On a point of order, Mr. Speaker. On 23 October, I sought your advice about how I could pursue some unanswered questions to the Secretary of State for Defence, dated in October, on pay and allowances for our troops. You said that I should table more parliamentary questions, Mr. Speaker, so since then I have tabled six questions chasing up the fact that my questions remains unanswered. I realise that it is very embarrassing for the Secretary of State that at the same time as he announces pay increases for our troops he is taking away their allowances, but is it right that my questions should go unanswered?

The Secretary of State for Defence is in the Chamber and will have taken note of what the hon. Gentleman said.

I inform the House that I have selected the amendment in the name of the Leader of the Opposition.

I beg to move, That the Bill be now read a Second time.

The Bill implements the majority of the proposals set out in “Strong and prosperous communities”, the local government White Paper, which was published in October. Local government has a long and proud history as a driving force behind public services and the success of our towns and cities. The House will be familiar with some of local government’s great historic figures and their achievements—for example, Joseph Chamberlain, Mayor of Birmingham, who left the city, in his words “parked, paved and improved”, or Herbert Morrison, who did much to shape the London we know. Let us not forget the more than 1.5 million men and women working in local government on whom we rely, day in, day out. We are never more aware of their service than in times of adversity, such as the current storms. I pay tribute to them.

History teaches us that local government works best when there is a constructive partnership with central Government to deliver what local people want and need.

Will the Secretary of State give way?

In a moment.

For decades, the relationship between local and central Government has swung between suspicion and trust, between tension and harmony. In the late 20th century, the atmosphere reached a low with the central Government and councils at loggerheads over the poll tax—perhaps that is the point on which the right hon. Gentleman wants to intervene.

As an opponent of it, I would be happy to do so, but I want to ask the Secretary of State a very simple question: is not local government best when it is not bossed around by regions? What part of the “No” in the north-east did she not understand?

Of course we listened to the view of people in the north-east, but surely the right hon. Gentleman would agree that the £19 million that it costs to run the regional assemblies is money well spent. Voluntary bodies administer hundreds of millions of pounds, largely on behalf of local authorities: they plan regionally, they spend for local authorities, they are often led by local authority leaders and 60 per cent. of the members are from local authorities.

May I suggest that the Secretary of State conduct at least a consultation, but preferably a referendum, on the existing unelected assemblies, to find out exactly how unpopular they are?

The hon. Gentleman would do well to listen to Councillor Keith Mitchell, Conservative chair of Oxfordshire county council and leader of the South East England regional assembly. He says:

“This year we brought £500 million of transport and housing investment into the region, yet the assembly only costs 50 pence per person per year.”

Good value.

With hard work on the part of local and central Government, things have improved immensely over the past few years. Massive investment and reform have driven standards up, and in many areas local government is not just up to the job, it is leading public service reform. I believe that we have now reached a point where local government can once again embrace its place-shaping role to meet the demands of the 21st century. I want to see all our councils leading the drive for sustainable communities, regenerating our city centres, lifting people out of poverty and improving local public services. It is the job of central Government to enable local government to play that role. That is the purpose of the White Paper and, indeed, the Bill.

The White Paper was the result of extensive consultation. I believe that we have forged a high degree of consensus in the local government community. In particular, it has been welcomed by Sir Sandy Bruce-Lockhart, the Conservative chair of the Local Government Association, who said:

“The Bill is encouraging. It takes steps on local leadership, deregulation and cutting red tape, reflecting the LGA’s long standing position”.

The Secretary of State rightly focuses on local government. Given that part 11 of the Bill fundamentally alters the way in which public and patients are involved in the NHS, does she not think it very wrong that no health Minister will be accountable to the House for the measures contained in the Bill, including the scrapping of patient forums? Is that not a reflection of the low priority accorded by the Government to patient and public involvement in health?

The hon. Gentleman will see my right hon. Friend the Member for Doncaster, Central (Ms Winterton) the Minister of State, is on the Bench beside me to listen to the debate and of course to reflect on it. The hon. Gentleman is right to draw attention to measures on public involvement in health, because they are designed to give more power to service users in local areas to raise issues of concern to them. They represent a huge advance on patients forums, because they allow an independent voice to be expressed.

Will the Secretary of State concede that by involving just local government in the process, it will be a closed process between public sector providers? There will be a complete loss of accountability from independent people who are able to express serious views about the performance of our health service. What are the Government afraid of when it comes to CPPIH—Commission for Patient and Public Involvement in Health—and patients forums? Surely it is inappropriate to take away that power.

The hon. Gentleman has completely misunderstood the proposals in the Bill. This is about involving a far broader range of patients and service users—the public—in delivering improvements for that service. As I understand it, patients forums have an average membership of only eight at the moment. In future, hundreds, if not thousands, of people will be able to register for the new local involvement in health networks–LINKs–in which local people can get involved in delivering service improvements.

The Secretary of State must understand the House’s confusion on the issue. Only last year, the National Health Service Act 2006 set up the patients forums and the Commission for Patient and Public Involvement in Health. One year later, the Government are scrapping the patients forums and the commission. Each year, we see yet another change to public involvement in the NHS. Why did the Government ever get rid of community health councils? We all understood what those councils did: they ensured that the Government and the NHS locally were accountable.

I am afraid that hon. Members are showing their ignorance of the proposals in the Bill. In fact, patients forums were not established last year; they were established five years ago and have been in operation for some considerable time. Of course, the name in the legislation had to change as a result of other changes that were made last year.

The explanatory notes—

The hon. Gentleman wants to intervene again. I shall be generous and let him have a go.

