Somerset County Council: Unitary Status

Tuesday 22nd May 2018 Westminster Hall

[Mr Philip Hollobone in the Chair]

16:00

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

I beg to move,

That this House has considered Somerset County Council’s plans for unitary status.

Thank you for calling me, Mr Hollobone. I am delighted to see my hon. Friend the Member for Yeovil (Mr Fysh) in his place, joining me today. This is an important subject to us, because it concerns the county of Somerset. A fortnight ago, the leader of the county council came to Westminster and threw an unexpected spanner in the works for all Somerset Members, who got no advance warning of the desperate plans to turn the whole county into a unitary. One by one, he spelled out his vision to us, and we were collectively gobsmacked—we had had no warning.

We knew that the county council was squeezed, and we understood the pressures of providing the most expensive public service with a small grant from Government. We also recognised that the writing had been on the same wall in Taunton for years. Funnily enough, it was back in 2006 that the idea of a Somerset unitary was originally conceived. I was there at that time; unfortunately my hon. Friend was not, but I believe that he was a county councillor.

[Mr Marcus Fysh (Yeovil) (Con)]

No.

[Mr Liddell-Grainger]

He says from a sedentary position that he was not, so that is me in the doghouse already.

The idea came from the dangerous mind of the chief executive, a tiny little man called Alan Jones—no surprises there. He was ruthless and he wanted a “lean, mean council”—his words. He went for the quick fix of getting rid of the district councils, and said the county could pocket—guess what?—£28 million. I will come back to that in a minute. Nobody ever knew quite how Jonesy arrived at £28 million, including me.

The present leader of the county council is still running with the idea 12 years later, and I am afraid that it is as wrong now as it was then. This is what rings alarm bells in my mind: Somerset County Council has never been good with money. I have looked at its books just to prove how bad it is. In 2007, it had only £11 million in the general reserve fund. Here we are, 11 years later, and it still has about £11 million—it is difficult to get a handle on it, but it is between £11 million and £18 million. That may sound like a lot in certain quarters, but it is chickenfeed when the overall budget runs into hundreds of millions. If an unexpected crisis happens—normally it does—there is nothing to fall back on, and unfortunately we have had that in Somerset. Occasionally, the place floods.

Alan Jones liked to pretend that everything was going well, but it was not then and it is not now. The county needed to borrow £376 million in 2007, so Napoleon Jones did a dodgy deal and signed his life away to IBM. He even persuaded his mates in Taunton Deane Borough Council to follow suit. Only two councils did so; the only other organisation to do so was the Avon and Somerset police force, known as the police farce. Together they created a thing called Southwest One, an overblown IT monster that it was boasted would save money faster than anyone could print it. The two councils apparently stood to gain £200 million in savings if everything went according to plan, but it never does—not in Taunton, anyway. Welcome to the south-west bubble: our proud county town—that is what it is—where backhanders are normal and nobody trusts the leaders. The two councils handed over a mass of public money to a multinational, and they wondered why it went belly-up.

If only little Jonesy had got away with creating a unitary, there would have been even more money for—guess who?—IBM. Many of us know of it. The plan was taken over by the districts, but it was doomed because the public did not buy it. When the county council refused to hold a referendum, we—me and the MPs at the time—organised it ourselves, along with the district councils who, regardless of political colour, all subscribed to it. Two hundred thousand people voted, and 84% of them said no.

By July 2007, the people had spoken and unitary Somerset was dead in the water. My hon. Friend the Minister might like to know this. He is the Member for Richmond—I helped on the by-election for his predecessor, Mr William Hague, only because I was in the Army and had a car—and North Yorkshire had also planned to become a unitary, but that plan was rejected by the Government at exactly the same time. There is historical precedent.

