways service to Denbighshire and Wrexham, but at the end of the day those authorities might decide not to purchase the service. The ratepayers of Flintshire would then suffer a loss. However, local authority organisations have explained to the Government that the district auditor can step in and the Government's powers can be used to stop such a situation dead in its tracks if a local authority provides a service that then begins to lose money. Therefore, the Government's argument is negated.

The arguments for negating cross-border tendering do not hold water. The private sector, which the Government want to compete, can still compete and, if it is efficient, it will win. If, for whatever reason, a local authority finds that it is losing money on a service that it provides, the Government have the power via the district auditor, via councillors who would not wish to be surcharged, or via the Secretary of State's powers to end that service and provide an alternative method of service delivery.

Since the Committee stage, I have discovered that on 27 April the hon. Member for Banbury said at a conference that local government reorganisation would provide fresh opportunities for the delivery of services. He also said--and it is significant for this debate--that there were cases where a council's DSO should be able to deliver services to another council's area or for a joint body of several unitary authorities to provide a service.

I return to the point made often by my hon. Friend the Member for Caerphilly (Mr. Davies) : if the hon. Member for Banbury intends to include in the forthcoming English Bill a facility for local authorities to provide a service, in co-operation with each other, to beat the system of competitive tendering--to allow, perhaps, Rutland to provide a highways service to a neighbouring authority such as Huntingdonshire--why will not the Welsh Under-Secretary do the same for Wales ?

I am an Englishman representing a Welsh seat. I received the vote of Welsh constituents, but I was born in

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England. I am a Member of a British Parliament. I reside in Clwyd. I do not want the residents of Saltney, one mile from Chester, to receive a service that is different from the residents of Chester, which is just over the border. I am acutely aware of the border as it falls in my constituency. If the Department of the Environment allows Cheshire county council to do one thing and the counties of Flintshire and Denbighshire to do another, I shall be angry and upset. There must be a level playing field between the Cheshires and the Clwyds and between England and Wales.

I rest my case. Tonight we want to hear from the Under-Secretary the detailed results of the consultation following the Committee stage. Does he agree with his Government colleague, the hon. Member for Banbury, or is Wales yet again to be the poor relation to England in cost-effective service delivery ?

Mr. Gwilym Jones : We have had useful debates on this subject both tonight and in Committee. As we promised in Committee, we have consulted the local authority associations, although I cannot go through all the responses this evening. We believe that the powers for regulation are still needed, but I am sure that the House will welcome the fact that we do not intend to impose any geographic restrictions unless there is clear evidence of authorities abusing their freedom to provide services to authorities throughout Wales. In the case of services subject to competitive tendering, we see no case for cross-border tendering for work such as refuse collection, building maintenance and catering. We have considered carefully the professional services that will become subject to competitive tendering after reorganisation. We have concluded that personnel, legal and financial services that are already adequately dealt with by even the smallest district council, and where there are many potential private sector suppliers, should not be used for the purposes of clause 25. However, we are still considering the possibility that authorities appointed as my right hon. Friend's agents for trunk road maintenance should be allowed to provide professional highways services to other authorities. In due course, we will consult further on draft regulations and will keep the position under review.

If genuine difficulties emerged, it would always be possible for my right hon. Friend to amend the regulations to provide a more relaxed regime. I cannot commend the Opposition's amendment to the House, principally because it would remove my right hon. Friend's regulation-making power.

On amendment No. 3, the Government believe that it is for the new councils to decide how best to publicise their service delivery plans. The publication of those plans will provide the public with the opportunity to comment on the shadow authority's proposals, and I suspect that shadow authorities will wish to consider whether a public meeting is the best way to subject their plans to public scrutiny. I am happy to consider whether the thrust of the amendment should be included in the guidance, but I am not prepared to limit the discretion of the authorities by including it in the Bill.

Mr. Murphy : There is a mixture of disappointment and agreement here. On the disappointment side, I do not understand for a second why some of the personnel, legal services, information technology and so on, certainly in the

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more sparsely populated areas of Wales, could not be the subject of cross-border tendering. Nobody would have anything to lose and there would be an awful lot to gain if that were to occur.

8.30 pm

I am, however, grateful that the Minister has agreed to have a further look at the highways provision and I am glad that the Government have agreed that the geographical restrictions should be lifted. It is also important that the possibility of public meetings will be included in the guidance notes to local authorities. Although I am disappointed, I am grateful for those concessions and to that end I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Madam Deputy Speaker : We now move directly to amendment No. 56, to be moved formally.

