Examination of Witnesses (Question Numbers
80-146)
Grant Shapps MP
6 December 2010
Q80 Chair:
Minister, welcome to our evidence session. Thank you very much
for coming. I suppose the obvious first question, which you might
have anticipated in your pre-briefings, is: if the Government
really is committed to a localist agenda—the Secretary of
State said that localism, localism, localism, is one of his priorities—does
it not seem rather contrary to that for the Secretary of State
or Minister to sit behind their desk in Whitehall and decide
how often a local council should be allowed to put out an information
sheet to its residents?
Grant Shapps: First,
thank you for the welcome; it is great to be before the Select
Committee again. I start by saying that perhaps most people misunderstand
what is meant by localism. It does not mean, for example, that
Government simply ignores what is going on and turns a blind eye
to reality on the ground; it actually means that the Government
puts in place a framework to make sure that localism can flourish.
One of the ways we need to do that in this particular instance
is ensure that local democracy itself—freedom of speech
and the ability of local publications to produce what they see
as the truth about local services—is not snuffed out by
state-sponsored so-called journalism. It is very important that
as Ministers we take seriously the responsibility to set the framework
and put in place something that enables local authorities to communicate
perfectly reasonably but, at the same time, does not enable them
to compete with publications that presumably present a much fairer
and more balanced profile of what is going on in the community.
Q81 Chair:
But what has come across to us from evidence provided by local
Government, newspaper owners and journalists is that there are
very few examples of weekly council newspapers. There are two
in the country that have been drawn to our attention. Seven come
out fortnightly. Most of the rest of the councils, therefore,
publish on a more infrequent basis. This is particularly a London
problem where the examples of most concerns have been drawn to
our attention. Therefore, as the Local Government Association
and London Councils ask: why is it necessary to be so restrictive
about how frequently councils can put out publications? The key
issue about which people have a real gripe is frequency, when
so few councils do it more frequently than monthly.
Grant Shapps: I
know that you are taking evidence from a wide range of different
bodies, so I will draw your attention to a letter from the Audit
Commission back in January that went to previous Ministers. That
shows that, if you take as the threshold four and above, there
are dozens of local authorities that produce more regularly.
I would argue that there is a real problem out there that needs
to be tackled by a framework. I can supply a copy of the letter
from the Audit Commission if required. Looking at some of these
weekly publications, I have right here Tower Hamlets' East
End Life.
Q82 Chair:
That has been drawn to our attention; it is one of the examples
that people are most upset about.
Grant Shapps: It
is certainly thicker than my local newspaper. It has 40 pages
or so and contains horoscopes and sudoku. It is all there. It
strikes me that it certainly competes with the commercial press.
In the case of that publication, its staff is 50% larger than
that of the local newspaper.
Q83 Chair:
That is an extreme example.
Grant Shapps: There
are other examples. I have here Greenwich Time, which
again has a very large budget. The Committee may be interested—this
has not been drawn to its attention—that this costs a whopping
£708,000 a year to produce. Before you think of all the
advertising in it, which after all is competing with whatever
the Greenwich local advertiser is called—these are real
adverts from real businesses—you should be aware that the
taxpayer is funding over £532,000, more than half a million
pounds a year, towards producing Greenwich Time. I have
just come from a debate in the Chamber where cuts to local Government
finance are being discussed in great detail and arousing great
passions. If you happened to live in Greenwich, I think most
residents would be pretty appalled to hear that half a million
pounds is going to fund the local town hall Pravda. It just isn't
on. As to providing guidelines, four times a year does not seem
to me to be terribly restrictive. I would have thought that if
a local authority communicated twice, three or even four times
a year, in addition to its leaflets that go out with the council
tax and the numerous other ways it has to get information out
to its citizens, that is not overly restrictive and would enable
them to push whatever sensible messages about bin collection they
need to get out to residents.
Q84 Stephen Gilbert:
Minister, we have received lots of evidence from local authorities
saying that their publications fulfil a role that the traditional
newspapers do not perform; it is to do with information about
services, access to services, the kind of stuff that does not
make good copy. In particular, parish and town councils have
referred to the way in which regular local newsletters can help
promote community cohesion and spirit and play a role perhaps
in the realisation of the big society on the ground. Do you see
a role there for council publications, whether it is a principal
authority or town council, helping to generate that kind of community
cohesion on which the Government is so keen?
Grant Shapps: Yes,
I definitely do. In all of this we need to separate out the parish
councils. There are probably 10,000 parish councils out there
and they have a particular role that is very close to the ground.
The parish newsletter in my local area is four pages; it is an
A4 sheet folded in half, or maybe they are two A4 sheets of paper
stapled together. It is clearly about local stuff and does not
carry much of what might be described as propaganda for the parish
council. I think that is perfectly sensible. I am sure the Committee
will be reassured to know that we do not intend that this new
code of conduct should cover parish councils in restricting them
in the way they keep in touch in a very reasonable way. My local
parish council sticks its newsletter out with the local church
newsletter; it is at that sort of level.
But you make the interesting point: is there not
a role for these publications? Are they not doing something that
somehow the local newspapers or other media cannot do? I was
really struck by data which shows that only 5% of these council
periodicals carry statutory notices, which is often the excuse
used for having to publish these things on a regular basis, and
only 1% outside London, so they are not being used in the way
some would have you believe to provide some service that cannot
be produced any other way. People really want to know when their
bins are to be collected and that is the sort of information that
local authorities should be putting out.
Q85 Bob Blackman:
We have heard evidence that in large parts of the country there
is no such thing as a local newspaper. They have gone out of
business and they are no longer around. Indeed, in parts of London
there has been a steady reduction in the number of titles. Do
you accept that is the position and therefore there is a gap in
the whole market?
