Baroness Hollis of Heigham
Main Page: Baroness Hollis of Heigham (Labour - Life peer)Local Government Bill [HL]
Baroness Hollis of Heigham Excerpts
Lord Tope
Unless something much more revolutionary than I expect is taking place, a change of parliamentary boundaries, which happens fairly regularly, does not entail the wholesale restructuring of the local authorities in an area, and that is where the expense arises. So the answer is no.
I have said it before and I want to say it again because we keep going over the same ground. If there is any message coming from this House—personally, I believe strongly that local government actually knows best and should be left to get on without messages from this House or anywhere else—it should be this. If noble Lords opposite have any influence, particularly with the city councils concerned, they should use that influence to urge these councils and councillors to try to put the difficult and emotional past few years behind them and to build new and constructive relationships so that they can work together co-operatively in the way we have talked about.
There is already evidence that that is happening in both Exeter and Norwich and Devon and Norfolk. We should encourage that; noble Lords opposite should spend their time and energy encouraging that to happen. We on this side of the House should do the same, particularly in relation to the counties. Where we have friends and influence, we too should recognise that the cities believe that they have grievances. Whether or not we accept that they are justified, let us accept that they are truly felt and work together to try to overcome that and to build a positive and constructive relationship between authorities of whatever nature, better to serve their people in what will be an extremely difficult, three, four or five years to come.
Baroness Hollis of Heigham
My Lords, I will be brief. Fairly obviously, I support these amendments. Does anyone in this Chamber doubt that unitary government, especially for cities, is the most effective form of local government and offers the best value for money? I was a Norwich city councillor when we were unitary before 1974 and know what it has meant for the city of Norwich.
Basically, unitary structures offer at least four gains for the people who local councillors seek to represent. First, they offer better integrated services. This is because services are all on one tier and you can make decisions out of the box, so to speak, and across the lines—particularly, for example, in housing and social services. When I was a very young councillor and chair of Norwich’s housing committee, my vice-chair was the chair of what was then called, in those pre-Seebohm days—the noble Baroness, Lady Shephard, will recall this—the welfare committee. The result was that we could produce halfway houses for battered wives and supported accommodation for those with severe learning difficulties because we ran housing and social services as one semi-common service. That is no longer possible. Now services are fractured and, frankly, it is a full-time job being poor and vulnerable.
The second gain from unitary structures for cities is better value for money—I shall in a moment engage with the comments made by the noble Lord, Lord Tope—because it avoids duplication, for example, on economic development, and the toing and froing on planning applications between two tiers. As I have told the House on previous occasions, when I was leader of Norwich City Council, development opportunities that would have brought 600 to 800 jobs to the city of Norwich were lost when the developers walked away after they learnt that they would have to work with two tiers. I do not doubt that the county would have been supportive—I have no reason to think it would have blocked it—but the point is that for those seeking to come to the city the structure of local government was seen as an impediment to what they wanted—which was quick, easy, simple, transparent and responsive comments to their proposals.
Not only is unitary better for value for money in terms of avoiding duplication, it is also cheaper—and here I shall tackle the points made by both the noble and learned Baroness, Lady Butler-Sloss, and the noble Lord, Lord Tope. For I think the third time, the noble and learned Baroness, Lady Butler-Sloss, has quoted the Permanent Secretary as the auditing officer saying that this did not represent best value for the money; and for the third time I shall attempt to appropriately correct her understanding of what the Permanent Secretary was saying. He was indeed saying that unitary Norwich and unitary Exeter were not best value for money—but compared with what? It was compared with a unitary county of Norfolk and a unitary county of Devon which wiped out the rest of local government—an outcome that no one except the Permanent Secretary and the Boundary Committee supported. Indeed, the county of Norfolk, I understand, would have taken out a JR against the recommendation of the Permanent Secretary. It is simply misleading and fallacious to quote the Permanent Secretary, as the noble and learned Baroness has done on several occasions—
Earl Cathcart
My Lords, two separate Labour Secretaries of State said on three separate occasions that a unitary Norwich would not give value for money. Is the noble Baroness saying that they were wrong?
Baroness Hollis of Heigham
No, my Lords. We were then in a very different economic situation. What is more, when this process was started, with a Liberal Democrat minority administration running the city of Norwich, the financial figures were incomplete. The revised financial figures, which have been accepted by the department and embedded in its impact analysis—it is available to the noble Earl and I am sure that he has studied it—show that the original figures have been overtaken by events. I shall proceed to give the revised figures in a moment.
