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Northumberland (Structural Change) Order 2008

Volume 699: debated on Thursday 21 February 2008

rose to move, That the Grand Committee do report to the House that it has considered the Northumberland (Structural Change) Order 2008.

The noble Baroness said: The order was laid on 8 January. Today we are debating five orders which bring into effect unitary authorities for Northumberland, Wiltshire, Durham, Cornwall and Shropshire. This initial debate addresses the Northumberland order, but since many of the same issues and processes will arise on each order, I hope the Committee will agree that it is sensible if I set out the main issues as context for the more detailed description of each case as we come to it. In that way, we will have a context for the individual situation and choices evident in each order without, I hope, too much repetition. I apologise to the Committee in advance: I have a rather long speaking note. However, I think it will serve the purpose of the Committee if we do it this way than if we have individual debates and I find myself repeating what I have said before.

I shall therefore explain to the Committee the general approach we have adopted to unitary restructuring; the precise approach we have taken—

[The Sitting was suspended for a Division in the House from 2.01 to 2.11 pm.]

I shall resist the temptation to skip to page 30 of my speech and resume where I left off. I was about to explain to the Committee our general approach; our precise approach to assessing proposals, especially when looking at the criteria against which we have made our judgments; and our approach to implementation. I shall then address the points raised by the Merits Committee of this House and the Joint Committee on Statutory Instruments in their reports, which I feel noble Lords would want me to do.

When we debated these issues in the context of the local government Act, I could refer only prospectively to the process which was then unfolding as we considered the merits of the various proposals put forward as a result of the invitation issued to local councils to come forward with a proposal for restructuring the local area. The Committee does not need me to speak at any length about the principle which inspired this, or the way in which it was set out at every stage of the process, save to make the fundamental point that it was in no way driven or imposed by government, and that any invitation that was taken up was a local decision which reflected local aspiration and circumstances. In fact, we needed to be persuaded that a case had been made, based on the evidence that had been brought forward. We were also well aware that, like every other reorganisation of local government, there was bound to be controversy and local disagreement—we certainly were not blind or deaf to that.

The orders that we are considering are the final legislative step in a process which started formally in October 2006 with the publication of the local government White Paper and the invitation to councils to submit proposals for unitary structures by 25 January 2007. I say that this is the final legislative step rather than the final step because, in terms of achieving the outcomes of better governance in the areas concerned, the order is but a milestone, albeit an important one.

If the orders are approved by Parliament, made and come into effect thereafter, there will in each of the areas concerned be a process of transformational change to deliver new local governance arrangements—different arrangements that fit the circumstances of each area—which both those who made the initial proposals, and we in government who evaluated them, believe are likely to facilitate the areas’ economic, environmental and social success. It is interesting to note not only how different are the six proposals that have come forward, but how clearly they demonstrate a difference in the notions of strategic leadership and neighbourhood engagement.

Our conclusions about two-tier and unitary local government and our decision to issue our invitation were based on extensive discussions across the country. That debate has continued during the past few months: there has been intensive debate within the new unitary areas. However, what is significant—and it was evident in the debates on each order in another place—is that although there has been heated local debate, involving particularly those who are loyal to the district councils that are being abolished, a genuine willingness has emerged to make work what has been undertaken.  In the areas which we are discussing today and in the very different proposals that have come forward, officials and elected members alike have put differences aside and have come together in a determination to work through what is best now for the local area as swiftly and as clearly as possible.  I pay tribute to all those who have been part of that process and who have served councils so well in the past. It is to the enormous credit of those who did not want to see a unitary council that they are now committed to making the process work and making the most of the benefits. They now need and seek the approval of Parliament.

That approval has been forthcoming.  As noble Lords know, these orders have been considered in detail in another place. The debates showed some sharply argued disagreements, sometimes between parties and sometimes within parties, but were good and constructive. A number of local MPs who opposed the decision and the process have committed to making it work.  That reflects the progress that has been made to make it a success.  I have every confidence that your Lordships will assist this process and support the orders, I hope without delay or division.

The most important point is that these orders represent successful advocacy and evidence from local authorities. Noble Lords will remember that some 26 proposals were submitted which followed consultation and rigorous assessment against the five criteria and led to the five orders we are considering today. Only nine proposals came forward.  There is a draft structural change order for Cheshire that we shall be considering another time, and the Government have yet to take a decision on proposals which they have received for unitary structures in Bedfordshire.  We decided not to implement 15 proposals and referred three proposals to the Boundary Committee for advice.  In short, we failed far more local authorities against the criteria we set than we passed.

The local authorities before us today satisfied the criteria against which the proposals were assessed. Let me reiterate why we went down this path in the first place.  The aim was to put in place local governance that would best enable an area to achieve greater economic, social and environmental success. We set out criteria to reflect that aim. Our invitation set out three criteria which specified the outcomes that any new unitary form of local government, if it were to be implemented, should deliver.  It is significant that even those who opposed the eventual outcome have often made the case—it has been a historic case in some instances—for some unitary solution on the grounds that it offers greater clarity and accountability. Indeed, some have put forward alternative proposals for unitaries that did not meet the criteria—for example, the district councils bid in Cornwall. These criteria focused on strategic leadership, genuine opportunities for neighbourhood flexibility and empowerment and the delivery of value for money and efficiency in public services. The judgment against these criteria was necessarily prospective because it was about future outcomes if the proposal were to be implemented.