Grant Shapps: It
is certainly the case that local newspapers have been under enormous
pressure. If you have a chat with your own local newspaper, you
will know this. What is the solution? To our mind the solution
is not to say that local newspapers are under tremendous pressure
and council ones should be published instead to put them under
even greater pressure. The really important point here is that
the amount local authorities have been spending on their own publicity
to pump themselves up in the eyes of their residents grew to £430 million,
doubling in the period from 1997. It seems to me that that figure
needs to be halved and halved again to get back to amounts that
are really about servicing local people.
We are not against there being some communication.
Four times a year still feels quite regular if you are a resident
and something is stuck through your door. It is enough to be
remembered from one moment to the next. As I am sure politicians
in this room including myself know, if it is much more than four
times a year, you are operating an incredible delivery service.
The truth is that too many authorities produce that delivery
service off the back of their hard-pressed council taxpayers.
We simply cannot carry on having propaganda published on the
rates.
Q86 Bob Blackman:
What would be your advice to a local authority, such as Hammersmith
and Fulham, where there is no local newspaper now other than the
publication produced by the council? How do they get out statutory
notices and other such information?
Grant Shapps: I
am not a London MP but I read the London Evening Standard
quite a bit. I always see Hammersmith and Fulham mentioned in
there. It is clearly a newspaper that covers with great interest
what that local authority does, and all the other boroughs as
well. Hammersmith and Fulham has been producing some kind of
publication. I am pleased to hear that it will cease to do that
next year. It realises in these straitened times that the last
thing it wants to do is spend, as Greenwich does, over half a
million pounds of taxpayers' money pumping out town hall propaganda.
Q87 Bob Blackman:
So, how do they get out their statutory notices and other information?
Grant Shapps: We
have already heard that typically the statutory notices are not
going out in those publications; they are not timely enough even
when they try to do it each month. They are not commercial organisations
producing them on a weekly basis at least, so it is not being
used much for that. They have their websites; they can use those;
they have the ability to put these notices out around the local
area where statutory notice is required. Most times we are talking
about planning permission. The reason there are not more statutory
notices published in the local newspapers—just 1% outside
London—is that it is not a particularly useful place to
say that Mrs Miggins is thinking of having a loft extension done.
You need to post it around half a dozen houses in the local area.
It is something of a myth that there is a constant flow of information
that local authorities need to publish.
Q88 Bob Blackman:
Do you accept that there is a need to reform the position of statutory
notices, for example, where at the moment the authority has to
publish those across the authority even though they are totally
irrelevant to 99% of the people?
Grant Shapps: Yes,
because my comments mix up planning notices with statutory notices.
I think we will see a change in the way that the statutory notices
are handled over a period of time. We live in the internet age
but we have to recognise that in the mean time not everybody is
on the internet, witness today's announcements about higher speed
broadband. I think this is a gradual process that will do two
things: first, it will get out of the way some of those authorities
that abuse their ability to publish town hall Pravdas and provide
sufficient transition to being able to publish things online,
at the same time ensuring that some people who are perhaps the
most vulnerable in society, or just do not have access to the
online world, still get to see that information. If you are a
town hall, why not make sure that every care home gets a copy
to stick on its notice board? It is far more effective than putting
junk mail through somebody's door.
Q89 Bob Blackman:
How far do you think authorities should go in advertising their
statutory notices and other such things just on their websites,
ignoring the actual printing of anything?
Grant Shapps: There
is often a lot of confusion about statutory notices. I cannot
speak of every case, but recently I looked at statutory notices
with reference to HMOs, which I know is a subject in which the
Committee is interested. You have to publish it in a couple of
places. For example, in the case of Manchester, statutory notices
on homes in multiple occupation are published on their website
and in their contact centre, and that is it. It is a scheme which
affects everywhere in the city of Manchester. Therefore, the
idea that statutory notices is now the reason we need one of these
papers is completely blown away by the evidence that the Audit
Commission presented about the amount of publishing of statutory
information that you have to undertake, or rather how much of
it actually appears in those publications.
Q90 Bob Blackman:
So, do you think there should be different regulations for those
areas which have high-speed broadband compared with those, possibly
rural areas, that do not?
Grant Shapps:
No; I would not go to that extent. But statutory consultation
and notices usually require a certain level of coverage to be
achieved. It very rarely says that you can achieve such coverage
only by putting a newspaper through every single door, even in
the area that is affected. Usually, statutory notices have more
impact on a certain area. To go back to the example of Manchester
and HMOs (Housing Management Organisations), the relevant information
affects every area of Manchester but the council did not decide
that the solution was to put a leaflet through every single door.
But even if it were required, we do not argue that town halls
should not communicate with their citizens; we just argue that
they should not abuse their taxes whilst doing it, so publishing
information four times a year would give them ample opportunity
to do those types of things as well.
Q91 Chair:
To tie together those two points, the Mayor of Hackney, who came
in earlier on behalf of London Councils to give evidence, said
that if he went to a local commercial paper the cost of publishing
statutory notices would be higher than the cost of producing his
council newspaper, so he is actually saving money. He can put
the statutory notices in the council's newspaper only if it is
a fortnightly production because that is the requirement. Therefore,
taking away the fortnightly production ends up costing more and
provides less information.
Grant Shapps: That
is a completely extraordinary argument, and I am really surprised
to hear it presented in those terms. I set up a printing company
20 years ago last month. I can tell you that, given the cost
of paper and production, to produce a 40-page publication cannot
possibly be cheaper than producing a single page leaflet. That
is just not possible.
Q92 Chair:
The Hackney publication is slightly less than 40 pages; it has
36 pages.
Grant Shapps: It
just does not add up. Paper costs money. It is impossible for
a 36-page magazine to cost less than a single sheet of paper.
I know about printing and I am willing to take on the whole Committee
on this subject.