Perhaps I may continue my response to the noble and learned Baroness, Lady Butler-Sloss. In the hierarchy of value, the cheapest option is a unitary county of Devon and a unitary county of Norfolk, which nobody wants. The second-cheapest option is unitary Norwich and unitary Exeter. The most expensive option, which neither the Permanent Secretary nor the noble and learned Baroness mentioned, is the status quo, which is exactly what the Minister is proposing in the Bill. Therefore, I hope that if we revert again, for the fourth time perhaps at Third Reading, to the Permanent Secretary as the chief auditing officer, it will be with all three options in mind and not just the two.
The Minister’s own figures in her recent letter of 22 July, which have already been quoted by my noble friend Lord McKenzie, show just how substantial would be the cost savings and value for money resulting from unitary structures. This is where, I suggest, the noble Lord, Lord Tope, is wrong. The Minister’s letter—I am sure that he has it to hand, so that he can confirm the statistics that I am about to quote—shows that, from year 2, the savings will exceed costs. To deny local authorities the opportunity to achieve those savings is to add to the costs and council tax of local citizens at just the same time as the Government are requiring cuts of 25 per cent or more. The Minister’s letter shows that, by year 2 of the transition period, savings will exceed the cost of transition and that, by year 4 and thereon, the savings will be nearly £4 million a year for the city of Norwich. Norwich has around 40,000 properties and the savings from unitary structure will be £4 million. In other words, there would be savings to every household in Norwich of £100 a year on the Minister’s own figures if Norwich were to be unitary. That £100 a year has been denied the people of Norwich and similarly, I presume, the people of Exeter, either through their being better off or the authority being better able to provide appropriate services. I therefore hope that when the noble Lord, Lord Tope, says that we cannot afford the cost of reorganisation, he is respectful of the Minister’s own figures, from her own letter of 22 July, which show exactly the opposite.
The third argument for unitary status, over and beyond better services for our citizens and better value for money, is greater citizenship, accountability and transparency. City hall becomes a one-stop shop. I always knew when someone was about to complain, because they stopped talking about the “city council” of Norwich and started talking about the “city corporation” before letting fly. People in the Norwich area have something like four local authorities providing their services. Of course, they do not know who does what, to what standard, at what value for money or with what outcome. We are then surprised by low voter turnouts for elections to authorities whose very structures and very responsibilities baffle most citizens. After all, under some of our existing two-tier structures, local authorities are increasingly run by the few people who can be bothered to stand, elected by the few people who can be bothered to vote. Voting turnout is, usually, significantly higher in unitary authorities and significantly lower in two-tier structures precisely because there is not the democratic deficit in unitary government that there inevitably is in two-tier structures.
Lord Tyler
My Lords, I had not intended to participate in this debate, but I am moved by the eloquence of the Howarth-Hollis panegyric in favour of county unitary status, as that seems to be the sheer thread of their argument: unitary authorities—county unitary authorities, rather than city unitary authorities—avoid the duplication that has been referred to at such length.
Baroness Hollis of Heigham
My Lords, let me clarify one point. I spoke of unitary authorities, especially for cities. I do not have a particular commitment to what may happen in very large rural counties. I repeatedly made the point that I was talking about city services.
Lord Tyler
But the argument advanced by the noble Baroness and the noble Lord was much more applicable to counties.
I was a member of Devon County Council in the long-distant past, when I was very young—I was 22. I then had the experience of seeing the County Borough of Torbay taken out of Devon. It was disastrous both for Torbay and for Devon. More recent experience that I have had would be more applicable and relevant to this debate. As a member of the board of the Devon and Cornwall Business Council until relatively recently, I was struck by the extent to which businesspeople in Exeter saw the value in the long term of a unitary authority for the whole county of Devon because Exeter is the county town of Devon. It is the natural centre, culturally, socially and economically, and has an amazing effect on the whole network of relationships in Devon. I speak not from personal experience of Norwich, but I think that my noble friends from that area would agree that it is similar in terms of being the county town of Norfolk. That may not be the case with other unitary authorities in other parts of the country.
What I am absolutely clear about is that, in the terms set out by the noble Lord, Lord McKenzie, we are where we are. To reopen the issue at this stage as the duet have encouraged us to do would be absurd, entirely inappropriate and against the decision taken by this House just a few weeks ago. Certainly, it would be against the mandate given to both parties in the coalition just a few short weeks ago.
There is a case for more unitary authorities. It was advanced extensively and deliberately for the county of Cornwall in recent months and I think that it will prove a success, but that was in different economic circumstances. To reopen this issue in the terms that the noble two over the way have suggested, at this stage, with this particular amendment, seems to me totally irrelevant and to show disrespect for the procedures of this House. It may be that in future there will be another case for looking again at local government in Devon and Norfolk. If so, we would need to look at the relative economics of a unitary authority for the whole of those counties—I am sure that this applies for the business communities in both counties—rather than simply reopening the issue of the status of Norwich and Exeter. But that is for the future. As far as today, this Bill and these amendments are concerned, I think that we should move on.
