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Session 1999-2000
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Delegated Legislation Committee Debates

Local Government Finance (England) Special Grant Report (No. 65)

Second Standing Committee on Delegated Legislation

Monday 24 July 2000

[Mr. Jonathan Sayeed in the Chair]

Local Government Finance (England) Special Grant Report (No. 65)

4.30 pm

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes): I beg to move,

    That the Committee has considered the Local Government Finance (England) Special Grant Report (No. 65): Invest to Save Grant (House of Commons Paper No. 70.)

We are debating the special grant report that will enable payment of grant totalling £17.5 million to local authorities that have been successful in the second round of the invest to save budget. The scheme goes across Government and is administered jointly by the Treasury and the Cabinet Office. It provides financial support to projects that bring together two or more public service bodies in an innovative way. This is the first year that local authorities have been eligible to bid for funding and I am pleased to say that 51 local authorities were successful in an open competition with other parts of local government, the national health service, Government Departments and agencies.

Of the successful bids, 39 projects were submitted through the Department for the Environment, Transport and the Regions, for which the special grant will allow payment. An additional 12 projects were submitted through the Department of Health, but involve local authorities. I shall outline this afternoon the purpose of the invest to save budget and the process used to select successful projects. If members of the Committee wish me to do so, I shall describe a few of the local authority projects to give an idea of the sort of innovation and progress that the budget will stimulate.

One of our priorities is to develop and improve public services. The budget, which is worth £230 million over the three years from 1999-2002, will be playing an important part in stimulating such innovation. To be successful, each project must either reduce the cost of delivering public services or improve their quality and effectiveness. In that way, the budget encourages different organisations from the public, private and voluntary sectors to work together to achieve better ways of meeting the needs of citizens and delivering services. Each of the successful 39 local authorities will need to build up new partnerships to provide those better services to local people. The lessons learnt from the projects will be disseminated throughout the country to help other authorities to take advantage of the knowledge and experience that has been gained.

The excellent response from local authorities in submitting projects for the invest to save budget is a good indication of the mood of change within local government and of the fact that local authorities want to use every opportunity that they can to rise to the challenges of improvement and best value.

Mr. David Rendel (Newbury): The Minister has just told us how many bids were successful. Can she tell us how many bids were unsuccessful?

Ms Hughes: I shall tell the hon. Gentleman that in a moment. There was a two-stage process, the first stage being when authorities expressed an interest and put forward a limited account of their intentions. At that stage, 229 local authorities expressed an interest. From those, 65 local authorities were invited to submit full bids, 39 of which were successful. That is a success rate of about 65 per cent., which is pretty good and made it worthwhile for local authorities to submit a bid.

The invest to save scheme is also promoting better use of new technology. I sent all members of the Committee details of the bids so that they could examine them before our sitting. I hope that they have received them.

Mr. Nigel Waterson (Eastbourne): No.

Ms Hughes: The hon. Gentleman must have received a copy. A copy was sent to each constituency office, and one was put on the Members' Board. We have some spare copies in case hon. Members have not managed to get hold of one. Many of the projects aim to exploit information technology to deliver services in a way that was not possible until recently.

Mr. Waterson: Before the Minister moves on to her next point, may I point out that 26 of the full bids were, according to my arithmetic, ultimately unsuccessful? Does she know the average cost for each public sector body of preparing their detailed bids?

Ms Hughes: No, we do not have that information from local authorities. However, we are not imposing a great demand in terms of bureaucracy. We exercised proportionality in relation to the amount of detail that we required from local authorities that submitted a full bid. An authority that was not seeking one of the highest sums of money was not asked for the kind of detail that was demanded of authorities that received a large amount. We tried to accommodate local authorities in terms of the detail that we required in relation to the size of the project and the bid.

The extent to which local authorities wanted to participate indicates that they thought that it was worthwhile to engage in the competition to seek invest to save money. An implementation plan was required to be submitted for each project, setting out the key milestones, as was a six-monthly progress report, showing the achievement against those milestones. Plans must be made to evaluate the project and to disseminate the knowledge and experience gained. In that way, the ISB projects will provide practical models from which other local authorities can benefit.

I had intended to describe one or two of the projects but, given that hon. Members have had full details, I shall not—unless they wish me to—at this stage. Another round of the invest to save programme is already under way. Again, that will be open to local authorities, and appropriate reports will be brought before the House in future years to allow for further payments of grant. The invest to save programme offers local authorities a valuable opportunity to develop new ways of working, new partnerships and the improvement of services. I am pleased that the Government are providing the funding to make such progress.

