Local Government Finance (England) Special Grant Report (No. 87), on 2001-02 Special Grant for Local Authority E-Government Pathfinders

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Mr. Don Foster (Bath): I have no intention of detaining the Committee. First, I place on record—[Interruption.]

The Chairman: Order. Does the Conservative spokesman wish to speak?

Mr. Malcolm Moss (North-East Cambridgeshire): I did not think that I needed to stand to catch your eye, Mr. Griffiths.

The Chairman: I am sorry, but because the hon. Gentleman was sitting down and looking fixedly, I did not think that he wanted to speak. Will the hon. Member for Bath allow me to call the Conservative spokesman first?

Mr. Foster indicated assent.

4.49 pm

Mr. Moss: Thank you, Mr. Griffiths. I was looking fixedly at you, waiting for the call.

I thank the Minister for his explanation. If he had said at the beginning what he said towards the end, the change in the way that councils are to receive the money for the pathfinder project would have been a little clearer. We would then have understood that, yes, the order does provide that the grant is to be paid to the selected councils. I have a question about the 24 councils that have been selected. What criteria were used to select them? Applications were made by 140 councils; some of them by grouping together—I think that the Welland project was mentioned—but none of the councils that aggregated seems to be on the list. If this is a first tranche of money to trial various things, why have the Government not chosen a group of councils who seek to collaborate?

The Minister mentioned that there are various amounts—we can see that clearly—but he did not explain why those amounts vary as much as they do. The Committee needs an explanation. Have the Government set out from the outset to test various criteria and methods, and then fitted the councils' applications to meet them, or have they ring-fenced, say, £24 million and then decided across which councils to spread it according to geographic spread and character?

A number of councils feel aggrieved that they are not on the list. I am thinking, in particular, of Bracknell Forest. It is well advanced in its e-commerce and is perplexed as to why its application to participate in the project was turned down. The Minister might not be able to give an answer now, but I would be grateful if he wrote to me about that specific example. It illustrates the point that some 75 councils will have been disappointed, and one wonders whether the Government set clear criteria at the outset for those applying to participate in the trial.

Will the Minister confirm that the amount promised for this e-government pathfinder project is £1 billion, which means that £24 million is rather a drop in the ocean compared with the total that is due to be rolled out? Will he confirm also that the Government have set a target for all local authorities to have electronic delivery of their services by 2005, some three and a bit years away? The Government's setting of arbitrary targets gives local authorities a problem with regard to take-up. I believe that the target set for electronic service delivery includes call centres. The targets seem to be expressed in terms of capability rather than take-up. That means that it does not matter how many people use the services, just that the services are there and can be delivered.

The project ought to be testing how much need there really is for people to access the services via this medium. If there is not a great demand, £1 billion seems to be a complete waste of money. Surely market research should be an important precursor to any further substantial expenditure on this. There is still, despite the Minister's assurances, some public sector scepticism. In March 2001, Public Finance published a survey of public sector organisations that detailed the scale of the Government's failure to deliver on e-government. It supports our argument that what matters is efficiency, not achieving targets. Nearly three quarters of the respondents said that the Government had failed to back their e-targets with adequate support and guidance, and that the £1 billion committed to the e-agenda by the Government was not coming through fast enough, and was tied up in complex bidding schemes.

That comes back to my earlier point, which is that £24 million, set against a a total of £1 billion, is really small beer. Why have the Government selected only 24 of 100 applications? Has the application process been overly complex and put people off?

We are also falling behind in developing the internet. Only this year, the Prime Minister said on e-commerce that

    ``to succeed we have to be quick on our feet''.

However, a report to the National Audit Office in December 1999 showed that the British Government were generally in advance of other Administrations in website development in 1996, but were lagging behind by 1999.

There has also been a failure to achieve the roll-out of broad-band internet access. The UK is behind Asia, the United States and most of Europe in broad-band penetration. Without high-speed connections to the internet, there will be little take-up of e-government services. Government policy has resulted in delays in opening up the local communications network to competition.

It is important for the Minister to tell us whether internet access is being opened up more widely—I believe that to be one of his responsibilities—which is necessary if all the services planned for local authorities are to be accessed quickly and efficiently. If access is not quick and efficient, people simply will not use the services, and money will be wasted. Hand in hand with providing the money for local authorities to develop their local services, the Government have a major responsibility to broaden the basis of internet access.