As for the Somerset IT monster, Southwest One had only two councils on its books, which made its own death inevitable. Then along came the international financial crisis, the credit crunch and the grim dawn of austerity, which we all remember with no great fondness. Austerity for everybody? Not in Taunton. Jones was sacked by the county in 2009, but it cost £300,000 to get rid of him. Down the road at Taunton Deane, the other IBM champion, Penny James and Shirlene Adam are still in the top jobs and, I am afraid, heading for another IT disaster. They say that donkey dung floats—we have incontinent donkeys galore in Taunton.

By 2012, Somerset Council’s borrowing was on course to hit £410 million, which means shelling out £100,000 every single day just to keep the loans going. All the while, the price of providing vital children’s services and social care was going up, and I say gently to my hon. Friend the Minister that Government grants were coming down.

There is plenty of evidence that the council cannot control what it spends and tackles big problems by taking even more ridiculous risks. The learning and disability service was outsourced, for example, which made financial sense only if the savings added up, but, just like with Southwest One, the real cost outweighed the benefit. Learning and disability burst its budget and then faced extra cuts.

There are ongoing problems in several parts of the council. A recent peer review found that only 65% of promised savings actually took place, so I am afraid the reserves are running out. They were dwindling three years ago when a budget freeze was imposed, but things have got worse. By September 2016, the cabinet talked about declaring the authority bankrupt. It did not happen then, but it is dangerously close to happening now.

I am indebted to the work of Kevin Nacey, whom my hon. Friend the Member for Yeovil knows well. He has been the head of finance at Somerset County Council for donkey’s years. He has done the accounts since 2006, but he has had enough: as the latest county calamity began, he announced an early exit. Mr Nacey is off to pastures new, and—dare I say it?—a big juicy carrot: he will soon be in charge of the books of the donkey sanctuary. Eeyore would say of all this, “How very appropriate.”

I have several direct questions for the Minister. We have to work through this; we cannot go on like this in local government. Last week, he and I had another debate on the future of Taunton and West Somerset, which—dare I say?—the Government managed to get through. I feel I was unfair in what I said at the time, but I gently say that I strongly believe that the Government are not playing fair with local government. Last week I was a little more profound, but I was more cross; this week I am more measured.

Local government does matter. The Minister’s constituency covers a vast geographical area—he has a seat bigger than mine, and I always think that Bridgwater and West Somerset is pretty large—and the problem for all of us is that the democratic deficit cannot be taken away without leaving a problem. Where unitary status has happened in very big counties, it has created enormous stresses, not least on the MPs in those areas. When councillors have to look after more and more, and deal with more and more, that deficit gets big. I ask him to pass this point on to my right hon. Friend the Secretary of State: please think about the future of local government. I do not wish to spend whatever time I have in this place getting up every time I can to say to Ministers, “Could you please defend local government?”

Reorganisations are never good. In 1974 the Government of the day created Avon, which my hon. Friend the Member for Yeovil is aware of. They created North Somerset and Bath and North East Somerset, which is now a unitary and is struggling because it is too small for a unitary. Maybe we as a county need to talk to Devon and to North Somerset.

[Mr Fysh]

My hon. Friend is making an interesting speech about the history of local government in Somerset. Does he not think, though, that to deal with the overhang of debt that the Liberal Democrats left the county with in 2009, it has been necessary to take a raft of difficult decisions? Is it not worth at least exploring ways of saving the taxpayers money? This proposal might be a solution, but like him, I would say it is imperative that we ensure no democratic deficit is created through the process.

[Mr Liddell-Grainger]

My hon. Friend is absolutely right. He was a county councillor, and so was fully aware of the situation—more so than any of us. I am delighted to see that my hon. Friend the Member for Wells (James Heappey), who I know had a pressing engagement, has made it here. He will recognise this point, because he wrote a devastatingly good article that follows on from what my hon. Friend the Member for Yeovil has said. My hon. Friend puts forward a good case that we must look at the debt, look at our options and look at our future. I will take that first point first, if I may.

