Public Bodies Bill [Lords]

Baroness Jowell Excerpts

Tuesday 12th July 2011 Commons Chamber

[Tessa Jowell (Dulwich and West Norwood) (Lab)]

I beg to move,

That this House, while agreeing that there needs to be a constant reassessment of the role, effectiveness and relevance of public bodies, declines to give a second reading to the Public Bodies Bill because it fails to provide a full and comprehensive plan for the reform of public bodies; regrets that Ministers have failed to properly cost reforms and identify savings, have failed to understand the important functions performed by some of the bodies affected by the Bill and therefore to provide for credible successor arrangements, have failed to consult properly on proposed reforms with the public and the bodies themselves, and have failed to undertake a proper impact assessment of each affected body; and considers that the overall effect of these failings has been that the House has been presented with legislative proposals which undermine the credibility of the proper processes of government.

It gives me great pleasure to move the reasoned amendment in my name and those of my right hon. and hon. Friends. I have listened closely to what the Minister has said. He was courteous and kind about the treatment of the Bill in another place, but to describe the scrutiny process in the terms he did was an understatement. In fact, the Bill, which in its original form gave him licence to meddle on an unprecedented scale in the affairs of bodies discharging functions on behalf of the public, was not just overhauled, but was mauled by the scrutiny of another place. Lord Woolf said that it was

“a matter of grave concern to the judiciary.”—[Official Report, House of Lords, 9 November 2010; Vol. 722, c. 75.]

The Lords Constitution Committee said that it struck

“at the very heart of our constitutional system”,

and Baroness Royall was not alone in saying that

“this is a bad Bill. It is badly thought out, badly structured, badly executed, bad for the constitution, bad for public bodies and bad for government.”—[Official Report, House of Lords, 9 November 2010; Vol. 722, c. 68.]

I listened closely to what the Minister said were his intentions for the scrutiny of the Bill in the House, and I would like to put him on notice: we will fight with every available argument to ensure proper protection for the Youth Justice Board, which has led to such a dramatic fall in youth crime, and we will fight to honour and see implemented the commitment to the office of the chief coroner. The Minister can deploy a parliamentary majority to vote down the decisions taken in another place, but, as has been indicated already by my right hon. and hon. Friends, as well as other right hon. and hon. Members, he will not be able to defeat the argument in the country over the chief coroner—an argument supported eloquently by the Royal British Legion. I therefore hope that, with humility, he will take heed of the debate and judge it on its merits.

The original Bill, as published by the Tory-led coalition, planned to sell off our forests. I would like to pay the warmest tribute to the campaign so excellently and eloquently led by my hon. Friend the Member for Wakefield (Mary Creagh), which rightly saw a climbdown by the Government and brought together 600,000 people in a campaign against the sale of our national heritage. The original Bill also left 150 organisations in the organisational limbo of what was then schedule 7 of the Bill—sounds innocuous enough, does it not? But Channel 4 was listed, as were the Independent Police Complaints Commission, the Charity Commission, the Criminal Cases Review Commission and the independent Judicial Appointments Commission. All were placed in a schedule that would have left them open to being axed at the stroke of a Minister’s pen.

The process of these reforms has been deeply flawed, and the Government still lack detailed plans for many of the bodies that they are seeking to change, merge or abolish. They have produced a Bill before a plan, rather than a plan before a Bill. Having said that—by way of introduction—of course we support the reform of public bodies and public services. Indeed, before the election, the previous Labour Government had put in place a programme to reform public bodies. That programme must be constant and continuing.

Nevertheless, these organisations carry out an enormous range of important public functions and play an important part in the life of the people of this country, providing support for our universities, our sports culture and the arts, standing up for vulnerable people, holding Governments to account, upholding minimum standards and helping to improve our public services. As the Institute for Government, of which I am a fellow—an unremunerated position—wrote,

“public bodies are now fundamental to the function of Government.”

The needs of the country constantly change and our public bodies must change too, which is why every Government need constantly to reassess their role, effectiveness and relevance. We did that and the Government are doing the same. That is not the issue. When we came to power in 1997, there were almost 1,130 public bodies, and by the time of our 2009 review, we had cut their number to about 750—a reduction of almost one third.

[Simon Kirby (Brighton, Kemptown) (Con)]

The right hon. Lady claims that her Government reduced the number of quangos, but actually spending went up in real terms by about 50%. How does she explain that?