Q93 Simon Danczuk:
Do you have any evidence that the people of Greenwich or Tower
Hamlets do not like the publications to which you point?
Grant Shapps: This
is what I mean about setting a framework. The trouble is that
it is very hard for somebody in Greenwich to express that opinion
in a fair way. For one thing, their opinion will have been biased
by having 40 pages of propaganda stuffed through the door. If
you live in a nation that is slightly less democratic than ours
where perhaps the ownership of the media rests in particular hands,
or in a communist country where the votes are not really free,
and all you are provided with is propaganda from one side that
tells you one thing, then, in the end, you may decide that the
council is doing a great job.
Q94 Simon Danczuk:
But the answer is that you don't have any evidence. The question
is: do you have any evidence that the people of Greenwich or Tower
Hamlets don't like these publications?
Grant Shapps: I
just saw the MP for Greenwich in the Chamber, who is clearly very
interested and concerned about the reductions in expenditure that
will come his way, and all of our ways in the April settlement.
The idea that his residents are delighted at the idea of half
a million pounds of their council tax going to fund Greenwich
Time Pravda is completely ludicrous. We need to set a framework
here that still allows local authorities to communicate. We do
not say they can never put newspapers through the door, but for
democracy to flourish you have to leave space for the struggling
local press, which, by the way, if you want to put out the message
about what is going on and that the town hall is doing this, that
and the other, is more than happy to fill its pages with that
kind of information. I think it is largely counterproductive
to do it in your own publication; you are much better off trying
to use the local publications, but if you snuff them out through
your own competition that route does not exist.
Q95 Mark Pawsey:
Having heard from the likes of the Minister, the Mayor of Hackney
and the newspaper industry, maybe we should do more work on the
statutory notices. I want to turn to the question of advertising.
We have heard from the local newspaper industry that it faces
very tough times; it has lost estate agency, motor and recruitment
advertising, and it fears that the advertising that currently
is being diverted into some local authority newspapers is affecting
their viability. I know that is a big issue in the code that
has come forward. What evidence does the Secretary of State have
to identify the amount of expenditure that is being lost to the
free press and the threat that that presents to the free press?
Grant Shapps: It
is an excellent point. We have already established via the data
from the TaxPayers' Alliance at least that town halls spend £430
million a year on publicity. We know the Office of Fair Trading
issued a warning on this last year, saying: "Local commercial
newspapers are facing increasing competitive pressures from public-sector
bodies, and local-authority publications should not be treated
as contributing to the plurality of independent news sources."
So, we know from an authoritative source, the OFT, that there
is a genuine problem. As the Committee has discovered, it is
quite difficult to pin down exact data. To go back to the opening
question, to a certain extent localism dictates that perhaps you
do not try to pin down every last penny, at least not centrally
and not as Ministers. Maybe that is more your job and that of
armchair auditors, but our responsibility is to have in place
a sensible framework and then you know that it cannot be abused.
That is what the new code proposes.
Q96 Mark Pawsey:
Rather than restrict the number of editions of a newspaper, would
it not be more sensible to place a limit on the amount of advertising
revenue that a local authority can seek for its local publication?
Grant Shapps: The
difficulty is one of monitoring all this, isn't it? If you go
for how much it costs and how much a council gets in advertising
revenue, etc, etc, you start to make it very difficult to do something
that is quite straightforward for a resident. If the resident
is being told that a publication is issued four times a year and
if it is more he can ring the alarm bell and speak to the district
auditor or whatever, that is pretty straightforward. If you expect
the resident to carry out a P&L analysis of the advertising
take over a 12-month period it just gets a bit too tricky.
Clive Efford: I should
preface my remarks, "As the other Member of Parliament for
Greenwich".
Grant Shapps: Indeed,
yes. You could not be in two places at one time.
Q97 Clive Efford:
I do not consider Greenwich Time to be a local newspaper;
it is a magazine that informs people about local things because
it restricts itself in the amount of time it reports on me. Therefore,
in that respect it has a self-denying ordinance. You used Greenwich
Time as an example. I challenged the local authority about
how much it spent on Greenwich Time. I just point out
to you that in its evidence to the consultation on the code of
practice, taking into consideration the cost of advertising that
it would have to pay for, Greenwich Time is produced "at
nil cost to the council". How do you respond to that?
Grant Shapps: I
can rely only on the data I have here. It may be worth making
a cross-check.
Clive Efford: You have
your own little Pravda.
Grant Shapps: For
Greenwich Time I have a total cost of £708,000 and
it is supported by public funds to the tune of £532,000.
Whether the discrepancy relates to what happens with the advertising,
perhaps I can write to the Committee and let you know. In a sense,
either way this is a publication that carries sports reports and
mainstream movie reviews. It doesn't carry what its local MPs
are doing in sufficient volume. What greater arguments do we
need that a free press would do this much better?
Q98 Clive Efford:
The issue for local authorities, not just Greenwich, is value
for money, is it not, and whether by doing what they are doing
they are conveying information about the bins and other stuff
at little or no cost to the local council taxpayer? Isn't that
something we would encourage?
Grant Shapps: I
just want to check this out. If I am a Greenwich resident and
want to find out when my bins are being emptied, I can have a
quick flick through here. I bet I can't easily identify that
information.
Q99 Clive Efford:
Would you expect the council to produce that information every
week?
Grant Shapps: The
information about bins? I do not know. If that is the case,
how do you know in which edition you are supposed to look? If
people want to know when their bins are being emptied, they will
do what most people do: either they will go online and look at
the council's website or pick up the leaflet put through the door
at the same time as the council tax bill that sits on top of the
microwave, at least in my house, or is pinned to the fridge that
tells you it is a Thursday and that means that it is the glass
that is being recycled. Is the idea that the only way they can
get out their information about when bins are to be collected
is to put this paper through the door every week, and that sometimes
it might be in there?
