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

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Dr. Whitehead: We have had a short discussion in which several important points have been raised, by the hon. Members for North East Cambridgeshire and for Bath, which I shall attempt to address.

The main issue that arose was the criteria by which the pathfinders were selected. I received 100 expressions of interest, so it is inevitable that some authorities will be disappointed. I am confident that the criteria of selection were always made clear. Local authorities were informed that the project was a pathfinding one and that, inevitably, some would be unsuccessful. The wider issue concerned funding to enable local authorities to achieve effective e-government by 2005. The pathfinder projects therefore informed the wider local government community and should not be seen as depriving other local authorities of assistance. They are vanguard, not exclusive, projects.

Mr. Foster: The Minister rightly acknowledges that there will be winners and losers. From over 140 expressions of interest, more than 100 bids were made. Only 24 were accepted, so 76 local authorities have been disappointed. Will the Minister assure the Committee that those hitherto unsuccessful projects will be reconsidered in the next round of bids? More importantly, will he confirm that councils will not have to fill in the complex set of forms all over again in order for the projects to be reconsidered? Can their existing applications stand, if they wish?

Dr. Whitehead: I intended to deal with that issue later, but as the hon. Gentleman has asked me about it now, I shall give him the reassurance that he seeks. As he pointed out, £350 million was allocated over three years for local e-government. The approximate breakdown of the allocation is £25 million for 2001-02, £135 million for 2002-03 and £190 million for 2003-04. The moneys for 2002-03 are essentially to provide pathfinder projects that will inform the wider local government community about the best ways of achieving the e-government target.

A substantially increased amount will be made available in 2002-03 precisely for the wider dissemination of good practice and good working arrangements among local authorities. The Government are minded—discussions are still proceeding about the best means of consolidating the advantages of the pathfinders—to make moneys generally available for achieving the target. The direct answer to the hon. Gentleman's question is that there will be no further pathfinders for which applications need to be made in the same way—only a more general application of the grant as it rolls out over the period.

In response to the hon. Member for North-East Cambridgeshire, the £350 million does not represent the sum total of all moneys available for local e-government. Local government can avail itself of several other sources of funds, including the Treasury's invest to save budget. It is through that budget that Norfolk carried through its proposal, which therefore fell outside the pathfinder project. Other sources include the capital modernisation fund, the Department for Education and Skills national grid for learning, and the people's network, providing freely available internet access in libraries. Those are all methods by which the difference will be made up between the £350 million that has been earmarked and the estimated £2.3 billion that will be required to achieve the 2005 target. Local authorities will, therefore, need to use some of their existing funding to become thoroughly e-enabled by 2005, but that has long been a prospect, and it is not anticipated that the money that they will need to invest for that purpose will have a grievous impact on other activities that they might wish to fund.

Clearly, what is being proposed is not match funding of the kind that was sometimes operated in the past. The IEG statements that several local authorities have submitted indicate that they are aware of the money that they need to invest to e-enable themselves. However, those statements also show that local authorities foresee that that investment will lead to considerable savings in the operation of local government. For example, Leeds estimates that it will invest £10 million, but identifies savings, over a specified period, of £34 million; Southampton city council states that it will invest £18 million, and estimates savings of £2 million; Haringey states that it will invest £7.5 million and estimates savings of £4.5 million. That is not match funding. Indeed, in many regards, it is the opposite, as e-enabling will result in the liberation of resources.

In answer to the question concerning disappointed bidders for 2001 pathfinders, it will not be necessary to re-bid in the same manner. Therefore, further applications for the funding made available in 2002-03 and 2003-04 can be received on behalf of such local authorities without bids having to be re-submitted.

The hon. Member for North-East Cambridgeshire asked a question, which I have not yet addressed, about the basis on which the pathfinders were selected. They have been selected on the basis of a spread of types of project, a spread of types of authority and a spread of location. Some local authorities that submitted good bids might have cause to wonder why they have not been prioritised—the hon. Gentleman mentioned one such authority—but that is how things turn out with pathfinders.

Pathfinders are intended to be part of a process that provides adequate information to the entire business of e-enabling local government. The hon. Member for Bath asked whether the Government are confident that particular methods of dissemination are satisfactory: it is true that a company has been engaged to undertake elements of that dissemination, but it is also true, as I mentioned in my opening remarks, that there is a specific requirement for pathfinders to sign up as mentors to other authorities. I also mentioned that money has been given to pathfinder authorities specifically for that purpose.

As a result of that programme, the Government are attempting to ensure that there are direct and well-connected routes for dissemination of good practice. It should not be left to chance, depending on who picks up which journal when, or who finds what on the internet. A specific method of mentoring allows information to be passed on to authorities that are particularly interested in projects that are being run as pathfinders. It can therefore be stated with confidence that mentoring for up to three other local authorities will begin to cascade the information down.

The hon. Member for North-East Cambridgeshire asked why partnership authorities were not mentioned in annex A. The hon. Member for Bath answered that in a succinct and adequate way in his exhaustive list of the partnership for Wiltshire.

Mr. Don Foster: Succinct?

Dr. Whitehead: Well, succinct is not the best chosen word in the context of our present discussion.

I previously mentioned the Welland partnership: Melton borough council takes part in that and, as hon. Members can see, it is listed as the lead authority in that annex. As the hon. Member for Bath made clear, most successful bids contain partnerships, which can be extensive, of one kind or another.

The purpose of local government online is to make an enormous contribution to internet access for citizens by ensuring that they have greater access to their local services via the e-routes, portals and various routes of access in which the pathfinder projects will allow citizens to participate. As the hon. Member for North-East Cambridgeshire said, if overall internet access is impeded much of the work will not be as good as it should be. Nevertheless, the target is to have all local authorities e-enabled by 2005. Contrary to some of the hon. Gentleman's suggestions, the IEG statements indicate that local authorities are generally making good progress and the target is therefore eminently achievable by 2005. That target marks a step change in the way in which citizens can fulfil their public service and local government requirements.

The hon. Member for Bath asked me to give two assurances, one of which I have mentioned already. The first concerned the fact that this money is neither ring fenced in the sense that some previous grant arrangements have been nor match funded. It is intended to provide examples of good practice that will inform local government so we cannot put it in that particular category.

The second assurance for which the hon. Gentleman asked was that the Government would not claim that this was new money. Being an unspun Minister, I can assure him that it is not our intention to say anything other than that the Committee has agreed—assuming that it does—to ensure that the funding that previously would have been paid to local government by means of borrowing permission will now come to it as a specific grant. That will be of specific relevance to the four headline authorities in this list of pathfinders which are debt free. There are approximately 90 debt-free authorities in local government and it would not be fair or reasonable in the long term to disadvantage them in gaining access to credit approval because of their particular status, which is the nub of this afternoon's case. Members of the Committee can feel reassured that the measure is designed to ensure that money is supplied fairly to local authorities.

Mr. Foster: I think that I understand the Minister's assurance about the press release. However, for absolute clarity's sake I should point out that the initial press release of 22 March gives the clear impression that real Government money was being given to councils:

    ``The initiative is part of the Government's support to promote continuous improvement in local government services through electronic service delivery (ESD) to achieve the target of 100 per cent. ESD capability by 2005. A total of £350 million has been identified in the Spending Review 2000 for this purpose including £25 million in 2001/02 for pathfinders.''

In the light of that press release, I am anxious that we do not over-spin today's changes.

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