Local Government Bill [Lords]

Caroline Flint Excerpts

Thursday 21st October 2010 Commons Chamber

[Caroline Flint (Don Valley) (Lab)]

I am looking forward to a number of exchanges with the Secretary of State across the Dispatch Box in the months—but, hopefully, not too many years—ahead. Just for the record, the right hon. Gentleman and I did attend a conference in Paris, but I am pleased to say that Mrs Pickles was there, as was my husband.

Characteristically, the Secretary of State made an attempt at an entertaining speech, but in doing so, he completely ignored the views of people in Exeter and Norwich and their desire for true localism in their communities. He exercised a typically liberal relationship with some of the facts. Following yesterday’s announcement of devastating cuts to local councils, the future of local Government is on all our minds. As we highlighted during Question Time, the cuts are much worse than those faced across the board in Whitehall Departments and far deeper than is necessary to deal with the deficit—and they are cuts of his choosing, not of necessity.

Let me make it clear at the outset that Labour believes in the benefits of unitary authorities, and we support the aspirations of Norwich and Exeter to achieve unitary status. Each application must be considered on its merits and on a case-by-case basis, but in principle we believe that strong local leadership and clear accountability are harder to achieve where local government has a two-tier structure. The Conservatives used to believe that too. The last time that they were in power they created 100 new unitary authorities.

The Liberal Democrats used to believe it as well, but—like their pledge not to increase VAT and their six-point plan to scrap tuition fees—their commitment to unitary authorities in Norwich and Exeter has been thrown on to the scrap heap of abandoned promises. Their policy paper, approved at Liberal Democrat party conference, states:

“Having several tiers of government can not only lead to confusion over which tier is responsible for what, but can also mean that some councils seem very remote from the communities they serve. The Liberal Democrats therefore believe that there should be a single tier of local government.”

Let me deal with a few of the arguments advanced by the Secretary of State. He says that the decision to set up unitary authorities in Norwich and Exeter does not represent value for money. He says that it will cost £40 million. That is simply not true. What he fails to mention is that the very same document from which he got those figures—the impact assessment, produced by his Department—also shows that in the same period savings of £39.4 million would be made; and in the years after that, annual savings of £6.5 million would be made. Now, if the Secretary of State does not understand the difference between up-front costs and ongoing savings, I fear that we really are in trouble in the stormy waters ahead. As his Minister in the other place, Baroness Hanham, was forced to admit, if Norwich and Exeter were given unitary status

“there ultimately would be savings”.

That is the reality.

Granting Norwich and Exeter unitary status would save the taxpayer money. The Government’s position is voluntarily to forgo the opportunity for Norwich and Exeter to save the taxpayer £6.5 million a year. The Secretary of State is within his rights to reject the application—that is his prerogative—but let him at least do it on the basis of the facts.

As for the letter of instruction from the permanent secretary, let me say this. In the end, officials are there to advise. They do not take decisions and are not accountable to Parliament. Ministers must make decisions and I believe that the previous Secretary of State was right to take the decision that he did. What the permanent secretary said was that creating unitary authorities to include the entire counties of Devon and Norfolk would create greater savings. The only problem with the proposal, however, was that it was never a viable option. The only people who appear to have supported the proposal were the permanent secretary and the Boundary Commission. It had no local support whatever, either from the cities of Norwich and Exeter or indeed from the counties of Norfolk and Devon, and it would not have met the criteria laid out by the Secretary of State.

What the permanent secretary did not say, as the Secretary of State suggested, was that the existing arrangements offered better value for money than creating unitary authorities in Norwich and Exeter. How could the right hon. Gentleman say that? As we have seen, the impact assessment produced by the Department shows clearly that after the initial up-front costs—amounting to £600,000—there would be year-on-year savings of £6.5 million. The worst value-for-money option—the most expensive option—is the current arrangement, but that is the one for which the Secretary of State has opted. So much for value for money.

Let me also deal with the points made in the High Court ruling. Of course, we accept the judgment. However, this is a political issue and it is right that it should be hammered out and determined by Parliament. The provisions relating to Exeter and Norwich were not imposed by anyone. They were debated in Parliament for more than seven hours, voted on, and approved in both Houses of Parliament. In this House and in the other place, a clear majority supported creating unitary authorities in Norwich and Exeter.

