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Having said that they intended to find certainty, the Secretary of State in relation to Norfolk and the Minister of State in relation to Devon-the Secretary of State fairly set out why he should not be involved in that matter-came, amazingly, to the same conclusion. They did not go ahead with the county-wide unitary structures that had, rightly or wrongly, been the preferred view of the boundary committee for England; they did not maintain the status quo, which had been ruled out but might have been an option; and they did not look at any other option. Instead, they decided to revert, suddenly and without any warning, to the two small city unitary proposals that had been ruled out before, leaving the remaining counties on a two-tier basis. It was a wholly new approach that had not been canvassed or significantly consulted on. That behaviour, coupled with, as the hon. Gentleman rightly says, the expenditure of public money, triggered another fairly unprecedented development.
Mr. Ronnie Campbell (Blyth Valley) (Lab) rose-
Robert Neill: Before I come to that development, I shall let the hon. Gentleman come in.
Mr. Ronnie Campbell: I do not want to start off on bad terms, but I must say that Northumberland went through the same procedure, and we are in a right shambles-a right mess: we are supposed to be saving £80 million, and cutting £30 million. We had a referendum, and 53 per cent. of the people in Northumberland said that they did not want a single unitary authority, but the Government imposed it. So the hon. Gentleman is going down a dark alley here, because they are going to impose it on him whether he likes it or not. That is what they did with us.
Robert Neill: There are occasions when I find myself in agreement with the hon. Gentleman, and he speaks from experience about Northumberland.
I shall return to the finances, but I want to deal with the latest developments, because the Secretary of State and the Minister, having decided on that wholly new departure, provoked a letter from the permanent secretary at the Department for Communities and Local Government, in his capacity as accounting officer. He felt constrained to write to the Secretary of State, in effect seeking a direction, saying in terms that because of his concerns he required a direction from the Ministers in order to implement the proposals.
It is worth saying why the permanent secretary felt obliged to do that-the background being that the Secretary of State and the Minister of State had to concede, as was apparent to anyone who looked at the evidence, that the proposals still did not meet the five criteria. Nothing had changed in that regard, but they had a new idea that there were now compelling grounds to permit departure from the criteria. I am glad that at the fag end of a Government there is still some inventiveness left in Ministers; it is a pity that all it involves is their trying to punch their way round the rules. In any event, they invented the new concept of the two compelling criteria.
The permanent secretary had this to say:
"Whilst I understand these wider reasons, I am concerned that the approach you are currently proposing makes it difficult for me to meet the standards expected of me as Accounting Officer.
My main concern about your proposed course has to be value for money for the public purse. It would impact adversely on the financial position of the public sector as compared with the alternative courses of action open to you."
In reference to the costings in the Secretary of State's proposed version, he says:
"I recognise that if your proposed approach of a unitary Norwich and Exeter achieves the economic gains you envisage"-
That was one of the compelling reasons why it was thought that economic development would be better advantaged by these small city unitaries, though I note in parenthesis that the evidence submitted to the Merits of Statutory Instruments Committee in the other place points out most compellingly that all the development areas and opportunities for the two cities are in fact outside the boundaries of the new unitaries. None the less, it was thought that having small unitaries would be better.
"there may be off-setting benefits to the public purse from increased jobs of extra local and national tax revenues and reduced benefit payments. The evidence for such gains is mixed and representations that you have received provide no evidence to quantify such benefits. I also recognise your proposed approach may open the way for improved public services through the Total Place approach"-
that was the second compelling reason-
"but this will be dependent on the collaboration of all the councils concerned and as yet there is no clear evidence of the costs and benefits that may arise."
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Ian Austin) rose-
Robert Neill: I am happy to give way to the hon. Gentleman; perhaps he is going to tell me what the costs and benefits are.
Mr. Austin: Is it not the case that, as a former Prime Minister once said, advisers advise but Ministers decide? Is the hon. Gentleman saying that if he is ever a Government Minister he will do only what he is told by his officials, and never take a decision for himself?
Robert Neill: No, but I do expect a rational Minister to have a sound base of evidence for the decision that they come to.
Angela Browning (Tiverton and Honiton) (Con) rose-
Robert Neill: Against that background of seeking a rational and sound evidence base, I will read out another paragraph and then give way to my hon. Friends.
The accounting officer goes on to say:
"Moreover, any departure from the criteria when taking your statutory decisions also raises feasibility, as well as value for money, concerns."