One thing that I think I can do is read the Queen’s English:

“Section 237 of the National Health Service Act 2006…requires the Secretary of State to establish Patients’ Forums for NHS trusts… Part 11 of the Bill makes provision for the abolition of CPPIH and Patients’ Forums.”

Last year, legislation was introduced for patients forums and trusts; this year, it is being scrapped.

I thought that I had just made myself clear that there were reasons why the legislation had to be drafted in that way. In fact, patients forums were introduced five years ago and have been in operation for a considerable time. Of course, over that five-year period, considerable changes have been made, and it is now right, particularly as primary care trusts have become more coterminous with local authority areas, for the local involvement in health networks to have a geographic focus on the local authority area and a wider remit to consider health and social services and to involve a far wider range of users.

Might my right hon. Friend not reflect with me that it is rather bizarre for the Opposition to criticise proposals that enhance the role of local government in the overall scrutiny and improvement of health services locally, when they have spent much time criticising the Government for not enhancing the role of local government? Why do they not applaud the measure, which will enhance the role of local authorities?

I completely agree with my right hon. Friend, who makes a very important point: the measure will take forward proposals to make it much easier for the public and, indeed, the voluntary sector to get involved with service improvement, and it represents a considerable advance on the previous measures.

Does my right hon. Friend agree that one of the fundamental issues of representation and accountability is the ability to remove the people who make the decisions? Does she not agree that the thing that is missing from the Bill is a direct power for either local people or local councils to remove the unelected quangos that we now have in local health authorities? At the same time, is this not also an opportunity to abolish the unrepresentative NHS Appointments Commission?

I understand the point that my hon. Friend makes, although he will of course recognise that the commission is an independent body that makes appointments on their merits. He will have an opportunity to discuss that in Committee, as the Bill progresses.

I hope that, given the consensus in the local government community and despite the reasoned amendment tabled by the Opposition, the Opposition will decide today that they at least support the principles behind the Bill: to give a stronger voice to citizens and communities to shape the places where they live and the services that they receive; to encourage local authorities to provider stronger and more strategic leadership for the places that they serve; and to reduce central prescription, so that local authorities and their partners can respond to local needs and demands.

The Secretary of State is making the point that local people should become more involved in decision making. If a council decides that it wants to become a unitary authority, will it need to get the approval of the people in its area?

The hon. Gentleman will be aware that we are currently going through a process of inviting proposals from local government and that all bids have to be in to the Department by 25 January. One of the criteria for assessment of the bid is whether there is a broad cross-section of support for those proposals.

rose—

I know that a number of colleagues want to come in on this issue. I will give way to my hon. Friend the Member for Blyth Valley (Mr. Campbell).

Talking about referendums in local government, we had the assembly vote in Northumberland, when people said no, and a vote for a two-tier system in Northumberland, when the people of Northumberland said yes. I presume that, as that is the wish of the people, we are going to get a two-tier system in Northumberland.

My hon. Friend will understand that I am not able to comment on specific bids that may or may not have been received. However, if a council puts forward a bid for unitary status that meets the criteria, it will be seriously considered on the basis of the criteria that have already been set out. If, on the other hand, local people and local councillors decide that they want to put forward a bid for a two-tier pathfinder, where they work together to create efficiencies, we would want to encourage that as well.

I welcome the part of the Bill that makes it easier for councils to become single tier, but is not the deadline of 25 January far too short, especially given that the Bill allows, for the first time, proposals for unitary authorities to cross county boundaries? That is an important reform, but it is also a complex one.

It was clear when we set up this process that local councils wanted us to provide a short window of opportunity for them to put forward proposals so that, after decisions have been made, they can get on with the business of delivering local government. The House will remember the Banham reforms, which dragged on year in, year out. People were distracted from the job of delivering for local people. We wanted to avoid that, hence the short deadline for councils to submit their bids. There will then be an opportunity for us to consider those bids. I hope that we will then move on from the debate on restructuring and that local authorities will be allowed to get on with the job of governing.

The Secretary of State has encouraged me greatly, because she has given the House the impression—this has already been said to me—that the Government will not be prescriptive on this matter and will allow the people in the areas to make the decisions. Bearing it in mind that the council in Shrewsbury is overwhelmingly opposed to unitary status and that we wish to keep our borough council in the proud, beautiful town of Shrewsbury, will she respect the wishes of my borough council, myself and the local people of Shrewsbury?

I understand the position that the hon. Gentleman is taking towards the potential submission of a proposal on unitary status. The criteria against which we judge proposals are clearly set out. One is that the proposal must command a broad cross-section of support. The others are that it must not put upward pressure on council tax, that it must deliver real value-for-money savings, that it must be able to be met from the council’s own resources, and that it must offer strong leadership and deliver for local people.

Does the Secretary of State agree that if there is a proposal, whatever its source, to go from two-tier to unitary, there will be a referendum—a vote with the local people involved—as suggested to the Prime Minister and the Deputy Prime Minister, both of whom agreed, last February?

The hon. Gentleman will be aware that that has not been the case under different Governments. We have set out a process that involves inviting local people to put forward propositions, but they must be able to demonstrate a broad cross-section of support for them.

The Liberal-controlled authority in Pendle talks about an “exciting vision” of a unitary authority with Burnley, which is

“shared by…citizens of Burnley and Pendle.”

There is no evidence for that at all. I return to the point that was just mentioned: are councils expected to canvass the views of the electorate if they are going to dissolve the two-tier system and move towards a unitary system?

