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1.47 pm
The Parliamentary Secretary, Lord Chancellor's Department (Mr. Gary Streeter): I congratulate my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) on securing a debate on this important issue and I welcome his support for the proposed scheme to provide a new magistrates court in Bolton. I commend him for the excellent way in which he presented his strong and powerful case. He is right to draw my attention again to the concern of his constituents about the efficient administration of law and order and to say that the Lord Chancellor's Department must do all that it can to secure that. And so we shall.
I fully accept that the courthouse in Bolton has outgrown its original purpose. I understand that it was designed to have three courtrooms but that it now sits with up to nine courts and that further growth is expected. The extra courtrooms have been provided by adapting the building over the years and, as a result, the supporting facilities for all those who use the building are clearly no longer adequate. As my hon. Friend knows, I have not seen Bolton court, but I can imagine what it is like and if he invites me I will certainly go to Bolton to see it. He makes a strong case for a new building. Investment in new facilities is plainly needed and the case for a new courthouse in Bolton has been accepted. I pay tribute to my hon. Friend for his considerable efforts over the years to secure improved accommodation for the provision of local justice.
As I said, we accept the case for a new courthouse in Bolton, but I must make one matter clear: it will be built under the Government's private finance initiative and in no other way. The search for privately financed solutions in place of publicly funded capital projects is now being taken up across the broad spectrum of public service activity, and the Government are committed to delivering the PFI approach. That message was reinforced by my right hon. Friend the Prime Minister only last week. Meeting the accommodation needs of magistrates courts
is no exception, and my officials have been working towards the launch of the entire forward building programme for the PFI route. So I can assure my hon. Friend the Member for Bolton, North-East that, contrary to his reading of the Sunday newspapers, the PFI is certainly not confused but is alive and kicking.
The PFI represents a completely new approach. It presents challenges and uncertainties, although I understand that some people may feel apprehensive about the prospect of securing their new courthouse by this procurement route. There has, of course, never been an absolute guarantee of public funding under traditional arrangements, and even under the PFI, delivery of the programme will always be subject to what the taxpayer can afford.
Recognising that fact, my officials held a workshop with representatives of magistrates courts committees, local authority associations and the private sector. The workshop considered how the PFI should be applied to magistrates courts to test how the PFI could meet their particular requirements. The PFI will involve the private sector owning the building, providing accommodation on a service basis, and accepting the transfer of certain risks in so doing. Crucially, the workshop exercise also showed that value for money can be achieved with this level of private sector involvement, while still allowing magistrates and their staff to carry out the courts' functions.
I am well aware that the Bolton magistrates courts committee--with the metropolitan borough council and with other courts committees and authorities which have schemes in the building programme--are anxious to proceed. Sadly, however, in April officials had to notify local authorities and MCCs that implementation was being delayed while certain accounting arrangements were resolved, and I should like to take a moment to explain the background to that.
Although local authorities have a statutory duty to provide magistrates courts with accommodation, either directly or by procuring from the private sector, my Department meets 80 per cent. of that cost by way of grant. That is true whether the cost involves a capital scheme or is met from revenue. The Justices of the Peace Act 1979 sets out the basis on which grant is provided and contains a provision that prevents revenue grant being used for capital purposes. We had to be sure that the revenue grant that would be available to authorities could be used for meeting PFI costs, and we have now researched the matter thoroughly.
I am pleased to be able to announce today that that doubt has been removed. Proposals recently announced by my right hon. Friend the Minister for Local Government, Housing and Urban Regeneration, which will ease the adoption of the PFI by local authorities, have the effect of clarifying the accounting position. I am also grateful to the members of the private finance panel, who are involved in discussions with industry and accounting organisations to pave the way for PFI projects to proceed. Draft regulations affecting local authority capital finance were published by the Department of the Environment earlier this week and deal with the particular accounting obstacle holding up implementation of the magistrates courts building programme under the PFI. I am therefore
satisfied that the accounting obstacle has been resolved, and I am pleased to announce that the PFI programme will now be launched.
