I am grateful for the chance to introduce this debate. Before I go into detail, it is my duty to declare two specific and important interests in this matter. First and foremost, I am obviously a Conservative, and it was the last Conservative Government who introduced the private finance initiative in 1992. I have absolutely no objections whatsoever to well-planned PFIs. They make good financial sense, the risk capital comes from the private sector and a decent cut of any reward is designed to end up in the public purse. The Treasury measures success by the simple yardstick that PFIs must be fair, and above all, accountable. They have a highly detailed standard contract procedure, which is understood by all parties. Private finance initiatives have their critics, and things can go wrong, but they are the most tried and trusted example of private partnerships.

My second declaration of interest is much more important. I have a financial stake in the private partnership that we are considering. I live in Somerset and pay taxes to Somerset county council. I have thus become a small shareholder in a huge new joint venture, brokered by the county and run by the global computer giant, IBM. The company is called Southwest One.

The Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), will be familiar with many of my concerns because we have discussed the matter privately and in this place. He listened to my speech in Westminster Hall on 26 March on the subject, and I thank him for his response to it. During that debate, I clearly expressed my anxieties about the way in which the company came into being. I feared corruption, and I made that clear at the time. I can prove that lies have been told and, tonight, I will produce fresh evidence.

I should like to make one thing crystal clear. Some have wrongly accused me of sheltering behind the protection of parliamentary privilege. That is incorrect. I have repeated outside everything that I have ever said about Southwest One here. My website and my blog—modesty forbids, but it is called Mogg the Blog—bear ample testimony to that. I have laid myself open to any legal challenge and, as yet, no one has dared challenge me.

Southwest One is formed of two councils—Somerset county and Taunton Deane borough—plus one police authority, Avon and Somerset constabulary. I remind the House that its business partner is IBM. Hon. Members will be surprised to learn that IBM owns 75 per cent. of the company. That means that, if Southwest One ever makes a profit, the “Big Blue” will pocket three quarters of it. It is a 10-year venture, which was supposed to save money. Somerset council claims that it will save it £200 million—£20 million a year. Yet the county offers no logical explanation or business realisation plan. Why? There is not one.

There is a document, which falsely describes itself as the business realisation plan, but it contains not one single fact or figure. Instead, it is an exercise in vivid imagination, probably written by—dare I say it, and show my venerable age—Andy Pandy. Let me give an example. The document states:

“Improved supplier service levels will result in authorities delivering higher performance.”

Excuse me—what is the precise predicted improvement year after year? We do not have any numbers—but there are no numbers. It is all aspirational garbage.

When did the document appear? Only the other day, after persistent demands under the Freedom of Information Act 2000 from angry trade unionists. I pay tribute to Unison, which has not stopped its campaign. As a taxpayer and Somerset Member of Parliament, I share its anger and frustration. I gently say that I hope that the Minister does, too. It is no way in which to conduct intelligent business.

The Government already rightly publish excellent advice on how to do things. Business Link describes best practice thus:

“Success in a joint venture depends on thorough research and analysis of aims and objectives. This should be followed up with effective communication of the business plan to everyone involved.”

However, the architects of the joint venture company have strangled information to such a tiny trickle that nobody outside the magic inner circle knows what is going on.

Not one elected councillor of any persuasion has been given unrestricted access to the 3,000 page contract, which was signed last September. Most of it stays hidden. Councillors, the unions and the public who, like me, pay for all that, have been treated like mushrooms. We have been left in the dark and, every now and then, some smug soul chucks a bucket of manure over us. The last big bucket of dung was delivered yesterday by the very man who boasted that not a single job would be put at risk by the deal.

As the Under-Secretary knows, I am talking about the chief executive of Somerset county council—a man who has lied consistently to everyone at all stages. Yesterday, he calmly told an audience of more than 200 councillors, almost in a throwaway line, that restructuring services throughout Somerset would probably mean a 30 per cent. cut in the total work force. That would mean Somerset county shedding 5,000 jobs in front-line services and almost 200 each for the five district councils. However, some of those councils do not employ 200 people directly.

Mr. Jones was not authorised or expected to say what he did; it just slipped from his lips like a blob of saliva. He is a man who claims to be guaranteeing the jobs in Southwest One, but he has now told us that thousands of other jobs will be sacrificed by the people of Somerset. That is the ultimate betrayal, and the unions and others now call him Alan “Judas” Jones. The current leader of the council, Jill Shortland, is trying tonight to explain away his words, by claiming that any job losses can be achieved by natural wastage. But the only natural wastage that most people want to see is the immediate departure of that incredibly dangerous man, who has cocked up and covered up for far too long.