Q100 Clive Efford:
Why did the Government opt to propose a revised code without first
asking the Office of Fair Trading to review the impact of local
authority publications on independent newspapers, as recommended
by the Select Committee on Culture, Media and Sport?
Grant Shapps: Quite
a bit of background work had been done on this. The Audit Commission
wrote to the previous Secretary of State in January of this year.
The OFT has commented on the anti-competitive pressures previously.
A code has been in existence for quite a long time and so we
know how it is working. Ministers eventually have to make decisions
about these things. Given that the evidence shows quite a lot
of publications publish more than four times a year and the extraordinary
pressures on the publication of local newspapers, the free press
as you might term it, the idea of delaying for yet another review
would be completely unacceptable. I want to see a free press
flourishing at a local level in this country and every moment
you delay is a newspaper killed, which is why so many of them
have been going out of business.
Q101 Clive Efford:
But if there has not been a proper analysis of the impact of advertising
on local newspapers—we have had quite a lengthy discussion
about that today—how can you know that that is what you
will achieve through this code?
Grant Shapps: It
would be impossible to argue that we would achieve the opposite,
wouldn't it, if you remove a place locally where you can advertise
that happens to be state-sponsored and published by the town hall?
Q102 Clive Efford:
You would rather have state-sponsoring of private newspapers?
Grant Shapps: State
sponsoring of their own newspaper. If you remove that as a source
and these things do not exist as advertising outlets, I would
have thought it stands to reason that, as night follows day, that
they will switch their advertising to the other local possibility,
which is the local newspaper. I refer to the Audit Commission.
According to the commission, if I correctly understand this table
of frequency of publication, 38% of councils publish four times
a year; 30% publish five to nine times a year; 9% of councils
publish 10 to 12 times a year; 1% publish 13 to 24 times; and
4% publish 25 to 52 time a year, presumably bi-weekly or weekly.
Remove them and you remove a competitive place to go and advertise.
Q103 Clive Efford:
But if the impact of that is that it does not save local newspapers
because other factors are in play rather than just local authorities
taking adverts, or not using the independent newspapers for its
own advertising, what then? If there is no review of the situation,
how can you be confident that you will get the outcome you want?
Grant Shapps: Every
Government keeps every decision under review. This has been changed
a couple of times in the past. It was up for review latterly
under the previous Government, though with the intention of going
completely the other way and liberalising the code. Of course
we would always keep it under review to see what happens in reality.
It is interesting that, if you survey people about what they
appreciate reading about in the council magazine, it turns out
that by far the most popular elements are finding out about when
the bins are being collected and practical information about town
hall services, and people do not feel that they need to turn to
East End Life to get their crossword. That is not the
way the public operate. In any case, I would not have thought
that publishing four times a year was incredibly restrictive for
them to carry out the activities that they think are appropriate.
Q104 Clive Efford:
To finish off, you are to write to us to clarify your figures
and I daresay Greenwich will as well.
Grant Shapps: No
doubt Greenwich will as well.
Q105 Clive Efford:
If the outcome is, as the local authorities say, that it will
cost them more money, will you compensate them?
Grant Shapps: I
am sorry; I did not hear their evidence, so in what way will it
cost them more money?
Q106 Clive Efford:
They are saying that by providing their own organ for statutory
notices and other information that they have to supply, along
with other leaflets that they produce of course, they are cost
efficient and saving the local ratepayers money. If it turns
out you are wrong and they have additional costs because of the
code, will you compensate them?
Grant Shapps: I
urge the Committee not to listen to this tosh about how 40 pieces
of paper can cost less than one sheet of paper. It is just untrue.
Q107 Clive Efford:
You are pointing at the most extreme cases and generalising right
across the country. We have to be careful about that, have we
not?
Grant Shapps: Of
course, but even an average publication contains several pages
and it can never be less expensive to produce several pages than
one sheet just because of the cost of printing and paper. The
idea that somehow it can be cheaper to produce a publication like
this more than four times a year and the differential between
doing that and putting out the occasional leaflet in, I imagine,
very extreme circumstances when for some reason they do need to
inform everybody of something, which as we have discussed before
as far as statutory notices are concerned is quite unusual, just
seems to me to be beyond the credible. I just challenge the basis
of that argument entirely. It is just untrue.
Q108 Clive Efford:
On what basis?
Grant Shapps: As
I explained, because you cannot argue that it is cheaper to produce
this publication more than four times a year.
Q109 Clive Efford:
You have a hunch?
Grant Shapps: No.
Q110 Clive Efford:
Where is the evidence? That is what we are asking.
Grant Shapps: One
thing I do know about is the cost of printing and paper and publishing.
I can tell you that it is always more expensive to print on more
sheets of paper than fewer and to print more often than less often.
Clive Efford: We will
see that in your letter as well, will we?
Chair: We will have that
information. Obviously, we will ask the councils to provide the
information as well.
Q111 Mike Freer:
Minister, I am struggling a little to nail down your objection,
whether it is propaganda, the cost or the angle of unfair competition.
You referred to unfair competition. Would it surprise you that
none of the journalists or the newspapers who gave evidence today
said there was any correlation between the decline in the free
or paid-for local press and the advent or increase in local authority
publishing?
Grant Shapps: To
answer your initial comment—you said you were somewhat confused—it
is all three. Those are the reasons. On the latter point, when
you take evidence from journalists, obviously they work for both
types of publication. If you are one of the 50% more journalists
who work for East End Life than for the local newspaper
and you are here to represent journalists, you would want to argue
as passionately as possible that a journalist is a journalist
and it does not matter whether he works for this or the local
rag; it is the same thing. The truth is that logic dictates that
the market is of a certain size and if you steal advertising from
one location, there will be less of it left to the commercial
market.