Baroness Hollis of Heigham
My Lords, I support the amendment moved by my noble friend Lord Rosser. Time after time in this saga, we have had erroneous or misleading or missing advice from the Department for Communities and Local Government. Not only has that contributed to the mess we are in; it has also contributed enormously to the cost to Norwich and Exeter—which, I emphasise, have behaved impeccably, legally and lawfully every step of the way. They are the innocent parties in this. They responded to an invitation, which was approved, and then found themselves in this quagmire. As my noble friend has quoted, on 5 July, when talking about the by-elections, Mr Justice Ouseley referred to the,
“preferred option of the interested parties”—
Norwich and Exeter—
“who are not themselves to blame for the pickle in which they find themselves”.
I repeat, as did my noble friend, that the judge was quite clear that Norwich and Exeter were not to blame.
By implication, therefore, much if not all of the responsibility lay at the door of the department—which has continuously given faulty, erroneous, misleading or missing advice. According to the judge, in December 2009 and January 2010, the department could and should have sent out a letter notifying the four interested parties that there were additional considerations to be taken into account. That, says the judge, would have met his concerns and there would have been no quashing of the orders. That letter did not come. I cannot believe that my right honourable friend in the other place would have refused to send out such a letter had he been advised of its prudence.
We then had a Bill that was so loosely drafted by the DCLG that it was arguably hybrid. However, as that was never argued before the examiners, for by then we had the court ruling, the argument that it was hybrid went effectively by default. Given the court’s judgment, councillors who had legally not stood for re-election last May now found themselves unseated. However, the court action was taken by Devon and Norfolk against the DCLG, not against Norwich and Exeter. Norwich and Exeter were, if you like, interested parties. The action was taken by the two county councils against DCLG. If, as the judge says, Norwich and Exeter are in no way to blame for this and they have been innocent parties throughout, why should they pick up the bill?
It seems profoundly unfair that Norwich and Exeter—which have behaved impeccably and legally throughout, as the judge has confirmed—should pick up the bill for the DCLG’s mistakes. I cannot believe that any of your Lordships would think that that is right, fair or proper.
With such a litany, I should hope that the Minister will take this back and ask her department to think again about the moral propriety of shrugging their shoulders and saying, “Tough, Norwich. Tough, Exeter. You’ve behaved legally, properly and innocently throughout but you’ll have to pick up the bill for our mistakes”. I have never known such a casual attitude in government to the assumption of responsibility. I very much hope that the noble Baroness will respond to my noble friend’s amendment.
Baroness Butler-Sloss
My Lords, I have one point to make on this. At the preliminary hearing, Devon and Norfolk asked for an expedited hearing so that these matters could be dealt with before the election. The two cities said that they would prefer the risk of by-elections to an early hearing by the court. So much if not all of this has been brought upon Exeter and Norwich by asking the judge for the case to be delayed until after the hearing.
Baroness Anelay of St Johns
Perhaps I may assist the House. This is Report. If the noble Baroness, Lady Hollis, wishes to keep to the rules of Report laid down in the Companion, I suggest that she ask the noble and learned Baroness, Lady Butler-Sloss—before the noble and learned Baroness sits down—to make a clarification, but that the noble Baroness does not ask further questions or make any further statement on her own behalf or on behalf of others.
“(2) Subject to subsection (2A) this Act comes into force on such day as the Secretary of State may by order appoint.
(2A) No order may be made under subsection (2) until the Secretary of State has made, in respect of each area for which a relevant order had been made under section 7 of the 2007 Act, a budgetary and financial planning order.
(2B) A budgetary and financial planning order made under subsection (2A) shall require the County council in the area concerned to provide the district council periodically with budgetary and financial planning information including—
(a) disaggregated expenditure and income data for the services it provides and the activities it undertakes with the district council,(b) a fully disaggregated medium term financial plan for all its services and activities within the district council.(2C) A budgetary and financial planning order under subsection (2A) shall specify the date by which the first information must be provided, and the frequency of subsequent provision of information.
(2D) A budgetary and financial planning order under subsection (2A) shall be made by statutory instrument.”
Baroness Hollis of Heigham
My Lords, the Minister has kindly written to those of us who participated in Committee and challenged her assessment of the costs and savings of Norwich and Exeter going unitary, and we are grateful. This amendment seeks to build on her information and take it forward to build the partnership that she in previous discussions and, today, the noble Lord, Lord Tope, have called for. In the impact assessment, at Second Reading and in Committee, the Minister regularly referred to the £40 million of transition costs and how these were unaffordable. That has been repeated again today.