Feasibility is one of the grounds on which an accounting officer can, and properly should, raise the issue of a direction from his Minister. He continues:
"Whilst there is no statutory basis for the criteria"-
although everyone worked on that assumption-
"there is a legitimate expectation that they will be the basis of your decisions. Your proposed approach of implementing a unitary Exeter and Norwich, and not implementing a unitary council for Suffolk would be a departure from the criteria, and whilst I recognise you could adduce your reasons for this as public policy grounds for not meeting the legitimate expectation, my clear legal advice is that the risk of decisions for a unitary Exeter and Norwich, and indeed for not taking action on Suffolk, being successfully challenged in judicial review proceedings is very high. You have been advised that there is every likelihood of such judicial review proceedings being commenced"-
"This poses significant risks for the feasibility of successfully delivering your currently intended approach. The probable nugatory expenditure which this would entail, particularly in the case of Exeter and Norwich, could only exacerbate the worries I have described about value for money. And it would also put pressure on departmental resources, altering priorities."
I have deliberately read out that long passage in full, because it is utterly condemnatory of the Government's behaviour and makes a most potent case against it.
Angela Browning: The idea that we have Ministers serving who, having been in office for so long, do not understand the responsibilities and role of an accounting officer in a Department is really quite dreadful.
Robert Neill: One would have thought that some of the Ministers concerned had been in office for long enough to have got around to reading the Ladybird book of what a Minister does, but apparently not, so far.
Mr. Swire: Are we not beginning to see a theme in this? The Under-Secretary of State just described the permanent secretary as an adviser, and the Secretary of State for Culture, Media and Sport, the right hon. Member for Exeter (Mr. Bradshaw), in a bizarre outburst, said:
"The selective leaking of internal correspondence has confirmed the suspicions long held in Exeter (and Norwich) that London-based civil servants have consistently been biased against Exeter and Norwich and have been firmly in the county camp."
That suggestion was completely withdrawn by the Under-Secretary of State for Communities and Local Government, the hon. Member for Stevenage (Barbara Follett), who said:
"All I can reiterate is that officials and Ministers in the Department for Communities and Local Government behaved entirely properly and the letter was not leaked."-[ Official Report, 2 March 2010; Vol. 506, c. 228WH.]
Are we not seeing a complete breakdown between Government and the civil service at this point?
Robert Neill: My hon. Friend is absolutely right. It is a most depressing and worrying precedent when a senior Cabinet Minister apparently makes an attack on the permanent secretary of another Minister's Department-a mere "adviser", who is actually, of course, the accounting officer and acting perfectly properly.
Mr. Henry Bellingham (North-West Norfolk) (Con) rose-
Robert Neill:
Before I give way, I will make one other point, which highlights the constitutional concerns that are raised by the behaviour of the right hon. Member for Exeter in his blog-I understand that it is called
"Ben's Brain Bubbles"-in making that assertion, which the Under-Secretary absolutely and categorically refuted. All I can say is that Ben's brain bubble will have been well and truly burst by the end of today.
Mr. Bellingham: Will my hon. Friend tell the House how many requests for directions from accounting officers to Secretaries of State there have been since the war, because this is obviously quite a dramatic development?
Robert Neill: My hon. Friend has asked a question to which I do not readily have the answer. However, I am told that there have only been about nine in the whole length of time that this Government have been in office since 1997, and this is the first such direction that has been asked for by the Department for Communities and Local Government or its predecessor bodies, so it is an almost unprecedented circumstance.
Mr. Richard Bacon (South Norfolk) (Con): The permanent secretary is not merely an adviser in this respect-as accounting officer, he is exercising his legal responsibility to Parliament to account for public money.
Mr. Bacon: It is his legal responsibility and, as my hon. Friend says, his duty to account for public money. We are familiar with the fact that Ministers in this Government are used to engaging in nugatory expenditure, but does not the fact that the Minister does not understand this indicate very clearly that their time is up?
Robert Neill: I could not agree more about the lack of understanding. The concerns that exist about the financial basis on which Ministers have made their case in relation to this, and in relation to other unitary reorganisations, have been reinforced by Professors Chisholm and Leach in their book, "Botched Business", which had already pretty comprehensively demolished the financial model that was used for previous unitary reorganisations, as alluded to by the hon. Member for Blyth Valley (Mr. Campbell). Writing recently in "Public Money and Management" magazine, Professor Chisholm points out that a careful analysis of the transition costs self-assessed by the new unitary authorities shows that they are £47 million out from the transition costs asserted by the Department. In all cases, they have turned out, with one or two exceptions, to be significantly higher, so the methodology adopted by the Department is demonstrated, by significant academic research, to be significantly flawed.
