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The Earl of Onslow: Before the noble Baroness concludes, it is an important issue for the Liberal Democrat and Conservative Front Benches. Would it not be wiser for the Liberal Democrats occasionally to break their habit and vote now on the issue rather than wait until Report stage? I put the idea to the noble Baroness. It is not a fiddly point which will tweak the provision on Report. It is a fundamental part of the Bill. I see noble Lords shaking their heads.

Baroness Hamwee: The temptation to divide the Committee has been great but I do not think that tonight is the night to do so. The Government's arrangements ensure that their numbers are here. We are coming towards the home straight of today's Session. It is not the habit of a lifetime for Conservatives and Liberal Democrats to fail to co-operate. I know that the noble Earl did not say that. The time to divide will come but now is not the time to do so. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Blatch moved Amendment No. 9:

The noble Baroness said: In moving Amendment No. 9, I speak also to Amendments Nos. 14 and 17. Amendments Nos. 9 and 17 are consequential upon Amendment No. 14. Amendment No. 14 requires the Secretary of State to publish a written report by an independent auditor verifying that the costs of establishing regional assemblies do not escalate above the costs of existing local government systems.

There are huge concerns about costs. We still await at least a ballpark figure of the costs of a reorganisation which would involve the abolition of councils. That seems fairly critical. Any area which agrees to have regional assemblies will incur huge costs. It is important that the people of the region, and of the country, know them. They may come from national taxation or local taxation.

The costs are large even if there is a no vote. During debate on the previous amendment, we heard that the detailed work about the shape of local government below the tier of regional government will involve visits, public meetings and discussions with councils and community people. There will be much discussion on one, two or perhaps more options. There will be feasibility studies. The Minister has been open with us and told us that that work will take at least a year. We know that it will be involved and detailed and extremely painful for the people at local level.

First, who will meet the costs of such an exercise? Who will meet them if it is a no vote? Who will meet them if it is a yes vote. There is a distinction between

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the source of funding if the vote goes different ways. It is abortive work if it is a no vote; and it will be fruitful if it is a yes vote. We know already that the soundings committee has been all over the country, to all eight regions, and completed its work. Will the Minister tell us how much that cost, and how detailed and involved the work has been, as well as telling us who has been consulted and who has not? We are beginning to find out that a large number of people in the region were not aware of the soundings exercise and did not receive any of the materials for it. Despite that, will the Minister tell us about the costs to date?

Will he also tell us the costs of the local government review and reorganisation, and the running costs of regional assemblies? That is the kind of information that needs to be available when the Boundary Committee has done its job. We know that the Welsh Assembly costs almost £150 million to run, compared with the running of the Welsh Office, which was a mere £72 million. That figure does not take into account the vast array of new buildings in London, Wales and Scotland.

For reasons of transparency, it is essential that people are aware of the costs before—I emphasise the word "before"—they vote in a referendum. They need to know the costs to the point of the referendum, and the predicted costs of moving fully to a unitary system below regional assemblies. The facts need to be broken down on the table, if people are to make an informed choice.

As the Minister said, the area most likely to be determined by the Deputy Prime Minister is the North East. If he does not determine that area, I cannot think what area he will determine as the first regional authority. One has only to consider the complications of Northumberland to realise that it will be an enormous exercise. It is important for the people of that area to know precisely what they would be voting for and what the costs would be.

The other amendments in the list under my name are consequential, and change the two conditions to five. I beg to move.

Lord Waddington: I should be surprised if the Minister accepted Amendment No. 14, because it is inconceivable that any independent auditor will come to the conclusion that,

    "no additional expenditure overall would be incurred as a result of",

this exercise.

We know perfectly well that an enormous amount of public money is involved. We recently had a paper from the Cheshire County Council, part of which stated that the estimate of the cost of the local government review in Cheshire alone would cost Cheshire residents an estimated £60 million, which is an average of £204 for every household. As I said on Second Reading, the limited Heseltine local government review at the beginning of the 1990s cost about £600 million.