It will be for councils to demonstrate that they have a broad cross-section of support. Clearly that is one factor that we will have to take into account, alongside the other criteria that we have set out in the invitation document. I have already said that I expect only a small number of propositions to meet the strict criteria that we have drawn up for unitary status.

If my right hon. Friend reflects on the Banham process, she will agree that it did a lot of good work. It took a long time, but it came up with well thought through proposals. The disadvantage was that the Conservative Government threw Banham out—or most of it, at any rate. We do not want to make that mistake again. Does she not agree that the more focused process in which she invites councils to engage will enable us to get down to the nitty-gritty with those who wish to opt in and debate the matter seriously?

My hon. Friend sets out extremely clearly and concisely my own view, which is that it is much better to have a focused, short debate, in which local people can opt into the process on the basis of strict criteria, than to have a drawn-out, lengthy debate that may or may not end up with a particular resolution being taken some years in the future.

Like the hon. Member for Cambridge (David Howarth), I support unitary authorities and welcome the measures in the Bill. I am sure that my right hon. Friend agrees that local people should have a say, but will she explain why her civil servants told chief officers that bids, such as that which will be made by Durham county council, will be successful and top of the pile only if they include one of the barmy ideas about directly elected executives?

I have full faith in my hon. Friend, but I do not recognise the account that he gives. That is certainly not the policy intention. It is absolutely right that we look for strong leadership, but strong leadership may take different forms. It is one of the criteria, and another is that the arrangements are responsive at neighbourhood level. That is the sort of governance arrangement that we will look for, but there is no mandatory requirement for any particular form of strengthened leadership.

May I refer the Secretary of State back to her earlier remarks, in which she said that local government had expressly wished for a short window of opportunity, namely the period ending on 25 January? Will she tell us on what evidence she based that statement?

Of course, there has been conversation on the subject between central and local government for a number of years, and it began before the Government came to power in 1997. One point that was made to me very forcefully was that local governments did not want unitisation and unitary authorities to be the only thing that they were thinking about for months and years to come. They wanted to get on with the job of delivering for local people, but in certain cases they made a powerful argument for change. They said, “Well, if you’re serious about the place-shaping role, and if you really want us to deliver value for money, and you want us to keep the council tax down to its lowest level, give us the opportunity to present our case.” The agreement that we reached was that the strongest bids would be considered against extremely strict criteria, but that the window of opportunity would then close, and the unitary debate would, I hope, close down thereafter.

rose—

I will take one further intervention, and then I will move on to a different topic.

On the issue of directly elected mayors, will my right hon. Friend confirm for the record that the unique situation flagged up in the White Paper in Stoke-on-Trent, which has a council manager and an elected mayor, can be changed in a referendum? Will she confirm that when it comes to choosing the kind of governance that we want in the elections of 2009, the Government will work with all elected representatives in Stoke-on-Trent to find a way forward that fits the particular local governance needs of the six towns of Stoke-on-Trent?

I understand the issue that my hon. Friend raises. She will, of course, have seen the written ministerial statement made on Friday, which says that we will work with local representatives and people to find a way through on the issue.

rose—

I must make some progress.

The Bill is the start of a devolutionary process. Other ongoing work is a vital part of the picture, including the comprehensive spending review’s consideration of government structures and powers in relation to transport, skills and economic development at the sub-national level, as well as the Lyons review of local government finance. The Bill is a huge stride forward in taking the practical action needed to make a real difference to our communities. Today, I am publishing an implementation plan that sets out how we will deliver on other commitments in the White Paper, too.

It is the role of councils to serve local communities and respond to citizens’ needs. People want clean, safe streets and public services that respond quickly to their everyday problems. They want effective solutions without endless bureaucracy, which is why the White Paper and the Bill place a strong emphasis on the role of democratically elected councillors. We should celebrate their role, and make it easier for them to get things done. Our proposals will give a new voice to individual councillors through the community call for action, which gives citizens and councillors a new way of raising issues that they care about such as persistent antisocial behaviour, a poor recycling service, or problems with care when people come out of hospital. The community call for action will allow a councillor to draw those issues to the attention of colleagues and demand an answer from the council. Councillors can act collectively, too, through overview and scrutiny committees, which enable them to hold partner authorities to account on behalf of local communities. The Bill therefore proposes to strengthen the powers of those committees to enable them to demand information from partners and require providers to have regard to their recommendations.

The new powers that we propose to give local councillors will help them to represent their communities better, but we also want those communities to have a greater say in the places where their members live and in the services that they receive. They cannot do so without adequate information, consultation and involvement. The best councils already engage with their communities, and the Bill proposes to require all local authorities to inform, consult and involve local communities as appropriate.

The Somerset Association of Local Councils has raised a narrow but important point about parish councils’ inability to enter into a guarantee. Parish councils are often involved in partnerships and charity work usually undertaken by companies that are limited by guarantee, but they cannot become full participants because of that legal bar. Will the Secretary of State look at that during proceedings on the Bill?

The hon. Gentleman makes a valid point that we are actively considering with local parishes. We are seeking to find a way forward, but I shall certainly correspond with him to see whether we can address the problem.

I am grateful to the Secretary of State for giving way again. She said that the Bill will empower local people and councillors to make decisions in their area, but she will appreciate that in an extremely large rural county such as Shropshire, councillors living 30, 40 or 50 miles from Shrewsbury will make decisions that affect the town. That is not right, because they live too far from Shrewsbury to know our town.

The principle behind the Bill is that it is local people who are best placed to determine such issues, not central Government. If local people want to move to single member rather than multi-member wards, it should be for them to decide. If they want to opt in to unitary status that, too, should be for them to decide. That is the point of devolution. We will provide a new power for the best parishes to promote economic, social and environmental well-being and, in addition, we will give communities the power to establish parishes in London, as they can already do so in the rest of the country. Those powers will give neighbourhoods more control over very local issues such as leisure facilities and provision to keep the streets clean and safe.

