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Local Government

[Relevant document: The Eighth Report from the Joint Committee on Statutory Instruments of Session 2007-08, HC 38-viii.]

12.12 am

The Minister for Local Government (John Healey): I beg to move,

Tonight, or rather this morning, we are to consider the draft order for the establishment of the new unitary Shropshire council. It is not prime time, but the business is important and it is right for it to be debated on the Floor of the House.

The order implements a proposal submitted to the Government by Shropshire county council, with the support of Oswestry borough council. It is a proposal presented to us by a democratically elected, locally accountable council, and drawn up for us by that council. It is a proposal that the council has presented after seeking local views, and it is the proposal that the council believes will produce the best governance in Shropshire in the coming years.

Having studied the proposal carefully and assessed it in the light of criteria that we published at the outset of this process in October 2006, we believe that its implementation would indeed establish a form of governance that would serve the people, businesses and communities of Shropshire well in the future. In reaching that view, we rigorously applied the five criteria that we had set out in our invitation to bid back in 2006. We had already set out the general case for unitaries in the White Paper that preceded it.

Our invitation and the White Paper reflected our belief that introducing unitary local government is a way of removing many of the weaknesses to be found in areas with a combination of county councils, district councils and parish councils. As we said in the White Paper, such structures often add to public confusion, and create a fragmented and sometimes complicated local leadership. They may also lead to duplication, inefficiency, difficulties with co-ordination and failures in service delivery.

Daniel Kawczynski (Shrewsbury and Atcham) (Con): The Minister says that the Government rigorously followed the five criteria. One of those criteria was the support of the local people. He will know that in Shrewsbury we had a referendum of my constituents, and on what is a very technical matter more than 18,000 of them bothered to turn up and vote against a unitary authority. That represents almost 70 per cent. of those who voted. How can the Minister say he has followed the criterion of listening to the public when my constituents have voted overwhelmingly against these measures?

John Healey: Because the criterion on support is not about public support; it is about the broad cross-section of support. Let me quote from the invitation of October 2006 that I referred to. It states that the Government recognise

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and that while no


The purpose of that is not to be able to demonstrate a majority of any particular group, including local citizens, who are in favour of a unitary council; rather, it is to allow us to make an assessment of whether support is strong and broad enough that if we decided to go ahead with implementing a proposal for a unitary council it would have a good chance of success. That was the basis on which we set out to make that judgment, and that is the basis on which we made it.

The hon. Gentleman talks about the survey that was done in his area. I recognise that his council, and two others, conducted such surveys, but I am sure that he would also recognise that the clarity of the questions and the balance and clarity of the supporting information that was provided to citizens as part of the surveys are relevant factors in assessing what weight to give to them. I could—although I do not particularly want to—quote from that supporting information, but let me simply say that an assessment of those exercises was done by Thrasher and Rallings, recognised independent academic experts in this sort of work, and we accepted their conclusion that there were reasons for treating the results of those surveys with some caution given the way in which they were framed and the context in which they were conducted.

Daniel Kawczynski: Regrettably, I feel that that is a patronising thing for the Minister to have said, because the referendum in Shrewsbury was carried out by the Electoral Commission and was conducted under the most professional auspices imaginable, with very clear questions. Therefore, I totally dissociate myself from what the Minister said.

The Minister says that he weighed the support. My understanding is that a total of only 45 letters of support were submitted by the county council from the thousands of people who live in Shropshire. Some of those people supply the county council with goods, so they have a vested interest and some of the people—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman might seek to catch my eye later in the debate, and I would not want him to use up all his ammunition.

John Healey: Thank you, Mr. Deputy Speaker. The hon. Gentleman has plenty of ammunition and I am sure that he will use it a little later. I am looking forward to hearing what he has to say, and I will be happy to respond to it as required, with the leave of the House.

Mr. Philip Dunne (Ludlow) (Con): Unfortunately, the Minister does not have the benefit of having taken the legislation through Committee. I was privileged to serve on the Committee, and I asked the Minister for the Environment, as he is now, about consultation. It was made clear to us that the consultation would take into account the views of the public, because it was acknowledged that they constituted a stakeholder in the context of the invitation to bid. That concession was eventually squeezed out in Committee.

