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Mr. Jon Owen Jones: May I help the hon. Gentleman? He is saying that the existing capping criteria are crude and ineffective and that they were unfairly applied to his local authority. Therefore, he should support the Government, because we want to remove that crude capping regime and introduce a fairer system.
Mr. Lansley: The hon. Gentleman is trying to help me, but he is directing me to the wrong solution. His solution is not the sort of capping that ought to be applied, as I hope hon. Members on both sides of the House recognise. Capping should be applied for excessive spending in year, rather than be spread over a number of years. If there is to be a reserve power, it ought not to be in the form provided for in the Bill.
The hon. Member for Clwyd, West (Mr. Thomas) said that schedule 2 was excessively complicated, and we know why. There is only one reason. The schedule is designed to give the Secretary of State great flexibility in the manner in which he applies the capping powers. Therefore, we are not talking about predictable reserve powers, which will operate only if local authorities increase expenditure excessively.
I am not trying to write policy and this is not necessarily the best solution, but legislation could specify that the capping regime would be based on a multiple of the increase in council tax at standard spending assessment and that capping would not apply to any local authority that spent within a given margin of the SSA. As we all know, the SSA is not a precise instrument. One of the most objectionable aspects of the regime was that capping was applied at or close to SSA and the Government have proposed in their White Paper that it should apply at or below SSA, which is an absurdity. If there is to be a reserve power, the legislation should specify that the capping regime should not apply within 10 per cent. of the SSA level.
Dr. George Turner:
The argument is well worth pursuing because when we try to simplify in local government, we take away local councillors' ability to argue for a particular circumstance. The Government are trying to strike a balance between everything being a special case and having an oversimplified system that lays down one rule for everyone.
Mr. Lansley:
The hon. Gentleman has missed the point. I wish that more Labour Members had taken this line as there are reservations on the Government side about the capping powers that the Government propose. The policy is designed to give Ministers--no doubt at their behest, in conversation with officials--the power to do anything that they want at any time.
However, that is not what a reserve power should be. Such a power should permit Parliament to assert that, although there is a case for simplicity, it cannot apply to a large number of authorities except in so far as it sets a boundary beyond which legislation may allow the Secretary of State to intervene. As long as that boundary allows a considerable margin between the cap and the average rate of council tax increase in a given year and that year's standard spending assessment, it is possible for most local authorities, year by year, to remain unaffected by the capping regime. That is what we want, but the Bill will not achieve it. Instead, it will mean that, every year, every local authority will contemplate the character of the capping criteria. They will even worry about the possible capping criteria in the following year that may bite back retrospectively on their budget decisions.
I shall return to the matter of the best value regime. The implication of the contributions from Labour Members is that there is a debate about who is in favour of best value. We are all in favour of it, which is why I find it astonishing that Labour Members should say that Conservative councils tell them that they support best value. Of course Conservative councils say that: I have a letter from the Conservative Cambridgeshire county council that makes it clear that it supports best value. According to the district auditor, that council is doing very well: the wide range of measures that it has adopted has put it at the leading edge among authorities implementing principles associated with best value.
There is no surprise about that. Conservative administrations in local government have led the way in creating best value. As my hon. Friend the Member for North Essex said, best value is simply an extension of
compulsory competitive tendering. If one thinks of best value as being both baby and bath water--with the baby being competition, or CCT--what makes this part of the Bill objectionable is that the Government, far from chucking out the baby with the bath water, are keeping the bath water and chucking out the baby.
A core element of local government activity must be exposed regularly to the harsh rigour of competition through competitive tendering. Otherwise, competition will be lost, by stages, within local government: even benchmarking--by which authorities compare their success with that achieved by the best 25 per cent. of local government practice--will not secure the same best value that could be achieved in a rigorous competitive regime.
The Minister talked about the four Cs--challenge, comparison, competition and consultation--but I fear that we shall find that Labour authorities will not pursue most of them. They will undertake consultation, but they will not challenge Labour authorities' presumption that the more services provided, the better. They certainly will not engage in competition and all comparisons made over time will be confined to local government rather than between the public sector and the private sector.
I share the worry expressed by my hon. Friend the Member for Poole (Mr. Syms) about beacon councils. Performance indicators must be focused on efficiency, cost and value for money if the concept of beacon councils is to have validity. However, I suspect that some of the elements in those performance indicators will be directed too much towards compliance with Government prescription, given that the White Paper often equates quality with volume of service provided. The result will be that beacon councils will be relatively high-spending authorities engaged in relatively high-volume activities and that they will then be rewarded with additional money from Government for precisely that reason.
I have a final point about performance indicators. The White Paper proposes that quality should be one of the performance indicators imposed by Government, but that should happen only when local government is carrying out a function prescribed and required by central Government. If quality performance indicators begin to intrude into services which local government has the discretion to provide or not, central Government will be prescribing what happens inside local government and not allowing local government to strike the essential balance between the provision of service and the cost to the taxpayer. Central Government should, as far as possible, be kept out of that decision. Quality performance indicators should be limited to those activities which it is prescribed in statute that local government must undertake.
