"the council hasn't spent any cash on this, only officer time",
is to be economical with the truth and insulting to small businesses in Swindon. Until this venture was announced in November last year, Swindon borough council's interest
in providing free internet access across the borough was not apparent from its published strategies and appeared, at most, a long-term aspiration. Other providers of this service have thus been excluded from bidding to offer a similar service.
A number of constituents have raised their concerns about the protection of communities from radiation hazards, including those associated with wi-fi communications systems. I am assured by the Department of Health that there is to date no consistent evidence that exposure to radio waves adversely affects the health of the general population, although the Independent Advisory Group on Non-Ionising Radiation is currently reviewing radio frequency exposures, including those from wireless networks. The Health Protection Agency considers it sensible to adopt a precautionary approach to the use of any new technology.
Had the borough council been better prepared, it could have prepared information in advance for residents. In fact, the lack of information available for residents on any issue relating to wi-fi is quite breathtaking. A question asked by an opposition councillor about the provision for a family to object to a transmitter being located level with and 6 feet away from their child's bedroom window has not been answered by the council. Because of the secrecy surrounding the project, a mature debate on this subject has been impossible and it was left to me to provide information to residents.
I deal now with the relationship between Swindon borough council officers, councillors from the leading Conservative group and the directors or owners of Digital City, aQoviaand Avidity Consulting. Underlying concerns about the lack of competition is the possibility that the individual behind this venture, Rikki Hunt, may have had access to privileged information that gave him an unfair advantage when putting his proposition to the council. Mr. Hunt is the chair of Swindon Strategic Economic Partnership. Until the end of 2009, he was also a non-executive director of Swindon Commercial Services Ltd, which is Swindon borough council's direct services company and the main contractor to Digital City for installation and maintenance of its wireless network. That would have given him access to senior councillors and council officers and, potentially, access to commercially valuable information not available to competitors.
It has been too easy for those concerned to hide behind various companies and to deny the public access to the full facts, yet the public are paying for those companies' activities and the directors are, as far as I can ascertain, accepting no liability. By virtue of his close association with Swindon borough council, Mr. Hunt may have been in receipt of privileged information in relation to the council's plans for widening access to the internet, as well as those of the economic partnership. As a consequence, it is possible that a conflict of interest could arise in his company's approach to the council, as covered by section 175 of the Companies Act 2006, under which a director has a duty to ensure that they avoid a situation where they have, or can have, a direct or indirect interest that conflicts, or may conflict, with the interests of the company. The information made available to the public by Swindon borough council provides insufficient evidence that no such conflict has arisen or that the council made efforts to assure itself that such a conflict had not arisen.
There has been considerable interest in the scheme from councils across the country-and, indeed, some councils from abroad-which is why we should look carefully at the business plan and the public service model offered. As I have said, rolling out internet access to the whole population is a good idea. The Government have stated so on numerous occasions and in various publications, and today the Prime Minister took that support further, giving Martha Lane Fox a role in co-ordinating the Government's digital activities. It is right that councils should be involved, but plenty of other good ideas have gone bad when people seek a commercial advantage through councils. We know what happened in the past when over-close relationships developed between councillors, council officers and property developers.
It has been suggested by Conservative councillors, including the leader of the council, that anybody who asks questions or raises concerns-or, indeed, anybody who even reports these in the local press-is working against an excellent initiative and against the interests of our town. That attitude worries me considerably. Asking pertinent questions is a legitimate activity in a healthy democracy. Probing questions should be welcomed, not pushed to one side or deflected by smokescreens. The job of elected members is to explain and promote their policies. They should not be secretive or defensive about that, nor should they abuse their position with officers. What has happened is a failure of the political process, and whatever errors of judgment have been made, officers must not be made convenient scapegoats. The scheme arose from discussions among councillors.
It is an irony that the internet has provided access to much of the information that I have detailed in this debate. Talkswindon members have sifted through council documents and company documents that are available online, and although it still took dedication and time to find the relevant information, that was a matter of days and weeks, rather than the months and years that it used to take.
Although I do not believe that there has been corruption on the part of officers, the process put in place at the behest of Conservative leaders of the council lays open the possibility of future corruption. I repeat my plea to the cabinet to delay any further allocation of taxpayers' money until a full cross-party investigation can be carried out into the actions of councillors and officers. The hon. Member for Meriden (Mrs. Spelman) is quoted on Digital City's website as saying:
"We want to see a flowering of this all over the country".