This is a big issue and all of us here who care passionately
about democracy should be interested in it. Why should the taxpayer
be paying excessive amounts of money to produce one-sided information
that has not gone through any kind of journalistic filter? That
is what these publications have to be. How often do you read
in the letters page, if there is such a page in this one, "I
am quite disgusted with my local authority. Tower Hamlets just
doesn't collect our bins properly"? It is not in there because
they cannot be objective. That is why I think there has to be
a fairer basis and that is what the code produces.
Q112 Mike Freer:
Let us assume that the trade unionist is riding both horses.
Both The Newspaper Society and the two newspaper representatives
said that the decline in advertising revenue presaged the increase
in local authority publishing and that the two biggest drops were
in estate agency and motor vehicle advertising, which are more
to do with the recession than with local authorities. The point
I am trying to get to is: would you be surprised that that is
their view because it seems to contradict your view?
Grant Shapps: No.
To be absolutely reasonable about this, the recession has had
an enormous impact on local newspapers. I had a chat with the
editor of my local paper and it was made quite clear that the
recessionary factors had been an enormous problem. But he has
also contacted me separately in the past, before we were in Government,
to say that the pressure coming on stream from other publications
that are taxpayer supported was beginning to cause a problem.
It stands to reason that it would. I know you have received
evidence from lots of different bodies. Some want to go further
than us and ban all advertising in local authority publications
so that they are unable to accept any. We have had those representations
as well. We do not think it should go that far; we think that
if it can offset some of the costs that is fine, but let us have
a framework—publications no more than four times a year—and
then we know that at least it is not pulling away all of the potential
income for the commercial free papers. It is only reasonable
to accept that in large part it is to do with a long, deep recession
with a difficult climb out; that is absolutely true. That does
not mean you should make it worse by allowing local authority
town hall Pravdas to finish those papers off.
Q113 Chair:
To go back to the "Pravda" allegation, clause 16 of
the code seeks to stop authorities influencing public opinion
about the policies of the authority. That of itself might be
an interesting concept to look at. On the other hand, clause 31
of the code recognises that local Government authorities should,
where appropriate, seek to influence attitudes and behaviour such
as around public health messages. On the one hand, they can influence
attitudes and behaviour but not influence the public's opinions
about the policies of the authority on the other. Given that
local authorities are to be given responsibility for public health,
so it will be one of their own policies, do you think those two
bits of the code sit together at all without some degree of conflict?
Grant Shapps: It
is a really interesting point. We all have to balance these conflicts,
don't we? There are lots of areas of public policy and it is
not unusual to find that tightrope being walked in codes or legislation.
It is absolutely the case that we do not want to promote a "Isn't
our council wonderful?" publication through the door, but
at the same time we think that local authorities have a role to
play and, under the health proposals, an increasing role to play
in areas like public health. The new health boards will want
to ensure that they are able to join up with the local authority
and push those agendas forward and nudge people in the right direction.
You identify a valid point, but I think a sensible editorial
approach will understand that to encourage a healthy lifestyle—use
of the parks and so on and so forth—is quite different from:
"And here's a picture of our fabulous Mayor, who has just
done x wonderful thing for a grateful audience."
I think an editorial decision is to be made there that is perfectly
compatible, but you are right to recognise that there are balances
to be brought.
Q114 Chair:
Surely, there are bound to be grey areas. A picture of the mayor
opening something might tell people, "This is now here and
available." It is a perfectly reasonable way to get across
a message. People might look at a picture when they would not
look at the words.
Grant Shapps: Can
I suggest the right balance then? As one of his first moves,
the Mayor of London, Boris Johnson, scrapped The Londoner
newspaper, which no doubt could have been full of pictures of
the Mayor opening stuff had it wanted to be. It is a saving of
£2.9 million. I am sure you have already taken that
into account in your evidence. I think it was absolutely right
to stop wasting Londoners' money in that way. I have not noticed
Boris not getting a lot of press doing lots of healthy things,
like using his Boris cycles, Boris bikes or whatever else. The
truth is—we all know it because as politicians we are expert
in it—that we do not have a problem going out there and
getting press. The idea that we must have our own local authorities
to help us is ludicrous. We do not need that assistance. In
exactly the same way, local authorities who will have these responsibilities
and connections with the public health boards, for example, will
want to make sure that they use all the different mechanisms available
to them, no doubt from the existing free press in their area to
viral online marketing, to get people to nudge them into having
slightly healthier lives, or whatever it is they are trying to
achieve. You simply do not require one of these papers to do
it.
Q115 Chair:
But there is information. All local authorities are saying, and
presumably the Government accepts, that there can be a real need
for them to communicate certain sorts of information that does
not get in the press. It could be a list of summer activities
for kids over the whole six-week period. All those details would
not necessarily be in the mainstream press, so the authority could
put it out.
Grant Shapps: Yes.
Q116 Chair:
But a picture of the mayor beside it might just draw people's
attention to it, but does that become "influence"?
If the council develops a new policy about how people respond
to planning applications, again it is almost like saying to the
public, "We think this is a great new thing the council is
doing; it gives you a greater opportunity to be consulted."
Is that starting to influence people's opinions about the qualities
of the authority?
Grant Shapps: On
the first point to which you half-alluded—the summer activities
that are coming up—these things can still be published four
times a year. There is no secret when the summer starts and ends,
so they can predict this in advance and publish it in the newspapers.
I accept there is a secret about when the weather will be good.
Nonetheless, these activities are planned; you know where they
are; you have a publication two, three or four times a year and
you can stick it in there. That solves that issue.
