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

The noble Baroness said: We are debating the order which brings into effect the two unitary authorities for Bedfordshire.  This is the last of the orders implementing restructuring proposals from this round that will be brought to this House for the immediate future. I feel that this is something of a solemn moment after the heat and burden of the day. I am sure that Members of the Committee are as sorry as I am to see the end of the passage of this order. The reason why this order is the last of those that have been presented to this House is because the process in Bedfordshire has been more complex than that in the other areas.

I do not want to reiterate much of what I have said on the previous orders, because we have been over it quite a few times. I also lack any cavalry behind me, but I am sure that they will be along in a moment. However, I need to outline the process because in Bedfordshire the situation was different. Members of the Committee will know that the process began in October 2006 with the local government White Paper, and we indicated that there was dissatisfaction with the confusion and weakness in two-tier working. Knowing Bedfordshire as I have come to know it in the past few years, I have to say that local governance in Bedfordshire could be viewed as an example of this confusion. It has not been a happy situation. It suffers from over-governance with four principal councils providing services to a population of just over 400,000 people. So we gave an invitation to councils to come forward with proposals for unitary local government or with proposals for enhanced two-tier working to overcome the challenges. As I said, on each occasion, the choice whether to come forward was absolutely up to them.

It has been more complex in Bedfordshire, which is why this is the last order and why the timetable is challenging—I take that point. The complexity has arisen because in response to the invitation we received not only competing proposals but a proposal which met the criteria, but which was in our judgment unviable without a satisfactory unitary solution for the rest of the county.

The chronology is slightly complex, so I will explain. In January 2007, in the first stage of the process in Bedfordshire, we received three separate proposals for unitary structures in response to the original invitation. There was a proposal from the county council for a unitary county; a proposal from Bedford Borough Council for a unitary Bedford; and a joint proposal from Mid and South Bedfordshire District Councils for a new Central Bedfordshire unitary for the rest of the county.

We assessed the proposals and judged that the Central Bedfordshire proposal did not meet the five criteria set out in the invitation; therefore, unlike the county and borough’s proposals, it did not proceed to stakeholder consultation. Noble Lords will remember the five criteria—they are a bit like the five tests—that we set out in the original invitation, which those two proposals were judged to meet. One was the strength of strategic leadership; another was the degree to which local communities and neighbourhoods would be involved in decision-making in future; the third was the value for money in improving public services—in other words the long-term outcomes that we seek. They also involved judgments about whether the proposals were financially affordable; and whether there was a range of support sufficient to make us believe that if the proposals went ahead, they would be a success.

In the case of Bedfordshire, we came to the judgement that both the county council’s and the borough council’s proposals met each of these five criteria. However, the Bedford Borough proposal was the one that we judged would deliver to a greater extent the long-term outcomes that we were seeking. We made the means by which we would choose between the two competing proposals that each met the criteria clear in the consultation paper published on 6 June 2007. In July, we announced that we were “minded to” implement Bedford Borough’s proposal. We made that announcement in the full knowledge that if the proposal were to be implemented, the rest of Bedfordshire would be unviable as a two-tier local government area.

That was not, as may have been suggested, a perverse decision. Our view was that the county council’s proposal would not deliver the long-term outcomes that we seek to the same extent. We wanted the best outcomes for the people of Bedfordshire and therefore decided, despite the fact that there was no viable alternative for the rest of Bedfordshire, to announce that we were minded to implement Bedford’s proposal.

We also announced at the same time our intention to issue a further invitation to all the remaining councils in Bedfordshire to put forward unitary proposals for the rest of the county. That was on 19 November. We could not have issued that earlier for two reasons. First, in the light of several challenges brought by councils against the Secretary of State in relation to the “minded to” decisions and the first pre-statutory invitation, it was appropriate to wait for the Local Government and Public Involvement in Health Act 2007 to receive Royal Assent before issuing an invitation, so that we could make that invitation on the basis of the provisions in the Act. Secondly, in the routine that we followed, we identified certain risks to Bedford Borough’s financial case. We therefore requested extra information, and it was sensible to wait until that had been thoroughly assessed by the independent financial experts. In fact, they confirmed that the risks were neither material nor significant.

