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Local Government Bill [Lords]

Volume 519: debated on Thursday 25 November 2010

Bill, not amended in the Public Bill Committee, considered.

Third Reading

The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill): I beg to move, That the Bill be now read the Third time.

This is a short, two-clause Bill that reverses the proposed creation of unitary authorities in Norwich and Exeter and puts to an end the uncertainty regarding reorganisation in the county of Suffolk. It was first debated and considered in some detail in the other House, then considered rigorously but briskly in this House both on Second Reading and subsequently in Committee. It reflects a coalition agreement and manifesto commitments of the two coalition parties, as well as the Government’s desire, which we believe is well supported by the people in the areas concerned, to put an end to needless disruption, uncertainty and cost for local government. The issues have been well aired within their narrow compass, and I will be happy to respond to such issues as are raised in the debate.

I have some sympathy for the Minister, who is having to try to justify the Government’s position on the Bill. Essentially, as he knows, he is trying to defend the indefensible. He knows that unitary councils are far more efficient than the two-tier model that he seeks to retain, and that they save money. He knows that the people in Norwich and Exeter want unitary councils. They want to have some control over their own destiny, and they do not want to be subject to the two-tier system that he seems to think is so wonderful.

The Minister also knows that most of the councillors in Exeter and Norwich support unitary status for those great cities, and that the unitary model is a better governance model for the local authorities there.

Does it follow, then, that it is the official Opposition’s policy that there should be unitary authorities across the country?

The Minister knows that we support local determination, and we know from the facts surrounding Exeter and Norwich that local councillors and the local people support unitary status for those cities. It is a fact that it offers a better governance model than the two-tier system.

Can the hon. Gentleman explain why it took 13 years for the previous Labour Government to come to that view, by which time, with a general election so close, they knew that there was a fair chance that they would never be able to deliver on it?

I do not accept the hon. Gentleman’s proposition. If he looks at Labour’s record of supporting local government and unitary councils around the country, he will see that we have supported unitary status where local authorities have requested it. Indeed, the previous Conservative Government created dozens and dozens of unitary authorities. I do not understand why the current Government take a different view from the Conservative Government of the 1990s.

I would also make the point that, for local people, a unitary council is a model that is much more easily understood. Where there is a two-tier system, people are confused about which authority is responsible for which services, and in some areas there is a degree of duplication in service provision. That leads to considerable confusion, which I suspect is one reason people overwhelmingly want unitary councils in Norwich and Exeter.

The Minister is also aware, as members of the Government parties across the piece must be, that cities are a significant engine for economic growth. Freeing up local authorities through the creation of unitary councils enables those councils to innovate much more effectively than they can under the two-tier system. I shall give a few illustrations of what I mean by that from the three cities in my own region, the east midlands.

Let us take the example of Nottingham city council, which was made a unitary authority in the mid-1990s by the previous Conservative Administration. It has developed a wonderful tram line infrastructure in the city, which is the envy certainly of the region and probably of the country as a whole. It has certainly been an economic driver in bringing new inward investment into Nottingham.

Similarly, Leicester is another council that was made a unitary authority in the 1990s by the previous Conservative Administration. It, too, has been extremely successful in securing inward investment, and the Queen recently opened its wonderful new Curve arts centre, a multi-million-pound project that is very well used and much admired by residents in and around the city. It is a wonderful, new, innovative arts facility not only for the people of Leicester but for people in Leicester’s hinterland and county area. That is the sort of thing that can be done if an authority is given the power to innovate through unitary status.

My own authority of Derby has also used the ability to bring inward investment into the city as a result of being a unitary council. Two or three years ago, I had the privilege of opening a wonderful new shopping centre that the council was instrumental in bringing about. That would have been considerably more difficult had it continued to be a lower-tier authority. Derby was yet another local council made a unitary authority by the previous Conservative Administration in the 1990s.

I know that the hon. Gentleman is making a case for unitary authorities, but does he not recognise that district councils do an equally good job in the county of Northamptonshire? The Corby district has just opened the new Cube building, a fantastic facility, and in Daventry district, which I represent, there is the iCon centre, which is a centre of excellence for construction. Surely there are points on both sides of the argument. I understand his point about self-determination, and surely that is the point of this exercise.

I hear the hon. Gentleman’s point, and he points to excellent examples of district authorities innovating, bringing about wonderful new facilities and generating economic activity in their areas. However, Norwich and Exeter are looking to secure freedoms that would enable them to innovate and deliver improvements such as those achieved by the district councils he mentions, but much more easily and effectively. That will be even more important in these straitened economic circumstances.

The Minister made a very short opening speech, perhaps because he is rather embarrassed to be standing here supporting the indefensible. He knows that he has to close ranks with the Secretary of State, who in effect has hung him out to dry.