Let me remind the House that Mr Justice Ouseley made no criticism whatever on the merits of creating unitary authorities in Norwich and Exeter. He was absolutely clear that the Secretary of State was entitled to make a decision on the matter, and that it was perfectly reasonable for him to take the prevailing economic circumstances into account. He simply said that the consultation process was not adequate. The Secretary of State was not able to consult more fully than he did because of the length of time that it took for the proposals to reach him. Owing to a series of judicial reviews and legal challenges, the proposals were twice postponed and took a year longer than expected to reach the Secretary of State, which substantially reduced his ability to consult more extensively.

Mr Justice Ouseley was at pains to emphasise that his ruling in no way prevented the Secretary of State from bringing forward the proposals again after a short period of consultation, but this Secretary of State has chosen not to do so. He has chosen to deny the people of Norwich and Exeter the chance to run their own cities. The fundamental point here is what is right for Norwich and Exeter.

[George Hollingbery (Meon Valley) (Con)]

Can the right hon. Lady remind me who set up the rules and regulations under which this process made its way to the judicial review, and can she remind me of the outcome of that review in terms of the process followed by the previous Government?

[Caroline Flint]

The criteria were set up by the Labour Government as guidelines to inform the Secretary of State when making decisions about this case. Every proposal, as I have said, has to be dealt with on a case-by-case basis, taking into account the circumstances when the applications are made and reaching the point of final decision.

[George Hollingbery]

rose—

[Caroline Flint]

I wish to make some progress and I hope to deal further with some of the points that the hon. Gentleman has raised. I will be happy to give way to him again later.

The Government’s assessment of the original bids in respect of Exeter and Norwich found that they satisfied all the criteria except for the payback period for the transition costs, which was estimated to be six years rather than five. However, given the small transition costs owing to the year-on-year savings—and given the economic circumstances at the time and the overriding priority of supporting economic growth and creating jobs—we believed that there were compelling reasons to create unitary authorities in Norwich and Exeter.

[Brandon Lewis (Great Yarmouth) (Con)]

The right hon. Lady has mentioned what she called the small cost of the transition and the savings of £6.5 million to be made. However, those savings are for 2015-16 onwards. Was it the previous Government’s view that the massive upheaval and uncertainty for those counties and what is actually a large sum of money—even if she called it a small amount—was worth it in the hope that, in five years’ time, those savings would be delivered? Given how much the economy has changed in the past five years, the chances of seeing those savings seem slim.

[Caroline Flint]

As I have outlined, and as is clear from the impact assessment provided by the Department, the most expensive option is the status quo. I am sure that my hon. Friends will make the point that in both Exeter and Norwich the local authorities are the driving engine for jobs and economic progress in their regions—[Interruption.] Yes they are, and therefore the opportunity to enhance Norwich and Exeter as cities of importance and expand their already good track record—as the people and businesses in the areas wanted—has been lost, because the Secretary of State does not recognise the truth of the situation.

The criteria exist to help the Secretary of State decide on the merits of an application. No set of criteria, however exhaustive, can make a decision—a judgment always has to be made. The point that this Secretary of State does not seem able to grasp is that, in essence, what we are debating is what is right for the people of Norwich and Exeter, what will deliver the best services for them, and what they want for their cities. Time and again, the Secretary of State has said that the proposals were not supported by local people. As he well knows, that is simply not true. He talks as if the proposals were somehow imposed by the Labour Government, for political purposes, against the wishes of local people. Nothing could be further from the truth, and if the Secretary of State does not believe me, he should go to Norwich and Exeter for himself. The people there will tell him what they think. Indeed, they already have. The fact that Labour made gains and the Tories suffered losses in both Norwich and Exeter in what were, essentially, single-issue by-elections will surely not have escaped his notice. In fact, the original move to become a unitary authority in Norwich was made by a Liberal Democrat—the Secretary of State’s coalition partners—not by the Labour party. The proposal enjoys cross-party support on the council and in the city. Opinion poll after opinion poll has shown that local people support the principle of single-tier local government in the city by a margin of two to one.

I pay tribute to the work of my former right hon. Friend, Charles Clarke, and the noble Baroness Hollis for the tremendous leadership that they have shown for the people of Norwich. The hon. Member for Norwich South (Simon Wright), who follows in my former right hon. Friend’s footsteps and sits on the same Benches as the Secretary of State, also supports unitary status, as does his wife, a city councillor in Norwich. A few days before the election, he said:

“It is very much a positive step…I broadly welcome a unitary Norwich. I think it is a good thing in terms of the democratic voice for the people of Norwich.”

