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Baroness Thomas of Walliswood: My Lords, before the Minister—

The Earl of Lindsay: My Lords, I am sorry, because of the time limits I must continue. I should also like to point out to the noble Lord, Lord Stoddart, that local authorities can vet the financial standing of potential contractors. Authorities are not obliged to accept the lowest tender. The Government's guidance makes it clear that the lowest tender can be rejected provided that authorities have specific well-founded reasons.

The private finance initiative is a further mechanism for improving local services. It is taking an expanding role in improving our country's infrastructure and public services. Contracts across the whole of the public sector for PFI projects worth £5 billion should be signed in 1995. We are actively encouraging local authorities to adopt the principles of the initiative to build on the impressive range of partnership arrangements already established by many local authorities with the private sector. New rules to encourage partnerships between local authorities and the private sector came into effect on 1st April. They streamline the controls on the transfer of assets to local authority companies, and on authorities' participation in private sector led companies; and they provide incentives for authorities to consider the disposal of specific categories of assets and the leasing of non-housing property. These changes significantly increase the local authorities' scope to harness the private sector's investment potential and management skills in delivering capital projects.

We see these changes as a start, not a finish. We aim to extend further the role of the private finance initiative in the local government sector, and we have asked the

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local authority associations for proposals for further measures to assist partnership initiatives with the private sector at the local level. Proposals have also been invited from private sector organisations and other interested bodies.

The dire predictions and dire statistics given by the noble Lord, Lord Dean, in relation to housing are misleading. The Government expect comfortably to exceed their commitment to 153,000 housing association homes in the first three years of this Parliament. We now estimate that around 60,000 lettings are being provided this year, bringing the total to over 180,000. So—

Lord Dean of Beswick: Will the Minister repeat that figure?

The Earl of Lindsay: My Lords, Hansard will record it and I shall write to the noble Lord in addition.

Lord Dean of Beswick: The figure might be wrong; I might wish to challenge it.

The Earl of Lindsay: My Lords, the noble Baroness, Lady Hollis, took a somewhat "doomsday" look at the provisions for the homeless. We are not preventing local authorities from using their housing to meet the immediate needs of homeless families and vulnerable people. Authorities will be free to use their own housing stock on a non-secure basis, or that offered by other social landlords or good quality private rented accommodation, for the homeless.

To complement the PFI, we have launched the deregulating local government initiative. The Department of the Environment has discussed with representatives of local government the opportunities to remove unnecessary and irksome bureaucratic controls on local authorities to improve the delivery of services and to help local authorities to fulfil their full potential.

On 6th March we published a consultation paper entitled Deregulating Local Government—The First Steps. This reviews the progress across government which has been made to date, makes a number of new proposals for removing or amending certain specific controls, and invites further proposals.

The consultation paper is just a start. We have high aspirations for the future and hope that the paper will encourage local government to come up with more innovative and far-reaching proposals for taking forward the deregulation initiative.

To ensure public accountability, by 31st December last year for the first time local authorities were required to publish performance indicators in local newspapers. In addition, on 30th March, the Audit Commission published the first ever national publication of Local Authority Performance Indicators. This publication is an important step forward in our charter initiatives and one which I am pleased to say has been recognised as such by the local authority associations and their members.

The publication confirms that many local authorities are performing very well across the wide range of services that they provide. But there is no doubt that there is room for improvement. The performance of some authorities falls well short of the standards that

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have been seen in other councils. It is important that the performance of public services are opened up to scrutiny. I am sure that the availability of that type of information will encourage councils to look hard at ways of providing better services for their citizens.

Finally, our framework for effective local government necessarily involves arrangements for the provision of resources to local authorities in order for them to deliver services. I would wish to face head on any criticism of the control mechanisms for local authority spending. As my noble friend Baroness Young said, any government must face up to the fact that local government in Great Britain is big business, accounting for one quarter of total public expenditure. Therefore, local authorities cannot be free from the disciplines on the use of resources which apply throughout the public sector.