When intervened on because the £40 million took no account of savings, the Minister said:
“I refer to gross costs because that is what we are talking about”.—[Official Report, 14/7/10; col. 709.]
It was of course what the Minister was talking about. It was not what we are talking about and in public policy terms makes no sense whatever. What matters is not gross costs, but net costs.
Let me give a simple example. Someone’s water rates are, say, £100 a year. A meter costs £100 but would reduce the bill by half to £50 a year. After two years there would be a continuous saving if you went from being on the rates to having a meter. Would the Minister really say that the only figure that mattered was the gross cost—the £100 cost of the meter—say that it was unaffordable and refuse to fit the meter to reduce costs even though she could recover the cost in savings, the payback time, in just over two years? Of course she would not; nor would anyone in this House. If necessary, she would spread the cost of the savings over the two years. She certainly would not tell us to share the house with another family so that in partnership we split the full water rates bill between us. The decision surely to fit the water meter we would all think is a no-brainer.
I ask noble Lords to forgive the analogy, but essentially that is what the Minister is doing here. She is not going for the straightforward option of calculating net savings with the purchase of a water meter, but suggesting that house sharing might possibly achieve the same effect. That is the position of the two authorities.
The Minister said in her letter of 22 July that the cost of creating a unitary Norwich during the transition period to 2014 would be £20.1 million and that savings for the same transitional period would be £22 million. From year two onwards, the Minister has identified savings, by full rollout, of almost £4 million a year. So there would be net savings over the first four to five years of nearly £2 million, and thereafter annual savings of nearly £4 million a year to be achieved by a unitary Norwich. In other words, the savings made by fitting a water meter would kick in at year two and it would have more than paid for itself by year three or four. Frankly, in all my time as a Minister, that is as good a return on capital in terms of investment to savings that I can recall. On the Minister’s own figures set out in her letter, savings would outpace costs after year two and thereafter would produce annual savings of £4 million a year.
Baroness Hanham
My Lords, I thank the noble Baroness, Lady Shephard, for her contribution, because she has summed up very clearly what the attitude ought to be about this. It is not government business to try to ensure that counties and districts get on together; nor is it government business to ensure that just one or two authorities are required to provide financial information. Public information is public information; if it cannot be obtained under normal freedom of information rules, there are ways of making sure that you get it. What worries me about how the noble Baroness, Lady Hollis, has put this forward is that she seems to be suggesting that there are such desperate animosities between the city and the county that it is absolutely impossible for this to work. I do not believe that in democratic government it is impossible for authorities to work together in a common cause.
The noble Baroness also said that I have said that savings must come now rather than through a reorganisation. Indeed I have, and that is not confined to Norfolk and Norwich. It is going to be a general view and a general situation across the country that serious savings will have to come. If we are talking about £6 million a year—I think those are the savings that it was suggested would be made—within that confine, the amount that has to be provided may be within those regions and it may not. Yet savings will surely have to be made in co-operation with Norfolk to ensure the preservation of services and the local community.
I am not going to accept the amendment. As I said on another amendment, the Government do not have any role in this. I hope only that people will hear what we say: that there will be have to be good co-operation at all levels of government over the coming months and years to ensure that, one way or another, we scramble out of this terrible financial situation in which the previous Government left us.
Baroness Hollis of Heigham
My Lords, we have had two contributions from the noble Baroness, Lady Shephard, and the Minister, who both make the same point—that government cannot legislate for local authorities to get on with each other. I completely agree, but that is not what this amendment does. They have answered a wider point about city and county relationships but not addressed the substance of the amendment, which asks for disaggregated financial information so that the city has the same information as the county has about the network of services that the county provides within the city—and, if the county wishes it, vice versa. That is all.
No one is legislating for good will. That is impossible—of course it is—but I am not even calling for that. I am calling for the financial information that local authorities and their citizens are entitled to have in order to review and provide effective delivery of services. If we do not have information, we cannot make the savings that we want. I agree with almost everything that the noble Baroness, Lady Shephard, said, but it was beside the point. I agree with most of what the Minister said—except that she will not accept the amendment—but that was beside the point. The amendment says that the county must provide this information. What does the Minister suggest? FOI. I suppose that we could down 150 requests for freedom of information to drag out of the county information that should be brought to light for the city. That is what we are talking about—financial information. It is right that you cannot legislate for goodwill partnerships, but how can we build effective value for money and make the savings that the Minister insists can be made this way, rather than by reorganisation, if we do not have that information? Can I please be told how we can do it? We cannot. We have had no answer from the Minister or the noble Baroness, Lady Shephard, although I agree with every word that she said. Therefore, I want to test the opinion of the House.