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Baroness Hollis of Heigham: My Lords, you are tempting him!

Lord Simon of Glaisdale: My Lords, I do not know whether the noble Baroness is on my side or not. But certainly subsidiarity has been gaining in esteem since then, and subsidiarity, like charity, begins at home. Therefore as soon as we can move the decision making to the person affected by the decision without damaging the services that will be vouchsafed, the better it will be.

I now turn to the other two questions. The noble Baroness, Lady Faithfull, asked a crucial question and it was taken up by the noble Lord, Lord Gisborough. How far do the people of Cleveland want what is proposed? The statistics, like most statistics, have been juggled considerably this evening but they are analysed with great clarity on page 23 of the report of the judgment of the Divisional Court. It seems beyond question that the people of Cleveland have been consulted and are in favour of what is proposed.

There is another thing. Members of Parliament are very close to their constituents and regard it as their duty to voice, so far as they may, the views and interests of their constituents. The interesting thing is that of the six Teesside MPs who are covered by this order—I include

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Hartlepool—four are in favour of the order. They are not all Government supporters: two of the four are Conservatives and two are distinguished Labour MPs. They spoke in the other place with great clarity and with great cogency and their speeches well deserve the closest attention.

The other question that the noble Baroness, Lady Faithfull, raised—as did, I think, the noble Lord, Lord Gisborough, and other noble Lords—is the question of costs. Again that was carefully gone into by the commission. It was very carefully considered by the Divisional Court and what seemed plain is that although there are inevitably additional costs in a transition, in three years' time those costs will be overtaken by the savings—I hope the noble Viscount will give the figures—and the further ongoing savings.

I come finally to the question of proceedings in the Supreme Court. So far they have only been in the High Court. The county council brought an application for judicial review. That was rejected. It then applied in writing for leave to appeal and the Court of Appeal refused that. It has now applied for an oral hearing of its application but no date has been fixed for it. Therefore, at the moment there are no proceedings at all before the High Court. If we wait on the High Court the proceedings can be spun out in ways that I am afraid lawyers are all too familiar with, until we do not get any effective and smooth reorganisation in Cleveland.

What my noble friend Lord Bancroft is really proposing—he is one of the most distinguished public servants of our time and carries great weight—is what used to be called the centipede syndrome. Until every 100 feet have been put forward, no one may be ventured in advance. If we have that, we shall certainly not have a profitable organisation of local government in Cleveland. Opinion there is unquestionably divided although, as I have suggested, it is preponderantly in favour of the order. It is far better that this propaganda and counter-propaganda be brought now to an end and the various local authorities allowed to get on with their reorganisation.

8.38 p.m.

Baroness Flather: My Lords, I must confess, first of all, that I am tremendously relieved to be standing in the shadow of the noble and learned Lord, Lord Simon of Glaisdale, because it was my great fear that I would be the only one to support the order and speak against the amendment. But the noble and learned Lord has done a wonderful job and has covered areas which I am not competent to cover, and that has given me tremendous heart.

It seems to me, listening to noble Lords and to everyone who has spoken in favour of the amendment, that there is a questioning of the whole basis of the reorganisation, and that is what, in my opinion, lies at the heart of the matter. Instead of saying, "Oh, yes, we are in favour of reorganisation but we are not in favour of this particular one", it is really a question of saying, "Look it is all right if it is some other county which goes but let it not be my county.".

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I do not know the county. I have no interest to declare other than 15 years as a district councillor. As a district councillor I know that delay—that little five-letter word —is dreadful for district councillors. You cannot plan anything; you cannot do anything; you are in limbo; and you do not know what is coming next. To put this whole process back and create delay and uncertainty is extremely unfair.

I have heard a great deal about how unfair and inaccurate the polls were. Although all the polls point to one conclusion, apparently they were all incorrect. If they are so inaccurate would it not have been better to have conducted other polls to bring out a different result? We have always had this problem. We say that only 5 per cent. of the people vote or only 10 per cent. of the people vote. You cannot force people to vote, although there are countries in the European Union which have laws to make people vote. Only 55 per cent. of the people vote for Parliament, but we abide by the result. We say that it is your right not to vote as much as it is your privilege to be able to vote.

However many people voted, a far larger number voted in favour of the reorganisation than voted against it. That is a fact which is staring everybody in the face. Perhaps it would have been better if there had been parallel statistics and other polls which pointed in another direction, but we do not have those.

We have also heard a great deal about what is going to happen to the staff. The four districts have committed themselves to ensuring that all staff who want to do so can transfer to the new authorities. That is a fact. Also, your Lordships may be interested to note that most of the senior staff from the county council have already left, either to go to the new districts, to neighbouring county councils or to other councils. It is almost accepted as a fait accompli that the four districts will come into being.

