HC Deb 27 July 1977 vol 936 cc605-8
2. Mr. Graham Page

asked the Secretary of State for the Environment what proposals he has for introducing new rules to deal with the tendering and accounts of local authority direct labour departments.

The Minister for Housing and Construction (Mr. Reginald Freeson)

I shall introduce new rules on accounting, charging and tendering when we have the opportunity for comprehensive legislation on local authority direct labour organisations.

Mr. Page

This does not need legislation. The right hon. Gentleman could bring these rules in without comprehensive legislation. Is it not the case that the disastrous loss of ratepayers' money by many direct labour organisations is due in part to the fact that there is no cost control in their accountancy systems or assessment of progress, and that they know how much they have lost only when it is too late to regain it?

Mr. Freeson

There are far too many generalisations and mini-truths mixed up in that supplementary question. In the first place, the matter does require comprehensive legislation. That has been clearly established in the course of debates in the House in recent months. Secondly, I do not accept the generalised remarks that the right hon. Gentleman made about direct labour organisations. There are direct labour organisations which are inefficient and there are private firms which are inefficient. There are, equally, DLOs which have sometimes added burdens to the ratepayers and many private firms which have likewise imposed burdens on them. It is about time that we stopped this ideological conflict.

Mr. Joseph Dean

Is my right hon. Friend aware that where direct labour organisations are well run, such as in the cities of Sheffield and Manchester, they make a valuable contribution to the local authority building programme and in helping the ratepayers, often providing a service where the private sector has fallen down badly, such as in the employment of disabled people and a proportion of apprentices?

Mr. Freeson

My hon. Friend is right. There are many instances of excellent practices by DLOs which have saved the ratepayers many millions of pounds over the years.

Mr. Tebbit

Has the right hon. Gentleman heard of the events in South Tyneside District Council where, apart from amassing an enormous loss, the DLO has had to declare over half of its work force redundant? Is he further aware that some councillors there are calling for a proper inquiry into what has been going on? Will he direct his attention to that?

Mr. Freeson

If the local council and the district auditor, who handles such matters, wish to proceed, they will, no doubt, do so. They require no instructions from me in this connection. They have all the authority they need to handle such questions.

Mr. Swain

Is my right hon. Friend aware that it is mainly in Tory-controlled councils that the direct labour departments are apparently, according to Opposition Members, a failure, because of the sabotaging methods used by Tory councillors? Is he further aware that the morale of the work force is being lowered as a result of practices by Tory-controlled councils? Will he take action to stop it?

Mr. Freeson

I am aware that there are arguments at local level—they are not confined to one side of the political spectrum, if one takes a period of years—that are not directed to the most efficient use of direct works organisations. I am aware also that there are local councils of all political persuasions which have used direct works organisations very effectively. I only wish that hon. Members on the Opposition Benches would act a little more rationally and in a little less doctrinaire fashion in this matter.

Mr. Stephen Ross

Is the right hon. Gentleman aware that there are some local authorities which ought to be putting their house in order in this matter and setting a good example even to private industry? Is it possible for him to issue a circular setting out model clauses incorporating accounting procedures that local authorities should adopt? If not, he should legislate.

Mr. Freeson

I have that in mind, and I have stated as much clearly in the House. I take this opportunity to remind the House that it was the Government's wish to introduce legislation to deal with this question but that Opposition Members opposed us on the matter, as they have done on previous occasions.

Mr. Blenkinsop

Does my right hon. Friend agree that it would be better for some Opposition Members to find out what they are talking about in relation to Tyneside authorities before making sweeping allegations?

Mr. Freeson

My hon. Friend confirms that much is said in heat and ignorance and that it is about time the subject was studied more quietly and rationally by Opposition Members.

Several Hon. Members

rose—

Mr. Speaker

Order. Before we go on, may I make an appeal for shorter questions and answers? Five Questions are being answered together on the next Question, all from one party. I shall call other Members afterwards.