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Mr. Edward Davey (Kingston and Surbiton) (LD): I agree with much of what the hon. Gentleman says, but I would like to focus on the figure of £1 billion. That is the 2002 figure that I have seen, but at meetings with the chairman and the chief executive of the Audit Commission I was told that the costs of inspection are coming down significantly. The plan is to reduce them by about 50 per cent., so we are talking about a future figure of £500 million or £600 million. Is that the hon. Gentleman's understanding?
Mr. Prisk: I am grateful to the hon. Gentleman. He has been prescient in that he pre-empted a question I wanted to put; I shall answer his question and thereby pose it to the Minister. We are unclear from the order and its explanatory memorandum what the status of the burden of the plans is—both those that are disapplied and those still in place. For example, does the Minister agree with the Local Government Information Unit that the indirect costs of about £400 million in 2002 have increased significantly during the past two years? To answer my question and the hon. Gentleman's as well, will the Minister tell us what estimate the Department has made of the total direct and indirect costs in the current year? That will allow us to understand the change that local government is being asked to make.
Mr. Davey: I am surprised that the hon. Gentleman is asking that question, because the James review set out the costs that could be saved in relation to inspection and regulation of local government. It was very clear about what could be done. I looked at that view and was surprised at the figures, because in our calculation they looked rather inflated. If the Conservative party publishes the James review and promises tax cuts based on its figures, and those figures are not correct, it will be presenting a false prospectus.
Mr. Prisk: That was a nice try by the hon. Gentleman, but I have to disappoint him. I have every confidence that the £1 billion figure highlighted in the James review is entirely correct. However, I know, Mrs. Anderson, that you will not allow us to drift into what will be a very important agenda—that of the next Conservative Government. Much as I might be tempted to talk about—and much as the hon.
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Gentleman encourages me to do so—what sunny uplands such an election result would provide, we will stick to the parameters of the order.
The Government and the Minister have made it clear that there are benefits from scrapping the seven plans. Why should such benefits be limited only to a small group of authorities? Why should we not try to help the many, rather than the few? What savings will be made from abolishing the plans? In recent months, I have dealt with Treasury matters, so I tend to look for the numbers that underpin the issues. I have looked at the explanatory memorandum, which mentions an expectation of savings, but does not tell us how much they would be. For example, what savings does the Minister anticipate will be enjoyed by my own Hertfordshire county council, which is, of course, one of the excellent councils to which he referred.
The basis of the order is the definitions of excellence for the authorities. Although it is encouraging and important to promote excellence in any form of public service, a question mark hangs over the comprehensive performance assessment. There was a piece about the weakness of the CPA in the Municipal Journal of 16 December. It asked:
''is it a good use of taxpayers' money?''
and went on to say that the Audit Commission
''knows that if there is no change, then the CPA is not achieving its aims, and becomes another redundant performance tool. So, improvement is built into the system, or else it is superfluous. If you add the fact that many councils have also got cute about the way they handle the CPA, then there is really no way for the underperforming councils to go anywhere but upwards.''
Given those flaws in the system and the clear benefits of disapplying the plans, why not remove them for all councils?
To conclude, my party is strongly committed to freeing all local authorities from unnecessary bureaucracy. Although we do not oppose the disapplications set out in the order, it is clear that they are too little and help too few. The CPA on which the order relies is badly flawed, and my party would abolish both the CPA and much of the bureaucracy that underlies it. I look forward to hearing the Minister's responses to my questions.
4.48 pm
Mr. Davey: It is a pleasure to serve under your chairmanship, Mrs. Anderson. I hope that I will keep in order during my remarks.
Listening to the hon. Member for Hertford and Stortford (Mr. Prisk) was interesting. Through him we send our best wishes to the hon. Member for Brentwood and Ongar, who recently broke his leg—or had a problem with it—and was out of action for some time. We were worried that someone would be describing him as plastered and pickled. We were concerned then that he should recover quickly, and I hope that he recovers quickly now.
The hon. Member for Hertford and Stortford is right that there is nothing offensive in the order. Essentially, it deals with deregulation that is to be welcomed, and we have no problems with it. Indeed, like the hon. Gentleman, we wish that the Government were going considerably further. They should involve
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more local authorities, not just excellent ones. Like the Conservatives, we have concerns about the CPA and the heavy burden of inspection and regulation on local authorities. However, after looking at their analysis of this programme, we wonder what they would do if they were in power and trying to improve local government. There is a very strong case for reducing inspection and regulation. There is also a strong case for moving away from across-the-board analysis to a better risk-based and more proportionate approach. The Audit Commission is keen on such an approach, and the Government should follow it.
The idea that all these arrangements can simply be ripped up, however, fills me with dread. We were always sceptical about aspects of the CPA, and in many ways the order justifies some of that scepticism, as the CPA promised lots of freedom and flexibility but was not going to deliver them. We retain those concerns, but the idea that certain local authorities do not need any external inspection on these measures does not hold water; there needs to be some framework. The Conservatives will have a real problem if they think that they can pocket £1 billion without any impact on local government and services. The matter of that £1 billion is one of the many questionable aspects of their approach in this area—a view that I hope the Minister supports.
I have a specific question for the Minister about how the category of excellent authorities will work under his Government's system, which I and the hon. Member for Hertford and Stortford do not support. The explanatory notes state that if a local authority loses its status as excellent, there will be a period of grace during which the duties are not reapplied and the local authority can try to re-earn its excellent status. I find that worrying. How long that period will be is not clear in respect of all the duties; the Secretary of State appears to have some degree of discretion in that issue. Also, it is probable that more authorities will now move up and down between the excellent and good categories than during the first period when the CPA was in place.
I can speak about that issue with some authority, because my own authority in Kingston upon Thames moved from excellent to good and then back up to excellent again in the space of just over two years. It moved from excellent to good because some traffic accident statistics for about four years before showed that the borough had not performed well in reducing the number of road accidents in that particular year. That figure was negative, and the current administration could do nothing about it. If those involved had looked at the number of road accidents for the royal borough of Kingston, they would have found that it was one of the lowest in the country. However, the problem was that the CPA indicator was the rate of change, and because the borough's figures were at such a low base, the rate of change was poor. That one indicator pushed us from excellent to good; in other words, the change was arbitrary, capricious and random.
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Some aspects of the CPA are welcome, but there is a danger that some of them—particularly the drive through to a numerical basis—will lead to authorities moving from one category to another without any rationale. The Minister should be worried about that. Kingston has gone back to excellent, so he could rightly say that these duties would not have reapplied because that happened within the relevant period. However, there is about to be a complete change in the CPA; I have been reliably informed that the weightings between the four categories of education, social services, housing and environmental services will significantly alter. It is therefore probable that more authorities will move between categories, and not just because there has been some one-off, one-year statistical quirk, but because there has been a significant change in the system.
I fear that the classification of some councils that are currently excellent will go down to good, and that they will be out of the excellent category for a number of years before rebuilding their status, because of the way in which the CPA has changed. Nothing will have changed in the councils involved—there will have been no change in policies or performance—but their classification will be different because the CPA structure has changed. That change might be made for a good reason, but there will be some odd results.
Will the Minister address that issue? If there is genuine freedom, it needs to continue for an almost indefinite period if an authority moves down from excellent to good. That might not be appropriate for an excellent authority that moved down to fair, as that might suggest that it was truly performing poorly; there would have to be quite a lot of change in order to go down by two categories. None the less, if we are to keep this system, which I am not particularly keen on, one would have thought if that an authority goes down by one category, there ought to be clear leeway for these deregulatory measures.
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