It was also important to consider not only what the proposal would achieve once implemented, but also the cost of the change. Would it be worth the candle?  Would it have sufficient support locally for the new unitary structure to be a success? Therefore, the invitation set out two additional and practical criteria to ensure that if a change were to be made, it would be able to succeed and that we would set up no new councils to fail. That meant, first, that those advocating change had to show that it was affordable and, secondly, that it would have the support of people who would ensure, pragmatically through their partnership and commitment, that its purposes would be achieved in terms of better services and better places for people to live. That is why we specified that there should be,

“a broad cross section of partners and stakeholders”.

These criteria also involve prospective judgments.

Since these criteria generated a great deal of public and parliamentary debate, I shall explain a bit more about them and how local authorities satisfied them. I shall take affordability first. For a proposal to meet the affordability criterion, the transitional costs must be expected to be more than offset by the savings that the proposal is estimated to generate, and that is expected to be achieved within less than five years. It also means that implementation will not involve capitalisation, using capital resources to meet revenue costs; it will not involve incurring costs that would have to be met by increasing the council tax; and to the extent that in any year the costs of transition are not covered by savings, they are expected to be met by council reserves.

In assessing all the proposals, the financial cases were subjected to rigorous scrutiny.  I am aware that some local authorities brought in their own academic reviews.  Quite rightly and properly, we engaged independent financial experts with wide experience in local government at chief finance officer level through CIPFA and the Institute of Public Finance to scrutinise the business cases and the additional information provided during the consultation process not only from the proposers, but also from those who expressed concerns about the financial viability.

For Northumberland and the other unitary proposals we are considering this afternoon, we are satisfied that there is a reasonable likelihood that all the outcomes specified by the affordability criterion will be achieved.  Our financial experts concluded that in financial terms the proposals were low risk.  Each of the new unitaries will effect projected annual savings of between over £9 million and over £18 million annually, a total of over £75 million.

However, in relation to the definition of “broad support” there has been, predictably, the greatest and most heated debate. Therefore, it is very important that I set out what it means. It is, essentially, about whether the new unitary authority will genuinely meet its objectives and will work for local people.  We have done things differently from in the past.  No other reorganisation has proceeded by invitation. We have wanted to ensure, given the strain and stress in any change—I know that noble Lords have been very concerned about this—that the proposals would be tested against whether they would work because they had the support of those outside local government itself, who would have to make them work in the interests of local people.

Therefore, we deliberately did not look for public support, we did not require local referendums, and we did not make this a test of public opinion. We did not base support on whether a majority of stakeholders, of local citizens or of some other group of interested persons supported or approved the unitary proposal. In our original invitation we explicitly said that no single council or body, or group of councils or bodies, would have a veto, and we recognised that a proposal might not carry consensus from or within all sectors. However, we thought that there needed to be sufficient confidence about the new council among those public sector bodies that will need to work with it.  There also needed to be confidence in the future prosperity and success of the area, which is why partnership with the business community, in its wider sense—from tourism to public sector industries—was a key element. There also needed to be a level of confidence about the improvements among local people, if the council’s plans for community engagement and empowerment were to work.

Indeed, to reinforce that point, one of the proposals we received—that from Somerset—in our judgment met all the criteria fully apart from the support criterion. We considered that the bid commanded some support, but it was not sufficiently broad in range and we did not progress that proposal.

Therefore, I understand that much of the debate has turned on the nature and extent of public support, and in each area the prospect of change has been greeted differently, not least because we left it to local authorities to work out how they wanted to do this themselves and solicit opinion in the way they thought effective. A wide variety of methodologies was used, from Ipsos MORI polls to questionnaires and surveys, public information leaflets, meetings and focus groups. The opinion polls were usually postal polls or surveys, undertaken by the district councils. Inevitably, that provoked a great deal of heat and hostility to the prospect of change. There has been a febrile atmosphere in some local areas, with claims and counterclaims and a campaigning strategy has been evident, but in each case, although it has been variable, we have seen sufficient positive support for change in principle and in practice, which has led us to conclude that there is reasonable support for the proposal among local people.

For example, in Northumberland, the public sector support ranged from Northumbria University; the local NHS trust, the Northumberland Care Trust; the fire authority; the North East Chamber of Commerce; local businesses; and there was also significant campaign correspondence expressing a preference for a single unitary option.

It is significant that this approach to determining a broad level of support was precisely one of the grounds on which we were challenged in the courts last year. Last autumn, the court dismissed the challenge brought by Shrewsbury and Atcham, and Congleton. The court found conclusively that the Secretary of State was entitled to take the approach she had followed in relation to assessing proposals against the support criterion. That judgment is currently the subject of an appeal and we await the court’s decision.

