That the Grand Committee do report to the House that it has considered the Local Government (Structural Changes) (Miscellaneous Amendments and Other Provision) Order 2009.

As Members of the Committee will know, this order is consequential on the local government structural change orders that Parliament agreed in early 2008. The order makes specific provision to ensure that various matters relevant to the new single-tier councils are dealt with before the reorganisation date.

These changes are necessary to update the statute book in light of the changes made by the structural change orders. Without these provisions, some of the new unitary councils would have to continue to refer to themselves as county councils, which is extremely confusing for their communities. Areas with historic traditions, including city status, would be lost to local residents. For example, Chester City would no longer be Chester City; new unitary councils would not be able to appoint members to relevant national parks or areas of outstanding natural beauty conservation boards within their areas; and there would be no administering authority for the Cheshire and Bedfordshire pension funds. I am sure that noble Lords would agree that these are necessary and sensible measures.

I shall take a little time to go through the order in more detail. Part 2 of the order makes provision to ensure that members of the new Central Bedfordshire Council’s shadow executive can continue as members of that executive until the June election notwithstanding that the authorities from which they were appointed will cease to exist before that date. Provision is also made to amend the electoral arrangements for some parish councils in Bedfordshire so that their elections are properly synchronised with the election cycles for the new Bedford Borough Council and Central Bedfordshire Council.

Part 2 also adds provisions to the structural change orders for Cornwall, Northumberland, Shropshire, Wiltshire and County Durham to make provision regarding the names of the new councils, essentially allowing them, subject to resolution, to omit the word “county” from their legal names. This is entirely sensible. It was requested by the councils themselves to provide the new unitary councils with the opportunity to adopt truly new identities in the eyes of their residents and, just as importantly, to make a fresh start in the eyes of the new council staff, whether they are from the previous county or district councils.

Part 3 of the order makes provision for the appointment of charter trustees as appropriate bodies in which historic rights and privileges may vest for parts of Cheshire West and Chester, Cheshire East, and County Durham. As has been requested by both the new and outgoing councils in the areas affected, we are creating charter trustees for the cities of Chester and Durham, the towns of Crewe and Macclesfield and the historic area of Ellesmere Port, to which historic rights can be transferred until such time as an appropriate parish council is established to which those rights can transfer.

Members of the Committee should note that the actual transfer of historic rights and privileges to these charter trustees is made in regulations of general application which have been laid before this House. Special provision is also made in this order in relation to market rights in Chester, where we have provided that these rights vest in the Cheshire West and Chester Council, essentially allowing the new council to continue to run the Chester market.

Part 3 also provides for the retention of the ceremonial counties of Cheshire and Bedfordshire by amending the Lieutenancies Act 1997 and the Sheriffs Act 1887 to update the definition of counties for the purposes of these Acts.

Part 4 of the order makes provision for the vesting of the local government pension fund maintained by the Bedfordshire County Council and the fund maintained by Cheshire County Council. It provides, further to the results of the consultation with those affected, that these funds will vest in Bedford Borough Council and Cheshire West and Chester Council respectively.

Part 5 of the order makes amendments to a number of port health authority orders. These orders are amended to reflect the changes as a consequence of the new local government arrangements in Cheshire, Cornwall and Northumberland, and provide for the new single-tier unitary councils to exercise the port health functions after 1 April.

Part 6 of the order makes provision regarding the membership of the conservation boards for the Chilterns area of outstanding natural beauty and the Cotswolds area of outstanding natural beauty to reflect the changes to local authority arrangements as a consequence of reorganisations in Bedfordshire and Wiltshire. Similar provision is made for the membership of the national park authorities, the New Forest and the Peak District, to reflect the changes as a consequence of the changes in local government arrangements in Wiltshire and Cheshire.

Part 7 of the order makes a number of miscellaneous amendments. These include amendments to primary legislation which use local authority boundaries to define geographical areas and which are updated to refer to the new local authority arrangements. Provision is also made in this part for the membership of the River Tweed Commission consequential upon the restructuring in Northumberland. Provision is also made to designate Central Bedfordshire Council as the relevant council for Bedfordshire and Luton coroner’s district within the meaning of Section 1(1)(a) of the Coroners Act 1988. The relevant council is responsible for the appointment of coroners and has other functions in connection with coroners under the 1988 Act.

I am sure that Members of the Committee will agree that the provisions in the order are sensible and necessary consequential amendments following the structural change orders that Parliament has already approved.