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No one can tell me that a great deal of public money will not be involved. Will the Minister take the opportunity to give us some figures from the Government's estimate of costs? Great sums are involved. I could go on at great length on this subject, but there is no point in doing so. The Minister has been helpful throughout our deliberations, so I hope that he will take some advice from his officials and give us a list of costs. We would love to know what the grand total is—it will surprise people, and the surprise will not be pleasant.

6.45 p.m.

Lord Greaves: This is an interesting amendment. We could not support it in its exact wording, not least because the vision we have for regional government might include limited increases in public spending if the money was spent on useful things, not simply on bureaucracy and reorganisation. Technically, we would find it difficult to support the amendment, but it is a useful probing amendment, and I congratulate the noble Baroness, Lady Blatch, on moving it.

As the noble Lord, Lord Waddington, said, the amendment provides the Government with an opportunity to set out the costs of the exercise, which they have not done so far. That should be done, not least from the point of view of those who want regional government to be established because, if they cannot come up with credible figures, the Opposition will do it for them. The figures that the Opposition produce may be genuine, or they may be grossly inflated to support their case.

There are four main areas of costs relating to regional government. First, there is bound to be an additional cost of running the regional assembly, in terms of councillors, support services and those who provide the advice and reports. The costs will include all the ordinary support services that any organisation requires.

Secondly, there will be an administrative or bureaucratic cost of running all the regional bureaucracies, including the elected regional assembly when one is established. It is not clear why that sum should be higher than it is now, if the regional assembly takes over some functions of the regional quangos and bureaucracies and is not simply an add-on that will monitor, supervise, scrutinise and produce strategic plans without actually doing anything. All that would cost a lot more extra money. If, on the other hand, the new body was put in charge of running things, which the Government by and large do not want it to do, it could result in savings by integrating several separate organisations.

Thirdly, there will be the cost of the operations put under the control of the new body, if any are put under their control at all.

Fourthly, there will be the cost of local government reorganisation, consequent on the establishment of a regional assembly in a particular region. I do not want to go over that argument again, but there is clearly a cost to reorganising local government. In the longer term, that cost may be offset by new structures being

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cheaper than existing structures. The noble Lord, Lord Hanningfield, shakes his head. Like him, I have been through local government reorganisations in the past, and I also doubt that that would be the case. The one cost that cannot be denied is the cost of the reorganisation itself.

There are four areas in which the Government must establish the costs, in any region where they are putting proposals to people through a referendum. If they do not do that, people like the noble Lord, Lord Waddington, will produce their own figures, which may be 10 times as high as the Government's.

Baroness Hanham: It would be a triumph of hope over experience to suggest that the costs after the reorganisation of local government and the introduction of regional government would be less than they are now. I was interested by the suggestion made by the noble Lord, Lord Greaves, that taking over quangos might reduce the cost. From my understanding of the White Paper, few of those quangos will be taken over; they will be left with a superstructure on top of them and a few elected members to oversee them.

I should declare an interest as a member of a local authority. It is abundantly clear from the experience of London that nothing has remained as a neutral cost. The cost to the council tax payer of the introduction of the Greater London Authority and the building of the new assembly city hall has risen 10 times since the assembly was introduced. That is the cost without a reorganisation taking place underneath—it is simply the cost of the superstructure.

Another aspect that has not been mentioned is that reorganisation means, by definition, putting people out of work. If you double up on unitaries, for example, you will probably not require the same number of people in local government. You will also have the oncosts of putting those people out to grass.

This is an important probing amendment to try to discover whether the Government have any idea of the total cost of a reorganisation. I know that the Minister will say that it depends on the size of the region, and I accept that; the cost in the North East of England will be entirely different from that in the South East. However, we need to address the issue. As the Minister is looking a bit weary, we do not expect him to produce the figures today. However, it would be useful if we could have at least an acknowledgement that those costs have to be spelled out while the Bill is still in Parliament.

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