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20 Nov 2007 : Column 69WH—continued

The hon. Member for Mid-Norfolk mentioned health and social care. The Government made something of the fact that by last October Norfolk was close to achieving in health and social care what they call coterminosity. At long last the primary care trust, as the commissioner of health services, broadly matched the social services authority—the county council. The Government saw that as a good thing, and I agreed. There is a real problem with co-ordinating health and social care, and a horrible organisational divide between the two. It makes a lot of sense to have those services at the same organisational size when starting to try to integrate them. Six months later, the Government are
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talking about destroying all that. I find that utterly bizarre, if we are in favour of evidence-based policy making.

The process is horribly flawed. The initial process involved Norwich city council putting forward a bid for unitary status. Inevitably, it concentrated on its own concerns and the bid neglected the concerns and interests of the rest of the county—a completely flawed process. When the Government considered the bid, they reached the remarkable conclusion that they would reject the application that had been made but would approve in principle an application that had not been made and that they would do so without any evidence in favour of or opposing such an application. That is scandalous and completely contrary to evidence-based policy making.

The process is quite remarkable and bizarre. Local authorities have been asked to present their cases in principle for a unitary option for Norfolk before the terms of reference have been issued. No one would believe it if it were not happening. It is remarkable. Nevertheless, that is how the Government want to proceed. Local authorities are being put into a straitjacket. They feel that they have no option but to put forward proposals that they may not be convinced about and that will inevitably be rushed through. The time scale is utterly ludicrous.

On cost, over the summer I made requests under the Freedom of Information Act 2000 to Norfolk county council and Norwich city council. The two authorities have together spent £600,000 on the initial process at a time when services for elderly people in our county are being cut and when many of our schools need extra funding. How on earth can anyone justify spending £600,000 on an initial process when there is such a need for funding for services in a rural county such as Norfolk, which has serious problems with educational attainment? That is scandalous. Incidentally, that amount covers the start of the process. As the hon. Member for Mid-Norfolk said, every authority is setting aside £100,000 or £200,000 to cover the main process. That beggars belief.

I have argued for a Norfolk convention. I do not want that to be a Liberal Democrat initiative or a Liberal Democrat-run idea. I want everybody to consider it seriously as a way forward. We should not have a political carve-up. We should engage the people in Norfolk and civic society in such judgments. Self-evidently, people should be able to consider the status quo option. It is extraordinary to rule out one option, particularly given the fact that there appears to be no evidence to support the idea of change. At the very least, the evidence is mixed.

At all costs, I oppose the concept of a political carve-up. I share the suspicion voiced by the hon. Gentleman: this is probably a done deal. I assume that Norwich city will get its unitary status whatever the people of Norfolk say. However, the criterion that we are told should apply—that any proposal should be supported by a broad cross-section of the community—will not be met. One can tell from hon. Members in the Chamber that the county’s political leaders are all over the place, with varying views on the issue. There is no gathering of support for any unitary option.

What is happening is a democratic outrage. We must not have a political carve-up. We must slow the process down and allow proper consideration by the people of Norfolk. Those people should decide.

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11.36 am

Mr. Henry Bellingham (North-West Norfolk) (Con): It is a pleasure to follow the hon. Member for North Norfolk (Norman Lamb). I congratulate my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) on securing this important debate.

I was interested to hear the speech made by the right hon. Member for Norwich, South (Mr. Clarke). Norfolk has seven local authorities and, apart from one, they are all performing very well. The flaw of his argument about Norwich is that the council has failed consistently and is by far the worst performer of the seven authorities in Norfolk. As my hon. Friend the Member for Mid-Norfolk pointed out, the Audit Commission was damning in its two reports on Norwich city council.

The city council failed in its bid for unitary status on all five criteria. The right hon. Member for Norwich, South talked about Peterborough and Ipswich, but they happen to be well-run authorities. In the wider counties that are involved, there is considerable support for unitary status for those councils. That support does not exist for Norwich’s case. Norwich is entirely on its own in Norfolk. There may be some support in Norwich, but I doubt that it is substantial. If we consider the different organisations that cover Norfolk, there is no support for unitary status for Norwich.

I find it absolutely staggering that the boundary committee has received no terms of reference from Her Majesty’s Government, but has begun preliminary work. It has said to the local government family in Norfolk, “Go out there, and try to come up with some solutions.” As my hon. Friend the Member for Mid-Norfolk pointed out, those organisations are being forced to spend substantial amounts of money on the process and the chairman of the boundary committee has been menacing and proactive. Based on everything that the chairman has said, one would conclude that it is already a done deal. Why should the local authorities in Norfolk have any dealings at all with the committee? It has no terms of reference, and I do not see why those authorities should engage with it in any way, shape or form.

Do we need change in Norfolk? The binary system that we have works well. Norfolk county council is a four-star council and has done extremely well. My local borough council, King’s Lynn and West Norfolk, is a beacon authority. Its focus on regeneration, value for money and accountability is second to none in the country. It has delivered better services with a reduced council tax demand. Let us consider the other district councils. Great Yarmouth has improved hugely over the years. North Norfolk is a good council. There are also Broadland, Breckland and South Norfolk; we have some excellent councils in Norfolk. The current system is working well.