My hon. Friend is right that it was the Liberals who created the debt—not the Conservatives, but the Liberals. We are now living with that legacy, but it has to be faced. I say to my hon. Friend the Minister that it is our social services that are pulling us down. The problem we face is that we do not have enough money to take care of the neediest in our community.

The second point my hon. Friend the Member for Yeovil makes, which I have made before and which I know my hon. Friend the Member for Wells agrees with, is that we should also look to our neighbours. My hon. Friend the Member for Wells wrote a good piece about looking toward BANES, and I mentioned looking toward Devon. We have no parameters—we could look at either of them—but we need democratic accountability. I say to my hon. Friend the Minister that if we are going to go through with any form of unitary, we need to have a referendum. If we need to look to the people of BANES to split up the ghastly edifice that is Avon and get our old county back, we will do that.

When Councillor Fothergill came to the House—he was very courteous; it was a very courteous meeting—I asked him directly about a referendum. He said, “I will hold negotiations or conversations with our stakeholders.” To me and to my hon. Friends the Members for Yeovil and for Wells, the stakeholders are our constituents. They are our stakeholders, not the Avon and Somerset police farce, based in Bristol, or the ambulance service, now based in Exeter, I believe, or the fire service, based wherever the heck it has got to now. We, the people of Somerset, are the stakeholders. That is who we represent.

I would like the Minister, if possible, to say a referendum should be held. We did not hold one in West Somerset. When I had to put my views gently to the Minister last week, I said that the majority of people who took part in what can only be described as a pretty desultory consultation were against that proposal, but they were ignored. I hope that will not be the format for the future.

I say to the Minister, please do not underestimate the ability of Somerset to fight back. We have done it once, and we will do it again. The last time was the battle of Sedgemoor in 1685, which happened in my constituency, very close to the constituency of my hon. Friend the Member for Wells. We marched on London. This time we are coming by train, so we will not get it wrong, and I assure the Minister that we will do what we have to in order to overturn this decision. I therefore urge him to think constructively about a great county such as Somerset. We have had our traumas, but we have a team that is blue throughout, and we want to keep that.

[James Heappey (Wells) (Con)]

I congratulate my hon. Friend on securing the debate. Does he agree that, while a referendum is certainly the way to finish this process with full public support, the problem with referendums in recent years is that people have sometimes gone into them with incomplete information at their disposal? We must insist that the county council and the districts fully resource the analysis of all possible courses of action, so that a decision can be made on our future as a county based on all facts, rather than those selectively presented to engineer the outcome the county council desires?

[Mr Liddell-Grainger]

I could not have put it better myself. My hon. Friend does a phenomenal job up on the north flank of Somerset. He is absolutely correct in what he says. We must take local opinion into account—not by saying in some waffly way, “Well, it’s quite a good idea,” but by saying, “A referendum must be held.” As I think my hon. Friend alluded to, his preference would be to go north and look toward BANES, if possible. We need to talk about that. It is no good the county council leader’s turning up in the House of Commons to try to persuade MPs of a course of action.

[John Howell (Henley) (Con)]

I am not from Somerset; I am an MP for Oxfordshire, which of course is thinking of going through a unitary process as well. Does my hon. Friend think it is wise for councils that are thinking about that to share common experience and the enthusiasm that he has for a referendum on these issues?

[Mr Liddell-Grainger]

My hon. Friend and I have worked together for many years, and I totally respect his guidance and thoughts on this. That is a wake-up call to the Minister. We need to have referendums, because this process is not working the way it should. We need to take public opinion into account, and a referendum is the way to do that. The Government need to make sure that they insist on referendums and therefore that we have democratic control, as opposed to a democratic deficit, which is where I started in the first place.

I therefore say to the Minister that this plan is a dangerous, unwarranted and unnecessary intrusion into government in Somerset. We will talk about it and look at it, but at the moment there is no merit in doing it. In fact, it would be more sensible for the districts to take over the county’s functions than for the county to take over the districts’ functions, because the difference is that the districts will not go bust.