We do not oppose the order. Indeed, it would be churlish to do so. However, we have reservations about the criteria that were used to select councils. We shall not point at this stage to political bias, but it is important that the money be spent wisely and the aim of the project and trial be clearly defined and measured at the appropriate time. If the Government's target is 100 per cent. access to all local authorities by 2005, they must get a move on. To date, they have shown nothing like the dedication required for that purpose.

4.57 pm

Mr. Don Foster: I begin where I left off. Thank you for allowing me to contribute, Mr. Griffiths.

I was slightly taken aback by some of the questions asked by the hon. Member for North-East Cambridgeshire (Mr. Moss). In particular, he said that the Minister took a long time to get around to explaining the measure's purpose. One would have assumed that, having done his homework, the hon. Gentleman would have known that before he came to the Committee.

I was equally surprised at the hon. Gentleman's criticism of the Government for not having selected projects that involve a number of councils grouped together. Again, that is clear evidence that he has not done his homework. Had he done so, he would have known, for example, that Wiltshire county council, which appears in annex A, is simply the lead council for a number of councils. I hope that the Minister will correct me if I have got that wrong, but I assume that I have not.

For the benefit of the hon. Gentleman, I should point out that that consortium includes Wiltshire council, Swindon council, Generic ESD, West Wiltshire, North Wiltshire, Kennet, Salisbury, the health authorities, the primary care groups, Wiltshire constabulary probation service, the fire service, Bath university, Wiltshire college, Salisbury college, Intel Securicor Information Systems, Wessex Federation of Chambers of Commerce, MPC Data, ICL, Microsoft, SWDRA, Junction 17, Oracle, Cisco, CSL, Cable and Wireless, BT and Sx3.

That is a good example of a rather large number of bodies that have been brought together. I congratulate the Government on selecting projects that genuinely involve a wide-ranging partnership in the area. However, before I ask the Minister some questions, I would like to make clear that, although we are in no way opposed to the Government's desire for an improvement in local councils' use of information communications technology, we continue to be extremely concerned about the way in which the Government use special and specific grants to ensure that local councils simply follow the Government's pet projects rather than allowing them to make their own decisions about how to use the money made available to them.

That said, we believe that, if there is to be a specific grant, the project that it supports must be a good one. We welcome the fact that the Government are supporting councils. We also note that the total sum of money to be made available for the set of projects is not, as the hon. Member for North-East Cambridgeshire said, £1 billion but £350 million. Given that fact, and the requirement for the grant to be met in such a short period—as the hon. Gentleman also said—I am surprised that only 24 projects were ultimately selected. Would it not have been better to use a front-loading system to get more councils involved at an earlier stage?

In that regard, I would be grateful for confirmation from the Minister that that is an example of a specific grant where there is no requirement for matching funds from local councils. He will be aware that nearly every one of the successful bids will have revenue consequences for the local council, as the Government primarily grant capital bids. Local councils will make available large sums of their own money for such projects.

Only yesterday, we had a debate in the Chamber on the Government's spin and media manipulation. I ask the Minister, in a friendly spirit, whether we can be assured that the Government will make no attempt, following our proceedings, to put out a further press release announcing their successful moves in that direction. The only press release that the Government could legitimately put out is one that deals with the change in funding methodology and the deletion of Norfolk council from the list. Were the Government to suggest that this is a new measure, they would doubtless put out an almost identical press release to that issued by the Department on 22 March, which gave all the details that the Minister gave us in his statement today. Will the Minister give us an absolute assurance that the Government will not attempt to spin this as a new success story?

Is the Minister convinced that the mechanisms adopted by the Government—he referred to a company that has been involved in that work—to ensure the spreading of good practice from the pathfinder schemes really are the most effective way forward? The Government have pushed forward several similar schemes on other projects, also funded by specific grants, and it has become clear that other councils have not picked up the good practice set out in them. My understanding is that the sum of £1.7 million, referred to in annex B, is being used by the company and in other ways to carry out that work. That is a lot of money to spend on dissemination of good practice. I hope that the Minister is convinced that there is a successful strategy for dissemination.

5.4 pm

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