I mentioned that we have a building programme; in fact, there are currently 50 schemes awaiting funding. They will continue to be ordered into a programme to be delivered over a number of years. Although the private sector will be asked to make the initial investment, it will levy a charge for the provision of the required accommodation and related services.
In the case of magistrates courts, there is little scope for those charges being met by raising money from other sources. Some income may be generated from catering, car parking or use of spare accommodation, but in practice the charge will continue to be met by the local authority and will require grant support from the Government. That is subject to public expenditure cash limits in the same way as capital has been. The rate at which the programme can be delivered is therefore subject to the availability of funding, as it always has been. My hon. Friend the Member for Bolton, North-East, who is a shrewd and successful business man, will understand that.
The delay of several months that has occurred while the accounting problem that I mentioned earlier was resolved will mean that some new courts will not be available as early as was originally planned. Obviously, I regret that. It must be recognised that those original plans would have had to be revised in any event, in response to the need to restrain public spending. Clearly those schemes that were close to being started will be most affected, and there is no question in my mind but that Bolton is one such scheme. In drawing up the revised programme, we shall be looking to meet those in the greatest need first, but we will take account of any delay that has been experienced. The implementation programme will be structured to allow lessons learnt from a "pathfinder" project to be applied to projects that will follow in phases. That will improve the chances of achieving successful agreements.
I am pleased to be able to confirm that the Bolton scheme, which had indeed reached an advanced stage of planning, will be among the first group invited to prepare proposals. It is expected that authorities will be able to advertise some of those schemes this autumn and the remainder in the next financial year, according to the level of funding available. Once advertised, I expect negotiations to proceed through to contract and service delivery.
I am keen to see Bolton, as with all magistrates courts committees in a similar situation, working imaginatively with the private sector to secure value-for-money projects which serve the community well. I commend the Bolton magistrates courts committee for the efficient way in which it is running that difficult court building, as my hon. Friend the Member for Bolton, North-East has clearly explained in this debate.
For Bolton, working imaginatively means that the magistrates courts committee will need to review its needs in the light of its current and expected work load and of any organisational changes that are likely to take place. In particular, it will need to take account of the planned amalgamation with neighbouring MCCs, and the likely effect of that on the need for and location of new court facilities across the new MCC area.
That review will then form the basis of a revised business case, to be sent to my officials by the end of September with a draft PFI brief and advertisement, to enable them to ensure that those who face the most difficult operational problems and are best able to demonstrate that they are ready to proceed with the PFI are given priority. I shall of course listen to the representations of my hon. Friend the Member for Bolton, North-East--which will no doubt be made in September, hot on the heels of any proposals made by the Bolton magistrates courts committee.
It is therefore still our position that the new Bolton magistrates court will proceed, but it will proceed under the PFI scheme. The costs and fees that have already been incurred in bringing the scheme to the current level, to which my hon. Friend the Member for Bolton, North-East referred, need not be wasted.
As I have already mentioned, the PFI will require a new and more imaginative approach by all those concerned if we are to reap the full benefits of involving the private sector. It will not be sufficient simply to pick up the threads of existing schemes. I ask my hon. Friend the Member for Bolton, North-East to take this message back to his magistrates courts committee: it is not merely a matter of dusting off the existing scheme--we are now looking for a more imaginative scheme, and for more active involvement of the private sector to be apparent in the proposal that is made in September.
Time and again, the private sector has demonstrated its capacity to produce exciting and imaginative solutions to problems. Our approach to the PFI must be geared to ensuring that we enjoy the benefits that will flow if the private sector is given a free reign to apply those skills to the problem of meeting the needs of the magistrates court service.
This debate has therefore come at a pivotal moment in provision of magistrates courts. The theoretical obstacles have been put behind us, and we are about to embark on the practical challenge of delivering the programme. Each proposal will be different and will have to be assessed on its merits. As that will be new to everyone concerned, my officials will provide local authorities and MCCs with active support, which will ensure that lessons learnt are collectively available for the benefit of all.
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