I propose to speak now to the Cornwall (Electoral Arrangements and Consequential Amendments) Order 2009. This order contains necessary and sensible provisions which are consequential on the Cornwall (Structural Change) Order that was approved by Parliament in February 2009. The order makes provision for the 2009 local government elections to be held on the basis of 123 electoral divisions, implementing the Boundary Committee’s draft recommended warding arrangements as published on 2 December 2008. These changes are necessary as without them the elections in Cornwall would be held on the basis of 71 wards returning 82 councillors, a number which is widely recognised by all in Cornwall and all involved in electoral administration as not sufficient to provide the strategic leadership that is needed for the new unitary Cornwall Council.

As we come to debate the order we find ourselves in unusual circumstances, to which the Merits Committee has referred, and I will address some of the issues it has raised. The circumstances are unusual because, in most cases, provision for electoral arrangements would be made by the Electoral Commission on the basis of recommendations by the Boundary Committee. However, Members of the Committee will be aware of a series of events which explain why we are in this unusual position today. I shall explain the background and put it on the record as part of understanding the order.

In February 2008, when the structural change orders establishing the new unitary councils were approved by Parliament, we planned that three of the new unitaries based on existing county areas—Cornwall, Shropshire and Wiltshire—would have elections in May/June 2009 on the basis of new ward electoral divisions, together with a new number of councillors, reflecting the new unitary status of the council. It was for the Boundary Committee and the Electoral Commission to decide the number of councillors there would be in future and to designate new wards, which would be established by a non-parliamentary order made by the Electoral Commission following a process of consultation undertaken by the Boundary Committee.

The Boundary Committee commenced its electoral review in Cornwall, Shropshire and Wiltshire in February 2008. The Electoral Commission and the Boundary Committee have essentially done what was expected of them and completed the review in Shropshire and Wiltshire. We understand that the orders for these authorities specifying the new wards which will be used for the 2009 local government elections in June were made by the commission on 6 March.

However, in the case of Cornwall, the Boundary Committee and the Electoral Commission have, for a number of reasons, failed to deliver the new electoral arrangements in time for the June election. This is unfortunate. Delay has largely been caused because of the difficulty that the Boundary Committee and the council have about agreeing the appropriate size of the new council.

On 15 August 2008, the Boundary Committee wrote to the leader of Cornwall County Council, confirming that on the basis of the evidence available to it, it was minded to base its draft recommendations on a council size of 123 members for the new unitary authority. However,

“given the serious delay to which this review of Cornwall has been subject, the view of the Boundary Committee is that there is now no possibility of any new electoral arrangements being implemented in any combined elections in June 2009”.

Members of the Committee can see the difficulty we face. All, including the Boundary Committee, are in agreement that there should be 123 councillors for the new unitary council, instead of the existing 82 for the current county council. However, the Boundary Committee is not in a position to specify the new electoral divisions. Indeed, it only finished consulting on a draft of what the new wards could be on 10 February 2009, and there is no prospect of it making an order specifying new wards in time for the 4 June elections.

When the Merits Committee said in its report that the decision to proceed with North Cornwall council elections in June 2009 had not been an obvious one, I would point to this process and the reason why there has been delay, and the admission by the Boundary Committee that there was no prospect of it making an order specifying new wards in time for the 4 June elections. Furthermore, when it became clear that the Electoral Commission was not going to be able to make an order in time for the elections, in the debate on the draft Local Elections (Ordinary Day of Elections in 2009) Order 2008, the Minister for Local Government stated that he was,

“minded to introduce for consideration an order that would, exceptionally, move the election date for Cornwall from the beginning of June to the end of October 2009”.—[Official Report, Commons, 20/11/08; col. 771W.]

However, before introducing such an order, the Minister proposed to take soundings seeking views from those affected in Cornwall and, as necessary, from the Boundary Committee and the Electoral Commission. That exercise was commenced on 1 December last year, when the Minister wrote to Cornish MPs, all Cornish councils, the Electoral Commission and the Boundary Committee. As part of the exercise, he made it clear that central to any decision on deferral was the likelihood of the Electoral Commission putting in place the new electoral arrangements in time for an October election. If there was any significant likelihood of this timetable not being met, he believed that it would be wrong to defer the election and a preferable course might be to hold elections on 4 June 2009, but on the basis of interim electoral arrangements to be specified in an order which, if Parliament approved, the Secretary of State could make under the Local Government and Public Involvement in Health Act 2007. The Minister was quite clear that there was an option here, and a condition being set. That is in part our answer to the concern of the Merits Committee.

The Electoral Commission’s response to the soundings exercise stated:

“Aiming to hold elections in October 2009 using electoral arrangements which have been approved by the Electoral Commission relies heavily on meeting an uncertain timetable for implementing the electoral review recommendations and could involve considerable risk to effective administration of the electoral process”.

In other words, the commission could not guarantee what the Minister had asked for—that the arrangements would be finalised for an October election. Given this position, the Government felt that it would be wrong to proceed on any basis other than a June 2009 election.