4.37 pm

Mr. Nigel Waterson (Eastbourne): I am grateful to the Minister for her explanation. I am sorry if it is my office's fault that the details did not reach me in time. Otherwise, I would not have spent many hours this weekend wondering what SPIDER stood for. I am delighted to discover that it stands for strengthening participation in democracy electronically in a rural area. I give credit to Carrick district council for coming up with such an eye-catching—to use the Prime Minister's word—title for its application. I would also have been beside myself had I not discovered what the Walsall PEALS project stood for, to which I may return in a minute.

We are discussing an interesting group of applications. The main problem identified by Opposition Members is in relation to where the programme fits in to so-called joined-up government. We know that the Government are currently investigating the so-called front-line first initiative, which would involve diverting a lot of funding away from existing local government structures. The scheme under discussion seems to be another example of the Government coming up with an eye-catching idea that involves local councils running around and competing—and spending their own money—for a pot of money.

Broadly speaking, since this Government came into office, the proportion of specific grants has increased by 50 per cent. That is, to put it bluntly, a way for central Government to impose their agenda and priorities on local government. Central Government should establish the proper level of funding for local authorities and let them get on with things, rather than try to micro-manage the specific local schemes.

I would be interested to hear how the proposals fit into the Government's best value and beacon council regimes. Is it more likely that councils will be considered beacon councils because of successful applications? Where does best value kick in in terms of value for money on such no-doubt laudable activities?

We discovered that there were 229 original applicants, most of which fell at the first hurdle, and that there were 65 full bids. Although I did not expect the Minister to have the answer at her fingertips, Ministers should spend a little more time trying to discover the cost to local authorities of producing the bids. The authorities are often already overstretched in their budgets, and the bids—an enormous distraction from the business of running a local council—cost real money, if only in officer time. On my arithmetic, about 26 of the formal bids were unsuccessful, which means that the councils lavished a lot of time on putting the bids together, only to have no benefit at all.

Even the lucky winners have to prepare implementation plans. On top of the costs of the 30 or 40 existing plans that local councils are meant to produce for all sorts of different purposes, does the Minister have any idea of, or interest in, what such plans will cost the councils to produce? Are the schemes not a way to ensure a few eye-catching headlines? I do not know whether the Prime Minister is personally associated with the programme. The bids are a major burden for the councils that lose, and perhaps even more of a burden for those that win.

We broadly welcome some of the projects, but wonder whether they would have seen the light of day anyway without the benefit of the rather convoluted system of funding. We do not intend to divide the Committee, but would like some detailed thoughts from the Minister on the issues that I have raised; if not today, then in writing.

4.42 pm

Mr. David Rendel (Newbury): I sympathise with a great deal of what the hon. Member for Eastbourne (Mr. Waterson) said, although I did not sympathise with him when he talked about the degree of central control and how his party would like to see much more local control. I wish that that had been the case when his party was in power. Only my party has been entirely consistent in its view that such matters should be dealt with locally, whether we have been in government or not.

I sympathise with the hon. Member for Eastbourne's points about the number of councils that have spent money without gaining anything from it. If we include those that merely expressed an interest—doing so must have cost them something—the total is 190 out of 229, so a large proportion spent something without saving anything. Far from investing to save, they spent without saving. The money has come from other local authority services that could have been provided had the authorities not gone in for the spending.

The hon. Member for Eastbourne expressed mild disappointment about the fact that the Minister was unable to tell us how much had been spent. I would go further and say that it is horrifying that she should have such a policy without apparently having any idea what is being spent on the bids. Local authority time must have been spent—other organisations must have wasted some of their money also—on putting bids together that were then unsuccessful. If one starts such a policy, one needs to know how much people spend on it, or one cannot tell whether it is cost-effective. I would not necessarily expect the Minister to have the details of the cost of every bid but, at the very least, she ought to have been able to give us a reasonable estimate of the sorts of costs involved in making bids for the project.

I am disappointed. I have no wish to divide the Committee—any more than the hon. Member for Eastbourne—on the details of where the money will go now that it has been agreed. However, the policy that lies behind the money needs much more thought before we go ahead with such schemes in future.

4.44 pm

 
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