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Earl Ferrers: My Lords, perhaps I can help the noble Baroness, if she is kind enough to resume her seat. I need to take some advice, but without taking too much advice, I believe that that would be unacceptable. Otherwise, one might run into the trap of noble Lords saying, "It would be much easier if I just handed my whole speech to Hansard". That might be very agreeable to your Lordships but it would not be the right way of doing things.

Baroness Thomas of Walliswood: My Lords, your Lordships will see what I meant when I referred to the noble Earl, Lord Ferrers, as having a particular talent in answering Members of the Opposition. I accept his guidance, and I shall do my best with the figures and try not to read out too many.

In future, Bedfordshire County Council will have 49 councillors and Luton Borough Council, the new unitary authority, will have 48. There are nine members of the police authority. Therefore, one might say that the division as between the new unitary authority and the continuing county should be five seats for the county and four for Luton. However, on the basis of population it would be much fairer to suggest that three of the nine places available should go to Luton, and six to the county.

I turn now to rather disagreeable political considerations. On the county council the Conservatives have the largest group of members, although not an overall majority. They have 24 councillors. On the other hand, they have only two on Luton Borough Council, and Labour has 37 seats. The Liberal Democrats have 10 seats on the county council and nine on Luton Borough Council, but that is not particularly relevant. Therefore, if Luton appoints four members and the county council

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appoints the remaining five, there will be two Conservatives, eight Labour members and three Liberal Democrats. If the appointments are made on the basis of the political balance on each of the councils, with the county council appointing six of the nine members and Luton Borough Council three, the result would be three Conservatives, four Labour and two Liberal Democrat members.

It is simply not possible to get a representative police authority under these two pieces of legislation operating side by side, unless we lay down that for police authorities whose members are drawn from more than one council, the number of members put up by the various councils should reflect the number of people in those authority areas and not the number of councillors elected by each authority. If that were done, then I believe that the problem of political balance would solve itself. I hope that in responding, the noble Earl will at least assure me that the matter will be looked into because I believe that it is serious.

3.35 p.m.

The Earl of Carnarvon: My Lords, I too should like to compliment the noble Earl on his new office. I am afraid that he went so fast in his introduction—I must say that I should like to have a two year-old as fast as him—that I may repeat a point that he has already answered. I hope that he will forgive me if I do.

I am speaking in a sense on behalf of local government generally and Hampshire in particular. Throughout the discussions on the future structure of local government Ministers have assured us that while new authorities may be created they never intended or envisaged the demise of the historic counties for ceremonial purposes. The order before us would establish Portsmouth and Southampton as counties separate from Hampshire. I understand that it is the Government's intention that regulations will be made so that Portsmouth and Southampton will be deemed part of Hampshire for what they call "ceremonial and related" purposes. Those include the lieutenancy, an office and function which is largely ceremonial but deeply rooted in our history and has a widespread popular identification with Hampshire.

The Department of the Environment has said that the necessary amending regulations will be made in the spring of 1996. I am not quite clear about that point. I hope that when replying to the debate the noble Earl will give an undertaking that he will bring before us as soon as possible the provisions necessary to ensure that the historic counties we are considering today will continue unchanged for ceremonial and related purposes.

My second point was referred to by the noble Baroness, Lady Thomas, and relates to the membership of police authorities. So far as concerns Hampshire, the county council, Portsmouth, Southampton and the Isle of Wight jointly will appoint nine local authority members to the Hampshire Police Authority. Under the Police and Magistrates' Courts Act 1994 those appointments must reflect the strength of the political parties on the separate councils. That concept of proportionality is tried and tested. However, because unitary councils will have more members than the

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county councils—a point made by the noble Baroness, Lady Thomas—their political proportionality will skew the calculations.

For example, there are 74 Hampshire county councillors representing 1.2 million people as compared with the three unitary authorities of Portsmouth, Southampton and the Isle of Wight, which between them will have 132 members representing half a million people. I wonder whether a fairer approach might be to introduce some element into the calculation that relates proportionality to the population of individual authorities. I hope that the noble Earl will give us an assurance that the Government will invite the Home Office to look into a formula for securing better proportionality on the police authorities.

My third point relates to regional planning and structure plans. I speak with benefit of my experience as chairman of the South East Regional Planning Conference. The word "conference" conveys the coming together of many separate authorities—in the south east representing 18 million people—involved in successful regional planning. Successful regional plans cannot be imposed: they come from a shared understanding of the wider issues we face. I know how difficult it is, first, to secure agreement about regional strategy; and, secondly, to ensure that individual authorities act in the spirit and letter of that strategy. Therefore, the most important element in that process is commitment to the strategy among all those authorities in the area they cover.

The Government intend that there should continue to be a single structure plan—I believe that the noble Earl referred to that—and that unitary councils and county councils will have joint responsibility to keep that structure plan up-to-date and for carrying it into action. Many of us are concerned about the provisions in the orders on strategic planning. The orders are designed to enable the continuing county council and the unitary councils to maintain a joint structure plan for their combined area, but the orders do not describe any arrangements to achieve that. In some places, authorities will indeed work together, but in others, authorities, perhaps flushed with their new powers, might seek to "go it alone".