Does the Secretary of State accept the concerns of London Councils, which was previously known as the Association of London Government, about the need to draw up criteria to prevent extremist groups active in London politics from seeking to challenge sensible determinations by local authorities not to permit the establishment of parish councils for purposes that neither she nor I would support?

The hon. Gentleman makes a serious point. In the White Paper, we made it clear that local authorities should make the final decision about whether a new parish should be set up. That decision should be based on a number of grounds, including the contribution that the parish would make to community cohesion. During the passage of the Bill, I propose to introduce statutory guidance to define the role of parishes in community cohesion.

The Secretary of State mentioned community involvement in provision to keep the streets safe. If a community can make a call for action on that subject, why is it not allowed to become involved in measures to tackle crime and disorder?

There are separate powers, which are already established, for local communities and local citizens to be involved in community safety issues. They can already issue a call for action, which must be responded to. We are supplementing that power in the Bill with a broader community call for action, which covers the other areas of local public service delivery. To improve local areas, we need to empower councillors and the communities that they serve, but we must also give council leaders the powers that they need to provide direction and take tough decisions.

We recognise that leadership comes in different shapes and sizes. We are therefore offering three different leadership models: a directly elected mayor, a directly elected executive of councillors, or a leader elected by their fellow councillors with a clear four-year mandate. The way in which councils choose to govern themselves will be different in different parts of the country, but each of our models will help make local leaders more visible and more accountable, and a clearer mandate will make it easier for council leaders to take tough decisions and see them through.

The discretion given to local councils to decide which model they wish to employ is a positive step in the devolution of decision making, but will the Secretary of State consider allowing councils the discretion to return to the committee system, in which all councillors were involved? Will she also consider, under the strong executive model, reducing the number of electors required to prompt a referendum to decide whether a strong executive or mayoral system should be put in place?

The hon. Gentleman will understand that it is no longer necessary to hold a referendum to move to a mayoral system, although it will still be possible to petition for a referendum. As to whether it would be possible for a council to move back to the committee system, we have ruled that out for a purpose. We think that greater devolution of powers goes hand in hand with the responsibility for stronger leadership that is able to look over the whole area in which local people live and be responsible for the quality of life across that area, not just for the local public services that are delivered in that area. Local council leaders will be responsible in future not just for social care, for example, or for the services directly delivered, but for the quality of the environment, climate change and all the issues that are of concern to local people. With that comes a responsibility not only for strong leadership, but for responsiveness at neighbourhood level.

Will the Secretary of State tell us about the fixed terms for council leaders? In the whole of the UK—the Scottish Parliament, the Welsh Assembly, and pretty much across the board—there is no such thing as a fixed term for an executive leader. Where does the idea come from?

The hon. Gentleman is familiar with the model of an elected mayor. What else is that? With the council leader model, we are trying to strengthen the mandate of the council leader to take decisions that are relevant to the people in their area, and to have the confidence and ability to see those through without constantly looking over their shoulder, wondering whether they will be in position the following month or the month after. That is an option which local people may be able to consider, and one that will prove attractive to many councils throughout the country.

I strongly support the thrust of the Bill and many of the measures in it, but on the subject of council leaders, High Peak council is currently run by a coalition of Liberal, Conservative and independent councillors. The leader of the council is a Liberal, who is one of only eight Liberal councillors on the council. I do not see how an elected leader from within the council could be sustained for a period of four years under those circumstances. There must be a way for councillors to recall a leader within those four years, especially if the political complexion of the council changes.

My hon. Friend makes a valid point, which is why we have embedded in the provisions the possibility of a vote of no confidence, so if the political complexion of the local authority changes, there will be an opportunity for members to hold the leader to account. We are trying to strengthen the mandate of the leader and the presumption that the leader will be in office for more than one year.

I cannot understand why the Government are fixated with the idea of leadership. Local government delivery of regeneration schemes in Manchester, Leicester—where my hon. Friend the Member for Leicester, South (Sir Peter Soulsby) was leader—Newcastle and Gateshead occurred under the old committee system. Those councils had strong leadership and also the ability, which my right hon. Friend described, to remove a leader. What is the difference between what she described and the current system?

My hon. Friend describes a system of strong leadership. We want strong leadership everywhere. We have examined different options that might be attractive to councils in delivering that, not only in areas that already have it but in those that do not. We do not say that people can be in post for four years without challenge. Of course they will be challenged and responsive to local members. In exceptional circumstances, a vote of confidence could be called and the leader could be changed. That is a useful way out. However, rather than living in fear that they may not be in place in a year, local council leaders can make decisions, safer in the knowledge that they are more likely to be there for several years. That is a compromise between the committee system and others for stronger local government.

I am a little confused. The Secretary of State made a comparison with a directly elected mayor. However, he is directly elected by the people, whereas a council leader will be elected by elected members, who may not have a large mandate to serve on the local authority. Why did the Secretary of State make a direct comparison between a directly elected mayor and an elected council leader? It does not stand up.

I described a directly elected mayoral system and an indirectly elected leader system. They are not equivalent, because one is directly elected and the other is indirectly elected, but they both have strong mandates and are visible and accountable to local people. When devolving more power to local people, it is important to have a visible and accountable local leader. One is directly elected and the other is indirectly elected.

rose—

I must make progress. Given the time, I believe that Opposition Front Benchers, too, would appreciate it if I made some progress.

