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11.37 pm
Mr. David Wilshire (Spelthorne): I shall not detain the House for long, because I am only too well aware that doing so late at night when the Opposition have said that they will not divide the House is the best way in which to make oneself deeply unpopular in this place.
The orders warrant a small amount of comment because they would allow councils to choose who is best able to carry out two more functions. Indeed, the orders could be used by some councils to invite competitive bids to test the market. My 11 years as a councillor persuaded me that choice, market testing and the use of contractors ensure the best possible service for local people and the lowest cost for local taxpayers--if the activity is fair and honest. That is a big if.
Events in my county of Surrey, which represent at best sloppy management and at worst criminal conspiracies, make me want to speak in this debate. I have studied the orders with particular care because of what has happened, and I shall briefly explain what bothers me about those events. Those who saw "Panorama" last week will have seen how a council can use powers such as those that we are being asked to grant tonight to cook the books. For example, Surrey was obliged by order to put a number of services out to contract. In respect of highway maintenance, the contractors were informed that the roads were longer than they actually were. Therefore, the council received high bids. It then bid for the right length of road and, not surprisingly, won the contracts.
Mr. Chris Davies (Littleborough and Saddleworth):
I shall be brief; perhaps my throat infection will ensure that my speech is even shorter than I intended.
The orders enable local authorities to contract out certain functions. The word "enable" shapes my approach, which would be different if they attempted to force local authorities to contract out their services. However, I share the concerns of the hon. Member for North-West Durham (Ms Armstrong) about the possibility of the orders becoming a precursor to compulsion.
The Liberal Democrats are deeply committed to the principle that decisions should be taken at the lowest practical level. We have always believed that locally elected representatives should ensure that the people whom they represent receive the services that they need and provide those services in the most appropriate circumstances.
I hope that all hon. Members agree that the vast majority of local authorities strive--and always have done--to ensure that services are delivered as efficiently and effectively as possible. That is why we object--and have done so in the past--to the imposition by the Government of compulsory competitive tendering, as it represents an unacceptable degree of control. It has proved a key element in the centralisation of power in the past two decades. Functions have been removed from local government, allowing central Government to dictate to local government and prevent it from exploring its own unique solutions.
Few hon. Members know better than I do that it is possible for a local authority to fall victim to a Frankenstein monster of its own creation. Some 15 years ago, I had the experience of inheriting a direct works department, where the employees and their trade union representatives put their own interests before those of the people and the council. The political circumstances at the time meant that I did not have the power to transform or to slay the monster.
That is why I believe that central Government should impose a general duty on local government to demonstrate publicly that services are provided in the most efficient and effective manner. However, we take a different approach from that of the Government. They are the only Government in Europe who force local authorities to undertake competitive tendering rather than giving them the freedom and the opportunity to do so.
Sir Paul Beresford:
I ought to touch first on the points made by my hon. Friend the Member for Spelthorne (Mr. Wilshire), who is soon to be a Surrey colleague. I have a keen interest in that matter being sorted out, and it has become a territorial interest. There are adequate police processes, and the fact that those people are being rooted out is a sign of that. Fraud occurs not just in the private sector--it occurs in-house. When one considers the vast amounts being spent by local authorities with or without contractors, the percentage that turns out to be fraudulent is very low. Incompetence is another story.
The hon. Members for Littleborough and Saddleworth (Mr. Davies) and for North-West Durham (Ms Armstrong) referred to compulsion, but there is none. The measure has been out for discussion for 18 months, and local authority response has been almost blank. I think that a total of 12 responses have been received over the whole 18 months, and local authorities are not concerned about it.
I accept the point that the hon. Lady made about confidentiality, which is vital, as the Government and the local authorities accept. Contractors will be covered by the requirements of the Data Protection Act 1988, exactly as local authorities are. Information obtained specifically for the purpose of local tax collection cannot be used for any other purpose, and contractors must observe the same strict regulations on local government taxation as local authorities. I hope that, with that assurance, the House will accept the orders.
Question put and agreed to.
Resolved,
Mr. Malcolm Bruce (Gordon):
My contention in this debate is to assert and demonstrate that councils in north-east Scotland are being unfairly treated in relation to the rest of Scotland. North-east councils are delivering vital services to a growing population with fewer resources than the Scottish average. North-east councils account for 9.74 per cent. of the population of Scotland--that is growing rapidly--while the Government's support for north-east councils represents only 9.05 per cent. of the total to Scottish councils, a figure that is falling.
In the circumstances, I find it gratuitous and insulting that inexperienced Ministers should attack north-east councils for profligacy, when, year on year for many years, those councils proved themselves the most efficient, not only in Scotland, but throughout the United Kingdom.
The Under-Secretary of State for Scotland, the hon. Member for Kincardine and Deeside (Mr. Kynoch)--who is to reply to the debate--has criticised Grampian region, the main predecessor council. May I remind him--and the other Under-Secretary of State for Scotland, the hon. Member for Aberdeen, South (Mr. Robertson)--that Grampian regional council was assessed as the best council in the UK for its efficiency and value for money? PA Management Consultants, on behalf of the Society of Local Authority Chief Executives, gave it the prize throughout the United Kingdom for its total quality management performance. That is a record of which it has every reason to be proud, and I believe that Ministers ought to give the council credit rather than make gratuitous criticism.
The new councils have had very little time to prove themselves. In spite of that, Aberdeen city council has the lowest council tax of the four cities in Scotland, and Aberdeenshire and Moray have respectively the third and fourth lowest council tax rates on the mainland. In fact, the three lowest rates of council tax on the mainland are in the three councils with Liberal Democrats in the administration--Borders, Dumfries and Galloway, and Aberdeenshire. Yet, in spite of low council taxes, north-east councils have continued to support and develop local services. That is, until now. This year, as a direct result of the Government's miscalculation of the cost of reorganisation and the inadequate real funding that they have made available, most developments have come to a halt, vital services are being cut, and charges are being hiked.
Councillors and council officials, who are rightly proud of their record in providing good-quality, value-for-money services to their local communities, are angry and frustrated at what they are having to do, because the Government have failed to provide adequate money to maintain services. All the councils are seeking and finding substantial efficiency savings, but they go nowhere near meeting the budget reductions, and many of them are short term and will lead to long-term damage of the services they offer.
Based on what was spent last year, councils have had to cut expenditure by an average of nearly 10 per cent in cash terms, and, in the present economic climate of low
inflation, that sort of cut means cutting through the red meat and well into the bone. If the Ministers have questions about that, I can give some detail as to exactly what it means for their constituents as well as mine, although they show rather less concern for the impact than I do.
In Aberdeenshire, the financial settlement and the grant-aided expenditure required a spending reduction on last year's budget of £25.565 million or 9.8 per cent. The city of Aberdeen recorded a reduction of £24.5 million. The situation between the city and the rural authorities was aggravated by a transfer by mismatch, which will mean that it will be worse for the city of Aberdeen next year, and the authorities are already expressing concern about the implications.
Aberdeenshire council has said that, simply to meet the capital budget, it will have to find assets to sell of £7.85 million, because it will be allowed to retain only 75 per cent. of the proceeds, and £5.9 million is the realisable, usable, capital receipt it needs.
That the draft Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) Order 1996, which was laid before this House on 20th June, be approved.
Resolved,
That the draft Local Authorities (Contracting Out of Investment Functions) Order 1996, which was laid before this House on 25th June, be approved.--[Mr. Brandreth.]
15 Jul 1996 : Column 915Local Government (North-east Scotland)
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Burns.]
11.46 pm
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