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Lord Rooker: I feel quite chipper. I have been to the gym twice this week and I will carry on as long as the Committee wants. I gave some figures on Second Reading and I will repeat them as they are the only figures that I have at the moment to share with the Committee. As the noble Baroness, Lady Hanham, said, Amendment No. 14 introduces an additional precondition before a referendum can be held. Although the amendment does not specify the time period, it would require the auditor to confirm that no additional public expenditure would be incurred. I

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freely admit that that is a quite onerous condition—which is probably why it was so drafted. As she said, it is a probing amendment. I will therefore not nit-pick about the details.

As I think I said on Second Reading, there will be costs in establishing the elected regional assemblies. However, we think that that is a price worth paying in areas where people have voted for them. Chapter 5 of the White Paper set out the direct costs of the assemblies that could be estimated at that stage, which was some time ago. We think that the assemblies will be public investments and will bring benefits to the people at large. Although I gave some figures on Second Reading, I realised that I was taking an inordinately long time to reply and may have missed out one or two.

The cost of the referendum, for example, will vary according to the number of people. Our view is that it costs bout 80 pence per elector for local authority mayoral referendums using all postal ballots. On that basis, the cost would range from about £2 million in the North East to about £6 million in the South East. Our best estimate of the average running costs of the assembly—one of the items listed by the noble Lord, Lord Greaves—is about £25 million gross. We think that about £5 million of that will be directly offset because posts will be transferred from various bodies such as the Government's regional offices. We think that the remaining costs could be absorbed within the assembly's programme budget through efficiency savings of about 5 per cent, although less in the larger regions. The assembly could therefore have a major impact on the region's productivity and prosperity.

I cannot even begin to give a figure for the potential cost of local government reorganisation. It is much too early to make such an assessment, which depends on a range of factors such as how many regions choose to have an elected assembly and the structures recommended by the Boundary Committee in each case. Reorganisation might result in cost savings if the structures recommended by the Boundary Committee led to economies of scale or reduced the number of partnerships in which public sector organisations had to engage. So I make no claim to being accurate. We do not have those figures because it is much too early.

The cost of the Boundary Committee's reviews prior to the referendum ranges from about £750,000 to £3.2 million. As the Boundary Committee's figures have been refined and are now more accurate, they are not the same as earlier figures. The Boundary Committee has continued to revise the figures since publication of the Bill's Explanatory Notes. These figures are therefore different from those in the Explanatory Notes in the House of Commons.

Given the thirst for detailed figures on costs and on cost/benefit analyses of the number of chief executives, bottle washers, cleaners and whether services are privatised or in-house, I realise that that is probably a wholly inadequate reply. I can think of loads of issues and may even table some amendments myself. However, it is just too early to provide that information. If the process continues and the Secretary

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of State makes his statement, and as we get closer to a referendum and publication of the Government's view and all the items we promised to publish, we will be able to give better and more up-to-date figures. If there were a successful "Yes" vote and we were closer to introducing legislation to set up a regional assembly, we would clearly be expected to give the House much more detailed figures.

Lord Waddington: I wonder whether the Minister can give me an answer to a question that I asked the other day. Clause 17 of the Bill enables the Secretary of State to make payments to the Electoral Commission for it to do its work. But who would foot the bill incurred by a local authority which had to go to all the expense of servicing a Boundary Committee review if there were then a referendum that resulted in a "No" vote? Can the Minister please assure me that the Government will foot the bill, not the unfortunate council tax payers in the area concerned when the council was put to enormous expense as a result of the Government's folly?

Lord Rooker: That situation would arise only if the council tax payers and others in the electorate voted "No". It is part of the cost of having a choice. I cannot answer the question, but I can assure the noble Lord that I will know the answer by the time we reach Clause 17.

Baroness Blatch: Perhaps I was naie in taking the Government at their word. I think that my noble friend Lord Waddington has taken me to task for tabling an amendment that was impossible for the Government to meet. It is unlikely that they could ever include in the Bill a report that provided a guarantee that no additional expenditure would be incurred. However, I am taking the Government at their word. They have said on various occasions that the proposals would not only be neutral but might even be beneficial to local people. However, given what we have heard, that is very hard to believe. Not only on Second Reading, but in a subsequent Question, the noble Lord told us:

    "I believe that the penny has dropped that there is no new money. If anyone is supporting the Bill in the hope that there will be more money, do not bother; stick with the status quo".—[Official Report, 20/2/03; col. 1328.]