My message to her is that she and her party's councillors need to have much more probity before they rush headlong into schemes that have the potential to waste hundreds of thousands of pounds of taxpayers' money, disadvantage small businesses and threaten the reputations of local councils.
There are still serious questions to be answered. Did this sorry mess come about because leading Conservatives wanted to keep the initiative secret, not just from opposition councillors, but from members of their own group, in case it was scuppered at an early stage owing to the flimsy business plan, or because they were scared that credit could be claimed by others? Although the blame lies squarely at the door of leading Conservative councillors who insisted on secrecy, were council officers unable or unwilling to challenge the Conservative group, which
will still be in power on 6 May? Did officers insist on one of their own number sitting on the Digital City board because they were concerned about the closeness of Mr. Hunt to councillors and the council processes, and did they recently realise that this decision would instead compromise them and therefore decide to run a mile from it? What safeguards are now in place to protect taxpayers' money and ensure a level playing field for the small businesses in Swindon? I hope and trust that my hon. Friend the Minister will help me get some serious responses to those pertinent questions.
The Parliamentary Under-Secretary of State for Communities and Local Government (Barbara Follett): It is a pleasure to respond to this debate, introduced by my hon. Friend the Member for South Swindon (Anne Snelgrove). I congratulate her on securing this opportunity to discuss her concerns about the way in which Swindon borough council introduced borough-wide wi-fi. As she knows, local authorities act independently of central Government, and Ministers such as I have no remit to intervene in their day-to-day affairs, except when specific provision has been made by Act of Parliament. However, local authorities are accountable to their electorate for their actions. If a member of the public suspects fraud, corruption, or misuse of public money, they should contact the appointed auditor for that authority. If a member of the public believes that the council has acted illegally or not in accordance with its constitution, they should contact the authority's monitoring officer. Despite the limitations on central Government intervention, measures are in place to secure local intervention.
The fact that Swindon is working with the private sector to make the town the first in the UK to provide free wi-fi internet access for all its residents has been widely reported in the press. That is a good aim, and may have replaced Swindon's magic roundabout as an identifying feature of the town. The challenges of the current recession make it even more important that successful partnership works to make effective use of public money, and that available resources are deployed as efficiently and transparently as possible to pursue local priorities.
The concerns expressed by my hon. Friend are primarily about the procurement process and the decision-making aspects of the project. They include the way in which the council handled the wi-fi zone roll-out in Swindon; the pilot scheme that was set up with Digital City UK, a company that started with a £450,000 loan from the borough council; the transparency of the decision-making process as only three councillors were involved in the agreement; the fact that a council employee is a member of the company's board; the fact that taxpayers' money seems to be at risk because the business risk does not seem to have been underwritten; and the lack of information on wi-fi, especially its effects on health, which are, hon. Members know, a cause of great concern.
Finally, my hon. Friend said that wi-fi is not necessarily the best solution for delivering broadband to any community, let alone excluded ones. In a city area, it may be difficult for wi-fi to penetrate housing, especially if the walls are thick and were built in Victorian times. Wi-fi is unlikely to support next-generation access speeds, so it may be quickly superseded by cable and fibre-optics, and wi-fi speed suffers as more people use it-the
contention ratio. All in all, there are many concerns about the way in which Swindon borough council went about the provision of that laudable item, and about the research it carried out.
I shall now outline the Government's established policy on procurement to clarify the matter for my hon. Friend. Our policy is that public procurement should be based on value for money, having due regard to propriety and regularity. The European Union's procurement directives set out the legal framework, detailed procedures and criteria for the specification, selection and award of contracts above certain thresholds. Even below those thresholds, the EU treaty-based principles of non-discrimination, equal treatment, transparency, mutual recognition and proportionality must apply. The EU procurement directives and implementing regulations enforce EU rules on transparency, free movement of goods and non-discrimination. They require that, in most cases, there should be a competitive procurement advertised across Europe.
Subject to their legal duties-including the duty of best value-and to public procurement law, local authorities are responsible for taking their own procurement decisions. The duty of best value, as laid down in legislation, requires authorities to make arrangements to secure continuous improvement in the way in which they exercise their functions, having regard to a combination of economy, efficiency and effectiveness. Any specific complaints that best value is not being met in a particular set of circumstances would need to be addressed in the first instance to the authority's external auditor. I stress again that Ministers have no ability to intervene in individual procurement decisions made by local authorities. Local authorities need to satisfy themselves that any aid provided by them does not contravene the European Commission's prohibition on the granting of state aid and that it meets the requirements of competition law.
