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I congratulate the Minister on his statement today about the European Defence Agency. It seems to have escaped the noisy pre-election rhetoric about European co-operation and about this agency, which was initiated largely at the behest of the previous Government. Given the likely outcome of the Comprehensive Spending Review and the reductions in the defence budget, we must as a country-as, indeed, must all European countries-look to collaborative projects to get the kind of defence equipment that will be required for the future.



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Lord Astor of Hever: I am grateful to the noble Lord for his congratulations. I very much take on board what he has said and I will take it back to my department.

Health: Spending Cuts

Question

3.37 pm

Asked By Lord Harrison

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): The Government are committed to improving the prevention of ill-health and will publish detailed proposals later this year. The determinants of public health are complex and we welcome this research. The spending review will set budgets for the years ahead and, in making savings, we will ensure that services work collaboratively and that the wider impacts of spending cuts are considered to avoid false economies.

Lord Harrison: Does the Minister acknowledge that it is impossible to ring-fence NHS spending from the surrounding cutpurse policies of this increasingly cut-price Government, as illustrated in the recent report? Will he tell his friends in the Treasury that decent jobs, decent housing, proper programmes for family welfare and protection of pensioners are integral to a proper and comprehensive health policy in this country? Will he slam the back door on these insidious back-door cuts?

Earl Howe: My Lords, the Government are conscious that the health and well-being of the population are affected by a number of factors outside the strict confines of the healthcare system. At the same time, we should not underplay the role of the NHS in tackling health inequalities, and not least the role of primary care. In that context, my department is privileged in being able to look forward to a budget that is not going to be cut over the course of this Parliament.

The Earl of Listowel: My Lords, we know very well the health inequalities among looked-after children in public care. Will the Minister look very carefully at the specialist mental health services provided by local areas to children in public care and ensure that they are sustained as far as possible? He may recall that, in 2004, 68 per cent of children in residential care were found to have a mental disorder. Will he look especially carefully at children's homes and ensure that, wherever there are partnerships with the mental health services, those partnerships are sustained?

Earl Howe: My Lords, I acknowledge the noble Earl's continuing interest in this area, about which I know he is extremely well informed. The Government are committed to improving the health and well-being of children and young people in whatever setting, especially the most vulnerable and disadvantaged. We

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are conducting a thorough review of the programmes that my department funds. There is nothing sinister in that; we want to ensure that, as part of the spending review, our programmes and policies have the strongest evidence base and represent the best value for money.

Baroness Barker: My Lords, does the Minister agree that the BMJ research makes a compelling case for the integration of local authority work and NHS work on public health? Will the work that his department is doing explicitly include those two groups as well as the voluntary sector, which plays a tremendous part in preventive health measures, which are very effective?

Earl Howe: My Lords, as so often, my noble friend is right. Local authorities will have a major role to play in the prevention agenda, as will third sector organisations. I can tell her that we are having extensive discussions at the moment with many such organisations.

Lord Campbell-Savours: My Lords-

Lord Ashley of Stoke: I wonder if the Minister will also say that I am often right, like the previous speaker. He always says that the Government intend to improve the health service, but he says in the same breath that they intend to go ahead with cuts. How can this illogical stance be repeated time and again?

Earl Howe: My Lords, as I have just indicated, the Department of Health is very fortunate to be protected from cuts in its budget during this Parliament, but at the same time we have a duty to spend every pound wisely and to obtain value for money. The spending review is still ahead of us. The only cuts that I can predict are those to bureaucracy and administration, to enable us to direct more money into front-line healthcare.

Baroness Finlay of Llandaff: Will the Minister provide an assurance to those highly specialised secondary care services that are fearful that GP commissioning may be at too small a population level to ensure that those with complex conditions, which may need complex early diagnosis and management, will be adequately managed? I declare an interest as a member of the BMA ARM at the moment.

Earl Howe: My Lords, the noble Baroness is right to draw attention to this issue, of which I am very conscious. Where we have commissioning, it is important that the population base for a given condition is sufficient for that commissioning organisation to contend with. With regard to specialised conditions, I am working hard to ensure that the model we propose will take them fully into account.

Baroness Thornton: My Lords, Hamish Meldrum from the BMA said:

"We urge the government and NHS organisations to focus on those areas where they can truly eliminate waste and achieve genuine efficiency savings rather than adopt a 'slash-and-burn' approach to health care with arbitrary cuts and poorly thought-through policies".



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For example, I understand that there is a 50 per cent cut in the communications budget of the Department of Health. Does this include public health information programmes, and are they being dropped? Will they include programmes on smoking cessation, stroke, obesity and various other public health issues? I would have thought that those would have been a priority for this coalition Government.

Earl Howe: My Lords, public health is indeed a priority for the coalition Government. However, we are subject to a government-wide constraint on marketing and communications expenditure. That means that every programme of communication or marketing has to be justified by the evidence that it will do some good. That is a good and proper control. It does not mean that we will stop all spending, but we have to justify what we do.

House Committee

Membership Motion

3.44 pm

Moved by The Chairman of Committees

Motion agreed.

