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Baroness Turner of Camden: My Lords, I thank the Minister for his response. However, is the noble Lord aware that there has been considerable criticism by former leading staff of the TEC: that one of the reasons for the problems that have arisen has been the Government's insistence that state-sponsored training for jobless people should be less about quality provision and more about getting people off the register of the long-term unemployed? Is the noble Lord also aware that difficulties arose regarding seconded civil servants who were able to provide a great deal of expertise? For example, once they were removed when their secondment had come to an end, there was difficulty in replacing the expertise that had disappeared.

Lord Inglewood: My Lords, as I explained in my Answer, the problems that have afflicted South Thames TEC are to do with financial management and cost control. It seems to us that the criticisms of which we are aware and to which the noble Baroness, Lady Turner, alluded have no direct bearing on the matter in hand.

Lord Avebury: My Lords, is the Minister aware of the particular difficulties which face the Windmill Project in Clapham as a result of the demise of the TEC? That project had taken on a training worker on contract who was funded 75 per cent. by the Home Secretary and 25 per cent. by the TEC. When the money ceased to come in in November, the Windmill Project (which is a small charity) had, nevertheless, to continue the payments which it was obliged to make under contract. Will one of the two other TECs to which the noble Lord referred in his reply assume that obligation?

Lord Inglewood: My Lords, I thank the noble Lord, Lord Avebury, for his question. I do not know the details of the Windmill Project to which he refers. Therefore I hope that I shall be forgiven for answering in more general terms. For payments which are due in respect of claims after 7th November, the Government have issued a letter of comfort to ensure that the bills will be honoured. The question of outstanding moneys relates exclusively to the period before 7th November. As regards the longer term, for the immediate future the activities are being managed by the receiver. As I explained in the first reply that I gave, for the period 1995-96 it is anticipated that the responsibilities of the South Thames TEC will be divided as I outlined.

Lord Gladwin of Clee: My Lords, while appreciating the answer given by the Minister as regards the reasons for splitting the South Thames TEC in half, does he agree that what is really required

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now is a strategic look at London's needs? It is not satisfactory to split this difficult area of London into two and to ask the neighbouring TECs to do the work. We need something more than that. Will the Minister help?

Lord Inglewood: My Lords, as regards the longer term, my right honourable friend the Secretary of State has announced that he will conduct an investigation into the future of the TECs throughout the London area. He is proposing to start by discussing the matter with the chairmen of all the TECs concerned to see whether the best solution is the one that is currently in place. I am sure that noble Lords on all sides of the House will agree that it is important that we deal with this in the most satisfactory manner from the point of view of all those concerned.

Baroness Seear: My Lords, will the noble Lord accept that we are glad to hear that there will be an inquiry by the Secretary of State into the TECs in London because there is a great deal of anxiety on the part of those who depend on them for training programmes? I declare an interest because the Apex Trust, of which I am chairman, has such interests. When this inquiry is undertaken, will the Minister ask his right honourable friend the Secretary of State to take into account the problem of people with special needs? The whole trend in TEC financing has been such that the money goes where there is success in getting jobs or qualifications. This leaves people with special needs very much out in the cold. Yet it is those people who, more than others, need training if they are to get back into employment. They are the people who tend to cause a great deal of both economic and social difficulty.

Lord Inglewood: My Lords, I shall be pleased to pass on the comments of the noble Baroness to the Secretary of State.

Lord McCarthy: My Lords, will the Minister tell us how he can say in advance of the inquiry he announces that what went on in this TEC was atypical? Surely many other TECs might be running out of money and out of control. How can he tell us in advance that nothing like that situation will be found?

Lord Inglewood: My Lords, as regards the noble Lord's question, it is important to be clear that the inquiry to which I referred is concerned with determining the way in which the allocation of responsibilities of TECs is conducted across London. As regards the particular problems of the TEC we are discussing, in the contract that is in place between the TECs and the department there is a stipulation about the manner in which the internal financial controls are carried out. Way back in December 1993 South Thames TEC was identified as being the only TEC in the country that was high risk in this regard. In answer to the noble Lord's question, I would say that it is possible to identify that this was an atypical circumstance for the reasons I have given.

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Local Authorities: Audit Commission Report

2.54 p.m.

Lord Boyd-Carpenter asked Her Majesty's Government:

    What action they are taking in the light of the Audit Commission's finding that inefficiencies among local authorities cost up to £1 billion a year of taxpayers' money.

The Minister of State, Department of the Environment (Viscount Ullswater): My Lords, the Government very much welcome these reports which set out clearly what could be achieved if all local authorities were to perform as well as the best. It is now for each individual authority to consider these reports and to see what value for money improvements they can make.

Lord Boyd-Carpenter: My Lords, does my noble friend's Answer mean that the Government as such are doing nothing about this?

Viscount Ullswater: No, my Lords. Indeed my right honourable friend the Secretary of State has already had preliminary discussions with local government leaders about the report and plans to have fuller talks with them and also with the Audit Commission next month. I should point out that the Audit Commission report is not a government report.

Lord Dean of Beswick: My Lords, the noble Lord, Lord Boyd-Carpenter, in his supplementary question asked whether the noble Viscount's answer meant that the Government were doing nothing about this. If they are not doing anything about it, the Government—the Minister must understand this—are only doing what they did when Questions were put in this Chamber regarding the Wessex Regional Health Authority, the West Midlands Health Authority and the development corporation for Wales. Nothing was done then either. Is the Minister aware that it is time that the three instances I have mentioned were dealt with by the Government, just like the matter we are discussing now?

Viscount Ullswater: My Lords, reverting more to the Question on the Order Paper, the studies make recommendations for good practice and the commission will usually seek to disseminate this through guidance to district auditors or sometimes in publications aimed at a wider audience. As part of the follow up, the auditors will usually be asked to pay particular attention to its findings during the course of the following year's audit. Therefore there is a route that the commission takes as regards local authorities. It expects the district auditor to pay attention to the recommendations.

Lord Cledwyn of Penrhos: My Lords, what precisely does the Audit Commission mean by "inefficiency"?

Viscount Ullswater: My Lords, the main findings of this report indicated that, although total local authority staff numbers have fallen between 1987 and 1993, non-manual staff numbers rose by 90,000, with numbers in senior posts rising by some 60 per cent. Significant

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pay bill savings therefore are available from improved productivity and from the better management of pay. Those are the commission's findings, not the Government's.

Lord Stoddart of Swindon: My Lords, does not the noble Viscount agree that when one removes powers from an organisation and makes it responsible for only 20 per cent. of money raising powers, it is inevitable that it will be less responsible than if it had those powers? Is not the answer to give local authorities more power and make them responsible for raising a greater proportion of the money they spend?

Viscount Ullswater: My Lords, central Government do not control local government pay and conditions of service. That is the basis of this report. I believe that this report indicates that if all local authorities managed their pay as well as the best there would be room for savings.

Baroness Farrington of Ribbleton: My Lords, will the Minister confirm that the Audit Commission report did not refer to inefficiencies costing £1 billion but to increased expenditure on management? Will the Minister also confirm that an arbitrary figure of £18,000 a year salary was used and that this figure includes large numbers of local government staff who are not managers but deliverers of services, such as environmental health officers, chief librarians and others?

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