We do not even know for sure who is on the board of Southwest One. There are quite a few bods from IBM, naturally, and a couple of harmless councillors who would not say boo to a goose or recognise a balance sheet if it bit them, like a goose, on the bottom, as well as the chief constable of Avon and Somerset police force, who apparently has the right to sit on a public board. I do not think that I have heard of an arrangement quite as dodgy as that. I am also reliably informed that the chief executive of Somerset county council is another regular attendee at board meetings, but that is hearsay. Mr. Jones has always sworn blind that he plays no active part in Southwest One. I am afraid that that now looks like another whopping lie.

I intend to dwell on Mr. Jones for quite a while. He more than any other public official has been involved in the formation of the company, and it is his ruthless tactics that we must expose. Mr. Jones has a habit of falling out with people and then covering it up. The first effective manager of ISiS—the improving services in Somerset programme, which was the precursor to Southwest One—was a bright and attractive young lady called Jenny Hastings, a constituent. She and Mr. Jones worked effectively and closely, but then there was the falling-out.

All councils have a procedure for resolving grievances—we all know that; we are Members of this place—but in that case there must have been something extremely difficult to resolve. The timing was uncomfortable. The Audit Commission was about to examine the county’s books. Somerset’s quest for five shining stars would have fallen flat on its face if the chief executive had been embroiled in a tacky public industrial tribunal. It took the services of ACAS to thrash out an agreement, under which Mrs. Hastings departed amicably—and silently.

The process also cost an awful lot of public money. I would like to know how much. I made a request under the Freedom of Information Act 2000 more than a year ago, but the council is still dragging its feet and delaying a response.

Mr. Jones’s reputation in county hall is a legend—a remarkable achievement. I am told by the unions that anthrax is more popular than Alan Jones, but I would not know personally. I am no friend of the Liberal Democrats—the Minister knows that, and you certainly do, Mr. Speaker—who hold political control, but I am appalled and horrified by the manner in which Alan Jones manipulates them. There is no better example of that than what happened to one councillor, who was the deputy leader of the Liberal Democrats on the county council.

Name him!

I thank the hon. Gentleman—that councillor’s name is Paul Buchanan. As Liberal Democrats go, he has the sharpest of brains. He was on the ISiS project, he worked with Jenny Hastings and he knows where all the bodies are buried. He has made no secret of the fact that Alan Jones would be out if he became leader, which he was destined to do. Unfortunately, that claim may have been a bit of an error. Last April, Alan Jones reported Paul Buchanan to the Standards Board for England—no fewer than 50 different trumped-up charges were made against the man.

I sit on the Select Committee on Public Administration, but I am afraid that I do not have a high opinion of the Standards Board for England. The Government’s motives for creating it were sound, and rightly so. After all, we must expect high standards of all our elected councillors and elected representatives. However, the Standards Board system allows injustice.

Alan Jones was able to make those absurd complaints, and because of the way the board is set up, it is obliged to take them seriously, regardless of their nature. As a direct result, Jones silenced his most powerful internal critic. Suddenly, anything and everything that Councillor Paul Buchanan might have been able to say fell under the cloak of sub judice. That scuppered his political chances as well—conveniently. Irrespective of political persuasion, nobody wants a new leader with a shadow of an investigation hanging over him, so the Liberal Democrats ditched their best man, and little Mr. Jones must have relished every second of it.

The original 50 charges, incidentally, were rejected very quickly indeed, but Jones, as usual, came back with fresh new charges. Inexcusably, the Standards Board is still wading through them. This dreadful system has permitted a brutal injustice in order to protect a dangerous unelected megalomaniac as he pursues the goal of a high-risk and very dangerous private partnership.

I am now in a position to prove that one high-level official in county hall acted in support of the chief executive and gave false testimony to the Standards Board. The Secretary of State said in March, and the Minister repeated it in my Westminster Hall debate, that I should take up my concerns with the district auditor. I thank the Minister for that advice; I have done so. However, I am sad to report that the district auditor considers my evidence outside the strict remit of his accountancy, so I have no option other than to call in the Serious Fraud Office.

I am also concerned about the involvement of Avon and Somerset police in all this. Alan Jones hired the wife of the chief constable to negotiate directly with the preferred bidder, IBM. Now the chief constable himself has the right to sit on the board. I believe that that is too close for comfort and sets a dangerous precedent. Mr. Jones is now beginning to admit some of the ghastly truth about this deal. It will lead to job cuts. Even the police—Avon and Somerset constabulary—are talking seriously of shunting and shredding the front-line office staff in 19 police stations across the force area. The Minister is based in Gloucestershire and I am sure that he would have something to say if his police force were affected.