Could unitary government work in Norfolk? Of course it could in theory, but in practice I am persuaded that, because Norfolk is a large shire county, some of the functions performed by the county council can be carried out only on a county-wide basis, with one authority in strategic control of functions such as highways, education and social services. A county council is needed to provide that framework. However, functions such as housing, planning, environmental health, and regeneration could be carried out by the county council only at the expense of accountability and only in a remote way, which is
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why they should be performed at the local level. That explains why the binary system works well in a county such as Norfolk.

We have a dilemma, therefore. Norfolk county council is obviously too large to carry out the whole panoply of local government functions, yet the existing boroughs are far too small to become unitaries. The only way to move forward would be to have complete upheaval, so why change things? As my hon. Friend the Member for Mid-Norfolk said, the proposals are entirely politically driven; there is no public support for them whatever.

As for cost I, too, have had a look at primary care trust reorganisation. Ten years ago, we had the Norfolk health authority, which itself was the consequence of a substantial number of earlier reorganisations. It was working very well, but the Government came along and said that health commissioning needed to be brought closer to the public, so they set up five or six PCTs across the county, all with their own chief executives, directors of finance, directors of corporate affairs and whole armies of bureaucrats. Ten years on, it was decided that that system was not working well, so we went back to the Norfolk health authority concept. In the meantime, various senior officials in the health service walked away into the sunlit uplands with redundancy packages of £300,000, £400,000 or £500,000, costing huge amounts. There was no consultation with the wider public.

I have been reading a report entitled “The 2006-07 DCLG Process for Creating New Unitary Authorities in England” that was prepared recently by Professor Michael Chisholm and Professor Steve Leach. In their conclusions, they were absolutely damning of the Government. They said:

They also said that retrospective legislation was in principle pernicious and that the process was biased in favour of unitary outcomes. The Minister should read the report if he has not already done so, because it is extremely critical of what has happened so far.

Do we need any change? My strong view is that there is no such need at the moment, because the status quo works very well. Of course, if one were starting local government in the shire counties from scratch, one might well consider a unitary solution. The pragmatic approach, however, is to ask why something should be changed if it is not broken.

There was a quotation from a Government Minister in one of today’s papers, which said:

The proposals constitute just that: change for the sake of change, with absolutely no wider public support and with a Government organisation—the boundary committee— completely out of control.

I urge the Minister to listen to Norfolk MPs. We are saying, “By all means go ahead with the process, but please do not rule out consideration of the status quo.”

11.43 am

Mr. Richard Bacon (South Norfolk) (Con): It is a pleasure to follow my hon. Friend the Member for North-West Norfolk (Mr. Bellingham). I shall take up where he left off on the theme of change, because it
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seems to me that the proposals are just the latest example of an insatiable desire that affects all Governments to engage in fiddling and changing things. I shall examine that theme generically and discuss the lessons that can be learned for Norfolk.

Wherever proponents of change are found—in the private or public sectors—it can be useful to look at how the same issues emerge, the same dramatis personae take to the stage, and the same stratagems are employed to achieve change despite strong and often compelling arguments against it. That applies in activities as apparently diverse as mergers and acquisitions of commercial companies and in delivery of changes in the adult education system or in the tax and credit system—to take two examples purely at random. I do not know why the Minister smiles, because the record shows that a lot can be learned in both of those areas. He should know that better than most, but I shall not dwell on that subject. The delivery of new computer systems is another such activity, as are private finance initiatives and the conversion of mutual building societies into banks.

Mr. Bill Olner (in the Chair): Order. The hon. Gentleman is not discussing local government in Norfolk.

Mr. Bacon: Thank you, Mr. Olner. I was about to mention the reorganisation of local government. Whichever activity is under discussion, the proposed changes usually have certain common features. The benefits of the change are often questionable and unproven. It is worth saying at this point that one is not opposed to all change, in all circumstances, all the time. Nevertheless, the right hon. Member for Norwich, South (Mr. Clarke) correctly articulated the Conservative position, which is that, if change is not absolutely necessary, it is necessary not to change—not least because change can itself bring all kinds of unpredictable and undesirable consequences in its wake.

Mr. Charles Clarke: Does the hon. Gentleman accept that nevertheless, for my constituents in Norwich, South, it is indeed absolutely imperative to change, for the reasons that I set out?

Mr. Bacon: Not necessarily. The first thing that the citizens of Norwich need is a council that can look after their money properly, rather than one that, as the Audit Commission has said, is not fit for purpose. Once the council has got its basic management sorted out, it could think about other things, but it should put the tasks in the right order first. However, let me repeat that my party is not opposed to change in all circumstances.

Mr. Keith Simpson: My hon. Friend may not be aware of an article that was published in September in the Eastern Daily Press in which the right hon. Member for Norwich, South (Mr. Clarke) put forward his arguments in favour of unitary authorities. It illustrates the very point made by my hon. Friend. The right hon. Gentleman was quoted as saying:

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His assessment of his own city council is pretty abysmal, therefore.