Current legislation does not provide adequately for this eventuality and new legislation is really required. If that is not forthcoming, as a minimum safeguard, I hope that the Secretary of State will publish advice notes imposing a clear duty to co-operate in structure planning, minerals and waste planning and in particular transportation. I am confident that most authorities will work together. However, I hope that the noble Earl will consider using the mechanism of advice notes to ensure co-operation in structure planning.

The orders are the culmination of several years of anxious examination and debate. I am glad to record that elected members and officers of all the councils in Hampshire and the cities are working in close co-operation to ensure the success of the new system. I hope, and guess, that noble Lords in this House will wish them well.

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3.44 p.m.

Lord Murton of Lindisfarne: My Lords, first, let me say to my noble friend the Minister that he is a man of many parts and I wish him well in yet one more guise. I hope that he does not find the debate too complicated. In my speech I shall endeavour, if at all possible not to deal with figures.

I begin by making the accustomed declaration of interest. I have no pecuniary interest in the borough of Poole. However, owing to the fact that the order includes Bournemouth perhaps I should state that until January of this year, through a minority shareholding in a private company, I had a financial interest in a property in Bournemouth. That, however, is now sold and the company is in the process of voluntary liquidation.

It is only to Poole that I intend to refer this afternoon. I can claim an interest of another kind—a sentiment of loyalty perhaps—because I have had a close connection with Poole for 38 years; and for the first 28 of those years I had a home in the town. At one time I was an elected borough councillor, and for close on 15 years I had the honour of representing the borough of Poole in the House of Commons. Since then and up to March of this year, I have continued in office in Poole Conservative Association, mostly as president—a total of a further 16 years. It gives me much pleasure, therefore, to welcome the order in particular in relation to Poole.

During the preliminary stages of the Local Government Review, across the county of Dorset as a whole, the consultation exercise demonstrated that 72 per cent. of those who responded favoured a change to unitary authorities. In the case of Poole, 81 per cent. favoured such a change. That result in Poole demonstrates a strong sense of community and the desire to achieve a separate identity as the new County of Poole.

Poole Borough Council has an enviable record in the effective delivery of local services and there is a willingness, indeed an enthusiasm, embracing all sections of the community, both business and residential, to work together to meet the needs and aspirations of a population of 136,000 which is expected to reach 150,000 by the turn of the century. The town grows apace and by the year 2000 there will be almost double the number of residents compared with the figure when I first came to live in Poole in 1957.

It is a prosperous working town with great potential. It also has a strong sense of history. There was already a busy port and harbour in the 13th and 14th centuries and a number of capacious stone built houses of that era, which still exist, are proof of the prosperity of the merchants who lived in them. The nominal roll of mayors and admirals of the port begins in 1490. Probably the most surprising—and in many ways nowadays viewed as amusing—episode in the town's history was the grant of the Great Charter of Queen Elizabeth I in 1568. By this, Poole became a County Corporate with its own sheriff, courts, recorder and Commission of the Peace, and with the style and title of The County of the Town of Poole. The town thus took

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its place with only 16 other cities and towns which at that time were entitled to that dignity in the whole of England—cities such as London, Bristol, York, Newcastle, Norwich and Southampton. When I used the word "amusing", I have to remark that it was a strange advancement for a town which had only 1,400 people in it at that time. History does not relate how that came about, but certainly some person or persons had great influence in the right quarters.

Sadly, much of this independence was relinquished under the provisions of the Local Government Act 1888. At that time Poole Council opted not to apply for county borough status. No one can be sure why, but a guess is that like the English Crown before the Civil War, the Corporation of Poole was expected "to live of its own" and to meet all expenditure from its traditional revenues, and that that was found too difficult to accomplish. That is the opinion of the town's most distinguished historian, the late Mr. H. P. Smith to whose work I have been much indebted over the years. Incidentally, in that Civil War Poole was a supporter of Parliament: a Roundhead town in a Royalist county. The town's two Members of Parliament were Royalists. They came to Poole. When they came ad portas (to the town's gates) they were barred against them. They withdrew discomfited and were followed by threats. If I may say so, that is an early example of the process of parliamentary de-selection.

However, in the age in which we now live co-operation has taken the place of conflict and that is well expressed in the relationship down the years between the county council and the Borough Council of Poole. From time to time there have been tensions but never antagonism. I am pleased to think, therefore, that for ceremonial and related purposes the new County of Poole will remain within the jurisdiction of Her Majesty's Lord Lieutenant of the County of Dorset and of the persons holding office annually as High Sheriff. It is a good example of Imperium in Imperio.

As it so happens, Poole's council historically has been responsible for many county level services such as education, libraries and trading standards, and agencies for the Dorset County Council such as highways. However, much remains to be done during the transition. One difficult task will be the disaggregation from Dorset County to Poole County of the new standard spending assessments. I think that will be extremely difficult to achieve. Working parties are already under way, dealing with the important matters of the police authority, the fire service and both strategic and land use planning where close co-operation with Dorset County Council is due to continue.