Much of that support is bolstered and, we believe, will grow due to the fact that each of the new unitaries, reflecting the size and range of the local authority itself, proposes to put in place new arrangements. The duty to involve, which we introduced in the Bill last year, will ensure that local people are represented properly, have local influence and will be connected in new ways to the local authority. That has been a very important part of what makes this a new organisation.

I turn briefly to implementation, the timetable and the impact on elections. Each of the orders provides for the creation of new single-tier local government from 1 April 2009, with the existing district councils being dissolved and the county council being transformed into a new unitary council with both district and county functions. They also put in place transition arrangements. Each one establishes an implementation executive to discharge transitional functions until elections are held, and provides for the creation of a team of officers to support the implementation executive.

In two cases—Northumberland and Durham—the orders provide for elections in May 2008. In Cornwall, Shropshire and Wiltshire they will be held in 2009, and the orders also provide for the cancellation of district elections in two districts which elect members by a third—Penwith, and Shrewsbury and Atcham respectively. I stress that in each case the decisions on timetabling and the implementation processes have been driven by what local members and their officers think is best for their area.

I would like to cover three connected issues arising from this: first, elections; secondly, the reports of the JCSI and the Merits Committee; and, thirdly, the rationale for the county council as a continuing authority. I know that noble Lords raised the last issue when we debated the Bill.

As I explained, the orders make provision for elections in Durham and Northumberland in May 2008. Our approach to deciding when the first elections should be was essentially as follows. As a matter of principle and as a starting point, we believe that elections to the new unitary councils should be held as early as possible to reduce delay and disruption. That would point to elections in May 2008, but there were also reasons why that might not be appropriate or right for a locality.

The first reason was that, if there was a consensus among all councils and across all parties that the first elections should be in 2009, then, as a matter of principle in terms of devolution, we should adopt that. The second reason was that elections earlier than 2009 would necessarily be on the basis of existing wards or electoral divisions. In some cases, those simply did not fit with the neighbourhood or community arrangements envisaged as part of the new governance arrangements.

In Northumberland and Durham, there was agreement for elections to be held in May 2008 because the councils wanted to proceed rapidly to determine their future and felt able to do so. In Cornwall, Shropshire and Wiltshire, the councils accepted or agreed that the first elections should be in May 2009, thus allowing the Boundary Committee to undertake a full review of the electoral arrangements to reflect the new community governance arrangements in the proposals.

I turn to the reports of the Merits Committee of this House and the JCSI. The Committee will know that the Merits Committee reported on all five draft orders, drawing attention to what it saw as the uncertain support, the cancellation of elections in some districts and parishes that would otherwise be held in May 2008, and the use of the orders to specify the structure and political balance of implementation executives.

The Committee will also know that the Joint Committee on Statutory Instruments reported on the draft orders for Cornwall and Shropshire, and highlighted what it described as,

“an unexpected use of powers in specifying the membership and political balance of the Implementation Executive in each case”.

It also concluded that there was doubt as to whether, if the order was approved and made, its provisions on cancelling district council elections would be intra vires.

I have discussed the support for the proposals. The structure of the implementation executives was discussed and agreed in each case by the affected authorities, and it was the authorities themselves that asked us to cement the arrangements—in some cases they had proved hard to negotiate—by prescribing them in the orders, for the avoidance of any doubt in the future.

Noble Lords would expect that, with regard to the cancellation of district council elections, we would have considered the reports of the committees very carefully indeed, and we did so.  However, we remain of the view that there is both an overwhelming practical case for cancelling these elections and, on advice, that an order giving effect to this policy would clearly be defensible if legally challenged.

As we explained in our memorandums to the JCSI, the cancellation of the elections is based on compelling practical grounds. It is necessary to maintain the confidence of the electorate during the move to unitary local government. To press ahead for those district councils affected would have serious consequences. First, it would mean holding elections whose purpose would be open to question, since those elected on this occasion would not have key functions that those elected would normally be expected to undertake; those functions have been transferred to the implementation executive, as I explained. They would have nothing to do with setting budgets or council tax for the next year.

In such circumstances, there would be a question about whether candidates would be prepared to stand for a council left with only residual functions. Would there be any point in standing if one could not carry out any manifesto commitments? If there were candidates, could that not be confusing and damaging to an electorate who would have thought that they were voting for a fully functional councillor? It would also be extremely wasteful to elect an officer for less than 11 months; they would not have the opportunity to take key decisions, as I said.

The second point is about the defensibility of the order against legal challenge. We have been advised that, while there are valid concerns about our powers in the 2007 Act to provide in the order for the cancellation of district council elections, there are reasonable arguments that there is a power under that Act to make such provision. In short, there are two arguments, as my right honourable friend in another place set out in a letter that I passed on to the Front Bench, but I shall put it on record. The first argument is that Section 11 of the Act lists certain matters for which an implementation order may make provision, including “electoral matters”; I think that that is in subsection (4). Section 12 defines “electoral matters”, specifying a number of matters that fall within that definition. Although many of the matters listed in Section 12 appear to refer to the holding and not the cancellation of elections, it is arguable that Section 12 matters, particularly,

“the election of councillors for any electoral areas”,

are wide enough to cover the cancellation of elections.