In future, local authorities will set out their vision for their places and influence their relationship with central Government through three key documents. First, the sustainable communities strategy provides the overarching vision. Secondly, the local development framework sets out the way in which an area’s physical development contributes to that vision. Thirdly, we propose to strengthen the local area agreement through the Bill. That will be at the heart of the central-local relationship, setting out agreements to deliver priorities for local areas and defining local authorities’ role in making them better places to live.

The strengthened local area agreement will radically cut the number of national targets and indicators for a local area. There are currently up to 1,200. We envisage reducing that to 200 indicators, with around 35 targets, plus the existing statutory education and child care targets.

Local authorities on their own cannot shape the places they serve. As well as engaging communities, they must work closely with other public service providers. The Bill therefore places a duty on key partners to co-operate with the local authority to agree the targets in the local area agreement, giving a transparent set of priorities to deliver.

We also propose, by amendment, to make provision in the Bill for new health and well-being partnerships and joint waste authorities. Those would support stronger local partnerships and help improve health and waste services.

In the spirit of devolution, the Bill also includes important framework powers for the National Assembly for Wales.

I believe that we have reached a watershed. Local government is up to the job and constantly improving. It is not only right but necessary for it to lead reform. The Bill takes important steps down that road. There will be further steps in due course, but the measure sets out significant proposals to empower communities, enhance the leadership role of local government and bring about a radical change in the nature of the relationship between central Government and local government and its partners. I commend it to the House.

I beg to move,

That this House declines to give a second reading to the Local Government and Public Involvement in Health Bill because it fails to provide the freedom and powers to meet the needs of communities as claimed by the White Paper; would lead to further centralisation because of the new power for the Secretary of State to direct councils to restructure; would lead to the costs of restructuring falling on over-burdened council tax payers; fails to return powers on housing, planning, transport, learning and skills from unelected regional bodies to local government; fails to impose an upper limit for the number of performance targets used by central government to micro-manage local government; fails to give NHS patients and the public an independent and investigative public services watchdog, or a national voice for patients; and fails to fulfil the Government’s pledge in the White Paper ‘Our health, Our care, Our say’ to give local councillors a commissioning role in public health.

I begin by expressing sympathy for the Secretary of State, who clearly does not have the full support of her own side, leaving aside the concerns that Conservative Members have expressed. Perhaps I can help her understand the reasons for that.

We had barely a month’s consultation on the White Paper before the Government proceeded with indecent haste to publish a Bill. Even more surprisingly, we are being asked to debate and scrutinise local government reform while still waiting for the much delayed Lyons report on local government finance. So instead of confronting the real problems facing councils, including council tax levels, and the lack of care for the elderly, of housing and of waste disposal facilities, the Government have opted for what the Secretary of State herself called a “distraction”, namely, the restructuring of local government. They have taken a new power, way beyond the scope of the White Paper, to direct councils to restructure. That is certainly radical, but it is the opposite of devolutionary.

I wonder what came over the Secretary of State? Did she panic about the lack of volunteers for the mass restructuring of two-tier local government by the 25 January deadline? The Bill gives the Secretary of State unfettered power to redraw the map of England. At one extreme, this might involve there being no more counties; at the other, it could involve the abolition of districts that are known, trusted and local. At least her predecessor, the Deputy Prime Minister, agreed that referendums should be used when changes of this scale were to occur. He said:

“if you want to have a unitary then you can have a ballot, discuss it with the people, but if you want it, fine.”

Why has that principle been swept aside?

Will my hon. Friend ensure that the Secretary of State gives strong advice to the chief executives of county councils about referendums? The chief executive of Shropshire county council has been playing a strong role in this matter, both on television and in public, yet I believe that it is fundamentally wrong of civil servants to play any role whatever in referendums of this nature. Will my hon. Friend ensure that that point is put across very strongly to the Secretary of State?

I pay tribute to my hon. Friend’s efforts to secure a voice for the people of Shrewsbury on this important matter, and to their success in securing a referendum. I feel strongly that those people should be given the chance to say whether they want their present local government arrangements to be abolished. I invite the Secretary of State to comment on my hon. Friend’s point about whether a public servant should remain neutral on the issue of referendums, or whether they should take one side of the argument or the other.

Does the hon. Lady not agree that her own party has form on this matter? When it abolished the Greater London Council and Tyne and Wear county council—the “mets”—there was never a proposal for referendums. To their credit, this Government at least provided for a referendum when the ill-fated assembly of the north-east was being proposed. As my hon. Friend the Member for Blyth Valley (Mr. Campbell) has said, the people in Northumberland and Durham spoke out quite clearly on that issue. Should not we therefore just press ahead for a single unitary authority in County Durham?

The hon. Gentleman made a number of interesting observations during the Secretary of State’s speech. I sincerely hope that the Government Whips Office will consider him for participation in the Standing Committee, because he would clearly bring a great deal of experience to enhance the debate. His intervention on me largely concerned history, however, and I want to concentrate on the threat that will face local government as a result of the Bill.

We now know that the whole invitation process, complete with its consultation and deadline, was a farce. First, the right hon. Member for South Shields (David Miliband) toured the country giving the chief executives of councils an insight into the promised land of unitary government. In bypassing the elected councillors and going to the appointed officials, he could not have made clearer his disdain for local democracy.

Then came the appointment of the present Secretary of State, who declared herself to be

“more concerned with outcomes for citizens than lines on maps”.