We gave councils four weeks to respond to that because we wanted to minimise the period of uncertainty, which has always been a consideration. We also made clear in July that we were going to issue a further invitation for the remainder of Bedfordshire, so councils had an extensive opportunity to get together to do the preparatory work. We hoped that all the remaining councils in Bedfordshire would co-operate to submit a joint proposal, but that did not prove possible. Instead, we received a new and much improved proposal from Mid and South Bedfordshire district councils for a unitary for the rest of Bedfordshire to be called Central Bedfordshire.

So, as we were required to do by the 2007 Act, we began a further consultation in December, in which we asked stakeholders to specifically comment on the extent to which the central Bedfordshire proposal, together with Bedford Borough’s proposal—the two-unitary solution for Bedfordshire—were likely to meet the outcomes specified by the five criteria set out in the invitation. We also requested that respondents consider whether the two-unitary option on the table or the single-unitary proposal made earlier by the county council would better achieve the long-term outcomes specified by the criteria. There were two options to consider. We allowed eight weeks for consultation, which was justified because of the preparatory work, the long and protracted process and the fact that there had been an earlier consultation on the proposals from Bedford Borough and the county council. We felt that an eight-week consultation period would allow us to press on towards implementation on 1 April 2009 and thus avoid another year of uncertainty and potential disruption.

The two critical issues were support and affordability. I know that we have gone over this ground quite a lot in Committee and in the House. The definition of “broad cross-section of support” is whether a new unitary authority would genuinely meet its objectives and work for local people because it had the support of critical partners outside local government, including health or police services, which would have to make it work. That is not the same as popular support; it was not a test of public opinion.

We left it to the local authorities to solicit opinion locally in the way that they thought effective. We received evidence reflecting divided opinion, divided politics and divided loyalties. It is clear from that that the two-unitary solution commands support from three of the four principal councils in Bedfordshire, but there was strong opposition from the county council. Those divided loyalties were reflected in local polls, and a poll conducted by the county council showed that 46 per cent of those polled preferred the single-unitary proposal. Bedford Borough, however, submitted a petition with over 30,000 signatures in support of its proposal. The county council submitted a petition with 30,000 signatures as part of its “save our services” campaign. It was very evenly divided, as was stakeholder opinion. While there was a consensus from the majority of respondents in support of a unitary local government solution, in whatever form, for Bedfordshire, it is fair to say that a majority of representations received from public sector stakeholders expressed a preference for the county’s single-unitary proposal.

However, as I said before, it is not and never has been about majority opinion. The two-unitary solution has support from some public sector stakeholders, the business community, education and housing, as well as some third sector support and support from some town and parish councils. We thought that was sufficient support to ensure that it would work.

In terms of affordability, as we followed for the other unitaries, the transitional costs must be expected to be more than offset by the savings that the proposal is estimated to generate within a period of less than five years. We used an independent assessment; we did not come to the judgments alone. The financial cases were subjected to rigorous and independent scrutiny by ex-local authority chief finance officers employed by the department through CIPFA and IPF. They went over all the figures for both the Bedford Borough and Central Bedfordshire proposals in the light of the further information that we requested. They undertook their own modelling and made their own assessment of the risks, and concluded that the two-unitary solution was a medium risk, but that it met the affordability criterion with a payback period of less than five years. They concluded that the levels of savings envisaged were about £18 million a year, which is the high end of the sort of savings that we have seen from other unitaries. In short, the proposals met the affordability criteria and will deliver savings that can be reinvested in local services or in reducing council tax.

As I said earlier, a decision on which proposal to implement where there are alternative proposals is not about support or affordability; it is about which one delivers to the greater extent the long-term outcomes that we are seeking. After considering all the relevant information, the Secretary of State concluded that the two-unitary solution would deliver those long-term outcomes to the greater extent, particularly as a two-unitary Bedfordshire would be better focused on the different needs of urban Bedford and the predominantly rural middle and south of the county.