Local Government Bill [HL]

Bill Main Page
Copy of the Bill
Explanatory Notes

Second Reading

3.44 pm

Moved By Baroness Hanham

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, this is our second attempt at a Second Reading debate on this short, single-issue Local Government Bill. The first was put on hold by the intervention of the noble Lord, Lord Howarth-I understand that he is unable to be in his place today-and the noble Baroness, Lady Hollis. Despite a ruling from the Public Bill Office that the Bill was not prima facie hybrid, and using the fact that they had obtained two opposing legal opinions on the matter, they persuaded the House that there was a case for the Bill to be deemed hybrid.

As a result of the success of that Motion, the Bill was referred to the Examiners for adjudication. This has taken place. I understand that the hearing was very short; no one from the Opposition attended to speak. After a very short deliberation by the Examiners, it was found that the Bill was, as expected, not hybrid. In effect, the Examiners put an end to a somewhat dubious delaying tactic. By their decision, they also vindicated the original decision of the Public Bill Office. That is important, as it is a strong convention that the House accepts the expertise of the Public Bill Office in these matters.



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The purpose of the Bill is to give effect to the statement in the coalition agreement that:

"We will stop the restructuring of councils in Norfolk, Suffolk and Devon".

Noble Lords may be aware that the previous Secretary of State decided, after much debate, to implement unitary councils in Norwich and Exeter. His decision was taken late in the Parliament and made despite the fact that those authorities did not fulfil the five criteria for becoming unitary. The Secretary of State cited "compelling reasons" why those authorities should be an exception to the rules.

The decision was also made against the background of considerable controversy, since there was a general lack of evidence for the "compelling reasons" and a lack of public support. Concerns were raised by noble Lords during debate on the orders about the cost and the lack of support, while questions were asked about the manner in which the decision of the Secretary of State was taken. A Motion of Regret tabled by the noble and learned Baroness, Lady Butler-Sloss, underscoring these concerns, was passed overwhelmingly.

On 24 March, Parliament approved the orders that established unitary councils in Exeter and Norwich. Since then, an appeal against the orders has been made to the High Court, which has recently declared that the then Secretary of State's decision on the proposals for a unitary Exeter and a unitary Norwich was unlawful and that the Norwich and Exeter structural change orders should be quashed. We expect the court next week-provisionally on 5 July-to decide the precise details of the quashing of the orders, in particular whether the quashing will also end the deferral of elections for one-third of city councillors in Exeter and Norwich from May 2010 to May 2011.

Lastly in this saga, the previous Government took no decision on the proposals to create unitaries in Suffolk, instead proposing a county constitutional convention. This was a pie-in-the-sky invention of the previous Secretary of State, which was meant to bring together the principal authorities in Suffolk and their MPs to reach a consensus on a possible unitary solution within that county. The convention has never met and the proposals, therefore, have not been pursued. The Bill will put an end to any possibility of this matter being taken further.

That brings me to the reasons why we are introducing this legislation. In short, our case for doing so is one of non-compliance with the five criteria and, more generally, lack of any evidence of value for money. The arguments in favour of the restructuring in Devon and Norfolk were, in truth, never made out and should never have been pursued. The surprising thing, given the problems identified, is that they were pursued. It is also of considerable significance that the department's accounting officer had such concerns about the value for money of the unitary proposals for Exeter and Norwich that he requested that he should receive a written instruction from the then Secretary of State to implement them. Having noted the accounting officer's concerns, the then Secretary of State still gave a direction to implement these unaffordable unitary proposals. He also made a

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statutory decision to take no action on the Boundary Committee proposals for unitary authorities in Devon and Norfolk, thereby putting an end to those proposals.

This Bill does more than just put a stop to the structural change orders for Exeter and Norwich. It will put an end to all uncompleted plans for unitary restructuring including Suffolk, thereby giving these councils certainty on their future and a clear position for them to regroup and work with others to structure their services. They will also not have to bear the significant costs of reorganisation, which it has been estimated would have cost their taxpayers in the region of £40 million.

I shall now briefly discuss what the Bill does. Clause 1 revokes the orders creating unitary structures in Exeter and Norwich. It will also prevent the Secretary of State from making an order to implement a unitary proposal that he received before the coming into force of the Bill and so will put a stop to the implementation of any Suffolk unitary proposals that remain on the table.

Clause 2 makes consequential electoral provisions in relation to the deferral of elections of one-third of councillors in Exeter and Norwich city councils. It may be that after the court hearing next week, when the precise details of what is quashed will be decided, this clause will no longer be needed. If that is the case, consideration will be given to removing it from the Bill by amendment in Committee.

Clause 3 provides for the short title and the commencement of the Bill.

In the gracious Speech, it was emphasised that this parliamentary Session will focus on freedom, fairness and responsibility. This Bill is the embodiment of that message, as it brings freedom from an imposed restructuring; restores fairness by redirecting the councils' focus to serving communities and the people who elect them; encapsulates financial responsibility by putting a stop to wasteful public spending on restructuring; and opens up opportunities for the councils to seek efficiencies without the distraction of reorganisation. It will prevent the wasting of public money on unnecessary reorganisations. I recognise that it was forecast that reorganisation might have led to savings, in the case of Exeter and Norwich, of some £6.5 million per year, and possibly larger savings from some of the proposals in Suffolk, but there were clear financial risks to those estimates.