I agree with my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) that the Government simply have to understand that council tax benefit limitation will hit hardest in circumstances in which there are many low-value properties and many benefit recipients. I cannot understand why the Government are blundering into this problem. There is an additional difficulty, which I hope that Ministers will consider carefully and try to avoid. It arises in relation to authorities that have been very low spenders and are spending below their SSA. In increasing their council tax, often as a result of a decline in their revenue support grant, authorities may incur a penalty as a consequence of the council tax benefit limitation even though they are
spending below the SSA. As it happens, the worst example is South Cambridgeshire, which will incur a penalty because the council tax benefit threshold is 23 per cent. below the SSA. There is no rationale, even on the sharing of responsibility criterion to which the Minister referred, for a local authority incurring a penalty if it is increasing its council tax, but spending that far below its SSA. I hope that, when Ministers look at the detail of the Bill, they will recognise that problem.
Mr. David Crausby (Bolton, North-East):
I am one who has always believed that the genuineness of democracy depends on how close it is to the people. The nearer democracy is, both ideologically and geographically, the more genuine it is. The more power and decision making wander away--to London or, even worse, to Brussels--the more a democracy fails to represent the people who have rightful ownership of it. That is why local government is so important. That is why it must be made to work, regardless of the local government model that we use. If one form of local democracy does not work, we have no alternative but to keep switching until we find one that does. It is community representation that matters, not the bureaucracy of local government.
Local government election turnouts that sink below20 per cent. obviously do not help. They send a clear message from the more than 80 per cent. of the electorate who choose not to bother to vote. The message is that something is very wrong with the set-up. Then again, after so many years of attacks on local government by central Government, we should not be surprised by that apathy.
It was the systematic destruction of local democracy that made the Scottish Parliament so necessary. If the Conservatives had remained in power much longer, they would have initiated a demand for a North of England Parliament. I believe that because I was first elected as a ward councillor on the same day that Margaret Thatcher became Prime Minister. I must say that it was the one and only moment of celebration that we shared, but I was delighted to be elected in May 1979. To be a local councillor in the late 1970s was something to be proud of. I found myself surrounded by men and women of various political persuasions who had spent distinguished lifetimes giving real service to their localities. They had collectively built up local services, improved public health, and demolished slums and erected millions of decent houses in their place.
As institutions, the councils were far from perfect and could certainly have been improved. However, they were generally controlled by decent and committed people who were rightly proud of their achievements. Those councillors never guessed on that fateful day in 1979 that the next 18 years would be the worst in the history of British local democracy and that it would change for ever. Instead of developing and improving the communities in which they lived, those councillors were forced, year on year, to cut services, scrap capital programmes and shrink the wages and conditions of loyal council workers.
Elected councillors quickly became the villains in almost everyone's eyes, as central Government forced them to increase rates, impose the poll tax and simultaneously devastate the local services that they had previously nurtured, for no pay, in their leisure time and often on top of full-time jobs. As the pressure mounted, many of those who had served their communities so well grew tired and stood down, and local government was the loser.
It is to be hoped that that is behind us now, but immense damage has been done. I believe that it will take many years to rebuild the respect, dignity and satisfaction once associated with being a councillor. However, the job must be done because local democracy must be strengthened; it must be changed and made to count again. I welcome the Bill as a meaningful start. As local government acquires power, it must begin to assume more responsibility. That is the only way that we shall return to the days when local people believed that it was important to turn up and vote in council elections.
It appears that almost everyone welcomes the abolition of compulsory competitive tendering. The Confederation of British Industry says that the time is right to move away from CCT, and the Local Government Association particularly welcomes the abolition of CCT and the inclusion of best value proposals. It makes one wonder who was in favour of CCT in the first place. In all honesty, CCT gave local authorities the incentive to move out of the competitive dark ages, but it was clearly too blunt an instrument. The concept of best value is clearly better than compulsory competitive tendering and should be supported.
Best value must certainly not be a soft option. I welcome the fact that the CCT regime will not be removed until best value legislation is in place. The problem with CCT was that far too many local authorities concentrated on survival and finding ways of getting around the regulations, rather than on delivering better public services. I was reminded of the many bonus schemes that I experienced in industry when employees spent more time finding ways of getting around the schemes than producing goods. CCT was introduced in an atmosphere of confrontation that was the hallmark of Government in the early 1980s. Instead of being viewed as a partner of central Government, local government was treated as the enemy. I am not referring only to Labour-controlled councils; Tory councils were often treated with just as much contempt by the Government of the day.
The Bill moves us on and, it is to be hoped, will ensure that continual improvements in quality and efficiency are at the heart of best value. I worry about the detail of best value and would certainly have welcomed more insight into how the intervention process will work. We all await that with trepidation.
Best value will not work if it becomes as threatening and destructive as compulsory competitive tendering. My local authority in Bolton does not need--and never needed--to be told that it is good to be more efficient. It has enough nous and incentive to drive for efficiency improvements and it has certainly been forced to make enough cuts over the years to understand how significant efficiency savings are. It is much more important that we allow councils voluntarily to do better and that we jointly seek better local government, because if we fail, the public will increasingly respond by staying at home on
election days. As the public stop voting locally, local democracy will be diminished and will reach the point at which it is no longer representative or democratic.
Bolton council understands that and has as much interest in ensuring public support and confidence as anyone. That is why, in advance of the Bill, Bolton has already set up a best value team. That is why it has taken initiatives to ensure constant improvement in local services through partnership with the public. I very much welcome the steps that the council has taken, especially its vision for future partnership with organisations from the whole community, including business, trade unions, the voluntary sector, the police and many others.
The clear powers in the Bill will enable Bolton council, and authorities across the country, to take on a more effective community leadership role. The Bill will reinforce and build on the progress that has already been made through such initiatives as the Bolton vision for the future, the 3Ds partnership and the Halliwell central forum.
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