There is an alternative argument, which is that Section 13 of the 2007 Act enables an order to include any,

“incidental, consequential, transitional, or supplementary provision”,

that that should be read broadly, and that it encompasses any matter which has a sensible connection to the main thrust of the order. It is arguable, particularly given the powerful policy case for cancellation, that the election cancellation provision in the order is part and parcel of an efficient and effective implementation of the unitary proposal, and hence could be included under Section 13 powers.

We believe that there are precedents, both in terms of policy and legal powers, for the order’s cancellation provision—for example, a 1995 order on the restructuring of Humberside, made under the Local Government Act 1992. Our advice is that there are sufficient similarities between the Cornwall and Humberside orders for them to be seen as reasonable parallels.

Before I come on to Northumberland, I assure the Committee that we are clear that the process is not in any way the county council just carrying on and taking over the district councils.  This is a wholly new start. There will be new members, a refreshed senior management team, new and innovative service delivery and neighbourhood engagement arrangements, which we can discuss when we come to the individual orders. They will be new councils, even though they are technically continuing councils, because that approach reduces the turbulence in each area and makes the transfer process much smoother and more tolerable.

We are very concerned to ensure that this is as smooth a process for loyal and committed staff as possible, and the staff of each of the new unitaries will be treated in the same way. It is an unsettling time for employees of the affected authorities. Detailed arrangements are for the local councils as employers to consider, but we are putting in place a framework to ensure that all staff are treated fairly. We have made it clear that all staff employed immediately prior to 1 April 2009 by the authorities which are to be abolished will become employees of the new unitary authority and will be protected in line with the principles of the Transfer of Undertakings (Protection of Employment) Regulations 2006— TUPE—as if those regulations applied. We made that clear on 5 December. This means that all staff that transfer to a new unitary authority will do so on their current terms and conditions. It will then be for the new unitary councils to decide their new staffing structures in accordance with TUPE and employment legislation generally.

I am very grateful for the Committee’s patience as I have set out that detail. I shall now say very briefly a few words just about the Northumberland order. In the case of Northumberland, we received two proposals—one for a single-unitary authority, which this draft order implements, and another for a two-unitary authority solution for Northumberland, submitted by the district councils. As I told the House on 5 December, our judgment is that if the proposal for the single-unitary authority were to be implemented, there is a reasonable likelihood that it would achieve the outcomes specified by all five criteria in the invitation. That is our judgment. In contrast, I also told the House that in our judgment the proposal for a two-unitary Northumberland met only two of the five criteria—those on neighbourhood empowerment and affordability.

On the basis of the proposal that we received, and having regard to all the other material and representations that we have received and to the advice provided by our independent financial experts, which shows the financial viability, the expectation is that the change in Northumberland will lead to annual savings of more than £17 million. Therefore, the proposal is affordable.

Secondly, we judged that the proposal met the support criteria, which we have also discussed. I gave a few examples of that and the mixed response from the public. But in the north-east, we were also in the unique position of being able to look at the results of the referendum held in 2004, which asked voters explicitly whether they wanted unitary authorities. In Northumberland, two in five people said that they did—I think that it was 44 per cent. Yes, a majority said that they did not want a unitary, but that was relatively narrow. There was support from public agencies for a single-unitary solution, and there were mixed views among town and parish councils, although the Northumberland Association of Local Councils expressed a preference for a single-unitary authority.

The order establishes the new unitary Northumberland Council, following consultation and full discussion with the councils, so that the arrangements that we are setting up are those which local people believe are best for them. The order provides that from 1 April 2009 there will be a single tier of local government in Northumberland. The existing district councils will be dissolved and the county council will be transformed into a new unitary council with both district and county functions. This is a wholly new start; there is no question of the county council simply taking over the district councils. There will be a refreshed senior management team and potentially, once elections are held in May 2008, new members.

Thirdly, the order makes provisions for the key transitional arrangements and provides for the establishment of an implementation executive to be led by the county council, whose membership will be drawn from the county and all the district councils. The membership and make-up of the implementation executive was discussed in detail with all the affected councils and a consensus was reached and is reflected in the order.

The order provides that the county council will have the function of preparing for and facilitating the economic, effective, efficient and timely transfer of the district councils’ functions, property rights and liabilities to the respective new council. It also requires that these transitional functions be discharged by the implementation executive prior to the election of the new Northumberland Council in May 2008, which is the earliest practical date for fresh elections. That means that there will be a democratic mandate as early as possible.

To provide the necessary support for implementation, the orders also provide for the creation of a team of officers in each area, again drawn from the county and all the district councils. Those arrangements can start to bear fruit and deliver the outcomes that local people will rightly expect only if all the councils in each area work closely with each other. The order places duties on them to do so, and the indications are that this is happening.