To return to the latter point, you are right that
there is a balance to be struck between what is good editorial
and when a picture is included. I have had an experience similar
to that of our other Member for Greenwich. I find it quite difficult
to get into my local town hall publication; it is quite shy, careful
and cautious, as well they should be, about publishing politicians
too much. I had far more success getting into the local free
press, and that is how it should be. We just think this is a
question of reasonable balance and sensible application. The
proposals build on guidelines that already exist; they are moderate
and sensible. They cut off the weekly publications, and quite
rightly, but four times a year should provide adequate opportunity
to get the message across.
Q117 Chair:
To go back to content, in the end there are grey areas, are there
not?
Grant Shapps: Yes,
there are. In our new world of transparency and openness in which
all live, if a resident has a concern it should be put on record.
They should get in touch with the auditor and make a complaint,
and the council can be named and shamed and put to rights over
it. Don't let your local authority get away with wasting your
money in this way.
Q118 Bob Blackman:
Obviously, a lot of the publicity put into these newspapers or
magazines comes not only through the local authorities but the
National Health Service, police and fire authorities, local charities
and community groups. Do you accept that one of the consequences
of this could be that it could drive up the cost of advertising
for those organisations?
Grant Shapps: My
experience of local newspapers, and I don't know whether everyone
else finds this, is that they are under incredible pressure and
universally they have had to reduce the number of staff. Therefore,
if you are a police authority, the health service or a politician
and you present a neatly created press release with a well-written
full story, they will grab it out of your hands with open arms
because they need to fill their pages so they can continue to
produce their publication and attract advertising. Therefore,
almost to the contrary, tough times provide a great opportunity
to all of those bodies you mentioned to get the message out there
through the free press and, nowadays, online with viral marketing,
Twitter and all these other things. I was tweeting just before
I came to the Select Committee to say I was coming in here. If
I wanted to get a message out, that is the way I might do it.
Councils will do the same thing once they get savvy to the idea
that it is free to twitter, but this publication in my hand isn't
free.
Q119 David Heyes:
Why does a provision about lobbyists belong in a code of practice
on local authority publicity?
Grant Shapps: That
is a good question. As Ministers in this six month-old coalition
Government, we have become concerned not only about the amount
of expenditure on lobbyists but the amount of time spent by lobbyists
trying to sell the message of local authorities. By the way,
it is completely counterproductive. If a lobbyist contacted me
on behalf of Greenwich or anywhere else, that would not be a top
priority. I would be far more likely to listen to the leader,
chief executive or councillor within the authority who contacted
us with a concern, so it is ineffective and also a counterproductive
use of taxpayers' money.
Q120 David Heyes:
Are you drawing a distinction between being lobbied by local authorities,
individually or collectively, and being lobbied by paid firms
of lobbyists?
Grant Shapps: Yes.
If you are lobbied by an outside firm of lobbyists it is a terrible
thing to do. It really proves that you are not really sure how
to go about lobbying; it is very ineffective. Do not waste your
money on it if you are a local authority and are paying outside
lobbyists. Do it yourself.
Q121 David Heyes:
There is no proposal in the current practice to prevent local
authorities individually or collectively from lobbying the Government.
As I understand it, the restriction is on paid lobbyists. You
said you were concerned about the amount of money and time that
went into it. The local authority witnesses who gave evidence
earlier said there was little if any money spent on paid lobbyists
by local Government. If you say you are concerned about the amount
of money and time spent, where is your evidence?
Grant Shapps: Sitting
on the other side of the table, I can tell you that on a daily
basis letters from lobbyists stream in. If it is helpful to the
Committee, I can ask officials to provide a collation for the
past six months.
Q122 David Heyes:
Are these lobbyists or paid lobbyists? Can you distinguish between
them?
Grant Shapps: I
am talking here about organisations outside the local authority
that write to me. I can only assume, therefore, that they are
not doing it for the love of it and are being paid. If it is
helpful to the Committee, I will quickly tot up the number of
letters I have had from lobbyist firms on behalf of local authorities
in the past six months. I think we will see a reasonable body
of evidence that this is costing taxpayers quite a lot of cash.
It is completely counterproductive to the local authorities'
cause.
Q123 David Heyes:
Why shouldn't local authorities be free to spend the money in
that way if it is cost effective and democratically justifiable
and that can be evidenced?
Grant Shapps: I
tried to stress that I think it is an extremely non-cost-effective
way to go about things. If you tell me that somebody else has
a problem with something I am doing, or would like more money
from me or something like that, that is not as effective as it
would be if that person came directly with his or her concern.
It stands to reason that it just does not work that well. Again,
in terms of setting an overall framework, in the same way we talked
about the advertising code providing a framework, we are very
keen that the framework on lobbyists should be established, partly
because we think the whole thing has got out of control. The
amount of money being spent on lobbyists has grown very dramatically.
I can either dig out the figures here or forward them to the
Committee to demonstrate exactly that point.
Q124 David Heyes:
But our earlier witnesses suggested strongly to us that it just
did not feel right in this code of practice. If you have these
concerns, this is not the right vehicle to address them.
Grant Shapps: I
am not sure why. We are keen not to have endless documents telling
local authorities what to do; in fact we have been spending our
time scrapping vast amounts of bureaucracy, documents and all
the rest of it. This one already exists. It seems to us that,
rather than create yet another, this is a code of recommended
practice of local authority publicity. Lobbyists effectively
publicise for the local authority, usually to central Government,
but maybe to many other people, the workings of that local authority.
I think we are being tough and fairly consistent on this. We
sent a message during the party conference season even to lobbyists
who paid to come to our conference. We said to them that local
authorities needed to consider whether they were paying them in
a sensible manner. This is by no means a partisan point; it is
just that we do not think it is a good way to spend taxpayers'
money in these straitened times. This seems to be a sensible
place—it is a code about publicity—to make that point.
Q125 Mark Pawsey:
If residents in a local authority do not like the fact that it
is wasting money on lobbyists and local authority newspapers,
why can they not just vote them out?
Grant Shapps: That
is absolutely right. I go back to the point I made earlier.