With swingeing cuts being imposed on local councils, unitary status in Norwich and Exeter would offer some protection for front-line public services. It is an undeniable fact that it would be a far more effective and efficient use of public money to make unitary authorities responsible for all council services in their areas. That would eradicate duplication and free up funding, which could offset some of the swingeing cuts that will be imposed. Over the next four years, as we know from the comprehensive spending review, there will be 28% cuts on average, although some local authorities will see even bigger cuts, and it remains to be seen how Norwich and Exeter will be affected. If we can eliminate some of the duplication in Norwich and Exeter, authorities there would have a fighting chance of at least protecting a few more front-line services, which would otherwise be put to the sword.

It is pretty obvious, where councillors from the county authority represent Norwich and Exeter, and councillors represent the districts in Norwich and Exeter, that that in itself is a duplication. We heard the Conservatives say in the run-up to the election, and we know from their gerrymandering Parliamentary Voting System and Constituencies Bill, that they want to make politics more cost-effective, but if they are genuinely serious about that, they would support the unitary status bid in Norwich and Exeter. That, then, is a duplication of the political process. There is also the duplication of the chief officers and the fact that the backroom activities of Norwich and Exeter duplicate those of Norfolk and Devon to some extent. I could go on—there is a long list of areas where there is duplication. That is surely a given.

On the hon. Gentleman’s comment about Norwich, is it not correct that, even if there was a Norwich unitary, under the previous Government’s proposals there would still be a Norfolk county council, so there would be no change in the number of chief executives? The hon. Gentleman’s point does not make sense.

Yes, there would still be a Norfolk county council and a Devon county council, but the fact remains that there would be far fewer councillors than there are now. There would certainly be the reduction in backroom staff in Devon and Norfolk that is necessary at the moment. That fact was recognised by previous Conservative Governments, which is why they were so keen to create so many unitary councils, which Derby, Nottingham, Leicester and many other local authorities around the country benefited from. The hon. Gentleman is on shaky ground if he is suggesting in some way that there is no duplication in the two-tier model that we have in Norwich and Exeter.

What is the hon. Gentleman’s assessment of the savings that would be produced by reducing the number of councillors? He said early in his speech that that was one of the main savings. I ask that particularly as the shadow boards that were set up paid considerable salaries to councillors who were already earning a council allowance.

The hon. Gentleman should not get too hung up on the issue of councillors. I explained that reducing their numbers represented not one of the main savings, but just one of the savings. If the hon. Gentleman looks at the impact assessment that was carried out at the time, he will see that it illustrated that the savings across the piece for Norwich and Exeter would be about £6.5 million per annum. That is an unanswerable fact, and I should have thought that the Government supported it.

Is it not absolutely astonishing that the hon. Member for Norwich South (Simon Wright) is not aware of the figures in his own Government’s impact assessment? They show quite clearly that there will be net savings within six years and then savings of £6.5 million every year. Those are not our figures—they are the Government’s figures, but the Government have completely ignored them.

I agree with my right hon. Friend: what the hon. Member for Norwich South (Simon Wright), who represents one of the cities affected, says is astonishing. It is even more incredible given that the Liberal Democrat party in the hon. Gentleman’s home city supports unitary status for the city. I do not quite understand why he has come here to justify and defend the indefensible. I know that the Liberal Democrats are on the leash of the Conservative party, but the hon. Gentleman perhaps takes things to the extreme.

The swingeing cuts that the Government are imposing will have a devastating impact on people around the country. I appeal to Government Members to consider for a moment what that will mean not only for people who work for the authorities affected, but, most importantly, for the recipients of those authorities’ services. I should have thought that Government Members would have a moral obligation to look for ways to ameliorate the full impact of the cuts to which local authorities are subject. Giving Norwich and Exeter unitary status would go a long way towards ameliorating that impact, so I call on Government Members to look into their hearts and ask themselves whether they are making the right decision. Are they simply being driven by some dogmatic imperative or are they prepared to reconsider their position? Are they—this is why hon. Members are elected to this Chamber—prepared to stand up for ordinary people and to protect their interests. By supporting the position of the Opposition and of the people and councillors of Norwich and Exeter, they would be fulfilling the role for which they were elected to this Chamber.

I promise that I will not trouble the hon. Gentleman again, but how can he stack up the comments that he made earlier about making savings in back-office functions, and therefore making people redundant, with his comments now about trying to prevent cuts in the public sector?

The fact is that there will be cuts as a result of the decisions being taken by the Government, who are in charge of funding for local councils, but the Opposition do not accept that it is necessary to make cuts on the scale that is being proposed.