Southwest One is currently trying to drum up extra trade in Essex, Torbay, Plymouth and Cornwall. Cornwall is becoming a unitary authority and I would say to that council, “Please look carefully at what you are doing; you are being led by the nose; if you go down this line, your expenses, accounts and accountability will be given to IBM based in Southampton”. The same goes for Plymouth. They are both good councils; both need, dare I say it, guidance away from this mad scheme. I think that they should be afraid; they should be very, very afraid.

The ethos of Southwest One is cut-price. The figures do not add up because there are no figures to see. If the other authorities sign up, they will be recklessly risking public money, but this is the way that IBM likes to do business: cutting margins, cheeseparing, getting less for more. The more it makes, the more it takes. Remember that IBM owns 75 per cent. of the action. New software arrives soon; it is called “SAP”, but everywhere SAP has been sold to local government, there have been huge operational problems and big costly overspends. That has happened in Bradford, it is about to happen in Somerset and we are going to pay through the nose for it as taxpayers and as local people.

IBM put in the Rural Payments Agency computers, but we would have been better off with a bag of kiddies’ counting beans than with the mess that was made there. I do not blame the Government; I blame the systems. IBM lost the Department for Transport £970 million—do not take my word for it; the National Audit Office nailed it a couple of weeks ago. IBM cares about only one client—IBM—but that is business, is it not? One has to be tough to flourish and picking a global partner requires similar expertise to be able to counter and understand what is happening. That is what is missing, and that is what I want to address.

Councillors in Somerset have had to rely on reports from a small group of officers, unaccountable to anyone, whose future careers are entwined with Southwest One. Councillors have found it incredibly difficult to represent the public interest because they are not getting impartial advice.

I have a handful of positive suggestions for the Minister to consider. When it comes to Government projects, it is mandatory for the 4Ps agency to do regular reviews. Why not extend that to local government? Just an idea. How about beefing up the Audit Commission so that it can handle these highly complex deals? Either that or allow the National Audit Office to do the job, which would of course come under the Select Committees of this House. Specialist training for councillors on scrutiny committees would be welcome. They could learn about, and hopefully understand, what they ought to be looking for. Please, may we have clear Government guidance on the use of the magical cover-up phrase “commercial confidentiality”? In Somerset, that phrase has been used time and again to explain away unnecessary secrecy. It is the motto of the county now. It has dropped whatever it used to be and it is now “Commercial confidentiality”. It is used at every turn. Finally, a good deal is only as good as the cost and benefit realisation plan. We must have a mandatory standard.

I am trying to be constructive for the future because I believe that, in Somerset at least, the project has been a complete disaster. Wool has been pulled over the eyes of the elected councillors and Alan Jones is clicking away with his knitting needles. I have been challenged to go and look at the contract. I have offered to take two forensic accountants, one business lawyer, Sir John Banham if he will come—I hope that he will—and possibly a couple of other people to help me. It will take six to seven days to go through it. However, I will not be allowed to see the whole contract or the whole business plan. I will not be allowed to see the correspondence on what made the deal possible and why the group was chosen over British Telecom and Capita. It is a joke. It is a sham. The group is hiding. Why?

The unions have been ignored and a cover-up has been the order of the day. It is, I am afraid—I say this gently—no good for the Minister to say that this is a matter for the councils concerned. It has moved on from there. I am afraid that it is no good telling me any more that the district auditor is the person to go to. We have brought the matter up with the Minister and in business questions already.

Somerset’s crisis today is going to be someone else’s tomorrow, without a shadow of a doubt. We need ministerial intervention, and I am afraid, to put it crudely, we need it pretty darn quick before the disaster gets worse.

Not for the first time—for the second, I think—I am left somewhat breathless in a debate with the hon. Member for Bridgwater (Mr. Liddell-Grainger). He speaks with passion about the issue. If he carries on at this rate, the Parliament channel will be competing with the “The Apprentice” and other programmes for viewing figures.

The hon. Gentleman is right about my response: it will be similar to the debate in March. I know that he is anticipating that in my comments about the role of the district auditor. If he has serious allegations to make about corruption, then he has made his views clear in no uncertain terms about the chief executive of Somerset county council and the chief constable of the constabulary. He did that in the previous Adjournment debate on 26 March and has used his parliamentary privilege to do so again today. As I said, the district auditor and the Serious Fraud Office are the places for him to go. He has indicated that that is what he intends to do.

I congratulate the hon. Gentleman on securing this second debate on an issue that is fundamentally about Government PFI contracts. He has made it clear that he does not have a problem with PFI or with partnerships as a whole.