16:18

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, for what I think is the first time in my new role. I congratulate my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) not only on securing this important debate, but on his continued engagement on the topic of local government. I have enjoyed the discussions I have had with him in previous parliamentary Committees and debates, and I look forward to many more. It is also a pleasure to see my hon. Friends the Members for Yeovil (Mr Fysh), for Wells (James Heappey) and for Henley (John Howell) contribute to the debate, and perhaps we may have the honour of hearing from my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) later.

My hon. Friend the Member for Bridgwater and West Somerset will have heard me say before that the Government are committed to considering locally led proposals for unitarisation and mergers between councils, where requested. He will also have heard me say that the Government are not in the business of imposing top-down solutions on local government; we wait to hear proposals delivered, developed and initiated by local government.

Only last week, as my hon. Friend mentioned, we discussed in a Delegated Legislation Committee the draft secondary legislation that, if Parliament approves and it is made, would implement the merger proposal that was submitted to the Government by two district councils in Somerset, West Somerset and Taunton Deane. Today we are considering the possibility of Somerset councils wishing to pursue further restructuring to form unitary local government in Somerset.

As my right hon. Friend the Secretary of State for Housing, Communities and Local Government said earlier this month, the Government believe that there is space and scope for unitary authorities, and where unitary authorities can seek to make a difference, the Government will support that. However, we want to hear from the sector itself on the benefits that can be experienced, and we will listen.

There are two unitary councils in the ceremonial county of Somerset—Bath and North East Somerset Council and North Somerset Council. It is important to put on the record that the Government have not received any proposals from the county council or any of the district councils for further unitarisation in Somerset. However, should such locally led proposals emerge, we would of course consider them.

If such proposals were to emerge, the Government have laid out previously the three specific criteria that we will use to judge them. It will be helpful to Members if I lay them out. The first criterion is that the proposal is likely to improve local government in the area, by improving service delivery, giving greater value for money, yielding cost savings, providing stronger strategic and local leadership, delivering more sustainable structures and avoiding a fragmentation of major services.

The second criterion is that the proposed structure is a credible geography consisting of one or more existing local government areas and that the population of any proposed unitary authority must be substantial.

[James Heappey]

Since the county council kicked off this conversation a couple of weeks ago, it has come to my attention that the Government have a figure in mind for what “substantial” means, in terms of the minimum size of an authority. Will the Minister offer any detail on that?

[Rishi Sunak]

My predecessors, the Secretary of State and myself have previously laid out that a unitary authority should contain at least 300,000 people or more. That figure comes from research conducted by the Department in the past. However, each proposal will be considered on its merits.

The third and final criterion is that the proposal commands local support. In particular, the structure must be proposed by one or more existing councils in the area, and there must be evidence of a good deal of local support for it.

[Mr Liddell-Grainger]

Will the Minister say these wonderful words: there should be a referendum?

[Rishi Sunak]

I am afraid that I cannot say those specific words; indeed, that is not the Government’s previous guidance. The criterion is that there should be evidence of a good deal of local support for the proposal, including from business, the voluntary sector, public bodies and local communities.

My hon. Friend will know from the various proposals that the Government have already considered that there have been a range of ways to demonstrate that good deal of local support. Other areas have engaged electoral and polling agencies to conduct representative polling, county and district council members—who represent people in different areas—have voted and extensive engagement exercises and consultation processes have happened. There are various mechanisms, but the key is that, at the end of the day, there must be evidence of a good deal of local support.

I will elaborate a little further on what a good deal of local support means, as opposed to the mechanism for establishing that it is there. We would like to see a good deal of local support, which we assess in the round across the whole area—from business, the voluntary sector, public bodies and local communities. We do not mean unanimous agreement from all councillors, stakeholders, councils and residents. However, we expect as much consensus from councils as possible.