I wish that she had stuck to her instincts in that regard. I can understand why she formed that view. She has a background in economics. When have we ever heard of a restructuring exercise that did not cost money? Proponents of unitaries may point to huge cost savings, but in the short term, there will be a big bill for redundancies, employment tribunals, contract write-downs and other sunk costs. Those costs will be added to the bill for council tax payers. Cambridge university has estimated that restructuring would mean an extra cost of £121 per person. That would work out at roughly £345 on top of the average council tax bill—a bill that has already risen by 84 per cent. since Labour came to power.

My borough council has commissioned two reports by professors at Oxford and Cambridge universities, which show that redundancies in Shrewsbury alone could add up to as much as £20 million—money that we local council tax payers will have to foot.

I thank my hon. Friend for his intervention, which shows precisely why the people of Shrewsbury are so entitled to their referendum on abolition. I pay tribute to the work of his council, which has prudently kept reserves in hand, little though it might have thought that the fateful day would come when it would have to investigate the cost of its own abolition.

It is a real irony that voters are being offered the chance to pay more tax for less elected representation. Did the Government ask people whether they wanted such change? Are members of the public spontaneously running up to the Secretary of State and her colleagues asking for restructuring? I doubt it. The latest Chartered Institute of Public Finance and Accountancy survey, conducted in the autumn, showed that only one quarter of respondents believe that local government reorganisation would be desirable.

My hon. Friend is making a powerful argument. Is it not the case that the Government have no intention of holding referendums on any of these issues, as they know that they are trying to ride roughshod over the popular will of many communities around the country, and having lost in the north-east, they have no intention of losing again?

I thank my right hon. Friend for that intervention. I suspect that the R word—referendum—does instil a little fear in the Government.

Why have the Government set district councils against county councils in a battle for survival that will cost the taxpayer dear? It cannot just be that they were stung by losing the chairmanship of the Local Government Association, and by the erosion of their position at successive local elections. Is not the truth that Labour is trying to do at the Dispatch Box what it cannot do at the ballot box?

I have a simple question: does the hon. Lady support the Conservative leader of Cumbria county council in wanting a unitary authority for that county?

If one is a serious localist, one should support the view of democratically elected local councillors. They, in turn, need the evidence of local opinion. Given the Government’s time scale, however, with two days remaining until the deadline, how is it practically possible, in places such as Durham, to establish that view?

Let me give my hon. Friend some guidance on what is happening in my area, which I share with my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), and pose a question through her to the Secretary of State. To establish a broad consensus of opinion, will the Secretary of State rely on ballots of opinion taking place, as we speak, in four out of the five districts in Shropshire? Alternatively, will she rely on a survey of a focus group of 44 people in Shropshire, which the proponents of unitary status argue gives them the consensus of opinion?

My hon. Friend must await the answer to that question from the Secretary of State. He will also be aware, however, of a poll conducted by the BBC to try to establish what local opinion in Shropshire might be in relation to this matter, which the BBC had to curtail because it had been abused by people being urged to vote early and often, if I may use such parlance.

rose—

I must make some progress.

With no warning and no consultation, the House is suddenly being asked to grant the Secretary of State the right to abolish or rearrange great swathes of local government, wherever and whenever she feels so inclined. Should not the Bill at the very least set out in detail specific situations in which that power can be invoked? However, it does not do so; there are no limitations on the scope of the power, or the circumstances in which it can be used, which makes it a formidable weapon for any Secretary of State. I caution Members to think long and hard before approving such a power, which will put councils for ever under the sword of Damocles, knowing that at a stroke they can be reorganised out of existence.

It would have been better had the hon. Lady consulted more closely her colleague, the chairman of the Local Government Association. If she had done that, she would have known that we have already given a commitment to the LGA that we will narrow the scope of the power to direct, but that it may be necessary in the short term, as a result of the current invitation, to deal with residual areas to make the unitarisation proposal work. There is no intention to force any council down a route that it does not want to go down.

Of course I consult the chairman of the LGA. That is why I am aware that the Secretary of State failed to consult him prior to introducing the clause that will enable her to direct councils to restructure themselves. That is step one. Step two is how hon. Members are to know about the extra explanation given orally by her if it is not on the face of the Bill or in the explanatory notes. At least we have been able to extract a willingness on her part to constrain this draconian power, but until we see it in writing in the form of an amendment, we will continue to press for the extreme power to be curtailed.

I spoke to the LGA today—its name has been bandied around—and have been informed that if the Secretary of State tries to overturn a referendum in a place like Shrewsbury, we could go for a judicial review. If she does that, I will spend night and day helping my council to pursue a judicial review. She will not destroy the independence of Shrewsbury.

The House is left in no doubt about my hon. Friend’s commitment to his constituents and those who live in Shrewsbury who do not want the status of their district council rolled over either by direction or through the power of the Bill. Local government is asking itself what on earth it has done to deserve this treatment at the hands of the Government. In fact, councils have been more effective in making efficiency gains than any Department, so why the kick in the teeth?

The Government hold out the promise of reducing the straitjacket of performance targets, but why is there no upper limit on the face of the Bill? When the White Paper was published, the Opposition were sceptical about how long it would be before the tick-box tendency took hold again, but even we thought that the Government’s pledge to reduce targets would last long enough to make it from the White Paper to Bill. It seems that our faith was misplaced. When it comes to the crunch, the Government simply cannot bring themselves to trust councils. They will not commit themselves to ending the target-driven tyranny that is such an obstacle to devolving power to local communities.

I understand how the culture of targets and directives comes about. Any new Government want to make their mark and they try to do that by driving things from the centre. That applies to Governments of all complexions. However, the Government have had almost 10 years and they still feel the need to micro-manage. Local government is desperate for more freedom to innovate and to better meet local needs. Local communities are hungry for a bigger say in decision making, and central Government are in the way. The Bill implies that there should be a general move towards less regulation, but there is nothing binding and nothing on which the Government can be held to account.