The noble Baroness has rightly said that we are tilling well tilled soil. My only comment on that is that, with all my agricultural experience, I have always found that if you till soil too much it becomes infertile.

Really?

Yes, it does; it is quite interesting.

I find it ironic that the Minister pleads post facto legislation—I do not think it is retrospective legislation—as justification for this process. If post facto legislation is a new term, I am sorry but it is appropriate in this case. As the Minister probably rightly argues, if there is a judgment on the original judicial review, it has in effect been superseded by legislation subsequently passed. Even if the judgment went against the Government, I suspect that the Minister is absolutely right that the lawyers would say that what the Government have done should stand.

I also accept the difficulty we face in that we are now electorally right up against the gun. Any delay would be very unfortunate. It is a reality, and I would have to plead when we come to other cases—as we unquestionably will, because there are a few more carcasses in the game larder that must be brought out when they are suitably ripened—that they be brought out with sufficient time not to be rushed in quite the way Bedfordshire will be, and as Cheshire was a little while ago.

I am bound to say that this is yet another chapter in this local government restructuring. It seems that both Cheshire and Bedfordshire will leave a nasty taste in the mouths of their local communities. Of course, the communities and their councillors will come together and make these proposals work. I have said time and again that local councillors have had to make systems imposed upon them work, whether or not they are good, right or effective. It is what local councillors do, and I repeat my tribute to them. Whether I should be concerned if the Government go around the country leaving a nasty taste in local communities’ mouths is entirely another matter. However, I cannot help but feel that that will probably be one of the effects of this exercise; although it will unquestionably die as time passes and people get used to the new system.

I have not been able to decide entirely what the Government’s purposes are in undertaking this exercise; they are certainly not to deliver the most cost-effective and efficient delivery of services. It is not the most representative system. The existing system is far more representative, if you count the number of democratic representatives, than the new systems will ever be. I wonder if this is change for change’s sake. I have always argued that everything that is done can always be done better, but that does not necessarily mean it is right to change things.

Anyway, there is nothing more I can say on this particular cusp. This has arrived at the point where any further obstacles would do harm to Bedfordshire, which I am not in the business of doing. Therefore, even if I do not particularly like the proposal, I shall not oppose it in any way.

I am grateful to the Minister for her detailed explanation of the timing, but we are perilously late getting these orders through. Will she say how perilously close we are? My understanding is that if the orders were not passed today, it would be too late to cancel the elections. That is what I was told. It cannot be right—the orders will not officially be passed until they have been through the House on Thursday—but we are very much at the 11th minute of the 11th hour. Perhaps this is a cheap point, but I will make it anyway: it sometimes feels that central government are very much on the backs of local authorities for not getting things done in a timely fashion, and it sometimes behoves the Government to do the same. This does not look good from the point of view of the local authorities.

With regard to elections, it is probably due to my inability to read the order properly, but I was struggling to find the references to when the mayor of Bedford will be up for re-election. I found the piece about the councillors, but I was struggling to find when the mayor would be re-elected. It occurs to me that the current mayor was elected as the mayor of a borough, and that being a mayor of a unitary authority, providing education and social services, is a quite different job. The mayor should have a new mandate.

I note that the Minister has breathed a sigh of relief at this order being the last in the current tranche. In many ways, however, it is a first: this is the forerunner of the unitary bids by county towns. We will be dealing with those further on in the pipeline; certainly in my own area of Suffolk we are very exercised by this. Most of us can understand why county towns, particularly historic boroughs, want unitary status—that is perfectly understandable—but it leaves the question, which the Minister has spent quite a lot of time on today, of how one deals with the rest of the county where there is no geographic coherence or sense of identity. On the whole, people in shire counties identify either with their town or with the county, and Bedfordshire has shown that up nicely.

I do not feel very much clearer about what criteria will be used when deciding the fate of Ipswich and Suffolk, Norwich and Norfolk or Exeter and Devon. I get a sense that I ought now to understand the ground rules, but I do not entirely feel that I do.