However, we are talking about the preliminaries to a possible "No" vote, and those preliminaries will incur expenditure. Unless the Chancellor is being uncharacteristically generous, that money can be found only by top-slicing local authorities' budgets. It cannot come from anywhere else unless the Chancellor will set aside the funds. Given that this exercise could be under way in the course of this financial year, in the sense of giving the Boundary Committee work to do, it would be helpful to know the source of that money.

The noble Lord has not said who will pay for a "No" vote or a "Yes" vote or for the added costs of local authorities who had to defend their corner in the review. He said that that is the price that local authorities will pay for having a choice. However, as

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we have said so often today, many county and district councils will have voted "No" but been outvoted by the large urban areas. I am reminded by my noble friend Lord Hanningfield, who knows the global statistics of local government better than I do, that Greater Manchester has about 2 million people and that Northumberland has less than half a million people. The re-organisation has no effect on Manchester because it is a unitary authority. It could make the decision for the whole of the north-western region, and many of the shire districts will have voted no. This is a horrendous proposition in that a very large sum of money is going to fall on the review and boundary committee exercise. It has already fallen on the soundings committee exercise. The noble Lord did not refer to the cost of that committee. Can he say what was the budget allowed for the soundings committee and what has been the outturn of that budget ? I can see now that my amendment is fanciful in a practical sense because there is no way in which expenditure will be contained at either a neutral or less than neutral level.

I shall think about what has been said. I shall give way to the Minister to come back to me on some of these points because we need answers. I fully accept that the noble Lord cannot give the costings of re-organisation because each one will be different. We could not possibly second guess what it is going to be at this point. My amendment does not ask for that. It quite specifically says that at the point where people are being asked to make a choice they should know what all the costs are in some detail. They should know what the running costs will be and the capital costs. We know that the capital costs in Wales, Scotland and London have been horrendous. But it is after the event.

People were asked to vote before they saw any details of the Bills. They went through another place with very cursory discussion. We did our customary thing in this House and challenged and tested some of the propositions. The London Bill was changed quite considerably during its passage.

I say to the noble Lord, Lord Greaves, that many of the changes which were made to the Bill came about as a result of the Government running scared of what Mr Livingstone might do if he became Mayor of London. Very substantial changes were made by the Government themselves to make sure that his wings were clipped and he could not go too far in his excesses in London government.

Nevertheless, these are serious points. The Minister has given us outline expenditure figures which are helpful as far as they go. But I want at least one promise that all the costings will be put in detail before the people as they come to vote. It would be helpful to know whether it is to be top-sliced by local government. Who will pay for a yes or no vote? Has the Chancellor put money aside to cover these costs or is poor old local government going to see yet more money top-sliced from the local government budgets?

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7 p.m.

Lord Rooker: I shall try to answer a couple of the points. As regards the costs of the sounding exercise, I shall take advice. But given the fact that there will be a major Statement made in Parliament in due course by the Deputy Prime Minister on the results of the sounding exercise, there will probably be documents published at the same time in summary form. I suspect that there will be a financial statement as well about the costs. That would be quite reasonable, but I do not know whether that is planned.

We are to have discussions with the Local Government Association about some of the one-off costs. Generally speaking, local government has a great deal of flexibility today as regards its budgets. In due course this House will receive the Local Government Bill, which gives much more flexibility as regards the power of local government over its own finance. I am not saying that there is a bottomless pit of money, but in some of the areas local government would be expected to carry costs of certain of its functions in responding, I suspect, to the boundary review or facilitating the administration of the boundary committee work. That would be quite normal local government expenditure.

A great deal of work will have taken place before the referendum. It would be wholly reasonable to give further and better estimates of the cost to the region. One cannot be absolutely precise. I take on board what the noble Baroness has said about the cost to Wales, Scotland and London. Lessons have to be learnt in a way which explains the potential costs to the electorate. We have already heard the free spenders among the Liberal Democrats saying that they would have wanted to increase local government expenditure anyway. That is what the noble Lord, Lord Greaves, said a few minutes ago. There are plenty of people who are set to put up costs, but the Government are not part of them.

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