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Baroness Hanham: My Lords, I thank my noble friend Lord Hanningfield for leading this important debate. It has not aroused the greatest attention of the Members of this House. It has aroused no attention at all on the Minister's Benches, as the
 
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noble Baroness, Lady Scott of Needham Market, pointed out, but it has flushed out one or two extremely thoughtful and helpful speeches.

I should also like to thank very much the noble Lords on my Benches who supported us today. The noble Baroness, Lady Byford, has plenty to do without joining in on an issue such as this. She carries in her experience a great deal of knowledge about rural life, which becomes extremely important in terms of local government and who administers it. It is not the first time that she has drawn attention to the issue of "small extensions" to villages. I am sure that we will keep returning to that issue. I think that the issue of post offices also will be in everyone's mind for some time, particularly as it is very relevant at the moment.

My noble friend Lord Brooke has saved me having to declare my interest as a sitting local government councillor. I thank him for his kind comments and also for one of his unique contributions. One of the great pleasures of this House is to listen to people such as my noble friend, who brings not only erudition but humour and great common sense to our debate. He raised in his contribution a problem that, as things stand, will never go away—the West Lothian question.

Most of the speeches have drawn attention to the unacceptable aftermath of the Government's frolic into referendum campaigns for elected assemblies. The defeats from which the Government suffered—having to abandon two of their chosen regions because of an evident lack of support and confidence in the delivery of the electoral system, and the subsequent rejection by a substantial majority of the electorate in the north-east of the proposition—have left this policy initiative in tatters. Mercifully, however, it has left England intact, something for which I think we are all heartily grateful.

I was extremely interested in the historical recollections of the noble Lord, Lord Rodgers. Most of us probably did not know or appreciate what he told us—that, originally, he was at the heart of all this. The base of regionalisation was certainly not, as the noble Baroness, Lady Scott of Needham Market, maintained, the Conservatives' move into Government Offices. That was a move to pull together administration in order to make it more efficient, not to make a political contribution to our system.

As a number of speakers said, the results of the referendum have also left unanswered questions about the proper tiers of government and diverted attention from the insidious transfer of decision-making to regionally based quangos.

Since 1997, each piece of legislation from the Office of the Deputy Prime Minister, and there has been plenty, has created ever more regional bodies—regional development agencies, regional chambers, planning boards, housing boards, fire and rescue authorities—all of which have a powerful role in deciding the strategy associated with their particular remit, and those are just the ones associated with the Minister's own department. As my noble friend Lord Hanningfield said, there are
 
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innumerable other bodies, spawned from other ministries including the important learning and skills councils.

Regions are a cuckoo in the nest of local government, as is their strategic role which overrides elected local government at other tiers. The regions include counties, cities, towns, villages and parishes, all of which already have democratically accountable local government and have competing interests and concerns. The decision by the electorate in the north-east and the manifest lack of interest in regional government in the other two putative but abandoned election areas should have caused the Government to reel back their enthusiasm for regionalism and reconsider whether there was indeed any future for it.

For years, this country's—and I suppose that for today's purposes I must speak only of England—elected local government has been based on historic county and metropolitan areas, districts, boroughs and parishes. They are recognised accountable entities with accepted roles, responsibilities and powers. So should the Government not now be considering, as indeed has been alluded to by my noble friend Lady Byford, how they can reinvigorate them as the true representatives and voices of local communities?

Had it not been for the efforts of this House, counties would have been stripped not only of their planning responsibilities, but of having any role at all in the future planning of their areas. It was not only these Benches, it was the Liberal Democrat Benches as well; but between us we managed to draw some common sense into that situation.

Heaven knows, little enough is now left to counties but an input into the strategic plans. The Government's sustainable communities plan and Kate Barker's report on housing envisage proposals for huge increases in housing, mostly across the south-east but affecting the northern parts of the country as well. Indeed her report recommended that regional strategic planning and housing boards should be combined, creating a mammoth of unelected power. It is our view that decisions about matters as important as these should not be taken at either national or regional level, but by elected local government. Education, planning, and housing are matters either for individual local authorities, or for a combination of one or two working in partnership. It will be instructive to see what the Government's response is to the South East England Development Agency's response to the insistence that 750,000 houses should be built in the south-east. It has rejected that number and told the Government that it will not build that many. It will be interesting to see who wins that titanic battle.

Local government powers have been consistently eroded while their reliance upon the beneficence of central government has increased. The standards of their services are constantly under review or inspection by a myriad of outside bodies and their structures are dictated by local government Acts. The Government do not welcome variability or variety in local authorities'
 
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performance, seeking to ensure that each is as good as or similar to the other. But doing that creates a situation where local authorities' accountability is to the centre, rather than to the local electorate who might find more enthusiasm for supporting or rejecting the standards that they attained if there were more room for creativity and flexibility.