I shall turn now to the audit and inspection of local authorities. Systems are in place to assess and audit decisions made by local authorities. Auditors perform an annual audit of financial statements. However, they also have wider responsibilities to review and report on whether an audited body has made proper arrangements for securing value for money, economy, efficiency and effectiveness in its use of resources. The auditors are obliged by the code of audit practice, which is approved by Parliament, to consider whether any representation or information that they receive needs investigation or action under their specific powers. They must consider whether to make a public interest report under section 8 of the Audit Commission Act 1998 on any matter that they judge should be considered by the audited body or brought to public attention. I am dwelling on these specific matters because some of the issues that my hon. Friend has raised could possibly be addressed through these means, if members of the public felt that they should be.
Those external auditor assessments of value for money in the use of resources feed into the performance framework for local services for all outcomes secured by local authorities working alone or in partnership. Such a partnership is known as the comprehensive area assessment. The CAA use of resources assessment considers how well individual public bodies manage and use their
resources to deliver value for money and better sustainable outcomes for local people. The assessment focuses on the importance of sound, strategic financial management, strategic commissioning, good governance and the effective management of natural resources, assets and people.
My hon. Friend has raised several points about governance in the council, particularly in regard to the transparency of the process for decision making and to the fact that an employee of the council was and is a member of the company board. My understanding is that Swindon borough council operates a leader and cabinet model, made up of the leader of the council and a cabinet of up to nine councillors to whom the leader allocates portfolios. The cabinet makes decisions in line with the council's overall policies. If it wishes to make a decision that is outside the budget or policy framework, this must be referred to the council as a whole to decide. To speed up decision making and to allow the cabinet to concentrate on major matters, members have the delegated power to make day-to-day decisions in relation to areas within their portfolio. However, specific questions about an individual decision would have to be addressed to the council.
One issue raised by my hon. Friend was how just three councillors can make a decision that affects the whole authority. Sadly, once again, it would be inappropriate for me to comment on an individual case. However, in terms of governance, there are times when it could be appropriate for decisions to be made without the participation of the full council. However, the council's particular decision-making process will be outlined in its constitution.
A further issue was whether there is a conflict of interest when a council employee is a member of the board of a company-in this case, the wi-fi company. Again, it is not appropriate for me to comment on an individual case. However, it is reasonable to expect councils to have in place mechanisms to deal with conflicts of interest such as that one, because employees may live in the authority and use its services, so they may have to come to decisions on matters that have a material effect on them and their lives.
Anne Snelgrove: Does my hon. Friend mean that councils should have a policy on this-a published policy on issues, such as council employees being directors and conflicts of interest, to which members of the public could have access?
Barbara Follett: I think authorities should have in place robust mechanisms for dealing with conflicts of interest and for advising staff on how to behave when they arise. In an ideal world-I do not know whether this is a duty, but I can write to my hon. Friend about it-councils should have the rules made accessible to members of the public either in a printed form or on their websites.
In summary, complaints about value-for-money decisions should be addressed to the authority's external auditor and concerns about the propriety of decisions and decision-making processes should be addressed to the local authority's monitoring officer.
It is unfortunate that the circumstances of the setting up of this project have caused comment, since the Government strongly support increased access to internet services and are committed to ensuring that virtually
everyone in this country, including those living in rural areas, has access to a good level of broadband. It is important not to lose sight of that in the specific concerns raised about the Swindon project. I am glad that my hon. Friend emphasised that the Prime Minister said today that broadband is the electricity of today. Indeed, it is; it will make a huge difference to our country's economy and the lives of the people who live here.
As I have explained, central Government have no ability to intervene in the decisions that have been made by Swindon council or in respect of the manner in which those decisions were taken. These are matters that need pursuing locally and I hope my hon. Friend is able to secure answers to the questions she has posed.
The Swindon project should present an exciting opportunity to boost the local economy and regenerate
parts of the borough by giving people, especially those in disadvantaged communities, a chance to access and use technology and share the benefits that it can bring. However, the questions that my hon. Friend has posed about the project and the process that has been followed are very important. It is in the council's interest to provide satisfactory answers to those questions, and to make transparent the way in which decisions have been made. Then, and only then, will residents' concerns be laid to rest. I sincerely hope that Swindon council will provide those answers, and that the project can then proceed to bring the benefits that my hon. Friend and the Government wish it to bring.