I am grateful to the Minister for setting out so comprehensively the case for the orders and explaining them in considerable detail. She has a well deserved reputation for going through the detail on these things and that is very much appreciated.

We cannot miss an opportunity to mention again the big-picture issue here: consequential orders on the reorganisation of local government. These orders are necessary because of the introduction of the five new unitary authorities that are coming our way. This side of the Committee tried to resist the change because we felt it was taking decision-making away from small local authorities that were closer to the people whom they represented and the place where they raised taxes. Moving to these monolithic, giant authorities, particularly in the case of Durham and Northumberland, is detrimental and has a democratic deficit attached to it. I speak and declare an interest as a council tax payer of the County of Durham—or should I call it Durham now? I am not quite sure. Perhaps it is the Shire of Durham. I remember being taught in my history lessons that, when it was originally founded, the proper name for the County of Durham was the area of St Cuthbert between the Tyne and the Wear. I am not sure that we need to go back that far, with all due reverence to St Cuthbert, but the point is that County Durham has a traditional position, as did the district authorities in places such as Sedgefield and the City of Durham where the local authorities were making a real difference and working very well.

The change was sold to us on the basis that it would reduce expenses and be a much cheaper way of conducting local government. In her comments on 21 February 2008, at col. GC48 of Hansard, the Minister said that in the case of County Durham, for example, the savings would be £11 million annually. If that is so, we in Durham do not understand why it is proposed that our council tax bills should increase by 5 per cent this year. That is causing a lot of people and a lot of businesses a lot of hardship in the present climate.

An opinion poll conducted in Durham found that a massive 76 per cent of people across the whole of the county were against this single unitary authority. The people of the north-east have a long tradition of their views expressed in opinion polls and referendums being overridden by this Government. Of course, we had a referendum on a regional assembly, which was rejected by 78 per cent to 22 per cent.

I thank the Minister for her long and detailed introduction, as the noble Lord has just said, in her usual careful fashion. I do not wish to rehearse the background or the arguments that we have had on the decisions that underlie the order; I suspect that the influx of people into this Room is not to hear this debate but is for the next business.

Before anyone teases me about it, I should offer that, on future legislation, if I protest about reserve powers held by the Secretary of State, this could well be an instance of why they are sometimes necessary.

In the debate in the Commons, my honourable friend the Member for Falmouth and Camborne asked for the Minister’s comments. They were not given, and I ask the Minister here to comment on what decisions took place regarding Cornwall between the Boundary Committee and the Electoral Commission. She asked what reasons it accepted as decisive in giving carte blanche approval to the proposals. If the Minister has anything she can say on that, I would be grateful.

On the other order, I ask about the position in Bedfordshire, where the shadow executive is to continue as a member of the new council’s executive until the June election. What happens to the other things that go on in that interregnum period? In particular, are overview and scrutiny arrangements in place—one would expect there to be arrangements to hold the executive to account if executive powers continue—or do they have to hold their fire until after the election? If it is the latter, I suppose they will be holding to account people who may no longer be in an equivalent position.

The noble Lord, Lord Bates, mentioned pension funds. They are topical, given that we are hearing suggestions that there may be shortfalls in certain places. I was interested to see that the pension funds have been vested in the outgoing councils, if I may put it that way. I assume that that is the case, as they are to vest in the new authorities. I had thought that there would be separate pension trustees rather than vesting in the authorities themselves. I hope the Minister can give us some assurance that there is no residual liability and that the rights of the pensioners are in no way prejudiced by the transfer. Other than that, we welcome the two orders.

I, too, thank the Minister for her long explanation. I am sure that I learnt a number of things. I shall apply my comments to the Cornwall order and, in doing so, I declare an interest: there is a possibility of my being a candidate in that election.

The most important thing about this issue is democracy. I feel strongly that, with a new local authority as important as Cornwall unitary will be, representing some 500,000 citizens, it is important that that authority has renewed and legitimate democratic control early in its life. The authority starts on 1 April but we will have to wait until 4 June to hold elections, as that is the earliest possible date. But we are now able to hold elections. I welcome that strongly, as do a number of my colleagues in Cornwall. At this time of unprecedented economic challenges, it is important that local authorities have proper leadership and the legitimacy to move forward, agree strategies and plans, and implement them. It is important for the business community in particular to know the direction of a local authority. To have left matters to the end of the year, with a none-too-legitimate interim executive in the mean time, would have been far from satisfactory. From all those points of view, this is a good decision.

My only concern is that there will be 123 members. I have just received news that the Government of the Czech Republic, which hold the EU presidency, have just fallen. It occurred on a vote of 101 out of 200 members of the Czech Parliament. If 200 MPs can represent the whole of the Czech Republic, an EU member state, then the figure of 123 for Cornwall is perhaps rather large. However, I recognise entirely that the Government accepted the recommendations of the local authority. Those are purely my personal views.