The Office of the Deputy Prime Minister has had a fine couple of years with legislation, but is now apparently, exhausted or has run out of prime ministerial credibility, for this is a fallow year. I do not complain about that, but believe that with this enforced leisure, it is time that the Government started to think, not what they could do to tie local government up in knots, but what they could do to release it from the Gordian chains.

So what do the Government propose for the future, a question that every speaker has asked? What is their response to the rebuttal by the electorate in the north-east, other than the Deputy Prime Minister's reply to do nothing at all? How do they intend to strengthen the role of democratically elected local government, which currently exists, rather than messing around with new untried structures, which have neither the virtue of consistency nor acceptability nor accountability.

The Government should dismantle the whole regional edifice, give back the quangos' responsibilities to local authorities, create a clear distinction between the powers and responsibilities of central and local government and decentralise to historic local government. Such policies might just breathe new life into local democracy, rather than suffocate it with more bureaucracy and targets.

The policy of electing some regions and not others was never going to work. It was incomprehensible and unfocused. Either the Government should have had the courage of their convictions and proposed comprehensive regional government across the country or they should have left it alone. We would have disagreed with that. We would have argued against it. But at least it would have been a coherent policy. We should address the real problem, that the Government have created a spider's web of unaccountable bodies in regions, and restore their responsibilities to the elected local government.

I do not doubt that the Government regret that they ever embarked on their ill-advised journey into regional government, but by doing so they have neither strengthened nor enhanced democratic local government. They have left a fund of unanswered questions.

The Minister of State, Office of the Deputy Prime Minister (Lord Rooker): My Lords, there will not be many answers tonight. I shall start as I mean to carry on. I have come to your Lordships' House to answer the issue on the Order Paper, that is, to draw attention to the current status of the regional agencies and bodies, and to the case for returning their responsibilities to elected local government. From my point of view, there is no useful purpose in trawling over the matter that has permeated
 
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virtually all noble Lords' speeches, that is, the referendum on 4 November. We said, "Let the people decide". An offer was on the table and they rejected it substantially, by 4 to 1. That has put the issue to bed for a long time, maybe for most of our political lives. We must face the situation as we find it and I do not want to spend any more time on it. I made the position quite clear during the passage of the Bill. I was a bit worried about the quotes from debates on the Bill last year that the noble Lord, Lord Brooke, was going to use, but nevertheless, I can live with what he said tonight.

Do not get me wrong. I am not knocking the speeches that have been made. It has been very useful and there are some key issues to be raised, notwithstanding the long-term answer to the West Lothian question. There is no doubt about that. But I was not sure that it is the policy of the Conservative Party to abolish the Scottish Parliament. It is obviously not in favour of regional governments so I do not know what its answer to the West Lothian question is. We did not hear anything about that, so I am not going down that road either.

I declare an interest as I have never been a councillor but I remember that when I was a child in Birmingham the council ran the bank, the buses, the water and the police. All those responsibilities were removed to regional bodies by Tory governments. There were regional planning bodies long before we came on the scene. I understand that the substance of regional planning bodies started in 1962. I believe that they were called regional planning conferences. So this has not happened overnight. But I do not want to make any cheaper points than that. This did not all happen in the past few years. There have been changes going on. But there are some very important issues to address for the future of local government, notwithstanding the great largesse of government funding that will be announced for its operations tomorrow. But we will wait until we hear the Statement.

However, I sincerely thank the noble Lord, Lord Hanningfield, for securing this debate as it is useful to get these points on the record, if only the point that we do not need to have any more debates about the north-east referendum in the future.

I want to set out the Government's views on the current status of the regional agencies and bodies and why we need them—that is certainly our view—and what they have achieved. I think that it has been accepted that everything cannot be done by local government. That was touched on in a few speeches but I do not want to make points about individual speeches. People live, work and learn across local government boundaries and there are some issues that transcend local government boundaries as we know them at district council and county council level. We need to make sure that things are joined up. The role of local government is important in working towards better standards of living across the country but its role is different from that of regional agencies. There is no question about that.

I want to touch on our agenda for local government because we have made some announcements in the past few months that have not generally been taken up
 
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in the House but which are, nevertheless, on the record. I do not want to get into a row about this, but our argument is that the regional institutions have not generally taken powers and responsibilities away from local government, although I accept that they did take some on the borders of planning and housing. So I say to the noble Lord, Lord Hanningfield, that there is little scope for returning to local government responsibilities that are operated by the regional agencies because the vast majority of regional agencies have their responsibilities, and, in some cases, powers, from central government as it is currently set up. Our intention is that the regional agencies and local government will complement rather than duplicate each other and will provide effective government at sub-national level.

