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Lord Henley: My Lords, it is not for me to guess the motive behind Oldham TEC's decision to take this matter to the courts. On the wider question as to whether TECs are adequately funded, I do not accept what the noble Baroness said. Overall, TECs' budgets this year, 1996-97, are set to increase. That is a sign of Her Majesty's Government's confidence in TECs. Obviously, we want to make sure that all TECs perform adequately. That is why we introduced the licensing process and why we intend to continue with it.

Lord Gisborough: My Lords, in view of the success of the licensing process, can the Minister say what percentage those 64 TECs represent? What help will be available to other TECs which are less likely to reach the criteria and for how long may that help go on?

Lord Henley: My Lords, I cannot help the noble Lord with the precise percentage of those which have not been licensed. My arithmetic is not up to it at the Dispatch Box. I can assure him that 64 out of 74 TECs have already been licensed. That leaves 10 TECs waiting to be licensed by next year. Certainly, we shall offer what help we can to those 10 TECs to go down with the licence process. I hope that the TEC National Council will do the same. Certainly, we hope that all will be licensed by next year.

Lord Rochester: My Lords, does the noble Lord recall that the policy director of the TEC National Council criticised the bureaucratic procedures under which TECs have to operate? Those procedures were said to be a natural consequence of allowing technocrats, distant from

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the field, to design systems of operation in environments which they had not experienced and did not understand. How does the Minister respond to those strictures?

Lord Henley: My Lords, I am aware of those criticisms. They were looked at by the Employment Select Committee in another place in its recent report on the work of TECs. But, as the committee's report emphasises, there is a balance to be struck between maintaining proper accountability in expenditure of public funds and ensuring that the detailed oversight of checks is not overly bureaucratic. The Government aim to bring greater trust and clarity into their relationship with TECs. I believe that there has already been considerable progress in that area.

Lord Hylton: My Lords, can the Minister say how many councils have so far gone bankrupt? I know of one case in south London.

Lord Henley: My Lords, the only TEC which was forced to go into liquidation was the South Thames TEC. We believe that that was not as a result of fraudulent claims, as alleged by some, but was due to its own inadequate financial control systems. We trust that with the improved measures and licensing procedures that have been introduced that will not happen again.

Lord Peston: My Lords, these councils are called training and enterprise councils. Can the Minister say where the enterprise comes in? What do they do that encourages enterprise? In particular, if they are encouraging enterprise and wish to go bankrupt, should not they be allowed to do so?

Lord Henley: My Lords, the councils work at a local level in partnership to bring about and encourage economic development of their local area. They assist in driving forward national targets for education and training and also help deliver the national training and enterprise programmes of Her Majesty's Government. They are training and enterprise councils, and we believe that they do their job well.

Lord Peston: My Lords, I do not want to press the Minister too much. However, the word "enterprise" has a definite meaning within the market mechanism and it is not about training. It involves enterprise, which is about risk-taking. That is why I should like the Minister to explain what it is that a council can do that encourages such enterprising, risk-taking activity. He has not yet given us an example.

Lord Henley: My Lords, I shall be more than happy to arrange for the noble Lord, Lord Peston, to visit one of the training and enterprise councils. I hope the noble Lord will take me up on that offer. I can refer him to a number of good training and enterprise councils in London, or perhaps the noble Lord would like to travel further afield. It may do him good to see some of the rest of the country. I shall be more than happy to arrange

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that; I am sure too that the TEC involved will be more than happy to show the noble Lord exactly what it can do to encourage enterprise and training.

Lord Dormand of Easington: My Lords, the Government have been encouraging the amalgamation of TECs and chambers of commerce. However, does not the Minister agree that the present position is so uncertain that the Government should be abandoning that situation?

Lord Henley: My Lords, I do not accept that. There is a case to be made for TECs, where appropriate, to merge with their chambers of commerce if they and their chambers of commerce believe something can be gained from that. But that is a decision for individual TECs and chambers to pursue if they believe it to be appropriate.

DSS: Policy Change Effects

2.52 p.m.

Earl Russell asked Her Majesty's Government:

    In the light of the reply given by Lord Mackay of Ardbrecknish on 28th March (WA 149) that "While every attempt is made to identify direct implications for other departments arising from public expenditure decisions, it is not feasible to take account of every potential second-order effect, still less to quantify it", what weight should be placed on the Department of Social Security's estimates of the public expenditure consequences of the measures it proposes.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the Department of Social Security, like all other departments when considering policy changes, consults widely within government to ensure that the full implications of any such changes are properly considered. The nature of such consultation will depend on the policy change in question. Her Majesty's Treasury is fully involved in that process.

Earl Russell: My Lords, I am grateful to the Minister for those remarks. I appreciate that he has difficulty in giving exact figures. But when the Department of Social Security says that a measure will save, for instance, £65 million, we need to understand what that means. In the Minister's Written Answer, when he said that it was not possible to quantify every potential second-order effect, was he telling me that the department takes account of some second-order effects or that it takes account of no second-order effects?

Lord Mackay of Ardbrecknish: My Lords, as I have explained to the noble Earl on a number of occasions, the Department of Social Security works inside the Government and, along with our colleagues in other departments, we try to take into account those effects which may come from decisions that we are proposing to take. Sometimes those are easily quantified but on other occasions they are not, perhaps because they are behavioural and therefore difficult to work out. But we do

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our best and over time the noble Earl will find that on some occasions we overestimate the amount of savings that we make and on other occasions, I am happy to say, we underestimate the amount of savings we make.

Baroness Hayman: My Lords, is it not clear that the savings in one department's budget can cause increased expenditure in others? Is it not important that the Minister looks at his own department--for example, in the area of social security benefits available for pregnant women to provide an adequate diet during pregnancy? Refugee women are of particular concern in that regard at the moment. Is it not clear that savings in social security benefit may increase the incidence of low birthweight babies and the highly expensive care to the NHS for neo-natal intensive care for those children? Is it not important that the overall costs are taken into account?

Lord Mackay of Ardbrecknish: My Lords, that is exactly what I said when I said that we consider with other government departments what the overall implications will be. We aim, and I believe we succeed, to make sure that all our policies result in a net saving to the Government overall. Even though there may be some expenditure to another department, that expenditure will be less than the savings gained by us. Controlling the social security budget is an important issue. In relation to the incidence of low birthweight, as I explained on a previous occasion at this Dispatch Box, giving up smoking is perhaps the single most important thing mothers can do to help the birthweight of their children.

Lord Barnett: My Lords, how does the Minister's department manage to keep within the limits set down by the Chief Secretary to the Treasury if another department does not underspend when his department overspends?

Lord Mackay of Ardbrecknish: My Lords, I am but a boy when it comes to answering a question like that from the noble Lord, Lord Barnett, who knows jolly well how the Treasury keeps government departments under control from the five difficult years he spent doing it in the last Labour Government. The important thing is that government departments are aware of each other's policies. They attempt to quantify any implications that fall to them. When the Government agree on a policy, all the various aspects--the pluses and minuses--are taken into account. As the noble Lord will expect me to say, the Treasury usually expects to come out on the plus side.

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