Although I accept the Minister’s explanation, there were a number of clear clerical errors in the initial boundary review that could have been put right. There are a couple of anomalies, particularly in north Cornwall, and I regret that they were not put right. However, all the boundaries—into which parish councillors in particular have put so much work with their recommendations—can be put right during the term of office and can be made perfect, if these things ever are perfect, by the time of the next elections.

The noble Lord mentioned Devon. Although it is nothing to do with this order, I would plead with the Government not to have another unitary authority as small as some of the existing ones in the traditional, historic Devon area, and to make Devon outside Plymouth and Torbay one unitary authority. Neither the business community nor possibly anybody outside the City of Exeter itself can understand why a second option, an enlarged Exeter, is still on the table, because it just would not work. But that is for another day.

I am grateful for the welcome given by noble Lords opposite. I think that we would all agree that nothing is perfect in the restructuring of local government; we have empirical and historical evidence to show that. I am sorry that the noble Lord, Lord Bates, was not part of our debates two years ago on the 2007 Act. I am sure that we would have some very lively debates around his perspective.

I am conscious that a large and lively body is waiting to debate a fascinating report, so I shall make my remarks as swiftly as I can and try to pick up some rather detailed points raised especially by the noble Lord. If he will forgive me, I shall not rehearse any of the arguments that we had about the merits of moving to unitary status, nor shall I pick up most of the comments about the Merits Committee. However, I shall come back to some of the things that he said about restructuring as a whole.

In relation to the specific arguments, the name of Durham council has exercised a lot of people. Under the order the council could choose to call itself Durham Council, although we understand that it will call itself Durham County Council. That is slightly perverse, but that is the local choice, which is absolutely fine. I have to say that the council tax in Durham will increase by an average of 2.9 per cent, not nearly 5 per cent, because it ranges from a 1 per cent reduction in council tax for the current district of Derwentside to an increase of 4.75 per cent in Easington.

The point on the ceremonial issues is interesting. The parish councils, when they come into being, will be the authorities which inherit the ceremonial rights. It is very much a local decision for the new unitary council on how it manages that.

We had a good and extremely detailed debate the other evening on port health authorities. The point is that they are public authorities which consist either of the local authority or a joint board of a number of local authorities. If they occupy portside hereditaments, the same rating arrangements will apply to them as to anyone else. Again, it will be a matter for decision in each individual case.

The noble Lord mentioned the combining of these elections with the European elections. All the evidence provided by the electoral authorities suggested that they were perfectly conscious they were handling combined elections and that they had the resources to deal with them. They were not concerned about the combination of elections in that instance.

In relation to the River Tweed—we are ranging far and wide—we had discussions with the Scotland Office and will write with details on the nature of those discussions.

As for the quotation from the Minister in the other place, he was perfectly clear that the approach we are proposing—elections in June, on the basis of 123 members—will indeed give the council full democratic legitimacy as soon as possible, which will be from 4 June.

The noble Lord raised issues about the timetable. The Boundary Committee started work immediately after Parliament approved the order; it did not waste time. Finally, he raised issues about the Boundary Committee’s undertakings on Devon. I am very glad that the noble Lord, Lord Teverson, took part in this debate, given his role in Cornwall. That order related to changes in structure. Here we are talking about electoral boundaries, but I acknowledge that he wanted to put his point on the record.

On the questions raised by the noble Baroness, Lady Hamwee, and the issue that a Member for a Cornish constituency, Julia Goldsworthy, drew attention to, we did not discuss adjusting the boundaries with either the Boundary Committee or the Electoral Commission. Even if those discussions had taken place, it would have been quite wrong, as I said, for the Government to try to adjust the electoral division boundaries on the basis of representations, because they would have been parti pris. It is not a simple decision based on local agreement; there must be objective criteria, concerns about electoral equality and community identity, and effective and convenient local government. I hope that that will satisfy the noble Baroness.

The noble Baroness also asked what happens during the interregnum in terms of overview and scrutiny. Central Bedfordshire will from 1 April be a full council and will therefore have normal arrangements for its committees, including overview and scrutiny. Bedford Borough Council is a continuing council and therefore its overview and scrutiny arrangements will continue between 1 April and the election in June. We debated the difference between continuing and full councils when we looked at the original arrangements.

The local government pension fund in every case is vested in the responsible administering local authority. Unlike private pensions, there are no trustees and the use of local government pension funds is controlled by the superannuation legislation and pensions regulations.

Finally, on the political question raised by the noble Lord, Lord Bates, the councils in Cheshire are in agreement that Cheshire West and Chester, which is one council, will hold the pension funds for all local government employees in Cheshire, so any outstanding difficulties there appear to have been resolved.

Motion agreed.