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Mr. Dalyell: I hate to interrupt my hon. Friends truly excellent speech. She talked about the Tories washing their hands of responsibility. I place it on the record in her speech that, during the reorganisation of local government, some of us pleaded, begged and went on our proverbial knees to Ian Lang and Lord James Douglas-Hamilton to ask them to listen, and we were absolutely spurned.

Ms Osborne: It comes as no surprise to me that that was happening in the House as well as in local government, where our words also fell on deaf ears. In South Ayrshire, the boundaries that we got were not the boundaries that the local area needed, but those that the Conservatives believed would gain them more seats. As it turned out, they got four seats out of 25, so it did not work--but they tried.

It is notable that, by definition, none of the Conservative Members present has any experience of local government in Scotland. I find some of their attitude and some of their remarks about local councillors in Scotland very patronising and deeply offensive to those who do a very hard job on the community's behalf.

Mrs. Maria Fyfe (Glasgow, Maryhill): Does my hon. Friend agree that the comments of the hon. Member for Woodspring (Dr. Fox), arguing that there was a culture of corruption within Labour local authorities, were deeply offensive? I do not remember any of us saying, when some Conservative Members were accepting large amounts of cash in brown envelopes, that it was a Tory culture and they were all at it. Why, then, are the official Opposition launching this attack? It is deeply offensive to honest, decent, hard-working councillors, who have a majority.

Ms Osborne: That is a well-made point, which will be noted by the people of Scotland as well as those present tonight.

The Commission on Local Government and the Scottish Parliament will report, and I believe that that will lead to radical change. For the sake of the Scottish people, it is vital that we go ahead on the basis of a revitalised local authority system, which has the credibility of civic pride--which has very much been enjoyed in Scotland--but in a way that reflects the needs of today's local government.

8.32 pm

Mr. Andrew Welsh (Angus): I support the plea made by the hon. Member for Ayr (Ms Osborne) on behalf of the very many hard-working local councillors from all parties who--week in, week out--do tremendous work for local communities. On their behalf, we should all condemn anyone who lowers the standard and brings the system into disrepute. My background, also, is in local government and I know its value and worth. Due praise should be given to the hard-working, honest councillors who work for their community.

The Tory motion smacks of hypocrisy. The Tories starved Scottish local government of resources. When they were in power, they placed extra statutory burdens

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on local councils and forced through a root-and-branch reorganisation against the clearly expressed wishes of the Scottish people. The Tories started the process of movement toward enabling authorities, with the consequent destruction of service departments and the loss of tens of thousands of jobs that affected communities throughout Scotland.

Since their total rejection by the electorate, the Tories have apologised for their treatment of local government. I suppose a death-bed confession is better than nothing, but it is no consolation to local authorities, the remaining staff or the communities they serve. It is an almighty insult for the Tory motion now to call for an investigation into all local government and every aspect of local government in Scotland when the problems of direct labour organisation incompetence relate to a limited number of very badly managed Labour one-party states. The efficient, professional, well-managed many should not be lumped in with the incompetent, corrupt few.

The North Lanarkshire report--an internal document from the North Lanarkshire council management services section--condemns the Labour-run direct labour organisation for its appalling "runaway Bonus Scheme". Taxpayers poured millions of pounds into a gaping financial hole that Labour councillors chose to ignore for more than a year. That damning report shows that the Labour party in North Lanarkshire swept away even the checks, balances and accountability procedures of the old Monklands and Cumbernauld and Kilsyth district councils, replacing them with the worst elements of the discredited Strathclyde region.

Under the system used by the district councils, the doomed bonus system could not have been created, nor could its effects have gone unnoticed. The report clearly states that no fewer than four elected members were aware of the situation; moreover, it refers to a report of March 1997 that levelled the same criticisms at the bonus incentive scheme.

Why on earth did those Labour councillors turn a blind eye and allow a system to continue which they surely knew would cost taxpayers millions of pounds and seriously undermine confidence in local government throughout Scotland? It is a fair question, and they should answer it.

Those Labour councillors are guilty of cheating the people in their local wards and of discrediting direct labour organisations throughout Scotland, which perform as best they can under new Labour's punitive financial regime.

