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16 Jun 1998 : Column 194

Local Government (Scotland)

Mr. Deputy Speaker (Mr. Michael Lord): I advise the House that Madam Speaker has selected the amendment in the name of the Prime Minister.

7.14 pm

Dr. Liam Fox (Woodspring): I beg to move,

It is fair to say at the beginning of this debate that, whatever twists, turns and controversies it may give rise to, it will provoke less anxiety than the one and a half hours that we had to sit through earlier today. If I had had a prescription pad close by me during the second half of the Scotland game, I could have made a fair bit on prescriptions for valium.

We have secured the debate to bring to the attention of the whole United Kingdom something that is well known in Scotland: the Labour party in parts of Scottish local government is rotten to the core. Council after council has thrown up tales of junkets, maladministration and financial deficit.

Why is it that a Prime Minister who seems to take such an interest in everywhere from Islington to Tuscany, and in everything from Britpop to Frank Sinatra, has so much to say on so many subjects but so little to say about the corrosive nature of politics in his own back yard? We hear plenty of comments on Oasis, but not on Ayrshire. He seems to want to deal with luvvies, but not with Lanarkshire. We seem to have a Prime Minister who wants to be leader of the Government without having to be leader of the Labour party.

We can give only a lukewarm welcome to the Secretary of State's investigation into direct labour organisations.

The Secretary of State for Scotland (Mr. Donald Dewar): Why?

Dr. Fox: Because it is inadequate and comes far too late. Perhaps the Secretary of State will tell us when he, his officials or senior Labour party officials first became aware of the problems in North Lanarkshire. An editorial in today's Daily Record--which I am sure the right hon. Gentleman will agree is hardly a Conservative newspaper--states that they knew a considerable time ago exactly what had happened in North Lanarkshire. I must confess, perhaps for the first time, that I agree that

Many sections of the Scottish electorate plead for such an inquiry.

Mr. James Wallace (Orkney and Shetland): When did Conservative Members first realise that something was wrong with local government in Scotland? Many hon. Members recall arguing with Conservative Ministers that there should have been a full public and independent inquiry before they proceeded with reform of local government. Is not his plea for an inquiry coming a bit too late?

Dr. Fox: The list of wrongdoings that I shall give in the debate demonstrates not only that it is not too late for

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an inquiry, but that we require an immediate and thorough investigation into events in Scottish local government. However, the problem is not DLOs themselves or the structure of local government, but the culture of Labour in local government. The Labour party cannot be the solution to the problem--it is the problem.

Although we can examine the structure of DLOs, the fact is that they are the creatures of whichever council they belong to. DLOs make contracts with the client part of the council and provide services. If they run up excessive bills, the client will simply provide more money. Such a practice certainly would not be accepted in the private sector. Nevertheless, such practices demonstrate the prevailing culture in specific councils.

As the Government were so desperate to end the compulsory element of compulsory competitive tendering, they gave us the nebulous concept of best value. Perhaps it would help the House if I gave some examples of the operation of that concept.

As part of best value in this year's housing maintenance contracts for the City of Edinburgh's council tax payers, tenders on an open-market basis were sought in only two areas. Tenders in other areas were "negotiated" with selected contractors, the largest of which was--surprise, surprise--Edinburgh Building Services. That "negotiation" led to an increase of approximately 14 per cent. over previous prices. That negotiated price increase allowed Edinburgh Building Services to make an unrealistically low tender of 67 per cent. in four tendered areas, effectively precluding all private sector bids from being considered. That reveals what best value means to the Labour party--best value for its friends in local government.

Ms Rachel Squire (Dunfermline, West): Does the hon. Gentleman agree that a prime example of a council failing to give best value to its council tax payers and of a council being guilty of gross mismanagement and overspending on various services was none other than Tory-controlled Westminster city council?

Dr. Fox: In so far as the wrongdoings of Westminster have been exposed, I of course criticise them, but the hon. Lady is not going to deflect the argument. We are talking about local government in Scotland. The Labour party is in government now, and it is time that it faced the problems caused by its mismanagement of local government in Scotland. It is time that it had the courage to start dealing with those problems. It is no good Labour Members throwing into the debate one council in England as they will no doubt do this evening--that is usually what happens when they attempt to defend their appalling record in local government in Scotland. Yes, I condemn wrongdoing in local government and shall do so at length this evening.