The role of the staff and the future of individual members of it are crucial in this reorganisation. Poole Council is paying close attention to these matters, in full co-operation with the local authority unions. In my day as a borough councillor, I heard repeatedly of Poole's aspirations for county borough status. There was some encouragement from Whitehall which implied that the magic figure to be reached before there could be any consideration of the matter would be 100,000 of population. Now at last, Poole is about to have its wish granted, albeit the magic figure has advanced to 136,000 and many years have elapsed in time. The borough

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council is to be commended for its able presentations to the Local Government Commission and the Department of the Environment. I congratulate the new County of Poole and wish it well for a successful future.

Finally, I offer my sincere thanks to my right honourable friend the Secretary of State for turning Poole's long held ambitions into a reality in 1997.

3.50 p.m.

Lord Bancroft: My Lords, it is saddening that government policy compels me to welcome the noble Earl—as I do warmly—to his new responsibilities with some mild criticism of the orders. He has introduced them with his usual courtesy and celerity, as my noble friend Lord Carnarvon mentioned.

I should like to take this opportunity also to pay tribute the noble Earl's predecessor, the noble Viscount, Lord Ullswater, who was a model Minister in your Lordships' House, always helpful and thoughtful. We all regret his, I hope temporary, departure from the Front Bench.

These orders, these "nine bright shiners", play an apt part in the melancholy process of local government reorganisation. The process, as we all know, has been a long one, is lengthening still further and has been, to put it at its most kindly, ill-starred throughout. The basic mistake exemplified by the orders was the Government's insistence on a rolling programme rather than a conclusive single report. That entailed, in the words of the Banham Commission's final document, that Parliament and all other interests had to,

    "react to the proposals for individual areas in ignorance of the overall picture, before both the Commission and the Secretary of State had made final decisions".

So we have suffered an incoherent succession of draft reports, revised proposals and final recommendations, produced at random intervals over a period of more than two years. These have been punctuated by the Secretary of State in a series of pronouncements whose illogicality has been exceeded only by their inconsistency.

Now, with these orders, here we go again. First of all, we had a number of structural change orders, whipped through this House and the other place before anything like the full picture had emerged. Now that most—though by no means all—of it has emerged, we are asked to approve nine further orders while the regulations setting out the general framework for the relationship between the transferor and the transferee authorities have still not been approved. I apologise for the Cherokee jargon. Rarely have so many carts preceded the horse.

The Local Government Changes for England (No. 3) Regulations will not even be laid until tomorrow, as the noble Earl informed us. There has, of course, been consultation, but meanwhile I am told there is continuing confusion among authorities about responsibilities for statutory duties during the handover period about the rights of consultation and information and about the exclusion of some county councillors from the budget process.

Other noble Lords have already registered, and some will register, their concern over such matters as finance and, in particular, police and fire authorities. There is

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the general point, too, that the draft regulations on which consultation has taken place are perceived by many, rightly or wrongly, as placing the powers and rights of the unitary authority above those of the amputated county.

I confine myself now to a word about joint arrangements, on which the noble Earl touched in his introductory remarks. Joint arrangements are fundamental to the whole of this wretched reorganisation. They need to be demonstrably robust, workable and effective. I continue to have acute concerns in this area, particularly about planning.

A number of noble Lords—most recently my noble friend Lord Carnarvon—have on various occasions drawn the attention of this House to the importance of maintaining effective strategic planning in areas where the review results in a county council being wholly or partly replaced by smaller unitary authorities. I was extremely grateful to the noble Earl's predecessor for his Written Answer on 5th July (Hansard, cols. WA 82 and WA 83), which place in the public domain what had been rumoured to be the case; namely, that the Secretary of State's power under Section 21 of the Local Government Act 1992 to establish a joint authority for those purposes is only available where the county council is wholly superseded by unitary authorities. It does not apply in what are commonly called "hybrid" areas where only part of the former county is to become unitary.

This newly acknowledged gap in the Secretary of State's powers must be viewed most seriously by all concerned, including many of the authorities affected by the orders now before us. On 9th March, when the Environment Bill was before this House for consideration on Report, I moved an amendment designed to provide for joint arrangements to ensure the continuation of strategic planning in areas where local government is being reorganised. I refer to cols. 438 to 444 of Hansard for 9th March 1995. In reply, the noble Viscount, Lord Ullswater, said:

    "should these voluntary arrangements fail, the Secretary of State already has a reserve power under Section 21 ... Where he considers that joint working is desirable ... but such arrangements fail to emerge, he is able to establish a statutory joint authority ... We do not believe that the provisions in the amendment are desirable or necessary".—[Official Report, 9/3/95; col. 443.]

That interpretation of Section 21 was given and accepted in all good faith. It is now acknowledged to be defective. Will the noble Earl, with his customary courtesy, undertake to re-examine the spirit of my amendment and come forward with proposals in a similar vein, using whatever legislative vehicle seems the most appropriate? In the meantime, advice notes as suggested by my noble friend Lord Carnarvon would be a great help.