Mr. Bacon: My hon. Friend makes the point very eloquently. As I was saying, a number of common themes emerge. One is the theme of huge financial costs, which are usually much larger than originally stated. Another is the presence of characters who stand to benefit from change whether or not the wider interests of the organisation and of its customers are served. Last is that of a jargon or patter that, at least superficially and on first hearing, makes what sounds like a convincing case for change.

It is no coincidence, therefore, that the proponents of change often adopt the same approach, in which the first tactic is to overstate the benefits. For example, most GPs say that it would have been better not to have proceeded with the NHS IT system, even though it promised huge benefits. Another example is that of mergers and acquisitions, most of which fail—although loads of people make money from them.

The second tactic is to understate the risks and costs. The Minister knows all about that from the example of individual learning accounts, which I mentioned earlier. And who would now doubt, despite the benefits that were touted at the time of demutualisation, that Northern Rock would have been better off had it remained a mutual building society rather than converting to a bank?

Another important tactic is to act very fast so that there is little time for those who doubt the wisdom of the proposal to examine the case against it. A good example of that is the tax credits mess, in which the timetable for testing whether it would work was compressed almost to the point of extinction. Many hon. Members have seen the results of that in their constituencies.

I am tempted to say that another common theme is emerging in cases in which there has been a mess: the presence of the Minister. I shall not say that, however, because it would do him a disservice. He was a Treasury Minister for many years, and I am told that once one puts on a Treasury hat one can never entirely take it off. I am hoping, therefore, that he will view the proposals with a very jaundiced eye—not because change is always bad, but because one should make the case for it stack up, which nobody has yet convincingly done.

The people who benefit from change go by different names. Sometimes, they are called merchant bankers and lawyers. They look for transaction fees. Sometimes, they are called chief executives—a phenomenon that is common to both the public and private sectors. On occasions, they stand to receive an enormous pay-off if they lose their positions, and so face the enticing prospect of financial independence for many years to come without the inconvenience of actually having to work. Sometimes, the people benefiting are called professors of local government, who receive commission for writing long and important reports. The people who lose are often the same, although with different names: council tax payers, shareholders or people who want their garbage collected once a week and find that that is not possible.

The last category is the cadre of professional explainers or witch doctors who explain how marvellous everything is going to be. Sometimes they are called PFI consultants;
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sometimes they are called financial PR consultants—I should declare an interest in that regard—and sometimes they are called Ministers. The key is to develop a convincing patter. Plausible examples are needed of how silly the present system is. An example might be that parish councils cut the grass, but district councils clean the pavements or county councils clean the roads. It might be that district councils collect waste but county councils dispose of it, or that counties deal with social services, whereas districts deal with housing.

The essential point about all these examples is that the proposals—if one can call them proposals in the absence of terms of reference—for local government change in Norfolk exhibit all these characteristics. The benefits are entirely theoretical. We can have a debate about the benefits, but as the hon. Member for North Norfolk (Norman Lamb) said, they are benefits on paper. We have had loads of experience in this respect. If 25 reorganisations of the national health service since 1982 have taught us anything, it should be that organisational tinkering must be treated with great caution.

There are enormous risks. The creation of, say, four social services departments where there is currently one involves enormous risks. There is the potential nightmare of organisational change, with vulnerable children—goodness knows, we have had experience of that issue in Norfolk—falling through the gaps in the new organogram, at a time when we have barely digested the changes caused by the merger of educational and social services for children into a new department.

The cost estimates vary, but they have been put conservatively at £100 million. I should like to know where that money is coming from. We have just had a very tight settlement through the comprehensive spending review. Why should the poor council tax payer stump up for what are at best theoretical benefits? For that matter, why should the central Government taxpayer stump up—after all, they are mostly the same people—when there are so many better things, as the hon. Member for North Norfolk pointed out, on which we desperately need to spend money?

In any case, those are conservative estimates. By how much will we see the costs explode? The largest component of the reorganisation of the police service in Norfolk, Suffolk and Cambridgeshire proposed by the right hon. Member for Norwich, South—the cost was £88 million—was merging the IT, at a time when people were saying that they wanted more police officers. How much will it actually cost to merge the IT of the different local authorities in Norfolk? No matter which proposal is chosen, we have to have the status quo as an option.

Of course there are characters around who stand to benefit from the process of change, whether the wider interests of the organisation and its customers are served or not. If we had several unitary councils, there would be several new social services directors, education directors—call them what you will; even with the merger of children’s services, there would be new senior staff—and directors of planning and transportation. My hon. Friend the Member for Mid-Norfolk (Mr. Simpson) mentioned the transformation director, on a stipend of £90,000. How much transformation we get for 90,000 quid remains to be seen. The answer is probably not much. If, however, we have a unitary council, there will be a number of highly paid officers taking enormous redundancy packages, as we have already seen in relation to primary care.

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