As for how I reconcile the points that I have made, I acknowledge that there will be some cuts, irrespective of whether Exeter and Norwich became unitary councils. My point, however, is that the savings that would be generated by unitary status could be used to protect front-line services. Moreover, freeing up Norwich and Exeter would give them the ability to bring in new inward investment and to innovate in a way that would create jobs in the private sector. The Government and the Office for Budget Responsibility claim that 2.5 million jobs are required in the private sector. We should support local authorities such as Norwich and Exeter in bringing in new inward investment and assisting the private sector to innovate and create the jobs that will be desperately required.

I just wonder what happened to the brave new world of Tory localism. Hon. Members will correct me if I am wrong, but did the Secretary of State not say that he wanted to put

“town halls back in charge of local affairs”?

The Government’s position on this issue calls that statement into question—it is something of a sick joke. If the Secretary of State genuinely wanted to put town halls back in charge of local affairs, he would support the democratic wishes of the elected officials in Norwich and Exeter and of the people who live in those cities. This is a bad Bill—it has all the hallmarks of a political stitch-up. It is more to do with placating Tory county backwoodsmen in Norfolk and Devon than with modern, progressive local democracy.

The Bill is not about looking forward at all. It harks back to the disastrous period for local councils in the 1980s, when the Secretary of State was the leader of Bradford council. If passed, the Bill will represent a sad day for the people of Norwich and Exeter, and a sad day for local democracy. For all the Secretary of State’s blustering hyperbole, it seems that he has already written the obituary for democratic localism even before the ink has dried on his much-vaunted localism Bill.

I do not wish to detain the House for long on Third Reading, because much was said on Second Reading and in Committee and we have covered the issues. However, I wanted to update the House on the Norwich and Norfolk situation.

The hon. Member for Derby North (Chris Williamson) referred to the potential savings, which in Norwich were just under £2 million. That sounds good, but there is an up-front cost of £20 million, and most savings would be made only after five or six years. In most organisations, such potential savings are never delivered after that amount of time because things change.

I urge the hon. Gentleman to look at the impact assessment. He is right that the cost of implementing unitary status in Norwich and Exeter is around £40 million, but the savings over that same period work out at £39.4 million, so the net cost of implementation is only £600,000, and there is an additional, ongoing saving of £6.5 million per annum.

The hon. Gentleman helps me to make my point: just think how much we could save if we did not have the up-front costs of a top-down, forced unitary authority. In Norfolk, local authorities and the county council are working together to find ways of sharing services and to make the savings of £6 million a year—or potentially more—across Norfolk without going to the trouble and cost of creating a unitary authority that is forced on them from the top down.

We must remember there was no screaming desire on the part of people in Norfolk or indeed Norwich for that change, and no opinion poll showed that they wanted it. The only review—published by the previous Government—showed an overwhelming desire for the status quo across Norfolk and that if there was a preference for unitary, it was for a Norfolk unitary rather than Norwich unitary, which could have meant an awful lot of savings. Changing Norwich city council, which has not had a great track record recently, into a unitary would not save anything in officers or councillors. The real benefit to Norfolk will come from local authorities working together and sharing services. Those discussions are ongoing, and I hope that savings can be made much earlier than they would have been made under a unitary authority. That might even happen before Christmas.

As my hon. Friend the Member for Derby North (Chris Williamson) said, this is a sad day for two of our great, historic English cities. I was brought up in one of them—Norwich—and I have represented the other in the House since 1997. The Government’s measures will not be lost on the voters of either city. Indeed, in local government elections in September—they were forced on us by the Bill—the Conservatives did very badly, the Liberal Democrat vote completely collapsed, and Labour retook control of the council. I predict a similar bloodbath for the Conservatives and Liberal Democrats in Norwich when voters there have the opportunity to use their democratic right.

The quisling stance of the Liberal Democrats and the hon. Member for Norwich South (Simon Wright) will not be missed by the voters of Norwich. As a candidate, he advocated Norwich’s unitary status; since then, he has voted with the coalition Government in favour of the Bill and against our amendments that would have kept the ambitions of Norwich and Exeter alive.

There is a long history to the Bill. For hundreds of years before 1974, Norwich and Exeter enjoyed self-government. Long before county councils were even thought of, let alone invented, Norwich and Exeter had their own unitary local government that made decisions on behalf of their citizens. In 1974, the then Conservative Government robbed those two great, historic cities of their right to self-determination in their reorganisation. They handed most of the services, including the most important ones—education and social services—to the county councils.

We have heard a lot in debates on the Bill about dealing with the problems of two-tier local authorities. That principle used to be held by all parties in the House. As my hon. Friend the Member for Derby North reminded us, the previous Conservative Government were very permissive in granting unitary status, including to the two other main urban areas in Devon, Plymouth and Torbay. It is funny that they were happy to grant Conservative Plymouth and Conservative Torbay unitary status but not Exeter, which is of even greater economic importance and value to the wider sub-region. The Conservatives have completely changed their position, and it is not really very clear what the Liberal Democrats position is.

