Local Government Reorganisation (Pensions)

HC Deb 25 February 1986 vol 92 cc909-15

Motion made, and Question proposed, That an humble Address be presented to Her Majesty, praying that the Local Government Reorganisation (Designated Councils) (Pensions) Order 1986 (S.I., 1986, No. 96), dated 23rd January 1986, a copy of which was laid before this House on 27th January, be annulled.

Mr. Roland Boyes (Houghton and Washington)

This is a simple order. It transfers to the designated councils the responsibility for certain pension and compensatory matters relating to the Tyne and Wear, West Midlands, and West Yorkshire county councils which, regrettably, are to be abolished on 1 April 1986. This can be done under the provisions of section 60 of the Local Government Act 1985 which states that on 1 April 1986 the superannuation function of each metropolitan county council becomes the function of the appropriate residuary body. Section 66 of the Act, however, allows the district councils to agree that, instead of the residuary body, one district in each area should discharge this function.

The Opposition do not intend to oppose this order. However, we have deliberately brought it on to the Floor of the House because there are certain questions that we wish to put, even at this late stage, to the Minister. The metropolitan counties require answers from him before they take certain actions.

Only five weeks are left before abolition. This is an important order, and more of them are to come. In evidence to the Select Committee on Statutory Instruments on 22 January 1986 the Parliamentary Under-Secretary of State for the Environment said: There will be further orders. Others will be brought forward as quickly as the Department can deal with drafting, consultation and other preparation.

I am reliably informed that at least seven orders dealing with matters relating to the Greater London Council will have to be introduced in the few weeks that are left before abolition. I refer, for example, to the Thames Barrier and Flood Protection Act 1972 (Amendment) Order and also to an order dealing with the designation of individuals or groups of staff for transfer. Some quite important Orders have yet to be brought to the House.

At the conclusion of the Third Reading on the Bill to abolish the GLC and the six metropolitan counties, the hon. Member for Ruislip-Northwood (Mr. Wilkinson) said: I must say that the Bill has been an extremely unhappy experience for many Conservative Members. It has been a dialogue of the deaf, and a case of the bland leading the blind."—[Official Report, 28 March 1985; Vol. 76, c. 750.] That was a stunning indictment of the contents of the Bill and the way in which the hon. Member's own Front Bench had in a cavalier and unconcerned way treatedthe arguments of hon. Members on both sides of the House. It is because of that attitude that we are now in the ludicrous position of discussing an order affecting a large number of people who work or previously worked for three of the metropolitan councils. We are only five weeks away from 31 March, the date for the final abolition of the GLC and the six metropolitan counties.

I am sure that members of local government throughout the land will take note of the way in which this Government value their work. During the long hours in Committee — something like 200 hours — my hon. Friends and I continually, but regrettably unsuccessfully, demanded answers to questions about the cost and staffing implications of abolition. We made it clear that each of the clauses in the Bill needed careful examination to avoid problems that would arise up to the abolition date. We argued that the badly drafted Bill needed a large amount of time in Committee to examine and explore the implications for the public and the staff. The Government, quite wrongly and vindictively, refused to allow the time needed. Instead of heeding our many warnings, the Government introduced a timetable motion. It was wrong then and it has proved wrong every time we have to consider an order like the one before us tonight.

During the debate on the timetable motion on 11 February 1985, my hon. Friend the Member for Copeland (Dr. Cunningham) said: First, the few Conservative Members who spoke seemed more concerned with the contents of the Strangers Gallery than with the contents of the Bill. We then had a series of repetitious speeches complaining about repetition in Committee, but, as the Leader of the House made clear, there was no repetition in Committee and no attempts to filibuster. The then Minister for Local Government, now promoted to the post of Secretary of State for the Environment and, incidentally, carrying on where his predecessor left off, confirmed what my hon. Friend said when he said: I readily agree that the Bill has not been delayed as a result of filibustering upstairs." — [Official Report, 11 February 1985; Vol. 73, c. 112–4.] I can only conclude from what has happened since that we in the Opposition were perfectly correct in asking for adequate time to consider the problems that would arise. Only a month or so ago the Local Government Reorganisation (Transitional Provisions) Order 1985, was debated in Committee. Such was the strength of feeling against the Government that the Committee divided 7:7 and the order was carried only on the casting vote of the Conservative Chairman.