I end with the observation that Forster, parodying Landor best sums up the role of the Secretary of State in fostering the flame of local democracy by his rebarbative reorganisations of local government:

    "I strove with none; for none was worth my strife.

    Reason I loved, and next to Reason, Doubt.

    I warmed both hands before the fire of life

    And put it out".

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3.59 p.m.

The Earl of Selborne: My Lords, after those erudite and well-informed interventions, I can be brief. I congratulate my noble friend the Minister on the way in which he introduced the nine orders. He made it clear that there will inevitably be further regulations which will tidy up some of the business which remains in hand.

Like the noble Lord, Lord Bancroft, I am an unrepentant two-tier man. Many of the tribulations through which we are going need not have arisen had we stuck with the county council and the two tiers. So be it. We must not reopen old debates as these Motions go through. I was relieved by the assurance that my noble friend was able to give that some of the further regulations will concern lord lieutenants and sheriffs and that they will be put in place before the new county authorities come into existence in 1997. He assures us that there will be no hiatus. That is clearly helpful. The sooner these regulations come on-stream, the better.

Like others who spoke, I am relieved that structural plans are to be produced by the county councils and the new unitary authorities. But again, I suspect that that demonstrates just what we have thrown away with the county council structure. I hope that there will be advice or guidance notes, as two speakers have already urged. There is a particular need in the area of structural planning and transportation. I cannot help thinking that these arrangements always work more robustly within a two-tier structure.

The noble Lord, Lord Bancroft, referred to "amputated" counties. I would draw attention to the problem that those county councils will face, losing, as they will, large centres of population. We shall be reducing the scale of their current activities, but not the range of their functions. They will continue to fulfil the same functions, though obviously with fewer resources; and they will have the disruption to deal with.

As I understand it—and my noble friend may correct me if I have misunderstood—the new authorities will draw on supplementary credit allowances, which will be repaid out of subsequent savings. That is clearly a commendable strategy, since inevitably there will be start-up costs. But equally, if there are start-up costs for the new unitary authorities, there will also, I fear, be costs incurred by the amputated county councils. And they will not have the same opportunity for savings. There will be a loss of income, and there will be a need to manage the disruption. The Local Government Commission pointed out that where only part of a county was to have unitary authorities, there would be little opportunity for savings in cost within the residual two-tier county. I hope that my noble friend the Minister will be able to look at the funding implications and will be able to ensure that the people paying taxes under the new county councils will not be unduly disadvantaged.

4.2 p.m.

Viscount Bridgeman: My Lords, I thank my noble friend the Minister for his courteous reply to my question about the lord lieutenancy. I am very reassured by his assurances that there will be complete continuity.

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I live in Hampshire. The noble Earl, Lord Carnarvon, and my noble friend Lord Selborne referred to the work being done in transferring functions from the county to the unitary authorities in some cases. The strain on the county council should not be underestimated in relation to adapting all its organisations, changing its area offices and, as the noble Earl rightly pointed out, reducing the scale but not the quality of its services.

We are advised by the Local Government Commission that the costs of instituting the unitary authorities of Portsmouth and Southampton are between £7 million and £9 million. To ask the question again: who pays? In Avon, Humberside and Cleveland, where clear savings are expected, facilities have been made for extra borrowing to be repaid out of anticipated savings. As my noble friend made clear, not all the authorities covered by this order will be in that position. The Local Government Commission, quite unequivocally, made that abundantly clear. So there is no sense in borrowing to pay set-up costs where no savings are to be made. It merely defers the costs over a longer period. I therefore ask the Government to look at the costs to the county.

I live in Hampshire, as I said, but at some distance from Portsmouth and Southampton. I do not want my local library to have curtailed opening hours, or to have social services that were previously free now subject to a charge. Neither I nor my neighbours would regard that as a fair and equitable consequence of the creation of the two new authorities. I therefore once again ask the Minister to take another look at financing for the counties, and to ensure that Hampshire, as just one example, is not put in the position of having to reduce its services in order to pay for its share of the transitional costs. All the indications are that the settlement for 1997-98 will be at least as high as this year's. We must not place funding for the structural changes on top of the heavy burden that councils already bear.

4.5 p.m.

Lord Harmsworth: My Lords, your Lordships will be aware that the local government commissioners' recommendation for four unitary authorities for Dorset was met in the county with almost across the board dismay. Only at district level was such a solution thought desirable. The decision of my right honourable friend the Secretary of State to agree that Bournemouth and Poole should each go unitary, the rural remainder being subject to the status quo—the old two-tier system—represents a very acceptable position. It is one with which I am more than content.

I pay tribute to those at all levels of the local authority administration for the way that they are now buckling down to the business of running the three parts of the former old county. In doing so, I particularly commend to your Lordships the very good work of the chief executive, Peter Harvey. There is a general attitude in the county that the changes must be made to work. Temporary tensions have evaporated, and the friendly former working relationships have reasserted themselves. I very much welcome that.