We wait to see whether that is still his view today, or whether what he said has gone the way of so many other Liberal Democrat promises.

We all know what a thing the Secretary of State has about council-funded newspapers, so I know that he will be keen to hear the views of the independent Norwich Evening News on the matter. Its editorial after the decision was announced was clear:

“Unitary decision is a wonderful opportunity”.

The same is true in Exeter, where the move to unitary status is supported by all four parties on the city council, including the Conservatives. In a vote in December 2009, the city council overwhelmingly agreed, by a margin of 31 votes to two, to support the city’s bid for unitary status, but the Secretary of State, sitting at his desk in Whitehall, thinks that he knows better than the people of Exeter.

The Secretary of State would be well advised to pay close attention to my right hon. Friend the Member for Exeter (Mr Bradshaw) when he speaks, because he has been a champion for his constituents on this and many other issues, and he knows what the people of Exeter want. Failing that, the Secretary of State should at least listen to his own party members and councillors in Exeter, because they support a unitary authority too. Let me remind the House of the words of Councillor Yolanda Henson, the leader of the Conservatives on Exeter city council. She said:

“We have always backed the Exeter unitary bid and said we would like to control our own destiny. We represent the people of Exeter and, of course, my colleagues are going against what we are going to get and they are going to lose.”

I think that she was talking about the Secretary of State.

What people in Norwich and Exeter will remember is that it was a Tory Government, in 1974, who abolished their unitary councils, after hundreds of years of self-government. They will not forget that it is a Tory Government, with Liberal Democrat cheerleaders, who have prevented them from running their own cities again. Norwich and Exeter are great, proud cities, with long histories of self-government and a desire to manage their own affairs. What this Bill really exposes is the gaping hole at the heart of the coalition’s plans to give greater powers to local authorities and local communities. The Conservatives say that they want to devolve power to local government and local people. The Secretary of State said:

“If you want to restore faith in politics…if you want people to feel connected to their communities, proud of their communities, then you give people a real say over what happens in their communities”.

He also said that he wants to

“put town halls back in charge of local affairs”—

just not in Norwich or Exeter. He says that he wants localism, but he is not happy for the people of Norwich to decide for themselves what time they turn their street lighting off, how they fund their schools, or which children’s centres should be spared the devastating cuts that the Government have imposed on them. That is his form of localism.

What does all this say about the Government’s policy on unitary authorities? The last time the Conservatives were in power, they set up nearly 100 unitary authorities across the country. Now we learn that they just do not believe in them any more. In the other place, the noble Baroness Hanham confirmed their policy, saying that

“the Government have no plans to issue further invitations for unitary authorities”.—[Official Report, House of Lords, 30 June 2010; Vol. 719, c. 1832.]

So there we have it: the Government believe that two-tier systems are more efficient, more accountable, and better value for money than single-tier unitary authorities—with counties disposing of waste and districts collecting it; districts dealing with town planning and counties dealing with transport planning; districts cleaning the pavements and cutting the grass, and counties keeping the roads clear; and with all the separate back-room functions that that entails. So much for simplification, reducing duplication and cutting bureaucracy.

Like on so many things, the Secretary of State appears to be all talk and no trousers. This is a petty, vindictive and, frankly, pointless Bill. It cannot change the situation in Norwich or Exeter, as the High Court has already quashed the orders setting up unitary authorities there; nor does it reform the process for setting up unitary authorities, as part 1 of the Local Government and Public Involvement in Health Act 2007 remains unchanged. The one thing that the Bill does effect is unnecessary, because unless the Secretary of State needs protecting from himself—which is not an entirely unreasonable suggestion—he does not need legislation to prevent himself from creating unitary authorities in Norwich and Exeter. All he has to do is not lay the orders. It is as simple as that.

At a time when local authorities are losing almost a third of their funding and communities are being denied the vital front-lines services that they rely on, creating unitary authorities in Norwich and Exeter could have saved those councils money—money that they could have used to try to mitigate the devastating cuts that this Government have imposed. Creating unitary authorities was supported by the people of those cities. The proposal would have helped to deliver more efficient and accountable services to local people, and would have spurred economic growth and created jobs when we need them most, benefiting not only those cities themselves, but the surrounding counties. Instead, the Secretary of State, who likes to vaunt his localist credentials, but so badly failed to stand up for local councils in the comprehensive spending review, has left Norwich and Exeter, like so many town halls up and down the country, high, dry and hard-up.