[Tessa Jowell]

We ought to take into account the reduction of bodies at the Department of Health, link to that the significant reduction in the number of bodies announced by the Haskins review of Natural England and consider the systematic reduction in the number of other bodies, as well as the fact that some were merged and others increased their functions. However, in March 2010, we announced plans to go further and faster and to reduce the overall number of bodies by a further 123.

[Mr Maude]

Does the right hon. Lady accept that the biggest reduction in the number of public bodies came through their devolution to the Scottish and Welsh Governments?

[Tessa Jowell]

I do not necessarily accept that that was the largest reduction. However, devolution was one of the most significant policies introduced—and proudly so—by the Labour Government, and of course previously reserved powers were then devolved to the Scottish Parliament and the Welsh Assembly.

A 20% reduction would have saved £500 million from next year. The Minister jibbed at that, but we viewed the process of altering, closing down and merging public bodies as one that should take place systematically over time. Those £500 million of savings would have been realised by next year.

[Mr Kevan Jones]

Does my right hon. Friend agree that a lot of what is being proposed is window dressing, in the sense that even closing down bodies such as the Audit Commission will cost some £400 million in pension liabilities and winding up other assets? When we look at some of those organisations in detail, we see that the payback period might not come for, say, 10 years.

--- Later in debate ---

[Tessa Jowell]

My hon. Friend is obviously correct. I intend to make some progress now, but I will come to precisely that point in a little while.

We would have saved £500 million by 2012-13 as a result of planned and properly costed change and reform. We also accepted that there is scope for further reform. We agree that the Railway Heritage Committee should be reformed and that the National Endowment for Science, Technology and the Arts should enter the voluntary sector. We also support the reform of a number of other significant bodies. The problem is not with reform, nor is it with the tests that the Minister has set for that reform, as I will set out in a moment; the problem is with his ill-thought-out and rushed through Bill. There has been confusion about what the Minister’s motives are. First he told us this week that the Bill was about, as he put it, “sound money”; later we were told that it was about underpinning good government. However, whether the issue is money or good government, the Government’s proposals in this Bill are certainly not the answer.

The Government are asking the House to agree to the abolition of important bodies such as those raised by my hon. Friends in interventions—they include Consumer Focus, the Commission for Rural Communities and the Football Licensing Authority—but the right hon. Gentleman cannot yet tell us what he will put in their place. He has also claimed £30 billion in savings when the reality is that the Government will save £1.6 billion—or less, when redundancies have been paid for.

[Andrew George]

I hope that the right hon. Lady would agree that rather than trading figures for partisan purposes, we need to have a proper audit of what is going on. A moment ago she mentioned the Commission for Rural Communities. As that body is being brought in-house by the Department for Environment, Food and Rural Affairs—that is probably a sensible thing to do—we do not necessarily know whether that will be counted as a saving or whether the costs will be lost from the overall audit of what quangos cost the country. At the end of the day, however, the important point is the one that I made earlier. We need a rural advocate that is independent of all the partisan debate that we have in this place.

[Tessa Jowell]

The hon. Gentleman has set out the precise nature of the debate that will need to take place in Committee, because losing the independence and the advocacy role of a number of these significant bodies will harm the proper process of representing interests that often get too little hearing in this House.

[Helen Goodman]

Does my right hon. Friend agree that what is exposed by the abolition of the Agricultural Wages Board and the Commission for Rural Communities —as well as the proposals on forests, on which there had to be a U-turn—is an attitude of arrogance towards the countryside and the idea that it is not necessary to listen because the Government think that they know best?

[Tessa Jowell]

I certainly hope that the Minister will accept my invitation to rethink some of the Government’s proposals and ensure that the Committee stage involves genuine and proper scrutiny of some of the compelling individual cases. I also hope that he will show proper respect and understanding, not for, as it were, the headline description of a clutch of quangos, but for the vital functions that many such bodies perform—as my hon. Friend has so clearly described—in protecting the quality of life for people across the country in a variety of different ways.

[Oliver Heald (North East Hertfordshire) (Con)]

Will the right hon. Lady give way?

[Tessa Jowell]

If the hon. Gentleman does not mind, I am going to make some progress, as there are lots of Back Benchers who want to speak in this debate.