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There are concerns, and noble Lords have referred to them this afternoon. One is the very important question of apportionment of funding for the rural areas. I think particularly of the higher cost of rural schools, transport to them and such services as libraries in rural areas. I hope that in the recalculation of the standard spending assessments, enough weighting will be afforded those inevitably higher-cost operations. I also hope that all that was said by all those concerned relating to the joint committees to deal with strategic matters, which were perhaps more easily dealt with under the old two-tier system, will be vigorously and persistently addressed. Dorset, perhaps more than many, has major strategic projects in the pipeline. I think particularly of the Melbury Abbas by-pass, which is of such importance to Poole and its very fine new harbour facilities—as referred to by my noble friend Lord Murton of Lindisfarne—and the Weymouth relief road.

I congratulate the Government on a very satisfactory outcome, and I wish my county all the success that it deserves.

4.8 p.m.

Lord Finsberg: My Lords, I apologise for speaking in the gap. I had not realised that structural orders would produce a list of speakers. I do so for two reasons. First, I am deputy chairman of the Commission for the New Towns, and the city of Milton Keynes is my special responsibility. I want to welcome this logical development for the future of Milton Keynes.

I know that noble Lords will remember the close connection that Jock Campbell had with Milton Keynes. I was proud to have the chance of working with him when I was a Minister in the department. He was one of the finest chairmen of the new towns that one could have wished to have. I know that he would have been a very happy man today. Knowing Jock, he is probably chortling from somewhere rather higher than your Lordships' House.

I have been in this House only three years. So far as I know, my noble friend Lord Ferrers is now wearing his third hat. He will, I am sure, take it as a compliment if I say that one of my favourite characters in Gilbert and Sullivan is Pooh-Bah. The only difference between my noble friend and Pooh-Bah is that Pooh-Bah had all the jobs at the same time—and, if I remember rightly, all the salaries at the same time. I do not think that my noble friend quite has that.

The tension that existed between the county and the then city has evaporated. The logic of making Milton Keynes a unitary authority became apparent to all. I chair the liaison committee which meets twice a year between the county, the borough and the commission, and certainly it is now recognised that all we have to do is work very hard in our co-operation to achieve a satisfactory future.

Having gone through this exercise in London nearly 30 years ago and served on an elected council, a shadow council and then a new council, I can tell your Lordships that it does work. We were very mixed. There were two Conservative boroughs and one Labour borough. We finished up with one Labour borough. The co-operation in that period was magnificent. We produced about 60

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recommendations, only one of which was never honoured. That one exception was the decision to have as our symbol an elephant's foot rather than a proper coat of arms. There was otherwise no problem. I welcome these orders but specifically the one that relates to the city of Milton Keynes.

4.11 p.m.

Lord Jacques: My Lords, I too did not realise that there would be a list of speakers since there were so many separate orders.

I take this opportunity to welcome the order that relates to Hampshire. I have been waiting for it for 23 years. Way back in 1972 I moved an amendment that sought to retain the status of a number of county boroughs, including Portsmouth and Southampton. I divided the House but lost the vote, but always thought that I won the argument. I have stated the case to this House for the unitary status of Portsmouth and Hampshire on a number of occasions, the last being on 30th March last. I am sure that it is unnecessary for me to repeat those arguments. However, I should like to comment upon the bipartisan consensus that has arisen following consultations. That is the most significant change relating to local government that has occurred in my lifetime.

In 1970, the Royal Commission made its report. The then Labour Government accepted the principle of unitary authorities throughout and said that they would introduce legislation to give effect to it in due course. An election followed and the introduction of a Conservative Government. A minority report of the Royal Commission had been signed by one member. He recommended that throughout there should be a two-tier system. The new Government adopted that system. Because of that election there was a move from one extreme to the other.

I hope that the consensus between the parties will bring that situation to an end and that the principle of the hybrid county is accepted so that the large urban areas have their separate authority but will co-operate with the county in all the matters that have been mentioned, such as strategic planning and police. On the other hand, I believe that for rural areas the two-tier system is the better and produces more efficient local government. I believe that what we are doing now is on the right lines, and that both the Government and the Opposition should be praised for the way in which they have arrived at this point.

4.15 p.m.

Baroness Hamwee: My Lords, the confusion of noble Lords who have spoken in the gap is as nothing compared with the confusion of those of us who arrived to speak at the time of the last set of orders. We found that there was no list and we all tried to find our places in the gap.

There must be many political equivalents of the Irish joke about the individual who asks directions and is told not to start from here. The local government review is perhaps the quintessence of that situation, but

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unfortunately it is no joke. I believe that those of us who think that the proper starting point is the function of local government and the effective delivery of services, not structure, have been vindicated. Most people will agree that the problem should first be analysed before a solution is attempted. As noble Lords have pointed out, that should certainly be done before producing a solution in the form of titillating, tempting sweeties that are distracting from the whole. If we had first considered function, we could have achieved subsidiarity in its proper and best sense, perhaps also at parish level, instead of what, sadly, many people may feel is a carve-up.