Mr. Dale Campbell-Savours (Workington): Will the hon. Gentleman give way?

Dr. Fox: No, I will not give way to the hon. Gentleman.

In the west of Scotland--

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Mr. Campbell-Savours: Why will he not give way?

Dr. Fox: I will not give way to the hon. Gentleman. I shall give way to hon. Members who are better mannered than him.

Mr. Campbell-Savours: Why will he not give way to me?

Mr. Deputy Speaker: Order. It is not for the hon. Member for Workington (Mr. Campbell-Savours) to question why hon. Members do or do not give way.

Dr. Fox: I am keen to give way to Scottish Members who can defend what Labour is doing in local government.

Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. I am an English Member of Parliament. Will you confirm that the Opposition spokesman will not allow me to intervene because I do not represent a Scottish constituency, although he represents an English constituency, too?

Mr. Deputy Speaker: Order. I shall confirm what I have already told the hon. Gentleman. It is for the hon. Member who is on his feet to decide to whom he will or will not give way. That was not a point of order.

Dr. Fox: Perhaps I should have written one or two extra prescriptions for sedatives this afternoon.

If we are seeking problems in local government in Scotland, we need look no further than the west of Scotland. In North Lanarkshire, an internal auditor's report has unveiled a catalogue of financial incompetence leading to a £4.5 million debt being discovered. Included in the auditor's findings was the case of a plumber--it has been well documented in the newspapers--who received payments totalling £54,000 despite being on a basic salary of £10,600. It also found that £800,000 of stock had been written off. Council chiefs have confirmed that the police will be called in if further investigations show that the stock was not written off but stolen.

In the same council, a lollipop man has said that he earned £17,500 a year for 10 hours' work a week. Commenting on that, Mr. John Gillen said:

It appears that the council tax payer will have to pick up the tab for Labour's mismanagement in North Lanarkshire.

The Minister who is winding up the debate--the Under-Secretary of State for Scotland, the hon. Member for Western Isles (Mr. Macdonald)--has said that the North Lanarkshire deficit could be covered by a £50-a-head rise in the council tax in North Lanarkshire. That might be fine for those on the same salary as the Minister, but will not be much comfort to those who are finding it difficult to pay the already inflated council tax imposed under Labour. That comes on top of previous scandals that have afflicted the council.

In 1996, the Labour leader of North Lanarkshire council had his office decorated with wallpaper costing £271 a roll which, as the Lord Chancellor would say, you

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don't get at B and Q. His carpet cost £51 per square metre, and he had a new bidet installed--very PC--as part of a £600,000 refurbishment of Motherwell civic centre. In addition, the same council has spent £700,000 on an exclusive car park for councillors.

Following the revelations in North Lanarkshire, amazingly, a shortfall of £3.5 million has been discovered in the DLO budget in East Ayrshire. East Ayrshire is also a very interesting council. There have been allegations of drunken junketing by Labour councillors. A council official, the deputy director of the commercial operations department, was threatened with the sack and challenged to a fight for refusing to buy councillors a drink on his expenses at a conference. The councillors concerned--James Carmichael and James O'Neill--were the vice-chairman and chairman of the commercial operations committee and effectively his political bosses. According to a report in The Herald, when the official concerned--Charles McIvor--refused to buy a drink, one East Ayrshire councillor said publicly:

I notice that there has not been the slightest challenge to the report in The Herald. The official's boss, Des Tierney, was then allegedly telephoned at home and told to order his subordinate to buy a drink for the councillors or his job would be on the line, too. The two officials have been suspended since February pending an internal inquiry into the running of the department, although it has emerged that they themselves were asking for an investigation as long ago as December last year.

Perhaps more serious are the calls for an investigation into the relationship between the council, Cumnock municipal bank and the Cumnock and Doon Minerals Trust. Councillors control the bank and act as directors. Four of the same group act as trustees of the minerals trust, which was set up to improve leisure facilities in the Cumnock and Doon valley area affected by mineral operations. There is a clear conflict of interest, with councillors sitting on planning committees determining applications from opencast coal developers who contribute to the trust which invests in the bank which in turn gives loans to the council that it serves.

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