The same criticism can be levelled at the uprated local area agreements, of which the Government have made much when justifying their localist credentials. The provisions for the agreements lack a clear process of how they will be achieved and to whom they are ultimately accountable. As the Local Government Information Unit says in its briefing, it is not clear how the duty to co-operate will be secured in practice. Will the chief constable, sitting at the table with the council leader, dance to his tune or that of the Home Secretary? Who has the line management? In home affairs, Whitehall has. Far from getting together and reaching an agreement based on the wishes of the community they serve, representatives are all dancing to the tune of their relevant Whitehall Departments.

I see nothing in the Bill that would remedy that problem. To make matters worse, I see no sign that other Departments are sympathetic to the devolving of power to local communities; the reverse, in fact. We will end up with a heavily compromised agreement between representatives who are in hock to their masters in Whitehall. That is why we have proposed something more radical in the Sustainable Communities Bill, which gives local councils far more discretion over the way in which money is spent locally and, for the first time, total transparency in regard to how much is spent.

The Government have rightly given councils a choice of leadership ranging from elected leader to elected executive to elected mayors, but rather like an anxious child dipping its toe in the waters of localism, they recoil and refuse to let councils decide for themselves whether they want a cabinet or a committee system. When asked about that earlier, the Secretary of State said, “We think it is not desirable to return to the committee system.” That is a classic example of centralism if ever there was one. Central Government “think”, therefore local government do not get. Has the Secretary of State listened to councillors? Strong leadership is about people, not structures. It is a relatively small issue, but it is a symptom of a Government who, beneath the surface, are still committed to micro-managing councils.

The Bill contains measures that seem localist on the face of it, but beneath the surface do nothing to loosen the stranglehold of central Government over local government. We welcome the measures to devolve power beyond the town hall to parishes, but urge the Government not to overlook other models of local governance such as residents associations and other elected forums. As we have heard, London councils in particular are concerned about the effect that introducing parish councils might have on community cohesion.

Further to the point raised by my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), I should add that the Commission for Racial Equality has also raised concern about inclusiveness in the proposed governance arrangements. Only 3.5 per cent. of councillors in England come from ethnic minorities, compared with 8.4 per cent. in the population as a whole, and last year only 10 per cent. of parish council seats were contested. That is the cause of the concern about cohesion.

If we are to encourage more civic-minded people into local governance, there must be root-and-branch reform of the Standards Board, beyond the scope of the Bill, to stop the frivolous and malicious complaints that will put people off serving their communities. More public involvement may be secured through the community call for action outlined in the Bill, but why has the exception been made for law and order? The Secretary of State said it was because a facility was already in place. If it is, it is not working particularly well.

The health provisions contain further evidence of the centralising tendency that dogs the Bill, particularly the section on public involvement. It is not a year since the Government published their White Paper “Our Health, Our Care, Our Say”, which stated that democratically elected councillors should have a local voice in health and social care. Where is that in the Bill? Without it, councils cannot give real expression to the statutory duty that they already have for public health, and health commissioning remains a Whitehall-driven process.

A further weakness is the lack of genuine public involvement. What the Government propose is supposed to be the answer to the whole sorry saga of abolishing community health councils in the teeth of strong public opposition. A myriad bodies have been created over the last few years, including the patients forums. Those have already cost £120 million, much of which will presumably have to be a sunk cost under the new formula, but that is now about to be ripped up in favour of LINKs, or local involvement networks. As we have already heard, there is a real danger in what the Government are proposing because of a conflict of interest. Local government already provides social care, which has to be wired into NHS provision. The question is, how independent and how representative will the LINKs really be?

Given that the Bill includes public involvement in health in its title, is the hon. Lady as surprised and disappointed as I am that the Secretary of State, in a very lengthy and detailed speech, did not cover that issue at all? I do not think that a case has been made for the abolition of patient and public involvement forums. Will the LINKs have adequate resources? Will they work within the terms of the Nolan principles, so that people directly involved in the provision of health and social care services will have to state as much and to withdraw from discussions? Most importantly, will they be bound by anti-discrimination legislation, because those who are involved in the PPI forums such as the successful ones in Leicestershire have not been able to get information on that out to their would-be successor organisations—the LINKs?

Another cogent case has been made for membership of the Standing Committee. The hon. Gentleman has a genuine interest in the issues under discussion, and I share his concerns. In particular, I have no doubt that we share a concern that the Disability Rights Commission has. It calls on the Government to make sure that there is proper representation on the new LINKs forum. I also share with him a concern about the loss of expertise that will arise as a result of the abolition of the—very recently created—PPI forums.

The Government are struggling to find a way to replace community health councils. I am concerned that although public involvement is mentioned in the Bill, the word “patient” does not arise a great deal. The voice of the patient was clearly articulated by community health councils, and I am concerned that that voice might be lost in this subsequent reform.

I have spent some time setting out the Bill’s biggest failings. However, its biggest failing of all is not to do with what is included in it, but with what is not. All Members will agree that what gets people really fired up about local government is the level of council tax. That is ironic, given that the blame for punitive council tax rises lies firmly at the door of the Chancellor. It is odd that the Lyons review has been put off until the Budget, by which time the Bill will have completed its passage through the House of Commons.