Once again we have heard examples of the different ways in which the protagonists have put forward the information about community support. That emphasises the point we have made before, that perhaps in future tranches the Government themselves need to take more of a hold on this so that the claims of support have some validity that we can all buy into.

There is a big dilemma in these county town areas. It bothers me that if we decide that the county towns are not of themselves large enough on current boundaries but they then expand too far, they lose the coherence that was the point of the bid in the first place as well as leaving the rest of the county rather stuck. It might be that a trade-off between coherence and size needs to be made here. I sincerely hope that we will have an opportunity to debate that in a more significant way than just when the orders come through.

I wonder whether I can ask one question. I apologise to the Committee for having arrived after the Minister had started speaking, but I did catch at the end of her remarks a reference to the Merits Committee’s request that;

“we invite the Government to explain more fully to the House what action they would take if the High Court’s ruling meant that the draft Order could not go ahead”.

Listening to the noble Baroness, the answer seemed to be, “We don’t believe that the court case will go the wrong way”. Does she have a more direct answer to the Merits Committee than, “We think it is going to be all right.”?

Can I just say how grateful I am for the way in which noble Lords opposite have worked with the Government on these orders? I am very conscious that, with this order in particular, we have come up to the wire. There are lessons that we can learn in the process. I am sure that when we reflect on—to use the wonderful analogy—the game hanging in the larder, we will consider how we do it and learn from the process.

The problem with Bedfordshire, as I explained, was that the politics were so complex that the timetable became extremely attenuated, and one of the consequences was the foreshortening of the consultation periods. Because everyone was going over the ground continually from last July, we felt that was sufficient, but we did all that we could to expedite it within the scope that we had. We are where we are. I did not quote at great length from the letters from the district councils, but a phenomenal amount of work is going on to put the new processes in place and to make sure that the services will be up and running, and that is going on with support from across the county.

In answer to the question of what would happen if by any chance the order was not passed—I hear that in another place both opposition parties have agreed not to oppose the order—a Motion will be on the Floor of the House on Thursday, and it will take effect on Thursday. If for any reason that did not happen, we would have to go ahead with the elections anyway; it would be too late. We were conscious of the timetable, and I make no bones about that.

On what the noble Baroness said about the future processes, we will all reflect seriously on what we can do to improve processes in the future as we come up to the three unitaries. There are also some lessons that we can learn about consultation and other things, which I want us to learn. The mayor is not in the order because the order does not affect the mayoral cycle. The mayor will come up for election as and when that is due—

I am grateful to the noble Baroness. Perhaps it ought to have been considered that there should be another election, because it leaves the mayor to run education and social services with no mandate for some time. I know that it is too late for this order, but perhaps the Government might consider that point.

Indeed, I take that point. The mayor was a very strong advocate of the unitary proposal. Now, he has been elected on a working mandate. In view of what the noble Baroness has said about consultation processes, relations with the new unitaries and so on, the consultation process would welcome any views. We certainly want to draw the attention of those who will make the decision to what has been said in this House at various stages about these processes. Of course, the process is open to noble Lords to take part and to make their views absolutely clear.

Finally, I turn to the question asked by the noble Baroness, Lady Hamwee. I responded as I did to the Merits Committee because that is our absolutely serious judgment—for the reasons not least picked up by the noble Lord, Lord Dixon-Smith. We have not speculated on what the implications would be if the order were to be quashed. My understanding is that, with the order having gone through, it might not be possible for the court to do anything other than accept that it had gone through. I have gone as far as I can in trying to explain why, in terms of the process and the timing, we do not think that it is likely that the court will come to that conclusion.

I am grateful to all Members of the Committee who have spoken. We will follow up what has been said. I am very willing, as are our officials, to talk to noble Lords about future processes in the context of the orders that will come forward in due course, and about the principles and the processes that have led us to this situation today. I am very grateful for the support.

On Question, Motion agreed to.

That completes the business before the Grand Committee this afternoon. The Committee stands adjourned.

The Committee adjourned at 6.21 pm.