The approach that the Government have taken in this Bill is the opposite of the clear and costed plan that was produced by the last Government. They are abolishing and merging bodies, in some cases without any idea of what their functions are. Again, I hope that a greater understanding of those functions will result from further scrutiny. Even now, more than 10 months after the review of public bodies began, we are still in the dark over what the Government have planned for a number of the bodies in this Bill. A number of consultations have begun, but the Government are not even waiting for the results. Consultation was eventually promised on the regional development agencies, but it has now been withdrawn because it would disrupt the process of disassembling RDAs that is already under way. Today the Secretary of State for Justice has announced a public consultation on all the bodies that affect his Department, but this will report after the Bill has gone through Parliament. Therefore, the Minister here today is effectively asking this House to give its permission fundamentally to change or to abolish those bodies before his colleagues have decided what will be put in their place.

While the Government cut quangos in this Bill, they are adding hundreds of bodies elsewhere. Let us take the national health service. As a result of the Government’s chaotic approach to the NHS, they have tripled the number of statutory bodies in the NHS, which now number 521. There will now be new shadow commissioning groups and authorised commissioning groups, primary care trust clusters, strategic health authority clusters, clinical networks and clinical senates, all of which will be overseen by the NHS commissioning board, which the chief executive of the NHS has described as

“the greatest quango in the sky”.

The question that we now have to ask the Minister is whether, even with the passage of this Bill, he believes that there will be fewer public bodies in 2015 than when he first entered his Department. What is his baseline number and what will be the number of quangos in 2015? I am happy to give way to him if he wishes to speak at the Dispatch Box. Okay, the House will note the absence of an answer to that question. The Government do not even know how much money they are going to save. In an article in The Sun—the Minister’s newspaper of choice for these purposes—in March, he claimed that the Government would save £30 billion in spending on quangos,

“so we can protect jobs and frontline services”.

What he failed to mention was that the majority of those savings were from cuts to the very front-line services that he had pledged to save. Almost £25 billion are from cuts to housing and universities, with almost another £2 billion from our arts, our sports and our museums. Only £2.6 billion of the claimed savings were from actual administration, and even that figure has now come under scrutiny.

In written evidence submitted to the Public Administration Committee, the Minister’s own Department admitted that only £1.6 billion of cumulative administrative savings can be found. Perhaps the Minister would like to explain to the House where the other £1 billion of administrative savings are likely to come from. [Interruption.] Again, the Minister appears not to know where the administrative savings will come from, and this is before the Government have even looked at redundancies, which are a major cost of any organisational transformation. The Local Government Chronicle has estimated that the bill for redundancies at the RDAs alone will cost the Government at least £100 million, yet the Department for Business, Innovation and Skills has not even estimated how much they will cost in this financial year. Information gathered from parliamentary answers shows that out of all the Departments affected, only two have so far made estimates of the likely costs of redundancies, neither of which is the Department headed by the Minister. The Minister should take this opportunity to admit to the House that he has no idea what the net savings will be from his reform of public bodies, and no idea of the cost of the redundancies. This deeply flawed Bill is part of a deeply flawed, ill -thought-out programme of reform that could well end up costing more money than it is projected to save.

[Mr Maude]

I want to make it absolutely clear, as I have done before, that these are cumulative administrative savings over the spending review period of £2.6 billion, and that they are net of restructuring costs—[Interruption.] That was made absolutely clear in March, in my response to the Select Committee. The right hon. Lady has lots of suggestions for what should not be done in the Bill; has she any suggestions for what should be done to reform the quango landscape?

[Tessa Jowell]

Yes, we certainly have. I should like to refer the right hon. Gentleman to the programme of reform that was clearly set out by the previous Government, on which I am sure full information is available in his Department. If not, I am happy to provide it for him. It involved £500 million-worth of savings by 2012-13.

Let me now turn to some of the specific bodies listed in the schedules to the Bill. When the Minister began this process of reform, he said that public bodies would be allowed to remain if they fulfilled one of three criteria—namely, if they performed a technical function, if they dealt with issues that required political impartiality or if they needed to act independently to establish facts. I should like to say to the Minister that those are good, rigorous tests of public bodies.

Let us apply those tests to the Agricultural Wages Board. If the Minister believes that we should preserve bodies that perform an important technical function, surely the board should be removed from the Bill, because it sets the pay of 140,000 people in England. That also covers holiday pay, sick pay and overtime. If the board is abolished, fruit pickers and farm workers will see their wages fall. Workers could lose between £150 and £265 a week in sick pay, because that would no longer be guaranteed. School-age children working at weekends or in summer jobs will also lose out. The Farmers Union of Wales has warned that

“unless there are systems in place to protect payments to agricultural workers, the industry will not attract the highly skilled technicians it needs to thrive.”