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The Minister for Local Government rightly said that local ballots took place in three districts in Shropshire—two of them in my constituency—but they should have been given due weight. Although he says that some of the questions were not suitably balanced, I must tell him—

Mr. Deputy Speaker: Order. There must be a distinction in this House in debate between an intervention and a speech. Interventions should be very brief, because otherwise we lose the whole sense of the debate.

John Healey: Those ballots were given due weight, as the hon. Gentleman suggests they should have been. They were not given overwhelming weight. They were given weight in the context of making the judgment about whether there was a broad range of support sufficient to give us confidence that if we were to press ahead with implementing these reforms they would be likely to succeed.

Robert Neill (Bromley and Chislehurst) (Con): The Minister makes a fundamental point about due weight, which we have rehearsed before. What is his definition of due weight? What criteria are applied in giving weight to anything? What is the basis of the balance to be decided between taking into account an element of local issues or otherwise? The fear is that this might have been a wholly subjective judgment.

John Healey: I do not accept that it was wholly subjective, although I accept that it was a judgment. As I have tried to explain to the House, the judgment was about whether there was sufficient support from a broad enough range of relevant parties, including local views, although not exclusively concentrating on them, to give us confidence that if we were to proceed with the change in this proposal it would have a good chance of success.

Dr. Andrew Murrison (Westbury) (Con): Is it the Minister’s judgment that there was more or less support for this measure than there was for the Wiltshire measure that we discussed a few days ago?

John Healey: It is a bit difficult to make direct comparisons. I am not entirely certain that doing so is relevant to the assessment that we set out to make about the proposal that we received from Shropshire. We wanted to know first whether it was a proposal that could bring a good and successful form of future governance to the people and the county. Secondly, we wanted to know whether the conditions and the sufficient degree of support were in place to give it a fair wind and a good chance of success if we were to press ahead with it. I could start listing in much detail the relevant bodies that offered support, although I do not propose to do so. Suffice it to say that the views were mixed, particularly among members of the public who contributed to the consultation. Some people expressed support but others expressed concern, and that would probably surprise nobody.

In addition to the questions of whether there was a broad range of public support and whether the proposal was affordable within the quite strict limits and criteria we set down, the three other important
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criteria for us were about whether this proposal would produce a council and a form of governance that was fit for the future and better for the people in Shropshire. We wanted to know whether it would give the strategic leadership required, whether it would create genuine opportunities for empowerment, influence and flexibility at neighbourhood level, and whether it would deliver good value for money and good efficiency in the future delivery of public services.

Mark Pritchard (The Wrekin) (Con): Many people in Shropshire are concerned that they, as taxpayers, and the county will be penalised for any efficiency savings that arise from the reconfiguration. Can the Minister assure the House, my constituents and other residents of Shropshire that any efficiency savings will not be top-sliced off any subsequent revenue support grant in 2009, if the order is passed tonight?

John Healey: Yes, if that is the hon. Gentleman’s concern I can say that over the next three years—a period for which we have made decisions about the distribution of the core grant from central Government to local authorities—efficiency savings, which we expect from all councils, will be entirely available to those councils that make them. Nothing will be clawed back to the centre and there will be no penalty incurred in any reduction of the core revenue support grant for councils that make efficiency savings. Those savings will be available for councils to use to improve services or to keep council tax pressures down.

Mark Pritchard: I would not want the Minister to misunderstand my point, although perhaps I did not communicate it as well as I could have done. I am not referring to efficiency savings in council services from within existing council budgets. I am referring to efficiency savings that arise from the reconfiguration into unitary status. Will there be any penalty applied to the revenue support grant as a result of unitary status?

John Healey: Let me be clear: no, there will be no such penalty. I shall go further. Part of the decision is a judgment about the affordability of the proposal. As in all such circumstances, various configurations of the figures are offered. We have recruited independent experts through the Chartered Institute of Public Finance and Accountancy, who have given me an independent assessment and advice on the financial case and how strong it is. They have looked at all the figures submitted by all the interested parties. Those experts judge that the affordability criteria are low risk. They confirm that, based on the figures submitted by the county, the expectation is that once the changes are made, the reforms will result in annual efficiency savings of some £9 million a year. It may be of interest to the hon. Gentleman’s constituents to know that that equates to a saving of some £93 per household in every band D council tax property. I hope that that is helpful.