The noble Lord, Lord Williams, and other noble Lords, including the noble Lord, Lord Desai, felt very uneasy about capping. But capping remains necessary to ensure that all authorities play their part in the restraint of public expenditure and also to protect council tax payers from the high council taxes which are the result of excessive local authority budgets.

This year's local government finance settlement is demanding, but it is necessary as part of this Government's overall strategy of controlling public spending. We have been accused of unfairly victimising local authorities. In fact, provision for spending by local authorities is set to increase by 2.2 per cent. overall this year.

Local authorities, like other parts of the public sector, are faced with hard decisions about priorities. But in setting these, they are able to explore ways of making their existing resources go further. The Audit Commission has recently suggested that authorities could save over 5 per cent.—£500 million—on their paybill by better pay and performance management, and its recently published performance indicators show that the worst performing authorities have considerable scope for improvement before they achieve the level of the best. The challenges facing local authorities may not be easy but they are certainly not insurmountable.

There has been some suggestion that local authorities' actions have been severely restrained by central government. However, only a very small proportion of the resources made available to local authorities must be spent on specific services. Having due regard to their statutory duties, local authorities are able to decide how to spend something like 90 per cent. of their income. It is more than merely a prioritising role, as the noble Baroness, Lady David, commented.

My noble friend Lord Boyd-Carpenter raised points about council tax banding. I know that this matter is also to be discussed tomorrow. However, I stress that of the 21 million dwellings which had to be taxed, 96 per cent. of the tax banding decisions were accepted. Only 4 per cent. were not accepted. There has been some increase in the speed with which the balance of cases of disputed bandings has been tackled. Very few appeals still remain to be heard. But, overall, after a difficult start there has

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been a considerable improvement on that front. Banding has been widely accepted by many people as an acceptable way to raise local government taxes.

With regard to council tax in two tier areas, each tier sets it own council tax, which is then included in the one bill. It is important that in the information accompanying the bill each tier explains in clear and simple terms the decisions that it has made on the level of the council tax.

The noble Lord, Lord Boyd-Carpenter, was worried about the debt of local authorities. The Government is also very worried about such debt. I hope that the incentives and restrictions that central Government have put in place will ease that problem.

I shall have to leave one or two points for either correspondence or another time. I shall try to send to the noble Lord, Lord Sefton, the definition of the SSA and how it is arrived at. Other learned commentators on the SSA, such as the noble Lord, Lord Tope, and my noble friend Lord Bellwin, have already given him some comfort in that direction. I can tell the noble Lord, Lord Parry, that the 20 specific questions on Wales will be answered by correspondence.

I have described the framework which central government have provided. There have been recent changes, such as reforming the map of local government; but the way forward is largely settled. It is now for local government to act. It must act on the promises made in relation to the benefits of unitary authorities and improved two-tier working. The Audit Commission reports on pay show them and us what further efficiency savings can be made. The national performance indicators show them areas where improvement is possible. The ball is now in their court. The opportunity exists for a renaissance of local government, with modern forward-looking leadership, providing better services, and giving people more responsibility over their own lives. I believe we can be confident that local government will rise to the challenge.

I repeat what my noble friend Lady Young said when she began her speech; namely, that local government in Great Britain is alive and well.

6.4 p.m.

Lord Williams of Elvel: My Lords, I am most grateful to the noble Earl for his response. I understand that this is the first time that he has responded to a major debate of this nature. The whole House will congratulate him on what has been an extremely difficult task. I did not agree with anything that he said, but that is another matter.

I should like to thank those noble Lords who have taken part in this debate. I agree very much with the noble Lord, Lord Boyd-Carpenter, when he said that seven minutes was not adequate time for a speech. I hope that we shall have other opportunities. Indeed, as I understand it, there is to be an ad hoc Select Committee of this House on the relationship between local government and central government. We shall all

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have our input to make on that. I am most grateful to noble Lords. In the meantime, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.

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