The previous Government were determined to impose restructuring, whether viable or not, which was expensive and destructive and would not have served well the cities and communities of Exeter, Norwich or Suffolk. It would have created uncertainty and controversy and, through the acceptance of a flawed case for reorganisation, the authorities' attention would have been taken away from the needs of rapidly changing service provision.

I recognise that both city councils will be disappointed by this move. Exeter and Norwich are dynamic cities. However, a controversial restructuring of services is not the way to achieve efficient delivery. There are excellent examples of councils of all sizes coming together to benefit from joint working, such as the sharing of chief executives, back-office pooling and

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co-procurement. Councils are free now to decide on sensible co-operation in the interests of their citizens, without restructuring. I believe that this approach will be made even more beneficial under the Government's plans, which were announced in the Queen's Speech on 25 May, to devolve more power to local authorities and fully focus on the power of localism.

I am confident that the council leaders of these authorities will want to commit to sensible co-operation and effective collaborative partnership with all the councils in their county areas. I make it clear that my department will help in any way that it can, while recognising that decisions should be made by local councils at a local level and that the age of centralisation is over.

In conclusion, this Bill puts a stop to all these uncompleted plans. It saves the taxpayer £40 million in restructuring costs. It releases the councils to focus on the services for their communities and the local people who have elected them. Above all, I stress that, with this legislation, Exeter and Norwich will be able to continue to be the powerhouses for their counties. They will be able to continue to be cities whose historical status can be, and always is, truly recognised. They will be able to continue their work without distraction and be impressive economic forces for their cities and the wider counties. I commend the Bill to the House and I beg to move.

Lord Richard: I wonder whether the noble Baroness can help me, because I am a little confused by one or two remarks that she made, particularly that we will find out on 5 July what is going to be quashed. As I understand it, the High Court has made an order quashing the original orders, which were enacted and went through this House. What are the alternatives as far as quashing is concerned? What else is there to quash?

Baroness Hanham: My Lords, the court made a decision only on the first clause-that is, to stop the reorganisation. It did not make a decision on the second clause, which relates to the election of the councillors. One-third of the councillors had their elections postponed until 2011. As things stand, they would have to have their elections immediately if this was not quashed or if we did not make a change in the Bill.

3.58 pm

Lord McKenzie of Luton: My Lords, I thank the noble Baroness, Lady Hanham, for explaining this short Bill. Although I believe it is not her first excursion to the Dispatch Box as a Minister, it is my first opportunity to welcome her, which I do-even if I do not welcome what she has said.

As we have heard, the Bill purports to put a stop to existing proposals for restructuring the councils of Norfolk, Suffolk and Devon and revokes the orders creating unitary structures in Exeter and Norwich. It makes consequential provision for the holding of elections that were due to be held on 6 May 2010 and which were deferred as a result of these orders. This avoids the necessity of interim by-elections and the expense related thereto and, as we have heard, the policy is to

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extend until 2011 the term of office of councillors who would have retired in 2010, but for the Norwich and Exeter orders. To get back into the normal cycle, one councillor or the only councillor elected to a ward in 2011 will serve a three-year rather than a four-year term. The restriction will fall on the councillor with the fewest votes and where there is an equality of votes or an uncontested election, the councillor to serve for three years will be drawn by lot. Given that the two-tier structures will remain in Devon and Norfolk, we can support this proposition. However, it would appear that should the quashing of the March orders precede the passing of the Bill, amendments will be necessary, as we have heard, to make the proposition effective.

The terms on which we consider the Bill have undoubtedly been changed by the decision of Mr Justice Ouseley to quash the orders which provided for unitary status for Exeter and Norwich. For a High Court judge, sitting alone and seemingly possessed of no additional information to that considered by Parliament, to overrule the democratically expressed will, especially of the elected Chamber, is a highly unusual step. I am told it is possibly unique. This was even in circumstances where the High Court was clear that the Secretary of State was entitled to reach the view he did on the merits of the proposal and that it was not irrational. Further, it was accepted that the final approach to decision-making adopted by the Secretary of State was properly within the scope of the 2007 Act.

In these times of economic stringency, with savage cuts to be imposed on local authorities by the coalition Government, the risks of incurring irrecoverable legal costs making it even more difficult to sustain vital services mean that an appeal cannot be contemplated. For now it is accepted that Norwich and Exeter will be denied the early opportunity to attain unitary status-an opportunity which has seen other local authorities of all political persuasions flourish under both Conservative and Labour Governments.

We note the decision of the Examiners that the Bill is not hybrid, but this was neither a spurious concern nor a delaying tactic. It is right that due process has been followed, even though the two councils withdrew their memorials before the hearing. Perhaps the Minister would say something more, particularly following the exchange with my noble friend Lord Richard about the structure of the Bill, and the decision of Mr Justice Ouseley to quash the orders. Does this mean that the orders under consideration are not relevant orders for the purpose of the Bill; that their revocation can therefore have no consequence; and that no councillor remains in office under Article 11 of the orders?


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