I began my response to the debate in March with a warning, and I feel that I should do so again. It is important to recognise that although local authorities are increasingly strong and independent bodies, they are ultimately accountable to local residents, and must ensure that they act in a professional and responsible manner. Clearly there has been a breakdown in their relations with Members of Parliament—certainly with the hon. Member for Bridgwater—but ideally they should have a good rapport with MPs as well. I have run-ins with my own local authorities, for these things do not always run smoothly, but in an ideal world that would be the case.

In particular, local authorities are responsible for the proper administration of their own financial records within the framework set by legislation—including the duty of best value and public procurement law—and codes of practice issued by professional bodies such as the Chartered Institute of Public Finance and Accountancy. For that reason, the specific questions raised by the hon. Gentleman can be answered directly only by Southwest One and by Somerset county council, Taunton Deane borough council and Avon and Somerset constabulary.

As I have said, if the hon. Gentleman has specific evidence of financial irregularities or a failure to follow due process in the establishment of the Southwest One partnership, he should present it to the district auditor. I am well aware that he has already done that to some extent. The district auditor is the right person to investigate such matters. If the hon. Gentleman has more serious allegations of corruption, they should be presented to the Serious Fraud Office. I realise from what he has said tonight that he feels somewhat fettered, and does not feel able to speak to the local constabulary, because part of his issue is with them in the first place.

Central Government cannot and, in my view, should not be involved in every action that councils take, and I think it right that neither Ministers nor officials have been involved in the development of the Southwest One partnership. However, owing to the hon. Gentleman’s obvious concern about this project—not least that expressed in the debate in March—the Department has made inquiries of the Audit Commission and Somerset county council. I have to say that, so far, no evidence of wrongdoing has been presented to or uncovered by either the auditors or the police.

Two auditors have been involved in reviewing the work to establish Southwest One. The Audit Commission appointed Grant Thornton to act as external auditor in 2006-07, and from 2007-08, the commission itself has acted as external auditor. Both auditors recently reported to Somerset county council, and I should say in fairness to them that they have been broadly positive about the processes that they followed. Grant Thornton summarised their opinions as follows:

“Given the size and complexity of the contract, it is inevitable that there are some areas of the process where improvement could have been made, but overall our review found that arrangements were sufficiently robust to give us assurance.”

The Audit Commission has presented outline findings in similar terms, stating that there was a reasonable process for procurement with planned improved outcomes for the council, that there were appropriate reporting and staffing arrangements, and that the deal had been market-tested and improved through negotiation. The Audit Commission points out that considerable service and financial challenges remain—I know that the hon. Gentleman agrees with that—and the council needs to invest properly in the management of the contracts. In a project of this size, that is not surprising, but I hope that the partners in Southwest One will take on board the conclusions and redouble their efforts and prove this project a success.

Both in this debate and when the hon. Gentleman spoke to me earlier this evening, he mentioned his concern about jobs; he fears that 5,000 jobs may be lost under some kind of redundancy scheme. However, in fairness to the hon. Gentleman—and also the local authority—he did make it clear that the county council has changed its position on that, and is now saying that any changes would be due to “natural wastage”; those are his words, not mine. Accountability for all these measures is ultimately through the ballot box at local level. Local authorities have to be able to demonstrate best value to their residents, but also, in an ideal world, work in partnership with local Members of Parliament.

In broader terms on commissioning, procurement and shared services, central Government can—and do—facilitate the sharing of experience and expertise so that councils can make the most of the opportunities for more efficient and effective service delivery that are available through partnership with the private sector, the third sector, or other parts of the public sector. The hon. Gentleman was generous in his praise of the Government, and of the guidance and the work being done to support local authorities on that path.

Many authorities are already benefiting from having entered partnerships: more than half of all councils say that they are engaged in, or are considering entering into, a service partnership, and that they expect to obtain savings of up to 15 per cent. as a result—savings not to be sniffed at. Let me cite as an example a partnership involving one local authority that covers customer services, revenue and benefits, property services, ICT and human resources. That has generated a variety of benefits, in this case including 12 per cent. cost savings on the services transferred, and improved service delivery such as better council tax and national non-domestic rate collection rates. Those are some of the advantages that can be gained through better partnership working.

indicated assent.

The hon. Gentleman agrees with that; he is nodding.

I have heard what the hon. Gentleman has to say. I think the wider world has as well, not only through Westminster Hall, but also now through this Chamber. Let me reiterate what I said to the hon. Gentleman earlier. Failures of process are for the district auditor—

The motion having been made after Ten o’clock, and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at two minutes to Eleven o'clock.