The order provides for the next elections after May 2008 to be held in May 2013, which is the normal election day for county authorities. We recognise, of course, that after the May 2008 elections, the Boundary Committee and Electoral Commission will be undertaking electoral reviews in each of the new unitaries with the aim of revising as necessary the counties’ electoral divisions in light of the new unitary arrangements. Under the statute, it is for the Electoral Commission to decide when these new electoral arrangements should be implemented, be that at the 2013 elections or some special interim elections. In the discussion document last August, we explained that we thought that the first few years of a new unitary should be as stable as possible, to get the new council off to a good start. Such considerations would point to avoiding any interim elections between 2008 and 2013.

[The Sitting was suspended for a Division in the House from 2.41 to 2.51 pm.]

Absolutely finally, there will need to be further regulations covering areas subject to reorganisation, and they will deal with matters such as staffing, transfers of functions, assets and liabilities, finance, ceremonial matters and so on. We will be bringing forward those regulations over the coming months as we work them up in consultation with all the councils, trade unions and other key stakeholders.

I believe that this approach will provide for a transition that is effective, that avoids disruption to services and people, that gives a good deal to service users and citizens, that is fair and equitable to council staff, and that, above all, will open the door to the creation of, in each case, a council that will be more effective in giving power and influence to the people it represents and in promoting the prosperity of its area. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Northumberland (Structural Change) Order 2008. Sixth Report from the Joint Committee on Statutory Instruments, Seventh Report from the Merits Committee.—(Baroness Andrews.)

I rise with a heavy heart. None the less, I am very grateful to the Minister for the way in which she has opened this afternoon’s proceedings so that we can have a general discussion about the issue. That will take a little time but the orders are all very similar and I hope that, when we consider them individually, they can be dealt with relatively expeditiously.

I want to go a long way back. I began in local government in 1965. Two years after I arrived, a royal commission reported on the structure of local government in the shire areas of England. It recommended that there should be a single tier of all-purpose authorities—this is quite interesting—with an average population of between 800,000 and 900,000. The consequence would have been that every shire area would either have to be amalgamated with territory from elsewhere or lose territory.

Inevitably, the recommendation was opposed because everyone felt that there would be a loss of identity. There was almost united district council opposition; there was almost united Member of Parliament opposition because MPs identified very closely with their districts, as was entirely reasonable and proper, although there was never quite the same relationship with county councils; and there was remarkably strong opposition from Members of this House, many of whom served in local government. Some of them were simply not going to go to a county hall in some other county’s territory—you could not do that sort of thing in 1964. The result was that a very deep pigeonhole was found for that report, and the whole subject of the structure of local government has been a political football ever since, which is a matter of great regret.

What is worse is that, for 40 years, much of the best intellectual capacity and drive within local government has been distracted from the proper provision of services to the public that it serves because of the constant irritation of the possibility of this or that proposal being introduced at the whim of this or that Minister. I realise that I stand here as a shadow Minister and I say “Heaven help me” in this situation.

At the same time over those 40 years, we have seen an increasing centralisation of resources, of standards and of pressures on authorities to conform. It would therefore be nice if the Minister indicated that this is perhaps the end of the game, at least for the authorities that we are considering today, because without that assurance the exercise is worthless.

It is axiomatic that if you ask any group of people in a position of executive authority whether somebody else should do their job, the inevitable reaction is, “Of course not. We’re doing it very well”. That is a position in which we still find ourselves: local councillors are rightly very proud of what they do. They are dedicated to making the system work. Whatever system the Government impose on them, they will do their level best to make it work. I pay tribute to all the work that was done, particularly by those in the areas which today’s orders affect. They will now find they have a limit to their capacity to serve their communities. These are people who have often given much of their lives to serving their community, and we should honour them.

For some people, this is a matter of great sorrow and regret, but it has to be faced. The Minister made two points on which we need to concentrate, partly because they are relevant to the future. First, she used the phrase “a reasonable level of support”. She decided that 40 per cent was a reasonable level of support. Well, 40 per cent support indicates that 60 per cent might have no view, but they might be opposed—it is difficult to read that. We need to recognise that the Government have judged that this is the way that they want to go, and they are to a certain extent fitting the facts to the theory, rather than the theory to the facts. The electorate may make a judgment on that at some point in the future, not in local elections but in a national election. I was interested in the Minister’s remarks, particularly in the light of other proposals which may come forward in the not too distant future.

The second point to which I wish to draw attention, because I find it slightly odd, is that, in two of today’s cases, we are creating a situation where people will serve six years without election. That is not impossible or intolerable, but it is interesting because it is beyond a normal parliamentary term. We need to recognise that that is what we are doing: certain parish councils which have been on a three-year cycle and which were elected last year will remain in a valid elected position until 2013. That is the reality. I am grateful to the Minister for her letter setting out the justification for the electoral processes for parish councillors, which rightly raised the interest of, and appropriate comment from, the Merits of Statutory Instruments Committee. We need to recognise that it is an oddity.