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. Terms such as "cheating people" are not expected in a parliamentary context. The hon. Gentleman is free to say what he wants, but he should bear it in mind that those men and women have families and that they have their own integrity. I therefore appeal to the hon. Gentleman for moderate language in these matters.

Mr. Welsh: Perhaps the strength of my feelings has led me to express them rather too strongly. However, these are serious matters that affect everyone and they lead to strong emotions. I should like strong action to match those emotions to solve the problem wherever it

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exists. I certainly do not wish to attack individuals in such a way, but I do wish to attack the problem that has been created.

Mr. Connarty: The hon. Gentleman has used strong language. Would he say that a member of a political party who is found guilty of fraud and stealing from the public purse should be kicked out of that political party and never allowed back into it?

Mr. Welsh: I think that if a person is guilty of fraud, a criminal prosecution should follow and they should be answerable for their own actions.

The crisis in Scottish local government not only exists at local level, but has been inflicted and encouraged by central Government. The Conservative party began the attack on councils with compulsory competitive tendering and effective privatisation of council services; new Labour has done nothing to reverse that trend. Best value retains the worst of CCT and imposes a top-heavy, bureaucratic structure that weighs the whole system down. It used to be said of some departments that they used to go out and cut the grass; now they appear to go out and measure it.

Councils must meet the demands of the Accounts Commission rather than those of the electorate and the community they serve. Unfair and inflexible comparisons are made between authorities in socially and geographically diverse areas. Crucially, best value is being implemented against a climate of severe local government budget cuts. The Labour party has clearly and unambiguously taken up the reins of local government cuts where the Tories left off.

In the last two years of Tory rule, council finances were cut by some £300 million. In Labour's first year, they have cut budgets by a further £150 million. The burden of pay increases was shifted on to councils and numerous additional financial demands were placed on local authorities without the money to back them up. That is at the root of the present crisis in local government. In addition, increases in pension costs, the effects of the Children (Scotland) Act 1995, the landfill tax and the true cost of local government reorganisation have hit local government. All that has come against a background of swingeing budget cuts.

The inevitable result has been a reduction in staff and an increase in work load. Among the first casualties have been the checks and balances that existed to prevent financial irregularities. Coupled with some rather inadequate actions, that has created fiscal and democratic disaster in North Lanarkshire, and it is repeated in too many other Labour one-party states. North Lanarkshire is a mess of Labour's own making, but it is now being used as a stick with which to beat every other council in Scotland.

In opposition the Labour party was quick to attack moves that stripped councils of their powers and of their ability to provide services. Since coming to power, the Labour Government have subscribed to the Tory idea that councils should be little more than enabling bodies or

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local management companies. The Under-Secretary of State for Scotland, the hon. Member for Western Isles (Mr. Macdonald), has said that

    "fewer services under the direct control of councils has to be the future".

I utterly disagree. Aside from the fact that that is an erosion of local accountability and local control, the evidence shows that such wholesale destruction of direct service organisations and direct labour organisations will lead to greater bureaucracy and lower standards.

DLOs, their employees and the communities they serve must be protected against being undermined in that way. DLOs must be allowed to work in a framework that is efficient and transparent. The review that the Secretary of State has commissioned into DLOs all over Scotland is nothing but a smokescreen designed to cover the trail of destruction left in the wake of several disastrous and incompetent Labour councils.

It is the Labour party's responsibility to demand that its own councillors clean up their act where that is required. To hide the shame of what is going on, Labour and the Tories are calling into question every council in Scotland, as the motion shows. The accomplishment of the majority of DLOs and DSOs, which include many in Labour councils, in the face of severe pressure, is threatened by Labour's determination to erode local government from above and by inefficient management by certain Labour councillors.

The Secretary of State should realise that the problem is not with the DSOs or DLOs, but with his own party's inability to manage its resources efficiently and effectively. Local government in Scotland has been plunged into crisis and, instead of pulling it out of the mire, the Labour party seems to want it to sink for good. Fortunately, the people of Scotland now have an alternative. These are serious matters that bring into question local government as a whole. I want a strong, effective, accountable local government system. The sooner the problems are cleaned up, the better for everybody.

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