My hon. Friend talked about democratic deficits, and he is right to highlight the importance of local democracy. From parish councils and all the way up, strong local democracy serves communities well and can make a difference to how people live their lives and to the area that they call home. We have seen in previous reorganisations and restructuring an increase in the incidence of parishing, revitalising that most local form of democracy. For example, in Wiltshire, Salisbury became a town council as part of that process. We are seeing similar moves towards parishing in other areas, such as Suffolk, which is currently in the process of a district merger. The Government also have powers to confer charter trustees as part of any reorganisation.

[John Howell]

I agree that proposals will never get unanimous support from councils, but that is not the issue. In many cases when a unitary council has been created, parish councils have not even been asked. If we are to put the emphasis on parish councils as the basic building blocks of local government, they need to be asked and they need to be included in the decision-making process.

[Rishi Sunak]

My hon. Friend makes an excellent point. If a local area tries to demonstrate to the Government that it has a good deal of local support from every possible sector in the local area, parish councils would clearly be a set of institutions that it would be worth considering talking to. Indeed, previous proposals that we have received have specifically engaged parish councils as part of their deliberations. The charter trustee status that I mentioned also means that ancient civic traditions can be retained in an area, regardless of the final form of the restructuring that takes place.

[James Heappey]

I am keen to understand exactly what level of support is required among local authorities. If all or most districts involved in the proposal were against it, would that be sufficient to block whatever plans might come forward?

[Rishi Sunak]

I am afraid I cannot give my hon. Friend a specific quantitative mechanism or definition that needs to be met. I re-emphasise the guidance, which states that a good deal of local support is needed. I have tried my best to elaborate on how that will be interpreted by the Secretary of State when he considers proposals in the round, along with all the other criteria that he has to balance.

I am keen to give my hon. Friend the Member for Bridgwater and West Somerset a minute or two to wind up the debate, so in conclusion—[Interruption.]

[Mr Philip Hollobone (in the Chair)]

Order. In a half-hour debate, Ministers do not have the prerogative to give the Member who brought the debate time to wind up. The Minister has almost four minutes to go.

[Rishi Sunak]

Thank you, Mr Hollobone. I was not aware of that; I appreciate the extra time.

It is important that the councils of Somerset think long and hard about how best to serve their communities and about how to deliver the public services that people rely on, whether adult social care, children’s services, strategic planning or transport. It may well be that innovation and re-organisation will help to deliver for the people of Somerset, but it is crucial to note that that decision should be taken by the people of Somerset themselves. It will not be for the Government to impose a top-down solution.

[Mr Liddell-Grainger]

I will be very brief; I promise I will not wind up the debate, Mr Hollobone. I am confused, because the Minister says that there must be local involvement, but also that local stakeholders must support the proposals. Most of West Somerset’s local stakeholders are not based in the county, funnily enough. Ambulance services are based in Devon, the fire brigade is based in, I think, North Somerset and the police are up in Avon. I would love to know how that will work. I ask the Minister to think this through. The most important people are the 500,000 based in the county of Somerset.

[Rishi Sunak]

My hon. Friend makes a good point, and he is absolutely right to demonstrate that local people should have their say and that their voice should be heard. However, it is also important, when these deliberations are made, that we consider effective local government as one of the criteria. In any local area, there will be institutions and stakeholders, who may or may not be based in that area, who will make a difference to the delivery of local services, and their views will form part of those deliberations.

My hon. Friend started the debate by saying something that I wholeheartedly agree with: local government matters. I take that very seriously, as I know does the Secretary of State. That is why the Government will remain committed to responding and listening to proposals that come forward from local government. We will not seek to impose our view, but where there is a desire and a thrust for more change and innovation—whether in Somerset or elsewhere—we will look to support those involved, according to the criteria I have laid out. In conclusion, I commend my hon. Friend for the continued passion he has shown in ensuring that local democracy in Somerset remains vibrant and strong.

Question put and agreed to.