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Ms Armstrong: The result was compulsory competitive tendering--which I am sure that the hon. Gentleman will now defend.
Mr. Jenkin: Is the Minister talking about the same Bill that we are considering in the House today? Does she accept that 27 new powers for the Secretary of State are specified in the Bill? The Bill, therefore, has a great deal to do with central control, including the continuation of capping by her Government.
Ms Armstrong: The Bill contains immense new powers for local people. Far from being a centralising measure, the Bill proposes to change the relationship between central and local government, and spells that out for the first time--something that the previous Government were not prepared to do.
Compulsory competitive tendering delivered some efficiencies, but at a cost. Too often, CCT meant the cheapest, rather than the most cost-effective. Contracts became straitjackets. Public services were delivered to minimal standards at minimal cost by minimalist providers.
Mr. John Bercow (Buckingham):
I am most grateful to the Minister for giving way relatively early in her speech. On the subject of new powers, will she tell the House in what circumstances she would envisage using the new power that the Bill will confer on her and her right hon. and hon. Friends to cap local authorities below their standard spending assessment--which is, after all, the Government's own assessment of spending need?
Ms Armstrong:
The hon. Gentleman obviously does not know that the provisions made by the Conservative Government gave exactly that ability. I shall describe the powers in the Bill later in my speech, and I am sure that he is happy to wait until then. Now, I intend to talk about CCT, even though the hon. Gentleman does not want me to remind the House or the people of the devastation that the Conservative Government were prepared to inflict on local government and local services through CCT.
Clause 18 will repeal CCT at the beginning of next year, as we promised in our election manifesto. In its place, the Bill introduces a duty of best value on all local authorities, including the Greater London Authority and its functional bodies when they are established.
Mr. Paul Burstow (Sutton and Cheam):
Does the Minister accept that the new powers to issue guidance and, by regulation, to make changes mean that future Secretaries of State will be able to reintroduce the CCT regime without further recourse to primary legislation, which has to be passed by Parliament?
Ms Armstrong:
No, I do not accept that. We are introducing a regime that is entirely different from compulsory competitive tendering--one that is farmore flexible and more focused on local people and
Best value will raise standards of public services in line with public expectations. The service standards of all local authorities will be brought up to those of the top 25 per cent. As a result, an annual 2 per cent. efficiency target should be well within the reach of all local authorities. If services are poor or inefficient, it will be clear where accountability lies. Local people should not have to put up with failing public services and the Government will not hesitate to intervene to prevent the worst excesses of inefficiency and waste.
Most of local government shares our belief in modern public services. More than 100 local authorities across party boundaries are involved in best value pilot projects and more than 250 are involved in various best value initiatives. The Local Government Association has worked with us to promote service improvement and has set up its own improvement agency. Those bodies recognise the new challenges that best value poses for local councils: expectation of higher standards; a push for continuous improvement; and pressure for greater accountability.
Clause 3 places a duty on each authority to consult the people whom it serves. The duty of best value is owed not to central Government, but to the citizen. I want there to be growing engagement between the public and their local councils. The citizens charter went some way toward telling local people what they could expect from public services, but best value will mean local people telling local councils exactly what they expect from public services.
Mr. Dafydd Wigley (Caernarfon):
Given the Minister's emphasis on the needs of people in their own locality, which vary from area to area, can she confirm that the order-making mechanism contained in the Bill gives considerable flexibility to enable the National Assembly for Wales to deliver slightly different policies that are in line with the needs of local communities?
Ms Armstrong:
Yes, I can confirm that, and the Under-Secretary of State for Wales, my hon. Friend the Member for Cardiff, Central, who will wind up the debate, will reaffirm it. The Bill is the first to devolve powers to the National Assembly and I welcome the right hon. Member for Caernarfon (Mr. Wigley) to the Chamber to celebrate that event.
Mr. Burstow:
Will the hon. Lady give way?
Ms Armstrong:
No. I want to continue. I am prepared to take interventions, but the hon. Gentleman has already intervened once.
There is a national interest, too, in the level at which service standards are set. Therefore, clause 4 allows the Secretary of State, or the National Assembly for Wales,
to specify performance indicators and standards in certain circumstances, accompanied by locally determined performance indicators and targets.