We have heard from the noble Lord, Lord Bancroft, that the delay need not be a long one and may be a few weeks. That is an impossibility. If the change is delayed the process will have to start running again. It could never be a matter of a few weeks. The delay will be far longer than that.

Change is always painful, especially if it involves the loss of a particular level of authority. We have seen that time and time again. The order has come to us at a point where all the steps have been taken. I hope that your Lordships will not delay the order and will proceed with it.

8.43 p.m.

Lord Stoddart of Swindon: My Lords, I hope that the House will forgive me for speaking in the gap. I had not expected to be able to speak tonight, and that is why my name is not on the list of speakers. I shall be as brief as I possibly can.

I find myself in the unusual position of supporting the Government tonight. Like the noble Baroness, Lady Flather, I thought that I would be the only one. But I shall support the Government tonight and vote against the amendment of the noble Lord, Lord Bancroft, if he puts it to the vote. I am opposed to the amendment, first, because I believe in unitary authorities and, secondly,

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because I believe that the delay which would be caused if the amendment were adopted would not be good for local government in Cleveland.

If the amendment were carried a number of things would happen. First, preparations in Cleveland which have been under way for some considerable time would have to be put on hold. There would be no further service development work due to the uncertainty of the situation. Staff morale would certainly be adversely affected. Staff retention and recruitment would be increasingly difficult for the county council and the new authorities. Furthermore, if the amendment were passed there would inevitably be similar amendments to other orders, delaying the whole process.

A great deal has been said this evening about the public opinion polls which have been taken. Much complaint has been made against them. My guess is that if instead of 75 per cent. of the people polled being in favour of unitary authorities they had been in favour of the continuation of Cleveland County Council, far from being criticised the polls would have been lauded in the debate tonight. We can only take note of the polls that we have.

I am a county borough man. I should like to refute some of the arguments which have been raised against the unitary authority principle. For example, we are told that the NSPCC is very anxious about the future operation of children's services. In my experience, the children's services are run extremely well by the county boroughs, and very often much better than by county councils. The same applies to a range of other services, including libraries, about which we have heard tonight.

Furthermore, the question of the costs of the new authorities—which was raised by the noble and learned Lord, Lord Simon of Glaisdale—has been dealt with. The transitional costs—which may well amount to between £13 and £18 million—will be saved with the new structures. It is estimated that £6 million to £11 million per annum will be saved in administrative costs. Therefore, there is a pay-back period of between two and three years, and there will be ongoing savings for the people of the area from then on.

I have almost exhausted my time. Perhaps I should say that I have an interest as a vice-president of the ADC. Nevertheless, my interest in this subject goes back a very long time. I merely want to repeat that I am in favour of the government order. If the matter is put to a vote I fear that I shall vote against the amendment of the noble Lord, Lord Bancroft.

8.47 p.m.

Baroness Hamwee: My Lords, if ever it were apposite to say that I would not start from here, tonight must be the night. Perhaps I should begin by declaring an interest, if it is an interest. That is for noble Lords to judge by the time I come to the end of my speech. I am a member of a unitary authority.

In my view the greatest tragedy is that the whole process has gone so badly wrong. I agree with the noble Baroness, Lady Farrington, that it would have been so much better had we started with a consideration of the functions of local government and also considered the question of tax raising. However, we have been diverted

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on to matters of structure, which have tended to divide rather than unite noble Lords, who clearly have a passion for good local government, even if our analyses of how that is to be delivered may differ.

It is also a tragedy that the review must have set back further consideration of the structure of local government by some 15 or 20 years. I say that in the context of the debate about regional government. I am a supporter of regional government. I accept that there is a need for much discussion as to precisely how it should be organised and what its functions should be, but I believe that there are many services which should be taken from central government and which would be better delivered at regional level. That would be a better context for the delivery of truly local services.

The language used during the debate—I do not refer to tonight's debate but to that outside the House—has often been unfortunate. One such occasion was the reference to an "early win", to which the noble Lord, Lord Bancroft, drew attention.

Thinking increasingly about tonight's debate, I have found myself in a dilemma. We do not have an option to vote for the status quo. Indeed no one seems to want that. The advocates of the amendment in the name of the noble Lord, Lord Bancroft, seem to be supporters of the Teesside-Hartlepool option. That option is not before us. I would have some reservations on that, although I understand the anxiety for Teesside about the disparity and size of the two authorities, which might make one authority the poor relation. Those who seem to argue that we should support the amendment, however they interpret its effect, are advocates of that solution. But many of their arguments against four unitary authorities seem equally to be arguments against a solution which would lead to one small unitary authority and one bigger authority.