That is why we have asked for Sir Michael Lyons to come before the Standing Committee on this Bill, in accordance with the new model of evidence-taking by a Bill Committee, so that we can take account of his views as the Bill is amended. We have also asked for Kate Barker, Rod Eddington and Sandy Leitch to do so, because they are all reviewing areas that directly affect the role of local government. Taking evidence as part of the scrutiny of legislation is a new House procedure, and the Government must make sure that they keep their promise to let scrutinisers have a proper say over who they call before them.

We are debating the Local Government and Public Involvement in Health Bill, but what is missing is the one vital measure that would make it truly local. That measure is the abolition of unelected and unaccountable regional government—regional quangos that cost every household almost £600 every year. How much longer must Ministers indulge in this absurd regional agenda? It was the Deputy Prime Minister’s pet project, but it has now become the elephant in the living room.

Nobody wanted regional government, but it was forced on them anyway, and for as long as it exists anything that the Government say about localism will be met with scepticism. Abolishing regional government would help to bring council tax down and give real force to localism. If the Bill were to contain that measure alone, it would be greeted with great enthusiasm across the country. But of course, the Bill does not provide for that, just as it does not provide many commonsense measures that would deliver real localism.

Instead it shackles local government more firmly than ever to Whitehall. How could the ongoing threat of abolition be perceived as anything else? Far from being a feast of devolution, this Bill simply throws councils a few scraps from the table. The reason for that is understandable. The Government are ruled by a centralising Chancellor.

rose—

The Chancellor is not sympathetic to localism; that stands to reason as he has spent the best part of 10 years waiting to get his hands on the levers of power so he is determined not to let any of it go. That distrust of localism is laid bare in this Bill. It is a Bill that short-changes councils and communities alike, and it is with regret that I am unable to support it.

I welcome this very important Bill, which marks a significant shift in the balance of power from central Government to local government. That is hugely important in terms of the way that our people look at government, both local and central.

The Bill is clearly only the first part of the changes that have to be made in the relationship between central and local government. The second will come with the publication of Sir Michael Lyons’ report and the Government’s response to it, and the comprehensive spending review will also have a massive part to play. It is right that that should happen, because this is about governance, administration and the delivery of public services; it is not, at the moment, about the quantum of those public services. However, the two are intertwined: we cannot talk about governance without referring to the resources given to local authorities—and, indeed, vice versa.

If the resources are to match the Government’s aspirations in the Bill, Sir Michael Lyons must address a number of issues in his report, including the ability to raise money from the council tax or its successor—if a successor is indeed proposed. Some 90 per cent. of my authority’s houses are in band A or B, which clearly reflects the nature of the borough’s economy. Other councils have few, if any, houses in those bands, which reflects their ability to raise money and the economic activity within those areas. That point has to be taken account of in the way that the council tax is raised.

However, local authorities’ ability to raise money from other sources must also be taken into account. I read recently in the Evening Standard that Westminster city council can raise £25 million from parking charges alone. Other London boroughs can raise only £1 million, and some even less. If the way in which central Government grant is calculated cannot take such differences into account, we will be unable to achieve a fair system for local government.

I am grateful to the hon. Gentleman for giving way. My local council, Wandsworth, has a much lower grant than average; however, last year, the Audit Commission said that it delivered the best value for money of any council. Does he agree that another criterion that national Government should consider is indeed the value for money delivered by local councils?

The hon. Lady mentions value for money, but the important point is that when central Government give resources to local authorities, such decisions should be based on need, an issue to which I shall return.

Sir Michael Lyons also has to ensure that the formula that distributes the central grant reflects the needs of the given area. I understand that fairness is a moveable feast, but importantly, the formula surely has to be based on measures of need. The Bill’s thrust is joint working between not just local government but other agencies, particularly the primary care trusts.

I am very grateful to my hon. Friend for giving way. He will know that, according to a number of indices, the borough of Stockport is considered very prosperous. However, the two Stockport wards that are in my constituency share many of the same characteristics as the five wards in the borough of Tameside and the neighbouring city of Manchester. Yet, as a result of their being in the borough of Stockport, we are at the back of the queue for much of the funding, including Building Schools for the Future Programme funding. Does my hon. Friend think that that issue also needs to be addressed?

Indeed I do. My hon. Friend raises a very important issue but if my reading of the Bill is right, it can be addressed through the overview and scrutiny committees. Local ward councillors in areas of deprivation within broad council areas that have a reasonable level of resources will be able to take such matters to those committees and make sure that the needs of their areas are addressed by councils.

We have to take into account that not only are some local authorities underfunded, but so are some primary care trusts. If PCTs are substantially underfunded and cover the same area—I see that the Secretary of State is looking at me askance, but I assure her that my local PCT is some £11 million away from its target, and will still be so at the end of the comprehensive spending review. That is a substantial amount of money, and when one adds in the fact that the local authority area I represent is also well off the target that the Government have set, we have a double whammy. The Bill refers to relating the local authority, the PCT and other agencies together, so the amount of funding they all receive will be important if we are to ensure that the governance arrangements deliver for the people of the borough.

I said earlier that the definition of “fair” is debateable and a moveable feast. However, it is not an abstract concept. On the contrary, it is very real and it will be a huge task to ensure that we have the ability to tackle deprivation. We have heard talk of a north-south divide, or a Labour-Conservative divide, but that is not the case. I recognise that there are many areas in the south of England, especially in some of our coastal towns, which have areas of great deprivation. They deserve the resources to tackle that. There are also many areas in need in Conservative council areas and, as my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) suggested, in Liberal Democrat council areas. It is important that we recognise that any definition of fairness has to be about tackling deprivation, on the basis of need, and we need a system of local government finance and other Government finance, when it is devolved, that recognises that.