In this country we accept that we have to have a framework. We
have free elections. I am very attracted to your argument that,
surely, they should just vote these people out. What we do accept
in the country as a whole is that we must have a balanced broadcast
media, so we pass laws to say that media must be fair and balanced.
We then come to what we do about the state. We pass laws to
make sure that the Government of the day cannot spend ridiculous
amounts of money, or any money, promoting on a political basis.
We did have a problem with the fact that the previous
Government spent half a billion pounds a year and became the second
biggest advertiser in the country, and that no advertising break
on TV was complete unless there were a few nannying messages from
the state. An awful lot of money was going down the pan then.
If we switch on the TV now you will notice that you can watch
an entire advertising break, whole films or the 10 o'clock news
on ITV, and not see the state telling you what to do or not to
do. That money will help eventually to pay down the enormous
deficit of this country.
We think it is fair to set guidelines on what can
and cannot be done on a national level. There is no reason why
those same guidelines should not apply locally. The danger is
that, once you let this type of publication get out the door on
a very regular basis, not necessarily weekly, as East End Life
is, or even monthly but perhaps bi-monthly or quarterly, at those
kinds of levels you are in danger of tipping the balance in giving
people this kind of warm, glowing feeling about how wonderful
their local authority is when in reality they are the ones who
happen to have your money to spend on telling you how wonderful
they are. We cannot have that situation go on because it is anti-democratic.
Q126 Clive Efford:
On the issue of lobbyists, do you not worry that in the way you
have approached this you will prevent local authorities from being
able to buy in expertise that they do not have in-house? To go
back to the example of the local authority in Greenwich quoted
earlier, having been on that local authority for 12 years, many
years ago, I can remember lobbying for the millennium and the
regeneration of the peninsula, which led to the Dome; I can remember
lobbying for DLR to come to Cutty Sark Gardens in Greenwich; for
the Jubilee Line to come to the peninsula right next to the Dome;
and, more recently, for Crossrail. I could go on with many other
examples. Without bringing in expertise that we did not have
within the local authority and people who knew the right questions
to ask, and the people to ask them of, we would have missed out.
Grant Shapps: Unwittingly,
you almost highlight the point I want to argue here, because if
you allow lobbyists to be brought in, rather than expertise being
brought in to advise on technical aspects—I am talking about
the communication/publicity side of things—to lobby the
Government on every occasion, is it not the case that what happens
is the same as has happens in US politics? Because you are allowed
to advertise on TV, if you do not do it, the other guy will and
you will be put at a disadvantage. Therefore, you have to advertise
on TV and as a result expenditure on presidential as well as mid-term
elections can run into the hundreds of millions, even billions,
of dollars. Why? Because there is no rule to say you cannot
do it. In exactly the same way, this code on publicity that bans
across the board the hiring of lobbyists in order to lobby Government
to publicise the needs of that local authority to Government will
put everybody back to zero, unlike at the moment where everybody
is on the same level but you have to pay lobbyists to be on that
same level. You almost make a very good argument, which perhaps
I had not considered previously, for a code of conduct for lobbyists
to ensure everybody is on the same level.
Q127 Clive Efford:
Have you ever been on a local authority?
Grant Shapps: No.
Q128 Clive Efford:
Local authorities on behalf of their local communities deal with
a great many things, and one of the most important is regeneration
and economic development. When there are large projects, competition
is quite often set up by Government departments where local authorities
are required to compete with one another, so unless you present
the case in a great deal of detail, your local community is likely
to miss out.
Grant Shapps: That
is an excellent case in point. Money is restricted; sometimes
you have to go through bidding and put together a bid. The argument
here is not that you cannot bring in experts to work out how to
put together an excellent bid on a technical basis but that you
should not waste your money employing them to come and lobby Ministers.
You ask if I have been on a local authority. No. Obviously,
I have been around local authorities for many years, but I have
sat on this side of the fence and I can tell you there in my mind
there is nothing less effectual than a lobbyist contacting me
to ask for a meeting on behalf of a local authority. I write
the same answer every time: no. The principle is: it should not
be down to who can spend the most money on lobbyists but who has
the best technical story. By the way, it costs nothing to contact
me via grant@shapps.com or the DCLG website. That is all it takes.
You do not require a firm of lobbyists to get in touch with Ministers
in our department. Therefore, there is no reason to go out for
the publicity element and contact lobbyists. If no one is able
to do this because it is banned under the code, then Greenwich
will not need to spend the money in order to keep the same competitive
advantage as its neighbouring authority that is spending that
money. Neither will be able to do it. Clearly, this ensures
that much less money needs to be wasted on lobbyists.
Q129 Chair:
Can you define the difference between a specialist and lobbyist?
Grant Shapps: The
bit we are interested in here are the people who on behalf of
local authorities go out to sell the message of those local authorities.
Q130 Chair:
You can employ someone as a specialist to advise you on how to
present your case better as long as you present it yourself?
Grant Shapps: I
would not advise it, personally; it is almost certainly counterproductive.
Lobbyists are go-betweens, are they not? They think they are
a lot more likely to attract your attention than a direct approach
from a local authority to Government, often a Minister. The answer
to go forth from this day is: it is not the case. You are wasting
money; worse still, you are wasting your taxpayers' money.
Q131 Chair:
The money cannot be spent on someone coming to Government on behalf
of a local authority, but someone who advises a local authority
about how to go to Government is fine?
Grant Shapps: Let
me just repeat the advice: going to Government is easy. Email
us; pick up the phone; ask your MP. It is very straightforward.
Q132 Chair:
Small local authorities in particular may not have information
and advice about complicated issues and on occasion it is something
they may need to buy in. Therefore, to buy in that advice to
help them present a better case to you when they come is acceptable?