There is not much more that I want to say. If the proposal for Northumberland is the endgame, whether I like it or not becomes irrelevant: it will be in the best interests of the community. However, if there is any possibility of this subject being reopened, at least in the foreseeable future, it would be better if we were not doing this at all.

I thank the Minister for her introduction. Adopting what is almost a Second Reading procedure is absolutely right on this occasion, and I will respond in the same way. I will make most of my remarks now, and only refer occasionally to specifics on each order—unless I am provoked. We on these Benches have always held the view that the principle of unitary authorities is right for all the arguments with which we are familiar: clarity, economies of scale and so on. From that point of view, we have no problem with the Government’s presumption that unitaries were probably the way forward. However, we have problems with how it is rolled out. I have had a great deal of correspondence on this over the past six months, which can broadly be put into three categories. Some simply do not agree that unitaries are the right way forward. Some think they probably are but are very unhappy about a lack of clarity, particularly in the process that the Government adopted. The last category consists of those who were broadly happy with the first two, but are now unhappy with how it is rolling out.

We identified the basic problem when the Act was going through your Lordships’ House; namely, this sense that there is no real strategic vision for local government—its shape, size, form and function. There is a sort of vague “one tier good, two tier bad” thread running through the White Paper and the Act. However, lots of people in local government did not feel that that was backed up by robust analysis of the strengths and weaknesses of the current system, and whether that would be better addressed by closer two-tier working or unitaries.

A sense of a lack of clarity about the balance between, on the one hand, issues such as strategic leadership and economies of scale and, on the other, questions of local responsiveness certainly came strongly through that. One of the best examples of that is, indeed, Northumberland—the subject of the order we are discussing now—where many of the large organisations, such as the business community, voluntary groups and so on, were very much in favour of a unitary model for the county. They could see that it would assist them in their work.

However, it is fairly clear that a significant proportion of the population was not happy with that model, and preferred the two-tier solution. That is not surprising. Northumberland is very much a county of two halves. My noble friend Lady Maddock, who cannot be here today, has pointed out to me that, in the south-east of the county, the population density is 10.6 people per hectare; in the remainder, there are three hectares per person. There is a very different feel. They have a different set of problems to do with sparsity, second homes and so on. It has been clearly picked up that people do not feel content with rule from an urban area; they think that they will not be understood. The Government have in some ways unintentionally made that worse, by insisting on what they call the “strong leader” model, such as elected mayors or having all the power vested in one person. I genuinely believe that, under a model which gave local authorities more flexibility to choose their governance styles, counties like Northumberland could have come up with a governance solution which might have addressed rural areas’ concerns. However, I feel strongly that that option has now been taken away. Whether the leader comes from the urban part or the rural part, as sure as eggs are eggs, the other side will think that they are not being properly represented or looked after.

There is an issue with the reduction in the number of councillors—in Northumberland, for example, from 305 down to 67. There are probably people who say “Jolly good job, too”. Nevertheless, whether one thinks that it is a good or a bad thing, it will fundamentally alter the nature of the role of councillors. There really has not been enough debate around that.

When councils were asked to make their case for unitary status, they did so without a real sense of what they were aiming at—what they had to tell the Government in order to win. The Government’s tests were too vague—all rather motherhood and apple pie. As a result, local authorities have provided information that obviously is partial. They provide the information that suits their case, as is perfectly natural. The Government can argue that this is a bottom-up process but that does not absolve them from the responsibility of checking whether councils’ assertions about levels of local support can be properly verified. That is the point that the Merits Committee makes.

I was intrigued by the noble Baroness’s citing of Somerset, which apparently ticked all the boxes but, because there was not sufficient public support, the bid did not go ahead. It fell not on any intrinsic merit but because the case failed to be made. In my local area of Ipswich, the council had its knuckles rapped by the Minister in another place for spending too much money on public information. Where an authority is trying to make the case and build up a campaign, that is wrong, but if it does not do so it loses the bid. The Government need to think about that.

I very much welcome the noble Baroness’s assurance about the abolition of existing councils and the fact that the unitaries will be genuinely new. That topic was discussed at some length during the various stages of the Bill last year. However, the Government have not listened enough to the arguments that we put forward then. I understand that there are technical reasons why they want to proceed in the way that they have, but that has ignored some of the local sensitivities about continuing authorities and the perception of “county takeover”. I imagine that my noble friend Lord Tyler may have some words to say about the Cornish situation, but it is the same across the country. It has become particularly difficult in Durham, where the county council insists on calling the new authority “the county council”. The order is clear that it is not the county council. However, the county council deciding that it is going to use that term has put it at odds with the districts, which are now talking about taking out some kind of injunction. I hope that the Minister will take that away, have a word with her colleagues in Durham and send them the order in very large font.

