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10.47 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Parmjit Dhanda): Not for the first time—for the second, I think—I am left somewhat breathless in a debate with the hon. Member for Bridgwater (Mr. Liddell-Grainger). He speaks with passion about the issue. If he carries on at this rate, the Parliament channel will be competing with the “The Apprentice” and other programmes for viewing figures.

The hon. Gentleman is right about my response: it will be similar to the debate in March. I know that he is anticipating that in my comments about the role of the district auditor. If he has serious allegations to make about corruption, then he has made his views clear in no uncertain terms about the chief executive of Somerset county council and the chief constable of the constabulary. He did that in the previous Adjournment debate on 26 March and has used his parliamentary privilege to do so again today. As I said, the district auditor and the Serious Fraud Office are the places for him to go. He has indicated that that is what he intends to do.

I congratulate the hon. Gentleman on securing this second debate on an issue that is fundamentally about Government PFI contracts. He has made it clear that he does not have a problem with PFI or with partnerships as a whole.

I began my response to the debate in March with a warning, and I feel that I should do so again. It is important to recognise that although local authorities are increasingly strong and independent bodies, they are ultimately accountable to local residents, and must ensure that they act in a professional and responsible manner. Clearly there has been a breakdown in their relations with Members of Parliament—certainly with the hon. Member for Bridgwater—but ideally they should have a good rapport with MPs as well. I have run-ins with my own local authorities, for these things do not always run smoothly, but in an ideal world that would be the case.

In particular, local authorities are responsible for the proper administration of their own financial records within the framework set by legislation—including the duty of best value and public procurement law—and codes of practice issued by professional bodies such as the Chartered Institute of Public Finance and Accountancy. For that reason, the specific questions raised by the hon. Gentleman can be answered directly only by Southwest One and by Somerset county council, Taunton Deane borough council and Avon and Somerset constabulary.

As I have said, if the hon. Gentleman has specific evidence of financial irregularities or a failure to follow due process in the establishment of the Southwest One partnership, he should present it to the district auditor. I am well aware that he has already done that to some extent. The district auditor is the right person to investigate such matters. If the hon. Gentleman has more serious allegations of corruption, they should be presented to the Serious Fraud Office. I realise from what he has said
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tonight that he feels somewhat fettered, and does not feel able to speak to the local constabulary, because part of his issue is with them in the first place.

Central Government cannot and, in my view, should not be involved in every action that councils take, and I think it right that neither Ministers nor officials have been involved in the development of the Southwest One partnership. However, owing to the hon. Gentleman’s obvious concern about this project—not least that expressed in the debate in March—the Department has made inquiries of the Audit Commission and Somerset county council. I have to say that, so far, no evidence of wrongdoing has been presented to or uncovered by either the auditors or the police.

Two auditors have been involved in reviewing the work to establish Southwest One. The Audit Commission appointed Grant Thornton to act as external auditor in 2006-07, and from 2007-08, the commission itself has acted as external auditor. Both auditors recently reported to Somerset county council, and I should say in fairness to them that they have been broadly positive about the processes that they followed. Grant Thornton summarised their opinions as follows:

The Audit Commission has presented outline findings in similar terms, stating that there was a reasonable process for procurement with planned improved outcomes for the council, that there were appropriate reporting and staffing arrangements, and that the deal had been market-tested and improved through negotiation. The Audit Commission points out that considerable service and financial challenges remain—I know that the hon. Gentleman agrees with that—and the council needs to invest properly in the management of the contracts. In a project of this size, that is not surprising, but I hope that the partners in Southwest One will take on board the conclusions and redouble their efforts and prove this project a success.

Both in this debate and when the hon. Gentleman spoke to me earlier this evening, he mentioned his concern about jobs; he fears that 5,000 jobs may be lost under some kind of redundancy scheme. However, in fairness to the hon. Gentleman—and also the local authority—he did make it clear that the county council has changed its position on that, and is now saying that any changes would be due to “natural wastage”; those are his words, not mine. Accountability for all these measures is ultimately through the ballot box at local level. Local authorities have to be able to demonstrate best value to their residents, but also, in an ideal world, work in partnership with local Members of Parliament.

In broader terms on commissioning, procurement and shared services, central Government can—and do—facilitate the sharing of experience and expertise so that councils can make the most of the opportunities for more efficient and effective service delivery that are available through partnership with the private sector, the third sector, or other parts of the public sector. The hon. Gentleman was generous in his praise of the Government, and of the guidance and the work being done to support local authorities on that path.

Many authorities are already benefiting from having entered partnerships: more than half of all councils say that they are engaged in, or are considering entering
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into, a service partnership, and that they expect to obtain savings of up to 15 per cent. as a result—savings not to be sniffed at. Let me cite as an example a partnership involving one local authority that covers customer services, revenue and benefits, property services, ICT and human resources. That has generated a variety of benefits, in this case including 12 per cent. cost savings on the services transferred, and improved service delivery such as better council tax and national non-domestic rate collection rates. Those are some of the advantages that can be gained through better partnership working.

Mr. Liddell-Grainger indicated assent.

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Mr. Dhanda: The hon. Gentleman agrees with that; he is nodding.

I have heard what the hon. Gentleman has to say. I think the wider world has as well, not only through Westminster Hall, but also now through this Chamber. Let me reiterate what I said to the hon. Gentleman earlier. Failures of process are for the district auditor—

The motion having been made after Ten o’clock, and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at two minutes to Eleven o'clock.

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