I have talked about the problems of the review process. I believe that the Government have wasted such opportunities. It may not be possible to please all the people all the time, but the procedure seems to be on the verge of displeasing all the people all the time. Perhaps I may say to my noble friend, Lord Rodgers—for this evening, he may be a friend but not an ally—that my colleagues in local government in Scotland and Wales have said, "At least you have had the review; you have had the commission. There has been opportunity for local people to put the local case, however badly organised that opportunity has been". The reorganisation for Scotland and Wales was kept entirely within this building. It was not a matter for local debate.

Reference has been made to cost. Of course there have been enormous costs simply to reach this point. They include the hidden cost of the hours spent working on the matter, which will never be recovered. The noble Baroness, Lady Faithfull, referred to extra cost as a result of there being four authorities. I do not believe that there will be much duplication. At the point of delivery of service there should not be duplication. The noble Baroness's concern related to the threat to attracting good quality officers. The greater threat is the centralisation of service and decision making within central government.

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The Opposition cannot set the agenda. We have to respond to this order. However, I do not regard it as a template or a precedent for future orders. I agree with the noble and learned Lord, Lord Simon in his analysis: that the amendment is opposition to the order in another form.

As regards strategic services, I am no lover of joint working, joint authorities or joint arrangements; those are all slightly different one from the other. They can be second best. My anxieties are for reasons of accountability and clarity. However, I believe that the issues raised in the amendment were addressed by the commission and the boroughs. In fact the Teesside-Hartlepool option would not avoid the need for joint arrangements. I much prefer the authorities involved to co-operate and work out their own methods of arrangements rather than having the Government impose the model from above by means of an order. I include economic development; it is an important issue raised by noble Lords.

Coterminosity is generally not on offer. The noble Baroness, Lady Faithfull, referred to the health service. But it is rare for there to be coterminosity between health and social services. Of the services to which reference has been made, care in the community (to take but one example) involves a great range of services. Of course, I bow to the great experience of the noble Baroness. It probably outweighs that of the remainder of us put together. However, I believe that many different services are delivered through care in the community, with many different client groups. Different numbers make up the critical mass for the good delivery of those services.

With regard to emergency planning, there has to be co-operation and careful working across boundaries. One cannot know whether a disaster will occur in the middle of an administrative area or on its border. Finally, perhaps I may refer to special needs, one of the many strategic services. I understand that the delivery of special needs services is already predominantly based in the districts.

I do not minimise the levels of stress and the problems for local authority staff who are subjected to what is taking place at present. However, the Minister has given us certain reassurances. I am persuaded that, though the package could be improved and one would wish to see it improved, it is less than that recommended by the staff commission and I hope that, even at this late stage, the Government may be prepared to reconsider the scheme. Nevertheless, a good deal of progress has been made. If we are ever to proceed to unitary government, on balance the position is as satisfactory as one might reasonably expect. I agree with other noble Lords that one cannot organise everything perfectly before taking the final decision.

On judicial review, it is not as though the matter has not already been considered at length by the courts. There are almost always further avenues of appeal.

The subject of polls inevitably concerned noble Lords. I noted that the latest poll—it was organised by the county —gave what one might call an answer (it may not be the right term; it is a shorthand description) which resulted in 50 per cent. support for four unitary

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authorities, and 29 per cent. support for two unitary authorities. Many other figures could be used. On balance one has to treat the polls as one factor in judging the dependability and credibility of the evidence from all sources.

The noble Lord, Lord Gisborough, gave a sample from the list of organisations which support an option other than the proposals before us. I suspect that such a list is a tribute to the quality of service that those organisations have experienced and perhaps reflects everyone's inherent resistance to change. It is not necessarily a conclusive argument against change.

I do not regard the order as a template or a precedent. Each geographical area and each group of communities poses separate issues. It is inevitable that Cleveland does not have quite the same place in people's hearts as did the old counties. I knew that I would agree with much of the argument put forward tonight. However, I diverge at the point of decision. I diverge from those noble Lords who spoke at the start of the debate. I cannot support the amendment. I am concerned about the 100-feet syndrome referred to by the noble and learned Lord, Lord Simon.

9 p.m.

Baroness Hollis of Heigham: My Lords, we have before us tonight the first order that comes from the Local Government Commission, together with the amendment of the noble Lord, Lord Bancroft. I should like to make three points.