I wish to ask some questions and make some comments about elections. The first is on the issue raised by the noble Lord, Lord Dixon-Smith, about the postponement of parish council elections to 2013. We are not quite into Fidel Castro territory but, nevertheless, they are long terms of office, especially in some places where people were not elected in the first place but co-opted or whatever. The Government could look at that.

I am concerned about the capacity of the Boundary Committee to do the work that it has to do in time for next year’s elections. I understand from debates in another place that Ministers are confident that it can all be done by February 2009, but that is very tight for elections to be held next May. There is no room for slippage. If parliamentary orders are required, there could be some difficulties.

Durham has again been in touch with me, because the Boundary Committee proposes that it has three sets of elections in five years—one this year, another in 2010 and another in 2013. What strikes me as odd about that is that the Government are defending the postponement or cancellation of elections in Cornwall and Shropshire on the basis that having too many sets of elections would be expensive and confusing, yet that is exactly what is proposed for Durham. That lack of consistency is confusing.

I will leave my comments at that. It is fair to say that these Benches have concerns about the process so far, and I have raised some of them. However, the authorities have gone a long way down the road. There is a lot of uncertainty for councillors and staff, but most importantly they are the people who provide the vital services. Our very strong feeling is that we need to progress this now and let them get on with it. If the Government have got it wrong, it is for them to sort it out at some later date and pay the price, but at this point we feel that we would like to see the orders moved through.

However, I hope that, once the orders are through, there will not be a sense of the Government breathing a sigh of relief and saying, “That is it; we can move on”. We are at the start of the process with Cheshire and Bedfordshire and authorities such as Norwich and Ipswich are further down the road. I hope that some of the lessons that we have learnt from this can be taken forward so that we do not have the same debate in 12 months’ time.

This has been a fascinating debate. As the noble Lord, Lord Dixon-Smith, said, it has been almost like a Second Reading debate: very thoughtful and much informed by people who have had many years’ experience in local government, which shows.

Like the noble Lord, Lord Dixon-Smith, I was involved in the reorganisation of 1974, when there was the nitty-gritty of transferring assets and staff and deciding which jobs were ring-fenced and which went out to public advertisement and so on. We have been through it once. I was also involved in very constructive discussions with his right honourable friend in the other place, David Curry, when it looked as though there might be further progression.

What 1974 taught me was that going from the original concept of a unitary to a two-tier structure in places such as Plymouth, Bristol—my own authority—Nottingham and Leicester, which became district councils, the citizens paid a cost as regards transparency and accountability. The result was that services such as housing and social services, which should be together, were splintered. Other services, such as planning, were concurrent; others were overlapping, such as environmental health and weights and measures; and some services, such as highways, were delivered by agency. The result was that each district council had a different set of arrangements with the county council regarding the services that it did or did not offer.

As a result, the poor public did not know who did what, to what level of service, at what price and whom to hold accountable. There cannot be decent local government if there is not sufficient transparency to produce accountability. From that, I learnt the desirability of unitary authorities. Whether they should be county councils or enlarged district authorities depends on the assessment or judgment in local areas about the appropriateness of service delivery and the needs and cohesion of the local community. I am open-minded about that, but I am convinced that they need to be unitary.

The second point, already touched on briefly by my noble friend, is that you cannot have reorganisation by popular plebiscite. I know it was not done by plebiscite in 1974. As the noble Lord, Lord Dixon-Smith, rightly said, Norwich would have been against it and the country would have been for it—plus c’est la même chose. You cannot do it by plebiscite and it was not done by plebiscite in the mid-1990s. There are some good reasons for that—for example, boundary extensions; I remember Plymouth back in the 1950s having boundary extensions. Anyone in the adjacent area who currently enjoys urban services but at lower rates because they are in rural areas—I mean this in no moral sense at all—is effectively free-riding on some of those urban services. I do not criticise them as they are absolutely entitled to use those services, but why would they want to see any such boundary extension when they already receive the services at a cheaper rate than those in the city area?

A second reason for not thinking that a plebiscite is the appropriate way forward is that what makes local government work is not just a head count in democracy—too often councils are composed of the few people who can be bothered to stand, elected by the few who can be bothered to vote—but a community of interest locally. I refer to voluntary organisations, which may be instrumental in addressing social services problems or working with challenged families, faith groups and, above all, businesses, whose ability to work smoothly and easily with the planning authorities ensures that local authorities get the economic growth, the green growth and investment in industry that they want to see. They are major players in the life of the community and there is no way in which one can pick them up in a plebiscite. You have to hear their voices, which is why I very much welcome my noble friend’s remarks about seeing who the stakeholders are. You need to ensure that the major stakeholders and those who in a pragmatic way—I believe that was the word she used—deliver local government services believe that they can make it work in the best interests of the people of their community.

I wish these orders well and I very much hope that the House will support the Government in all ways possible.

I am grateful for noble Lords’ contributions and particularly for the support of my noble friend, who captured precisely why we went about things in the way that we did. In these debates, I am always conscious that I am confronting noble Lords with many years of experience and great commitment to local government. I always feel that I am a relative novice on this, and I stand in awe of that collective experience.