Mr. Morgan rose

Madam Deputy Speaker : Is there a problem ?

Mr. Morgan : I wanted to speak to amendment No. 59.

Madam Deputy Speaker : I do not think that we have got there yet. We have reached amendment No. 56.

Clause 28 --

Decentralisation schemes :approval, implementation and safeguards

Amendments made : No. 56, in page 22, line 6, leave out one year' and insert six months'.

No. 57, in page 22, line 11, at end insert

( ) Where he proposes not to approve the scheme as submitted, the Secretary of State shall notify the council concerned, before the end of that six month period, of the modifications which he proposes to make to the scheme, or (as the case may be) that he proposes to reject the scheme.

( ) Before he approves a scheme subject to modifications, or rejects a scheme, the Secretary of State shall have regard to any representations which have been made to him by the council concerned.'.

No. 58, in page 22, line 28, leave out from beginning to end of line 12 on page 23.-- [Mr. Gwilym Jones.]

Madam Deputy Speaker : We now move to amendment No. 59.

Clause 32 --

Decision making procedures of principal councils : experimental period.

Sir Wyn Roberts : I beg to move amendment No. 59, in page 25, line 19, leave out from beginning to end of line 17 on page 26.

Madam Deputy Speaker : With this, it will be convenient to discuss Government amendments Nos. 60, 110 and 111.

Sir Wyn Roberts : Clauses 32 and 33 were intended to allow the new authorities in Wales the opportunity to experiment with alternative forms of political management within the framework provided by the existing system, but, of course, there was severe criticism of the clauses in Standing Committee and we concluded that further consideration would be beneficial before legislating for

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changes to a system which appears to be working quite well. Therefore, we have decided that the introduction of a completely new unitary structure with all that that entails in terms of upheaval and reorganisation of services is not the right time to be putting forward the proposals included in clauses 32 and 33, so we decided to remove them.

Mr. Morgan : Thank you, Madam Deputy Speaker. I apologise for having misheard you a few seconds ago. I only wanted to speak briefly on the matter.

Obviously I shall not oppose the Government introducing amendments for which we pressed hard in Committee, but it is fair to say that the Minister did not tell the whole story in that brief introduction. We were asking for a spirit of experimentation which would involve some discussion of the benefits to central Government of the merits of those aspects of the historical functions and modus operandi of local government that we were commending. We were asking for the same flexibility to be applied, possibly to the proceedings of the House. As a result of some of the movements in the direction of flexibility in the reform of Prime Minister's questions and other aspects of the Jopling report, we thought that the Government should give serious consideration to measuring the benefits of Opposition Members having access to civil servants who work only for Ministers in central Government, but whose equivalents work for both sides of the political divide, if there is one, in local government.

Had we had equal access to those officials, as we would have done in local government, we might then have been able to uncover some of the mysteries of the functions of the Office of Parliamentary Counsel and its rather strange extensions which appear to have affected or had a side effect on the proceedings of the Bill.

We were concerned with the principle of measuring the effectiveness of Government. If they want experiments, they should apply them not only to local government, but to central Government. In order to have an experiment, we need some measurement technique to decide what we would count as a success or an improvement on the present system. Many of us have had short, medium or long experience in the House as well as backgrounds in local government either as elected members--in some cases leaders of councils--or, as in my case, as a local government officer and a civil servant before coming to the House. We therefore have some idea of how some of the advantages of the civil service and Cabinet government and some of the advantages of the committee system and shared access to full-time local government officers could be applied to central and local government simultaneously in a properly measurable, audited and independently validated experiment to improve local and central Government. Some aspects of local government practice would benefit enormously the proceedings of the House and central Government through the Executive, and some aspects of central Government practice could be brought into local government through experimentation procedure, as was the purpose of the two amendments.

We are happy that the Government have listened to us, although they heard only half the message and took the easy way out by scrapping the whole idea without really

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conceding the principle that both central and local government could do with a great deal of improvement and could learn a great deal from each other.

Obviously, the Government are nervous about learning something from local government and giving Opposition Members equal access to full-time local government officials. As a result, they have taken the coward's way out. Before anybody had too many bright ideas about giving Opposition Members access to Parliamentary Counsel, private offices or full-time civil servants, they decided to scrub the idea of introducing Cabinet government monopoly access to full-time officials for people on the majority side in a party organisation, using the techniques of Cabinet government and having the sole loyalty of the full-time officials until they get thrown out at the next election.