During the process the guidelines have shifted radically. Many of the proposed unitary authorities have not been consulted on the specific proposals as they are now. Where there was consultation, there has been a divergence between the preferences expressed in the polls and proposals that were not on offer until the Government announced them, for instance those for Brighton and Hove. Some of the responses are only partly replicated in the proposals. Among them are the proposals for Hampshire where I understand that strong representations were made for a unitary authority for the New Forest as well as for Portsmouth and Southampton.

I congratulate the Government on a post hoc rationalisation of their proposals, characterised by a number of people as cherry picking. They include cherries which understandably some Labour councils have been happy to go along with. The noble Lord, Lord Bancroft, put the matter more eloquently than I have been able to do. However, we start from here. I recognise that what is most important is certainty but within that certainty some matters are fundamental to the changes, including the matter of finance with which the noble Earl, Lord Selborne, dealt earlier. County councils face problems. They will be reduced in size and population base but will have ongoing costs. I appreciate that the figures may not work out precisely. For instance, on the basis of population, East Sussex will lose one-third of its budget but only 5 per cent. of its geographical area. Authorities in a similar position are concerned about the costs they will have to continue to bear and the disproportionately lower resource base with which they will be left. They are right to be concerned and to draw the Government's attention to problems that will arise when county-wide support services are located in an area that is to form a new unitary authority. As the noble Earl, Lord Selborne, said, there will be little opportunity for hybrid counties to make savings in future.

The problems of adequate supplementary credit approvals are very serious. I have made the plea on previous occasions that the Government take seriously the need for adequate supplementary credit approvals. It is borrowing that will be paid back over a period. It is not a plea for extra cash. The continuing counties are bound to worry that their needs may be put at the end of the queue because of the concern that the new unitary authorities should operate adequately. There are also concerns about competitive tendering and staff who will be transferred. There is also the issue of unfair advantage in relation to in-house direct service staff where contracts will have to be immediately re-tendered

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whereas outside companies which have won tenders will have protection as a matter of contract for the period of the contract.

Noble Lords, including my noble friend Lady Thomas of Walliswood and the noble Earl, Lord Carnarvon, have referred to the absurdities that will arise in the arrangement of police authorities. The noble Earl, Lord Carnarvon, and the noble Lord, Lord Bancroft, drew our attention to the genuine concern about joint arrangements and in particular planning. The noble Lord, Lord Bancroft, said that he was grateful for the Government's Written Answer to his Question.

On reading the Government's analysis of the hole they had dug for themselves, I felt alarm rather than gratitude. When I first became involved in strategic planning as a councillor, a colleague said to me—it is politically incorrect to use the example but I shall do so because it is so vivid—"If there is no strategic planning authority, who is going to decide where the gypsy sites go?" That example can equally be applied to questions of mineral extraction and waste disposal. A small authority will naturally resist development—I use the word in its broadest sense in planning jargon—which has an effect on its own area.

There is disquiet too about the shadow period; the regulations to be laid tomorrow have been referred to. It may be useful to flag up what are already actual concerns in the case of East Sussex, which, as the Minister reminded us, is subject to a slightly different regime because of the different arrangements which are to apply. There is the rather loosely worded general duty to co-operate. But local government law is very clear: local authorities are empowered only to do what they are specifically empowered to do. Those authorities which try to transgress the boundaries, as the Government might see them, are sharply rapped on the wrist and told to draw back. It is essential that the transferor authorities as well as the transferees know their position with certainty, if for no other reason than knowing when expenditure on certain activities might be subject to audit challenge.

There is no right in the general regulations for the counties which remain to be consulted by the unitary authorities on how transferred services are to continue to be delivered. As I said, there is simply a duty to co-operate. But if there is a failure to consult, it could mean that the options available are not fully explored and it may turn out that some options have been closed.

Transferring authorities do not have the same rights as transferees to require information. Reference has been made to the exclusion of certain county council councillors from the budget process. I find that quite extraordinary. If councillors were debarred from contributing to decisions about their council budgets where they had a ward or local interest, no budget would ever be set. As my noble friend Lady Thomas of Walliswood pointed out, budget-making is not a matter of taking a snapshot; it is a continuing process. In these days, cash is not pouring out of local authorities' pockets, and indeed, as a matter of good planning, many local authorities set themselves rolling programmes. Only by doing that and by sharing their plans with local

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communities over a long period can they have any hope of securing the confidence of those communities that they have a good overall view of what needs to be done.

Those are matters of particular urgency to East Sussex and to the other authorities which will be affected by the regulations to be laid tomorrow. Generalised expressions of good will are not enough. The Government must provide a robust framework and, I add, a framework which is even-handed between the new authorities and the remaining counties.

4.25 p.m.

Baroness Hollis of Heigham: My Lords, perhaps I may first record that I am one of the many vice-presidents of the ADC. Like other noble Lords, I am delighted to welcome the noble Earl, Lord Ferrers, to the debate on the local government review. He joins it when most of the acrimony and much of the confrontation are over. I am sure he will agree that he could not have arrived at a better time.