The noble Lord, Lord Dixon-Smith, and my noble friend took us through some of that history and made me aware again that the concept of the unitary council has a long and honourable, if somewhat complicated, history. It commands a lot of intrinsic support and receives positive responses. I am equally aware from the passion with which the noble Lord, Lord Dixon-Smith, spoke that, as we have searched for better solutions for things, there has inevitably been disruption. I join him in all that he said about the work of local government. He said it with a full heart. It was partly because of our awareness of that sort of distraction, and our desire to minimise it, that we did things by invitation this time.

I assure the noble Lord that we do not have hidden plans for future change or a rolling programme up our sleeves. During the debate on the local government Bill, I said several times that we have no plans for a rolling programme, restructuring or any further invitations to councils. As the noble Baroness, Lady Scott, said, we are where we are now with other aspects of this initiative. We have some way to go with the outstanding councils and there is no rolling programme, but we recognise that in certain areas there might in future be an appetite for more unitary structures and it might be right to issue a targeted and focused invitation, but under specific and exceptional circumstances. This programme has been discrete and sufficient unto itself.

The noble Lord raised a point about the length of elections, as did the noble Baroness, Lady Scott. For those county councils which are moving to hold elections in 2008, we are conscious that when the Electoral Commission and Boundary Committee carry out their review, they might indicate that 2010 is a better alternative to 2013. Our feeling is that we need as much stability as possible. While it is up to the Electoral Commission to make its recommendations—it has the power to do so—our view is that we should be looking for stability. I feel fairly confident that the Electoral Commission and Boundary Committee will take into account the views of the people they are working with as a result of these changes. They will look at the implications, the local geography and so on, and I am sure that they will have regard to the representations they receive. We cannot second-guess them but we have made it clear that, although it is a longer time than usual, it is probably wise to have stability.

The noble Baroness, Lady Scott, raised a point about parishes. Parish council elections are usually held at the same time as elections to the principal authority. That is a sensible use of resources and sensible timing. The problem is that parish councils are not always successful in finding people to stand, so one has to look at the conservation of resources as well. Most parishes held elections in 2007 and we think that having to hold elections again in 2008 or 2009 would be disruptive. Most local authorities agree with us, and many parishes that responded also agree. The order cancels parish elections so that they can be held at the same time as future elections.

[The Sitting was suspended for a Division in the House from 3.20 to 3.30 pm.]

I was explaining what we intended to do about parish councils. My right honourable friend said this in the other place in response to similar concerns; we have always recognised that six-year terms are not ideal, so with the 2009 elections we would ask the implementation executive to consult the parishes and county and consider moving parish election dates if that was wanted locally. These long and indefinite periods are not set in stone.

The noble Baroness raised important points about the nature of Northumberland. I appreciate that the noble Baroness, Lady Maddock, is not here, as she would speak very eloquently on these matters. We recognise the sparsity and the differences between parts of a very large county, but there are a lot of cross-commuter flows these days; it is not as if those rigid distinctions and barricades are as high as they used to be. There is a high degree of strategic co-ordination. One thing that is most encouraging about the process is the way in which each of these authorities has come forward with community governance arrangements.

The noble Baroness referred to the character of Northumberland. The area partnerships of local partners and stakeholders will be based on area committees, based on three characteristic communities: the urban south-east, the rural commuter belt and the genuinely rural north and west. Underneath those, they are creating what they rather beautifully call “belonging communities”—26 community areas that will have some powers and opportunities devolved to them, which will also include people from councils and the VCS, and so on. It will give people who feel the loss of their district councils another form of local influence, visibility, profile and connection. We have seen that in all the different proposals that have come forward in different ways. I hope that that will help to make that transition more comfortable for people and that they will be effective bodies.

The noble Baroness also raised the question about what to call the new council in Durham. In the order, as she said, the authority is called the County Durham Council. The order adapts its approach to reflect the new start and specifically provides that all members of the current Durham County Council cease to hold office on the fourth day after the 2008 election day. There should be no doubt that that is what is intended.

The letter that I have from the City of Durham informs me that the decision has been taken—one assumes by the implementation directive—to,

“badge the elections to the new unitary authority as ‘Durham County Council’”.

In other words, it is acting in contravention of the order. This could be seen as angels dancing on the head of the pin over a name, but locally it is particularly important given the sensitivities of Durham city and Durham county. It is also important because of the legal position, which has led to the city seeking an injunction to stop the county using the term “the county council”; it wants the county to use the term expressly set out in the order.

I am very grateful to the noble Baroness for drawing that to our attention, and our officials will write to follow up that point. I think that I have addressed most of the issues that were raised. With regard to the point about capability, if the orders come into effect by 26 February, the Electoral Commission and Boundary Committee assure us that they will be able to complete their work in time for the elections in 2009. They expect the reviews to be completed by February of that year. Those bodies are very efficient and I think we can take comfort from that.

On Question, Motion agreed to.