First, we on these Benches do not necessarily quarrel with the outcome as such—to replace the county councils with four unitary authorities. Secondly, however, we do quarrel with the way that the matter has been handled by the commission and by the Government—so much so that, had the Bancroft amendment been an amendment not to an order but to a Bill, we might well have been minded to support it. Because it is an amendment to an order, which, with the consequential delays would make it essentially a wrecking amendment, we believe that we should continue to respect the long-established self-denying ordinance of this House on orders and statutory instruments not to defy the elected Chamber. Therefore we shall abstain on both the order and the amendment.

Perhaps I may say a little more about each of those points. First, we do not necessarily quarrel with the outcome. The Labour Party's position over some 15 to 20 years has been that the 1974 reorganisation of local government was mistaken, was unstable and should be reformed. We have over many years called for unitary authorities based largely on district councils where they enjoy the support of local people within a framework—which I know my noble friend Lady Farrington also supports—of elected regional authorities.

Like my noble friend Lord Stoddart, I was a councillor in a county borough both before and after the reorganisation of 1974 and am now a vice-president of the ADC as well as the AMA. The 1974 reorganisation splintered services that should be together—especially housing, which became a district function, and social services, which became a county function—at just the time when they needed to be integrated for the effective

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delivery of care in the community. At the same time it made other services such as economic development and aspects of leisure concurrent, so that in some authorities both authorities carried out the functions, while in others neither did so.

The consequence is that local residents and taxpayers to this day, as all polls have shown, still do not know who does what, to what standard of service, at what cost and in whose name. This was brought home to me forcibly just a few months ago. Our city library in Norwich, as many noble Lords will know, was burnt to the ground. It was a calamity for us. The city council, the Lord Mayor and even myself as a former leader received countless letters about the matter —as though we, the city council, were the library authority. Yet it has been a county function for 20 years. Many people in the street and almost all of those who wrote to us did not even know that fact.

If they believed that the city was responsible for the libraries, how could they hold the county council responsible? And if they could not hold the county responsible, what is local government all about? As Redcliffe Maude said—and I am only sorry that Sir John Banham did not apparently read this part of Redcliffe Maude —county boroughs and unitary authorities were the most effective form of local government England has known.

Yet the Labour Party has always argued that those unitary authorities should be within a framework of elected regional authorities in order to bring power down from Whitehall—the principle of subsidiarity mentioned by the noble and learned Lord, Lord Simon—to democratise the quangos (there are under this Government now more members of quangos than there are of elected local authorities) and to have a regional perspective on economic development, on strategic planning and on Europe. We have regional government in this country. What we do not have is regional democracy.

Therefore the Labour Party gave a cautious welcome to the original Heseltine review when, in January 1992, the Secretary of State said:

    "We know that most local authorities want unitary status and we believe that such status will provide a better structure for the future in most areas".—[Official Report, Commons, 20/1/92; col. 37.]

But we also voiced our concerns: namely, that we feared that the review process would be whimsical, arbitrary even and possibly shambolic. As my right honourable friend Mr. Dobson said in the other place on this order the other night:

    "After two years of wrangling, vast expense and court cases, we do not have a sensible set of propositions from the review ... The process should have been clear, consistent and straightforward".—[Official Report, Commons, 11/1/95; col. 206.]

Instead, to quote my right honourable friend, it has become "a shambles". He was entirely right. Of the 296 districts that entered the review, there will probably be some 230 at the end of it.

Why has the whole thing been such a mess? We in this House must take some measure of blame. Three-and-a-half years ago my noble friend Lord McIntosh of Haringey and I argued, and we had considerable support, that the Bill should make it clear

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that the review was to establish, where appropriate, a coherent pattern of unitary authorities. That amendment was also urged by my right honourable friend Mr. Blunkett in another place. The Minister resisted it on the grounds that the Government did not want to,

    "tie the hands of the commission".

With hindsight, that was a critical mistake.

Belatedly, the Secretary of State came to realise that the amendment was absolutely right and he circulated guidance to that effect—which was then struck down by the courts because it was not embodied in the Act itself. Had the Government listened, and had they accepted that amendment, none of this shambles need have happened. But the Government did not, and subsequent Ministers have had to pick up the pieces—for by refusing that amendment what subsequently happened was that the green light was given to Sir John Banham. He became not just independent of the Secretary of State but effectively independent of the will of Parliament, because the words were not in the Act. He has exercised that freedom in a way that has been deplored by one of his fellow commissioners, Mrs. Hodge. She told the other place that the chairman,

    "showed no consistency of approach, was too often influenced by personal preferences and personal experiences, rather than objective assessment, and operated somewhat undemocratically and autocratically".—[Official Report, Commons, 11/1/95; cols. 223-4.]