Grant Shapps: To
get this straight in my mind, are you telling me that if somebody
is an expert on the Underground, say a specialist in train extensions,
and they are technical in nature, that is the same as being a
lobbyist who contacts Government to try to get Government to buy
their case? No, they are two completely different jobs. If you
are a local authority that needs advice from an expert engineer,
go and hire that expert engineer. That is not a lobbyist.
Q133 Chair:
Is there to be a list of specialists you can buy in and those
you cannot?
Grant Shapps: This
is all pretty straightforward. I do not have the same difficulty
in interpreting what a lobbyist is. I do not think an engineer
is a lobbyist. Do you?
Q134 Chair:
In the end it probably will not be your decision; it will be that
of the district auditor or somebody else. Therefore, it is helpful
for the district auditor to have it clearly understood.
Grant Shapps: To
me, this is like having a conversation about the difference between
a doctor and dentist. Everyone understands the difference between
them.
Chair: A lot of lawyers
end up being made very rich on the basis of those sorts of arguments.
Grant Shapps: This
is a statutory code and there are proper procedures in place to
monitor it. I cannot imagine anyone else will experience confusion
about the difference between a lobbyist and, for example, an engineer.
Q135 Bob Blackman:
This is published as a recommended code of practice. We already
know from discussions we have had that some of the publications
would appear to fall foul of the recommendations in this code
of practice, so how is it to be enforced?
Grant Shapps: In
line with localism, we would expect local authorities to adhere
to it in the first place. I think that by and large they do abide
by the current code, although there are some exceptions that of
course are easier to highlight. Then local people—the armchair
auditors—will be able to say that a publication is still
coming through the door weekly and make a complaint to the local
authority auditor. The auditor will wrap knuckles in public and
name and shame the local authority.
Q136 Bob Blackman:
So, it is the auditor who will decide whether or not the authority
has breached the code?
Grant Shapps: Yes.
Q137 Bob Blackman:
And will propose any appropriate action?
Grant Shapps: I
always look at these things and imagine there must be a very complex
system to ensure that local authorities adhere to everything that
central Government asks them to do. One of the big surprises
to me coming into Government is that for the most part that does
not exist. For the most part local authorities consider that
their number one duty is to comply with things like statutory
codes; that is what they live for, and they do not go around routinely
abusing them. I am no fan of Tower Hamlets or Greenwich council,
but I would be very surprised if they carried on publishing more
than four times a year once the statutory code is in place. If
they do, it is up to any member of its local population, perhaps
their local MP, to make a complaint.
Q138 Bob Blackman:
To be clear, when you say "statutory code" you do not
propose any primary legislation to introduce this code?
Grant Shapps: No.
This code will be laid before Parliament before the end of the
year and will come into force next year.
Q139 Bob Blackman:
To be clear on time, you say by the end of 2010?
Grant Shapps: It
will be laid before Parliament.
Q140 Bob Blackman:
And it will come into force in the early part of 2011?
Grant Shapps: Yes,
early 2011. Again, I can provide the Committee with the exact
timeline if it does not have it. I cannot tell you the exact
day it is to be laid before Parliament, but it is in our Department's
business plan that it will be in place by early 2011 and to meet
that timeline we would have to lay it before Parliament before
the recess.
Q141 Chair:
You said that authorities had to adhere to the code. The wording,
as I understand it, is that they must have regard to it. Therefore,
is it not slightly less clear-cut about what they need to do?
Grant Shapps: How
far you go with these things is an interesting point. I think
I am right in saying—it will be interesting to read the
evidence of the Committee as it writes up this investigation—that
by and large the code is complied with. I have not seen widespread
abuse of the code. It is the code that is to be announced rather
than the fact that it is being widely abused. The balance is
probably about right. I think it would be quite difficult to
carry on publishing 12 times or five times a year once the code
says four times a year. It will be embarrassing to be pulled
up on these things by the auditor. This applies right the way
across Government, particularly in its relationship with local
authorities in many different ways. I refer to all the work on
things that we have now scrapped, like the comprehensive area
assessments and local area agreements. These things worked because
local authorities spent their time trying to comply with the stuff
that they were being asked to do. Fortunately for them, we are
scrapping a lot of the stuff that they have been asked to do and
simplifying what is required of them, so it should be very easy
for them to comply.
Q142 Chair:
You say there is no problem with the current code as it exists,
apart from the fact you do not like the fact it does not specify
four times a year.
Grant Shapps: I
am sure there are legitimate concerns. Someone may be pulled
up in front of the Committee, but our argument is not that here
is a code that is being abused in a widespread way but that here
is a code that is so lax that it puts potential pressure on local
publications, so damaging the free press and allowing town hall
Pravda.
Q143 Chair:
With regard to the timetable about which you said you would give
us some information, obviously the Committee will produce a report
on this inquiry. We will do it as quickly as we can. We have
had just this one evidence session today. Is it possible for
the timing to be such that the House will be able to have regard
to our report before it comes to a decision on the code?
Grant Shapps: I
will switch the question round and ask how quickly you will produce
the report.
Q144 Chair:
The end of January.
Grant Shapps: You
will not produce the report until the end of January?
Q145 Chair:
That would be realistic.
Grant Shapps: I
need to come back to you in that case. I should mention that,
as you already know, we had the consultation; it closed in November.
The order of events is that you then announced your inquiry,
but, as part of our departmental business plan, this code was
to be in place—we may have named the date—certainly
early in the new year, which means we planned to lay this before
the recess. May I go away and consider what you have said and
come back to you?
Q146 Chair:
I think that would be helpful. The reason for the timing of our
inquiry is that we wanted to take advantage of the consultation
your department had undertaken rather than to call for a separate
set of evidence.
Grant Shapps: I
can see that would be sensible, in which case let me come back
to you on that detail.
Chair: Thank you very
much.
| 