Mr. Adrian Sanders (Torbay) (LD): The hon. Gentleman makes the point that there have been many developments. Is he up to date with the latest one today, the letter from the Minister for Regional Economic Development and Co-ordination to the leaders of the councils affected? It states that
"a unitary Exeter will be able to tailor public services to the needs of its urban area 'while still being able to achieve economies of scale that are possible under the countywide delivery of such services as adult social care and children's services'"-
the very two services that Exeter will get from being a unitary authority. What nonsense!
Robert Neill: I was pretty amazed when I realised that the Minister had taken time out from her doubtless busy schedule to write that letter, at the very moment when I had assumed she would be carefully crafting her eloquent, reasoned, closely argued and evidence-based response to the debate. Instead, she decided to write to the local authorities in the two counties concerned urging them to do what, ironically, they are already doing. She extols the virtue of joint working, and she and I are at one on that. The irony is that the two counties, and indeed Suffolk, which remains in some kind of municipal limbo, are all local authorities with excellent records in joint working. I shall take this opportunity to give some examples.
Norfolk has an excellent and detailed shared services agreement and its LEAPP programme-lead, engage, aspire, perform in partnership. In Devon there is the integrated Devon concept and a series of joint local strategic partnerships, joint chief executives and joint service provision-all the things that the right hon. Lady is urging them to do, they are already doing without any need to be told by her. There is a joint growth point between Exeter and East Devon councils, which is important for these purposes because of all the growth outside Exeter. In Suffolk there is a pathfinder scheme for joint working.
Those are not local authorities that require a lecture from the right hon. Lady about joint working. The letter says something about the Government's priorities, and indeed about their timing and public relations, but I do not suppose we should expect otherwise. It demonstrates that the Government have made, in the words of one response from Norfolk that I have seen, "a perverse decision". In the words of the Saffron Housing Trust-not a particularly political body, I suspect-it was "the least rational choice".
Mr. Andrew Smith (Oxford, East) (Lab): Do not the hon. Gentleman's dismissive remarks show that he has a complete absence of understanding of the pride that such historic cities take in themselves and their wish to rule themselves? Oxford is the same.
Robert Neill: Actually, I have a great deal of respect for the pride that those cities have. They have their lord mayors, and I have been pleased to see some of the civic work that they do, as do the historic counties. A sensible balancing act has to be carried out. Pride is an important consideration, but so must be proper process and consistency with the Government's own criteria. With every respect, I do not remember pride being one of the five criteria. Perhaps when the Minister opens the Government's defence, she will tell me that that is a third compelling reason that she has managed to think of in between writing letters to local authorities up and down the country this afternoon.
Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): The hon. Gentleman talked about joint working and seemed to suggest that if councils had joint working arrangements, they should logically merge and cease to be separate councils. Is that the purport of what he is saying? Is he saying that every council that is in a partnership with another one should merge?
Robert Neill:
No, I was not saying that, and I am surprised that the hon. Lady could possibly interpret my comments that way. She is highly experienced in
local government matters, and as Chairman of the Select Committee on Communities and Local Government I honestly think she can do herself more credit, with respect. That is clearly not what I am saying-indeed, I was saying the reverse.
The twists and turns have not quite finished yet. The statutory instrument for the unitary authorities was of course laid in the Commons, but it was also laid in the Lords, and the other place has a Select Committee on the Merits of Statutory Instruments. Generally it does not make any particular report on them, but for only the third time that I recall, in this case the Merits Committee drew the special attention of the other place to the statutory instrument because of its concerns about it. The summary of the report of about 170 pages that the Committee produced states:
"The Department has proposed the creation of two unitary councils...which do not conform with all of the Department's five published criteria. In these circumstances we would have expected the DCLG to have set out a more detailed case for the proposed course of action than the assertion of 'compelling reasons' with little supporting evidence. The parts of the explanatory material to which this Committee routinely looks for evidence to support a policy proposal, in particular the Impact Assessment and the outcome of consultation, do not in our view combine to make a clear, evidence-backed case for the proposal."
The Merits Committee asked the Department to produce some evidence, but stated:
"The Department's response...has failed to provide more robust evidence."
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