I hope that the Minister will recognise that Labour is seeking to help him by today launching our “Back the Apple” campaign, which shows our commitment to fairness in the countryside and our backing for the Agricultural Wages Board. It is a precious asset that helps to ensure the decency of fair wages and to enable people working in the countryside get a fair deal.

[Andrew George]

rose—

[Tessa Jowell]

Let me turn briefly to the Commission for Equality and Human Rights—

[Andrew George]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. There should be only one person on their feet. If the shadow Minister does not wish to give way, the hon. Gentleman should recognise that fact.

[Tessa Jowell]

Thank you, Mr Deputy Speaker. The hon. Member for St Ives (Andrew George) did not catch my eye—

[Andrew George]

rose—

[Tessa Jowell]

I must make some progress; I am sure that the hon. Gentleman will have a chance to speak later.

The Minister’s second criterion for the preservation of bodies was that they should deal with issues that require political impartiality. The Commission for Equality and Human Rights is an example of one such body. It exists to break down inequality and to build opportunity and the type of society in which fairness and a life of dignity and respect are not merely an ideal but a fact. The commission’s inclusion in schedules 3 and 5 to the Bill leaves it open to being rendered ineffective by having its constitution altered, or its functions amended or transferred. I ask the right hon. Gentleman to think again. Only a year ago, the coalition told us that it was going to “tear down” the barriers that people faced as a result of who they were, and that it would stand up for fundamental human freedoms. In defending the Commission for Equality and Human Rights, will he stand up for the fundamental human freedom that it represents?

The third type of body to be preserved under the Minister’s tests are those that need to act independently to establish facts. Consumer Focus is an excellent example. It is the statutory consumer champion, and it has strong legislative powers.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

My right hon. Friend might not have been in the Chamber earlier this afternoon when the Secretary of State for Energy and Climate Change referred to the need for a strong consumer champion in the energy market, especially as there is effectively a cartel of six big energy companies. Given that the functions of Consumer Focus are effectively being transferred to Citizens Advice, does she acknowledge the concern that the work of those two bodies in protecting the consumer involves two very different skill sets?

[Tessa Jowell]

My hon. Friend is absolutely right. The combination of the regulatory responsibility of Consumer Focus and the voluntary responsibilities and representation involved in Citizens Advice’s role is wholly inappropriate. I hope that the Minister will think again on that proposal as well.

I want briefly to refer to S4C, which also remains in the Bill. S4C is vital to sustaining the Welsh language’s prominence in Welsh culture and society. We therefore hope that the Minister will agree to the independent review of S4C for which the leaders of all four main parties in Wales have called.

I also want to deal briefly with the office of the chief coroner and the Youth Justice Board. I urge the Minister to stick to the settlement that was concluded in another place in this regard. As has already been mentioned, the introduction of the office of the chief coroner received cross-party support when it was legislated for in 2009. There is a desperate need to improve the coronial system, which fails too many families. Establishing such a system is also a central obligation under the military covenant. I hope that the Minister will heed carefully the words of Chris Simpkins, the director general of the Royal British Legion, who has said that he believes that

“this decision would be a deep betrayal of bereaved Service families. We anxiously await a response that will satisfy us that the interests of Service families will be represented.”

Over the course of the last Parliament, the Youth Justice Board oversaw a 43% reduction in first-time youth offenders, by working with youth offending teams to focus on the causes of crime. In another place, Lord Woolf said:

“this initiative has been wholly salutary. It…gave new hope to all those who were concerned for this area of our justice system. The best test of the innovation is to ask, “Did it work?”…the balance sheet would show a huge improvement”.—[Official Report, House of Lords, 28 March 2011; Vol. 726, c. 961.]

I hope that, during the Bill’s progress through the House, the Minister will consider carefully the power of these arguments from people of the utmost distinction and sincerity.

In conclusion, let me reaffirm our support for reform, while stating that it needs to be planned, properly costed and undertaken on the basis of clear necessity and an understanding of the context in which these bodies operate. The way in which the Government have conducted this legislation to date has been an affront to decent process. I now call on Members of all parties, having properly considered the important role and function of many of the bodies that so clearly meet the Minister’s test, to rebuild the shaken confidence in this legislation and support our reasoned amendment in the Lobby this evening.

[Several hon. Members]

rose—