She went on (I am quoting a commissioner):

    "We should have dispensed with his services".

In consequence, each county proposal is therefore ad hoc; whereas if the guidance had been part of the legislation, as it should have been, we could have been considering today a coherent set of recommendations for England as a whole, just as the amendment of the noble Lord, Lord Bancroft, asks.

Such a position in the Act might also have checked some of the dog fights that have taken place between districts and counties. Unlike Sir John Banham, they could not have insisted that it was a free-for-all. Perhaps some of the energies and efforts that have been put into the review over the past two years could instead have been put into ensuring better services.

The amendment of the noble Lord, Lord Bancroft, also calls on the Government to ensure that there is a proper provision of essential services. The commission says that it is satisfied that such services will be provided effectively. Not surprisingly, so do four of the five authorities concerned. But given that so many noble Lords have raised the issue tonight, it is perhaps worth reminding ourselves that, of the proposed unitary authorities, three of the four are larger than Kingston-upon-Thames, which is one of the London boroughs; for Hartlepool, the fourth unitary authority proposed, even the county council itself agrees that it should have unitary status.

It is also worth reminding ourselves, since on occasion it has been said, that because those authorities co-operate to provide a specialist joint service, it does not make them a quango. They remain elected, open and accountable. Would that quangos were! Given the way that many county councils have established district

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offices for education and social services, in very many counties to my personal knowledge we already have district administration. We just do not have district accountability.

However, where we very much agree with the noble Lord's amendment is on the need to protect the position of staff. Local government services are as good as and no better than the staff who deliver them. As the noble Baroness, Lady Flather, said, there has been some movement on that issue. I understand that all employees of Cleveland will be transferred, if they wish, to the new authorities. There is a national agreement which will come into effect at the end of this month to guarantee that.

Moreover, I understand that under pressure the Government have also conceded a national detriment compensation scheme for those local government staff who would lose pay as a result of restructuring, and that is also welcomed. I also understand that Cleveland local authority leaders have given additional assurances. We have had letters to say publicly that all the district authorities support a no compulsory redundancy policy and see no reason to change in respect of the review.

So there has been some movement on staff, but not enough. It is still the case that the compensation for staff who take voluntary redundancy is simply not good enough. In the 1986 review they were entitled to up to 86 weeks' compensation. This time around the Government are offering only 66 weeks. That is not fair to those staff of Cleveland County Council who have given competent, dedicated service over many years. As my right honourable friend Mr. Dobson said in the other place, the Government must think again on this matter and meet the Staff Commission's proposal of 82 weeks.

I shall not comment on the courts, since the Minister told the other place that he would take stock of the legal position before any order was made. I shall instead turn to my final point.

Because of the shambolic state of the review in general and inadequate compensation for staff in particular, we on these Benches support much of the substance of the noble Lord's amendment. Why then do we propose to abstain from a vote? I repeat, had this matter concerned an amendment to a Bill rather than to an order we might have been minded to vote for it. Why then is there a difference? If we had amended a Bill and the other place had rejected our amendment, we should have had to acquiesce in their rejection of our amendment and the will of the democratically elected Chamber would have prevailed. But if we amend an order or a statutory instrument, that kills the order. The other place cannot override us, so that we, an unelected Chamber, will have overturned a decision of the elected Chamber. That order would then have to be re-laid before both Houses of Parliament.

The noble Lord's amendment is not technically fatal; but, in our view, it is so hostile that it has the same effect, as my noble friend Lord Stoddart made very clear. The elections to the shadow authority could not take place in April and therefore there would be delays of a year. I am sure that that would be repeated for each and every order in the pipeline which, having been passed by the other place, had come to this House. For

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every time that a local government order was introduced for half the counties of England, this House would have established a precedent for sending it away again.

This Cleveland order, precisely as the noble Lord, Lord Bancroft, said, should be taken with other orders. It cannot therefore be taken by us as a one-off. It could kill the review. The House of Lords, an unelected Chamber, would have been responsible for that. We would have thwarted the will of the other place. That convention, the self-denying ordinance, that the unelected Chamber does not thwart the will ultimately of the elected Chamber is so strong that, during the period of the last Labour Government, your Lordships sought to amend an order only twice: one on town planning and one on national parks. Neither order had the degree of political sensitivity for the other place that this order carries.

For the rest, and for the past 15 years, that self-denying ordinance on politically sensitive issues has been respected and we on this side shall expect it to be respected in the years to come. We amend as an unelected Chamber; we debate as an unelected Chamber; we revise; but ultimately as an unelected Chamber we do not thwart. For that reason and that reason alone we shall be abstaining tonight.

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