There are many reasons to advocate unitary government, and they have been taken up by all parties. My hon. Friend spoke of the economies involved, but almost as important to my constituents is the feeling that they have some democratic control, and that councillors have some democratic accountability. They do not currently have that. Countless decisions that affect Exeter and Norwich are made by county councillors who are not from those cities and who do not have their interests at heart. That is one reason why all parties in the House have supported unitary government in the past. It is more efficient and cheaper, and there is a direct line of democratic accountability, which voters prefer and value.

In the course of debates on the Bill, the Government have been absolutely unable to produce evidence for it. Their own impact assessment made it quite clear that unitary status would mean significant savings to the taxpayer in the medium and long terms. They have been unable to challenge the fact that unitary status in Exeter and Norwich enjoyed widespread support. In my own city of Exeter, every single party on the local council, including the Conservative party, the Liberals, the Liberal Democrats and the Labour party, supported Exeter’s unitary ambitions, as did our university and business community. In Norwich, support was almost but not quite as unanimous—the Conservatives were the only party on that local authority to oppose Norwich’s bid.

The Government have produced absolutely no evidence for what they are doing today. My hon. Friend was quite right, therefore, to imply that the only possible reason for the Bill is political spite. There is no other reason for it at all. The voters will long remember and not forgive that, but all is not lost. I was pleased that in an earlier debate on the Bill, Labour Front Benchers gave a very clear commitment that under a future Labour Government, the just and rightful aspirations of the people of Exeter and Norwich will be honoured.

With the leave of the House, I will briefly reply to the debate.

I congratulate the hon. Member for Derby North (Chris Williamson) on a remarkable display of political chutzpah. I kept my opening speech brief not because I am embarrassed by the Bill—I am not remotely embarrassed by it—but because when I was a young barrister, those who taught me often said, “The stronger the case, the shorter the argument should be.” As briefly as possible, I shall briskly rebut some of the points that were made in the debate.

First, the Bill is not about the merits or otherwise of unitary authorities per se, but about the specific proposals for Norfolk and Norwich and Devon and Exeter, and the hangover arrangements relating to the county of Suffolk—no more than that. That came about, I observe, because the former Labour Secretary of State, the right hon. Member for Southampton, Itchen (Mr Denham), attempted to rush through these unitary proposals, against the advice of his Department’s accounting officer and his own party predecessors, in the dying days of the last Parliament. That was struck down as unlawful by the High Court, however, so the matter remains outstanding and has to be brought to a close.

If this is not an argument against the merits or demerits of unitary councils, it would seem that the Minister has inadvertently conceded that this is an act of political spite.

On the contrary, it is clearing up an act of partisan manoeuvring by the previous Government, who abandoned their own criteria. It is worth remembering that a previous Labour Secretary of State, the right hon. Member for Salford and Eccles (Hazel Blears), concluded that neither the Exeter bid nor the Norwich bid met the value-for-money test that she had set. Was she acting out of political spite? I rather doubt it. It was also concluded that the Norwich bid was questionable on the affordability test. So the Labour party set out certain criteria, but these proposals did not meet them, and it then completely changed its tune. It is the ultimate hypocrisy, therefore, for Labour Members to accuse the Government of having changed their stance; it is they who have been so inconsistent that the High Court overturned their attempted gerrymandering.

How does the Minister respond to the point that the impact assessment concluded that there would be ongoing savings of £6.5 million per year? Surely that is an example of good value for money, and it would be brought about by creating unitary councils in Norwich and Exeter.

I am glad that the hon. Gentleman raises the impact assessment, which I was going to come to, because throughout this debate Labour Members have singularly failed to understand how the impact assessment operated. First, it set out and commented on the costs and savings by reference to the previous Government’s assessments. If they think there is a problem with the previous assessments, it is not our difficulty—we did not create them. It was the previous Labour Government who judged that these proposals did not meet the financial criteria and, in the case of Norwich, the value-for-money criteria as well. They cannot have it both ways; their impact assessments were used by their own Ministers to condemn proposals that they later chose to bring forward—so I will not hear any arguments on the impact assessment.

Secondly, it is quite clear—there is ample evidence from across the country, from joint working by local authorities, including those in Devon, Suffolk and Norfolk—that considerable savings can be made through collaborative working without the on-costs and up-front costs of reorganisation. So we can have the benefits without the costs.

At the end of the day, this was a political act by the Labour Government, who, finding it inconvenient to stick with the decisions of their own Secretary of State, the right hon. Member for Salford and Eccles, decided to wriggle out of it by inventing a reason that had never existed before for departing from their own criteria. That was struck down by the High Court. We have concluded that enough is enough, and that this would not serve the good interests of the governance of the counties of Devon and Norfolk, of which the cities concerned are an integral part. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time and passed, without amendment.