Clause 5 requires local authorities to carry out fundamental performance reviews of all their functions to consider new ways to deliver services and set targets to show continuous improvement.
Through the best value performance plan, a local authority will set out its targets and plans for the public and report on performance. Real local accountability will come when people can compare what a council says that it will achieve with what it actually achieves.
That brings me to audit and inspection. Clause 10 provides the Audit Commission with inspection powers to complement the work of the existing inspectorates. All functions will be subject to rigorous scrutiny. An inspectorate forum will take forward arrangements for joint monitoring of the delivery of best value, particularly where local priorities cross traditional boundaries.
We will ensure that collaboration between existing and new inspectorates works properly. For example, we will extend the role of the Housing Corporation to enable it to provide consultancy and support services to assist the Audit Commission to carry out its new duties under best value.
Police authorities will be subject to the duty of best value, in line with their statutory function to maintain an efficient and effective police force. Policing has a unique tripartite structure, within which chief constables also have a role in delivering best value. Therefore, I propose to table amendments in Committee to reflect the role of chief constables under best value and to define more clearly the respective roles of Her Majesty's inspectorate of constabulary and the Audit Commission. I also propose to table a further amendment in Committee to deal with the funding of inspections.
In most cases where the auditor or inspector recommends action, I expect the local authority to act speedily on the recommendations. In the first instance, councils will be expected to put their own house in order and will have the opportunity so to do. However, there must be a line in the sand. Clause 13 sets out the enforcement powers that the Secretary of State or the National Assembly in Wales may use in the cases of the worst failures. We will develop a protocol with local government to ensure that there is a clear understanding about when those might be used. Indeed, we are already discussing that in partnership with local government.
Sir Paul Beresford (Mole Valley):
Will the hon. Lady give us some idea of the time span for the procedure that would end in confiscation? I do not necessarily have an argument with it, but I am concerned that, by the time that it happens, the dust will lie upon the problem that inspired the reaction in the first place.
Ms Armstrong:
I am interested to hear the hon. Gentleman say that. The Conservative Government never used their most severe powers. The reality is that, in the initial period, a performance plan, on which local people will be able regularly to give their views, will have to be published every year. Of course, the auditor will make an annual report and trigger inspections if necessary and inspectors will, if necessary, report to the Secretary of State. At this stage, I do not want to go into precise
Innovation and reform are at the heart of modern public services, so clauses 14 to 16 contain powers to facilitate best value. We expect local authorities to look at a wide range of options for service delivery, focusing on innovation and new ways of working, and testing the boundaries of service delivery and best practice.
Where it will improve the standards of public service, we want local authorities to be able to enter into new forms of partnership. Instead of the sterile debates of the past, which paid more attention to the means of service delivery than to the quality of services delivered, we want to promote public-private partnerships--a third way for public services.
Also, best value will encourage local authorities to work in partnership with other public bodies--pooling budgets, making better use of assets and ending some of the false boundaries between different deliverers of public service. Some of what was revealed in the statement earlier this afternoon by my right hon. Friend the Secretary of State for Health shows the importance of enabling local authorities and health authorities to work together much more closely. At the same time, however, best value will encourage partnerships with private enterprise and voluntary organisations to secure new expertise and greater investment, and to promote innovation. The scope of those enabling powers will have to be carefully drawn. Therefore, clause 15 sets out the detailed process for using them, including further scrutiny by Parliament.
Compulsory competitive tendering has tied public services in too much red tape for far too long. Modern public services require flexible procurement practices, and it is high time that the legislative framework was amended to reflect that. That is not just the view of the Government: it is also the view of both the Trades Union Congress and the Confederation of British Industry.
In a recent open letter to the Prime Minister, the CBI stated:
Local authorities need confidence in their partners, and private companies need to be able to demonstrate that they are good employers. Clause 17 gives the Secretary of State and the National Assembly for Wales the power to amend the categories of "non-commercial matters" that authorities may take into account in selecting tenderers and awarding contracts.
"The major task ahead is to break the CCT mindset . . . Best value should be the driver and therefore the centrepiece of local government reform . . . building innovative partnerships between councils and business and establishing the link between service improvements and better treatment of staff."
In November last year, I was pleased to receive the first-ever joint delegation from the public and private employers and trade unions working in local government. Those social partners came to press for the best value provisions that are contained in this Bill.
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