It has already been pointed out that the Government Offices were set up for administrative purposes—and I agree—in 1994. In 2002, we set out the position in the English regions, outside London, in the famous White Paper, Your Region, Your Choice: Revitalising the English Regions. We have developed and strengthened the role of the Government Offices. They now cover the responsibilities of 10 government departments in the regions, when originally it was three or four. So there has been a substantial change in that respect. They deliver the responsibilities of central government departments in the regions and work as a team.

The Government Offices also work with partners to align national, regional and local priorities for investment decisions so that decisions can be made out of Whitehall, nearer to where they will have effect. There is also the question of managing local relationships at a local level on behalf of central government. So the Government Offices perform a valuable role.

On my fairly infrequent visits to Government Offices, I have noticed that their finger is on the button of what is happening locally in the region, which I pick up from other visits. They raise issues; they are all briefed and know exactly what is going on. It is very useful for central government to have this body out in the regions. So there is a regional knowledge that comes back to the centre to inform the development of policy at the centre.

In addition, we wanted to create an economic powerhouse for each region. That is why the regional development agencies were set up separately in 1998. Their budgets are large enough for them to make a difference. By 2007–08, their budget will be about £2.3 billion. For the first time in our political lifetime, bodies in the regions are developing a regional economic strategy for each region. We have inherited those regions—we have not looked at regional boundaries. We all have our own views on that; it is not currently an issue but can be considered in the future.

The regional development agencies across England—including the London Development Agency, which operates slightly differently but is nevertheless part of the family—have, over the past couple of years, created,
 
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saved or enhanced some 160,000 jobs and are playing a major role in reshaping the regional economies. We want to be in a position, in a fairly short time, where people are not disadvantaged by where they live. We must look at regional disparities to see what we can do at a regional level. Major disparities among the regions mean that we do not perform anywhere near as well as we should compared with our economic competitors, our partners in Europe. We can do a lot better than we are doing at present.

More than one speaker has mentioned housing. Whether we are talking about housing for key workers, families or vulnerable people, I take no pleasure in what is implied in supporting lower planning numbers for housing, because, in a way, it means less housing for local people. People would be driven away from the villages and market towns where they were raised; there would be no places for young children; people would be driven away to take up education or look for jobs; families would split up and caring relationships would break down. All kinds of issues would be raised if there were not enough affordable housing, of all ranges, for key workers and for vulnerable, local and young people.

The issue has to be solved. It cannot always be done at local authority level. I do not want to start another debate, but local authorities have failed to use their powers to create enough sites for travellers. Those local authorities will not take these politically dodgy decisions. They would rather the Government said, "You have to do this". The local authorities can then say to their electorate, "We have to do this; central government have changed the law". That is an abdication of responsibility. If local government want responsibility and accountability, they have to take some hard decisions on occasion. That is just one example.

Our view is that not all the housing challenges in an area can be addressed by one local authority or solved within one council's area. We saw the need, a couple of years ago, to create a strategic approach. That led to setting up the regional housing boards. Where the homes should go, whether it is social housing, private, or a mixture of tenures, cannot be taken in isolation. Building on the opportunities presented by the strength and experience of regional institutions, we can have integration of the different processes. We have embraced the idea of merging the regional housing board with the relevant regional planning body, as recommended by Kate Barker. We have said that we will not come back in detail on the Barker review until towards the end of next year; we said that we needed 18 months. If the election was 2006, we would have pronounced on Barker. It has nothing to do with an election cycle; we said that we needed 18 months. We accepted the recommendation to merge the regional planning body and the regional housing board. It is well known that the consultation on that finished yesterday, 30 November, and we are starting to consider the responses.

For regional development and regional economic prosperity we need skills in the workforce. We have massive disparities in the skills of the workforce, as shown up by the census. Joining up the regional
 
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economic strategies of the regional development agencies, we can also introduce regional strategies for employment and skills; we must marry the two. It cannot be done at national level, and it is certainly not something that can be done at local authority level. We are going to up-skill the workforce in our regions so that we can perform better. We have also introduced regional directors to the Learning and Skills Council so that it can contribute fully at a regional level and engage directly as a key member of the regional skills partnership.

There has been a lot of criticism in your Lordships' House of the voluntary regional assemblies. To be effective, regional approaches need to be co-ordinated, and different regional bodies need to be scrutinised. That is one of the reasons why we offered elected scrutiny, but that is on the back burner now. There are other ways of scrutinising. To do this, we have recognised the voluntary regional assemblies in each region.