The Government and Opposition agree on the need for a sensible exit strategy from what, as many noble Lords have quite rightly said today, has been a chaotic experience. These orders have widespread support and consent. Notwithstanding the remarks about amputated counties from the noble Lord, Lord Bancroft, and the noble Earl, Lord Selborne, these orders will give unitary powers to those cities which, for the most part, were county boroughs before 1974 and have been running their own affairs for centuries. In my city of Norwich, we ran our affairs for 800 years, whereas the administrative county council has had a life of barely 100 years. So the vocabulary of amputation was perhaps unfortunate.

The orders will restore powers to those cities which have had a long experience of running their own affairs, while allowing the rather more rural parts of the country to remain, at least for the time being, as two-tier authorities. The Labour Party had a name for that in the late 1970s. It was called "organic change". Had the general election not occurred when it did but a few months later, the present proposals might have been achieved then. However, we now look forward to such sensible views being put into practice by a happy meeting of minds.

As we discussed earlier in the year, we see a first move in that direction with the abolition of those counties which were created through shotgun marriages in 1974. This second tranche includes many of the authorities known in the local authority organisations as "the big 11". The remarks made by the noble Lord, Lord Finsberg, and in particular his generosity to our departed former comrade and friend Lord Campbell of Eskan, were very welcome. It would, I know, have given Lord Campbell immense pleasure to know that Milton Keynes was obtaining the ability to manage its own affairs as a result of the orders that we are discussing today.

We hope that fairly soon, in the late autumn or new year, will come the 20-plus authorities which have been newly referred back to the commission. Then, either under this Government or the next, will come a further tranche of authorities, such as Ipswich, Oxford, Lincoln

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and Chester, which have good grounds for believing—and very often a long history of evidence to confirm it—that they should have been included in the bids for unitary status. I suspect that further changes, if they occur, will be dependent on constitutional changes. I share with the noble Baroness, Lady Hamwee, a hope that in due course we shall see democratic regional government in this country.

The Minister has also arrived with a new commission, which is welcome. I hope that it, too, will see the wisdom of this settlement, at least for the time being, of the confusion and antagonism surrounding the unhappy local government review.

This array of orders accepts that city and countryside are different. Managing the city is about managing the problems of density, traffic pollution and population congestion. The problems of more rural areas are essentially those of managing sparsity—for example, the lack of transport or the insufficient number of families to justify maintaining the small village school or rural post office. The hope is that by going for "hybrid" solutions, as we call them—unitary cities within two-tier counties—that essential distinctiveness between town and country will be recognised and with it a recognition that one does not need a tidy, mathematical, uniform solution for local government throughout the country as a whole. Local government is about local difference and recognising the distinctiveness both of local geography, local history and local communities, though the noble Lord, Lord Bancroft, was assuredly right when he said that nonetheless we should have had a coherent strategy on this from the beginning.

The local government review has major advantages. First, it will allow the new city authorities to provide much better services. At a time when community care is one of the major responsibilities of local government, housing and social services will be integrated, as will planning and highways. Those noble Lords who have been taking part in recent debates on the disability Bill, will realise the problems caused when a planning authority at district level gives permission for a disability access to be put onto a pavement which the traffic authority, which is the county council, then vetoes as a highways authority. By integrating those responsibilities into one authority, such changes will be more effectively delivered.

The review will allow for the integration of youth and community services. At a time when many young people are unemployed, which may often give rise to anti-social behaviour, that is surely wise. We hope also that the specialist services which currently operate on a country-wide basis (for instance, museums and archives) and which are working well and with consent, should not be fragmented but should go forward on a joint basis—a joint committee, a joint authority. I am confident, and we have plenty of experience to show this, that where joint arrangements are entered into voluntarily by partners of equal weight, they work well. They certainly do in the museums joint authority between my city and the county of Norfolk.

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There was discussion earlier in the debate—and it was particularly mentioned by the noble Baroness, Lady Thomas of Walliswood—about proportionality of police authorities. As I understand it, there will be set numbers of police authorities and the apportionment will be left to local circumstances to decide. Where there is disagreement, the Secretary of State has the last resort power of knocking heads together. It is surely right that where possible the local authorities concerned should come up with their own proposals, provided that the Secretary of State holds backstop powers, which I understand is the situation.

A second advantage of the proposals is that by integrating services—for example, housing and social services—local government in those cities can focus on the needs of the user. It is too often overlooked when talking of pensioners, disabled people or homeless families who need an array of services, that split services means split providers, which means tunnel vision by separate providers. Each provider—the county, the city, the quango or the health authority—tries to export its costs onto another authority in order to keep its own down. The result is often confusion and unacceptable practice.