By scrapping the two clauses and the idea of experimentation, the Government have shown that they never thought it through in the first place ; nevertheless, I warmly welcome their decision.

Mr. Rowlands : I am sure that my hon. Friend's wonderful recollection of the debate is the accurate one. My own is that my hon. Friend's marvellous mocking humour shamed Ministers and we probably made too good a case against the clauses. I suspect that, as a result, the Minister has given up and given way.

Amendment agreed to.

Clause 33 --

Decision making procedures of new principal councils : permanent provision.

Amendment made : No. 60, in page 26, line 18, leave out from beginning to end of line 42.-- [Sir Wyn Roberts.]

Clause 38 --

Initial transfer of assets to council funds.

Mr. Gwilym Jones : I beg to move amendment No. 61, in page 31, line 29, leave out from beginning to end of line 1 on page 32. I must first thank the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) who helped us reach the conclusion that clause 38 can be deleted. In Standing Committee, he asked whether the assets referred to in subsection (1) could include, for instance, council houses whose finances are dealt with in the housing revenue account and whether, therefore, the clause duplicated the order-making power in clause 54, which provides for the transfer of property rights and liabilities.

The answer to his question was that clause 38 would not operate in that way, but we have looked at the position again and concluded that clause 54 gives my right hon. Friend all the necessary power to transfer assets and clause 38 can therefore be deleted.

Mr. Murphy : I wish simply to place on record the fact that at least four columns of the Committee Hansard were devoted to the Government's defence of clause 38. I am extremely grateful that the Minister has conceded that the clause is unnecessary, but more importantly agreed that my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), as he did in all the proceedings of the Committee, made an outstanding contribution to the success of that Standing Committee.

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Amendment agreed to.

Clause 44 --

Redundancy payments

Amendments made : No. 62, in page 34, line 39, leave out from (1)' to end of line 3 on page 35 and insert

In determining the effect of any provision of

(a) Part IV, V or VI of the Employment Protection (Consolidation) Act 1978, or

(b) Chapter II of Part IV of the Trade Union and Labour Relations (Consolidation) Act 1992,

in relation to a person whose contract of employment is terminated as a result of this Act, it shall be assumed that he was dismissed by the old authority concerned by reason of redundancy immediately before 1st April 1996 and that his dismissal was proposed by the authority.

(1A) For the purposes of this section

(a) a person's contract of employment is terminated as a result of this Act if

(i) immediately before 1st April 1996 he was in the service of an old authority under a contract of employment which would have continued in force if that authority had not been abolished ; and (ii) his contract of employment is not transferred to a new principal council or to the Residuary Body ; and

(b) a contract of employment is transferred

(i) to a new principal council, if it is treated by any provision made by this Act, or by or under any other enactment, as continued in force with that council on 1st April 1996 ; or

(ii) to the Residuary Body, if it is so treated as continued in force with the Residuary Body on that date.'.

No. 63, in page 35, line 5, leave out such'.

No. 64, in page 35, line 5, after payment' insert

under Part VI of the Act of 1978'.-- [Mr. Gwilym Jones.]

Clause 45 --

Other compensation payments

Amendments made : No. 65, in page 35, line 12, leave out from (1)' to end of line 16 and insert

This section applies where any contract of employment made before 1st December 1993 is terminated as a result of this Act.

(1A) Subsection (1A) of section 44 applies for the purposes of this section as it applies for the purposes of that section.'.

No. 66, in page 35, line 39, at end insert

( ) The Secretary of State may by regulations exclude the operation of this section in prescribed circumstances (and, in particular, in cases of engagement by new principal councils).'.-- [Mr. Gwilym Jones.]

Clause 47 --

Old and new principal areas with the same name

Mr. Gwilym Jones : I beg to move amendment No. 104, in page 36, line 27, leave out 1' and insert 1(1)'.

Mr. Deputy Speaker : With this, it will be convenient to discuss also Government amendment No. 112.

Mr. Jones : Clause 65(2) provides for certain clauses to come into force on enactment. However, as implementation will take place in 1996, there is no longer the pressing need to have the other provisions of clause 1 amending the 1972 Act immediately following Royal Assent. They can be phased in using the commencement order powers under clause 65.

Amendment agreed to .

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