These are composed, as has been said and criticised, of representatives from local government, business, trades unions and the wider community. All parties are represented on them, and some are even chaired by Conservative councillors, who are doing a good job. There is no argument about that; they are taking their role extremely seriously. These voluntary assemblies scrutinise the work of the regional development agencies. They are the regional planning bodies, and they will become the regional housing bodies. They play a co-ordinating, strategic role with the full involvement of local authorities and other representatives of the regions.

All the wisdom does not reside in any one body, which is why we need—I know that there has been resentment of the word "stakeholders", and if you like I will not call them that—the other bodies that represent the community, whether it be business, trades unions, the voluntary sector, or the work of business in the community. All those need to be fully reflected in the strategic decisions co-ordinated at regional level. We see no difficulty about that whatever. They are playing a full, responsive, co-operative and positive role, which we want to build on. The presence of local councillors provides a degree of democratic accountability. No-one is saying that they are fully democratic. We are not making that claim in the first place; but we want them to be a microcosm of the region, to ensure that local authorities and regional bodies work together.

There are many operations of the Office of the Deputy Prime Minister where we have introduced schemes such as the Housing Market Renewal Pathfinders, for example. They cover nine areas of the country where we need to get a grip on the collapse of the housing market. Every one of them covers more than one local authority; either two, three, four, or in one case five local authorities. They are working well together across the boundaries, and not with big bureaucracies either. I was in south Yorkshire the
 
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other day, which covers four authorities. The central team is only 14 people, and the work is being done by local authorities.

Fire and rescue services are another example of where co-operation at a regional level will deliver better results. We are encouraging local fire and rescue authorities to work more closely together through regional management boards. That will be to everyone's advantage. We are using the integrated fire risk management plans for local authorities to decide their own priorities.

As I explained at the outset, the successful regional institutions need not and have not taken away powers from local government. On the contrary, we want to complement their decisions. For example, we have done many things to encourage local government. We have repealed restrictive controls on local authority borrowing. That was done through your Lordships' House through the legislation. We have given local authorities greater power to promote the well-being of their communities. We have given them freedom and flexibility to deliver better services more in tune with their local priorities. Higher performing authorities—the excellent authorities—are benefiting from an extended package of freedoms with virtually no ring-fencing, plans or inspection. Moreover, we are committed to continuing the devolutionary agenda, as evidenced by the launch in July of our document, Local:Vision. It carries out an extensive consultation about the future of local government, looking at the options for enabling more decisions to be made in local communities.

Over the next six months, we will take that debate forward in a series of daughter documents. The first of them was a prospectus for local area agreements, a radical idea for streamlining all the funding that we can get from Whitehall into local areas. Twenty-one local authorities will be used for a year, with publications all around the country; there is more than one in each of the regions. We want to see what we can do with the central government pot. Some areas are excepted—"Supporting People" and some education matters—but much of the central government pot in those areas will be divided up within the local strategic partnership area so that funding priorities can be changed to reflect local circumstances. If successful, we will roll it out in years to come.

Other key decisions and issues such as neighbourhood management, local leadership and the performance framework will be discussed in more detail. We will produce documents on those.

The Government remain committed to improving economic performance and quality of life across the country at every level. It does not require elected regional assemblies to do that; that was an opportunity, but it would never have been all-in-one in any event, as we accepted. That does not alter the fact that many of the key decisions at sub-national level need to be made at regional level. That does not take away the powers of local government, which gets enhanced powers from central government in some of the examples that I have given. We will continue local government reform and an active regional policy.
 
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If we say, "As the model is today, can it continue for the next 10 or 15 years?", I suspect that the answer is no. However, there are degrees of consultation through which we want to go with our colleagues in local government and both Houses to find answers to some of the questions, and to get more decisions locally. We need to provide better value for money, and will seek to do that through opportunities in local government and local councils, working across the boundaries. The boundaries are there for reasons that we all understand; nevertheless, people do not necessarily live, work or have care arrangements fixed within them.

Some issues were raised, but they were nearly all relevant to the referendum. As I said, I did not really want to debate all that. I am not embarrassed about it—we can debate it till the cows come home—but it does not get us anywhere. We will not have elected regional assemblies; the idea has been put on the back burner, probably for many years to come. We have no plans to resurrect it. We need to have a look at the effect on local government, get more decisions made locally, and enhance the role, where necessary, of regional agencies so that they can perform better. Then we can encourage the voluntary regional assemblies, in particular, to carry out roles of scrutiny. They are fully able and equipped, intellectually and financially, with the capacity to do that. I see no problem with that. Simply because they are not directly elected does not mean that they cannot have a role.
 
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To involve the wider community beyond local government is very important, whether it is through local strategic partnerships or regional assemblies, so that people can bring something positive to the table. We get better decisions, a better framework, and better delivery of services to our fellow citizens. After all, that is what it is all about.

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