This integration of services will mean that at the forefront will be the needs of the user of the services—the old person, the disabled person or the homeless family—rather than the needs of the provider and the urge to export its costs to others. There will be no excuse for such behaviour in the future. As a result, these orders will produce better value for money. While some services, like housing and social services or planning and highways, are split but should be integrated, other services, as we know literally to our cost, are concurrent; they overlap; they duplicate. At the moment both districts and counties have overlapping responsibilities for planning. For example, the district is responsible for environmental health, the county for trading standards. When it comes to regulating an open food market, the district environmental health department is responsible if the food is stale, but the county is responsible if the food is underweight. That is absurd. It cannot be sensible to have two sets of authorities, two sets of councillors, two sets of officers, two sets of committees going over the same issue—and all too often coming up with different conclusions. How on earth are ordinary people to know who does what, to what standard and at what price if such confusion prevails?

That brings me to my final reason for welcoming the orders: they will produce in consequence better democratic accountability. The responsibility for all the services will be located in city hall. Voters in the new unitary authorities will know precisely who is taking the decisions and who to hold to account if the decisions made and the moneys spent are not to their satisfaction; they can vote them out. If we are to rebuild healthy local government—the recent commission on local democracy was right to emphasise this—it can best be done where the lines of accountability and responsibility for who does what are clear and unambiguous. In two-tier structures there can never be clear accountability. As all the surveys show, even now, 21

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years after the 1974 reorganisation, people do not know who delivers what service. If they do not know who delivers what service, they cannot hold their councillors responsible for it. That is a fact.

We greatly welcome the orders. With the exception of minor boundary changes at Stoke to include the Wedgwood factory, and with the major exception of Brighton and Hove, these authorities are going ahead on existing boundaries. There is no expansion and aggrandisement at the expense of neighbours. It means, again with the exception of Brighton and Hove, that we will not need shadow authorities but nonetheless will properly have all-out elections. As my noble friend Lady Gould said, Brighton and Hove are very much part of an integrated economic community.

The average size of the population in the new authorities is something like 187,000 which is larger than many existing unitary authorities in London and in the Mets. They are clearly competent to run their own affairs even though population size is a good indicator of that. They all have widespread popular support, as tested by the opinion polls and qualitative surveys; all have all-party support in their localities; all have clear and long-standing identities.

In relation to costs, in all the authorities it is clear that the Local Government Commission and the Audit Commission expect the transitional costs to be repaid within three to five years and thereafter there should be cost savings, though, as the noble Lord, Lord Bridgeman, said, it is right to emphasise that proper arrangements for funding those transitional costs for both district and county should be made. My only regret is that the staff, who bear the true cost of the reorganisation, have not even now been given the financial protection that they had in 1986 when the Met. counties were abolished. However, the ADC and the ACC agreement for 100 per cent. transfers will, I hope, continue to be honoured.

On financial matters, many noble Lords raised the concern that they hope and expect the standard spending assessment to be adjusted appropriately. We need clear assurances on that from the Minister. It is a matter of particular concern, for example, in Portsmouth; it was raised by the noble Lord, Lord Murton, on behalf of Poole and I am sure that it was shared by all the authorities concerned.

These orders will create strong, confident city authorities. They will now have the full range of local authority functions and responsibilities. They can look forward to a vibrant future and I am sure that we wish them well. However, I hope—and the noble Baroness, Lady Hamwee, was absolutely right—that as we get the structure of local government finally into shape, we can begin the even more important argument and debate as to its functions and constitutional standing. Without a healthy local democracy, political citizenship in this country will not flourish.

4.39 p.m.

Earl Ferrers: My Lords, I am very grateful to the noble Baroness, Lady Hollis of Heigham, for giving such a welcome to these orders from the Front Bench opposite. I hope that this will be a prelude to the many

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occasions when she will agree with what the Government are doing. She is right in saying that for local authorities to run properly there has to be local democracy. That is what these measures are about.

I am most grateful to all noble Lords for their contributions. I thank the noble Lord, Lord Bancroft, for his tribute to my noble friend Lord Ullswater, always the most courteous and considerate of Ministers. He was a ministerial colleague of mine; I know that his reputation is of great substance. I am grateful for that acknowledgement from the noble Lord, Lord Bancroft.

My noble friend Lord Murton graciously said that he hoped that I did not find these matters too complicated. They are complicated. My noble friend Lord Finsberg said that he had been in this House for three years and in that time I had been in three different jobs. I was thinking only this afternoon that in the past 12 months I have represented three different departments, which is rather odd, having been for six years in the Home Office. One moved from a position of relative solidity—I do not believe that that is the right word—to one of relative rapidity. Whether that is a good or bad thing I do not know.

The noble Lord said that I reminded him of Pooh-Bah. I say to him that as I entered my new department, my thoughts were much more akin to "The Nightmare" song of Gilbert and Sullivan, which, I believe, runs like this:

    "When you're lying awake

    With a dismal headache,

    With your eyeballs and head

    Ever aching,

    Your slumbering teems

    With such horrible dreams

    You had very much better be waking.

    For you dream you are crossing the Channel,

    And tossing about in a steamer from Harwich

    Which is something between a large bathing machine

    And a very small second class carriage".

or words to that effect.

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