Robert Neill: Can the Minister confirm two points? First, can he confirm that the figures that he mentioned, in relation to CIPFA and the other controls that have been put in place, are those that are already in the public domain? If not, will he ensure that they are? Secondly, if it is suggested that significant savings are to be made, on what criteria will they be assessed? We
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have some concern already about the criteria in relation to councils’ current expenditure and benchmark allocations. Can the Minister ensure that nothing is double counted? The concern is that many of the implementation savings are double counted already.

John Healey: That was the purpose of getting the independent financial experts to go over the figures to ensure that the assumptions that were being made were proven, that there was no question of double counting and that there were no areas where likely incurred costs had been overlooked. Based on that, I have the confidence to say that the proposal, if it goes ahead, will meet our affordability criterion, as it will meet the other four criteria. Let me make a final point on affordability. Not only are the annual savings likely more than to offset the transitional costs, but the payback period is well within the five years that we set at the outset.

I have dealt with the question of support, so let me turn now to the order. We prepared it following detailed discussions and consultation with all the councils that will be affected in the area. The main provisions are as follows: from 1 April 2009, there will be a single tier of local government in Shropshire; from that point, the district councils will be dissolved; and the county council will then be transformed into a new unitary council that will adopt the current district and county functions.

Let me make it clear to the House that this is not in any way a county council takeover. It is not just the county council carrying on in operation, whatever some might like to argue. We are creating a new start for an authority for which we will set wholly different expectations. It is possible that there will be new members of that authority—there will certainly be a refreshed senior management team.

Mr. Dunne: I am listening carefully to the Minister, and I hear his assurance about it not being a county council takeover and his reference to a refreshed senior management team. Will he kindly confirm to the House in which grades of senior management the roles will be subject to open competition and where there will not be automatic reappointment of a county council officer?

John Healey: I expect to be able to confirm that formally shortly, but my intention would be to see the appointment to every chief executive post subject to open competition. I would expect to be able to make that a requirement. It is right that we should set the expectation that other of the most senior officer posts will be open to re-recruitment and competition. In some councils, however, there may be good reasons why they may want to keep particular postholders in post. I also intend to set out arrangements for that shortly.

Mark Pritchard: Will the Minister give way?

Robert Neill rose—

John Healey: I shall give way to the hon. Member for Bromley and Chislehurst (Robert Neill).

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Robert Neill: Will the Minister be a little more specific about the terms and manner in which that requirement will be set out? Will it be in regulations, a guidance note or whatever else? We have a slight concern that, particularly in a place such as Shropshire, we will have a number of very small district councils in competition with one county council that is rather large by comparison. Many people would say that that is a pretty uneven contest. How will we ensure that the officers from the district councils have a fair crack of the whip? There must be an enormous suspicion that it will not work out that way.

John Healey: I quite understand that concern. The arrangements that we put in place need to deal with those concerns and to cater for the counter argument—in some places, and in some posts, blanket open competition might create difficulties. That is precisely the balance of factors that I am weighing up at the moment. I quite understand the interest in ensuring that the final decision is set out soon and in a clear manner. That is imperative, because councils will want to try to hold on to the best of their officers to get through the period of transition and implementation.

Mark Pritchard: I am grateful to the Minister for giving way again. He is being very generous indeed, but the problem goes beyond senior managers: it is also about the dedicated and hard-working staff at all levels in all the councils whose jobs will disappear as a result of the proposals. This is a Government initiative, so will the Minister assure the House that there will be no compulsory redundancies among Shropshire’s hard- working council staff?

John Healey: I recognise that employees in the affected authorities face a period of unsettled uncertainty, but the hon. Gentleman will surely accept that the detailed arrangements are for the local councils—the employers—to consider. The Government’s job is to put in place a framework that ensures that staff are treated fairly. We have made it clear that all staff employed immediately before 1 April 2009 by the authorities that are to be abolished will become employees of the new unitary authority, and that they will be protected according to the principles set out in the Transfer of Undertakings (Protection of Employment) Regulations 2006, as if those regulations applied.

I gave that commitment when I made the announcements on 5 December last year. It means that all staff transferred to a new unitary authority will remain under their current terms and conditions. It will then be for the new unitary councils to decide their new staffing structure, in accordance with TUPE and with the provisions of our employment legislation. That is the proper role for central Government to play: by putting in place that framework, we are giving people a degree of certainty and assurance that they will be treated fairly, but decisions about staffing arrangements will quite properly be left to the new unitary authorities that will be their employers. Those authorities will also set the terms on which they wish to employ—or cease to employ—people after 1 April 2009.

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