In spite of the many problems inherent in the Bill, what have the metropolitan counties done and why? Some have reached no agreement at all about superannuation and its administration. Some have an agreement, but not the one that they wanted. I will explain that fully in a moment. Three of them have opted for a named district council rather than a residuary body, although, as I shall illustrate later, that was not necessarily the first choice of those councils.

Why have three of the metropolitan counties opted for a district council even though that was not necessarily their first choice? In an article in the Local Government Chronicle on 10 January, 1986 entitled "Co-operation in Re-allocation", Mr. Robert Hedley wrote about the Tyne and Wear metropolitan county council of which my constituency is a constituent part: the five district leaders quickly agreed their underlying philosophy: the Government appointed residuary body would have as little as possible to do other than close the accounts and perhaps dispose of property. In another article in the same journal, Angela Holden wrote on 31 January 1986 about the approach to abolition in the west midlands. She wrote: A fundamental principle, agreed immediately, was to keep as many functions in district hands as possible and lead authorities were established to re-organise the met county services. The three metropolitan county councils which reached agreements with the district duly named the lead authorities to deal with, among other functions, the superannuation matters of the staff. That I applaud. It leaves the issue in the hands of directly elected representatives rather than in the hands of a body that is selected and directly accountable to the Secretary of State for the Environment which has only a limited life.

Section 67 of the Local Government Act 1985 refers to residuary bodies. It states: Except as respects any of its functions for the discharge of which provision will be or is likely to be required after the end of the period of five years beginning with the abolition date, it shall be the duty of each residuary body to use its best endeavours to secure that its work is completed as soon as practicable and in any event by the end of that period.

It is clear that it was in the interests of the employees and former employees of the metropolitan county councils and of the public in general that the administration of their pensions and increases in pension rights should be in the hands of directly elected local government representatives. It is clear that the fund will have to be passed from the residuary body to another body on some other occasion in view of its short life. The sooner that it is passed to a successor authority the better, for that will eliminate uncertainty for all.

With only five weeks to abolition, it is disgraceful that some members of staff do not know whether they will be working for a residuary body or a district council. Indeed, they do not know whether they will face the ultimate humiliation of the dole queue after many years of service with a metropolitan county council. I regret that that is the fate of some of those who work in the pensions departments of the metropolitan county councils. Unfortunately, it is the destiny of thousands of those who are currently metropolitan county council and GLC employees.

I pose two questions that I consider to be critical for those who are currently employed by the metropolitan county councils and for those who will be administering the bodies that succeed them. First, is there any way of unscrambling the arrangements that are set out in the order so that joint committee-lead authority arrangements can obtain in Tyne and Wear, the west midlands and west Yorkshire eventually? I ask the question because the Tyne and Wear authority has a scheme whereby south Tyneside will have administrative responsibilities. The Tyne and Wear authority would have preferred something quite different. It would have favoured a voluntary joint committee with a lead authority providing administration and management.

The legal advice that was given to the officers of the Tyne and Wear authority—similar advice was given to other authorities—was that this was not possible under the 1985 Act. The function has to pass to the residuary body or to one district alone, albeit with a consultative committee. Therefore, the Tyne and Wear authority could not have its first choice, and it ended up with what it considered to be the best of the two options that remained. It is important that the county council and those who will be concerned with its functions after abolition should know whether it will be possible at some future date, especially after the function of the residuary body has come to an end, to proceed to the status that it first wished to obtain.

There was no problem in west Yorkshire about the superannuation function going to Bradford, as that was generally agreed among the five districts, with the addition of an advisory body. In the west Midlands, the authorities, although happy with the present arrangement, had earlier discussed the possibility of a joint authority-lead district.

My second question revolves around the fact that three metropolitan county council areas are not included in tonight's consideration. For those areas, will the Government lay the necessary orders quickly to transfer the superannuation function from the residuary bodies to joint committees? Can that be done at the request of only a majority of districts in an area? I ask that, because unanimity is required on some issues.

Greater Manchester prefers a joint authority-lead area district. South Yorkshire is not included in the instrument, and the authorities there want the functiion to go to a joint authority-lead district and not to remain with only one authority. Merseyside can see no prospect of agreement, and in the earlier debate my hon. Friend the Member for Copeland illustrated the problem in Merseyside in getting agreement, the districts being split three to two on all but one, rather ludicrous, issue.

Three metropolitan county councils will most likely end up with the residuary body, after which the residuary body will disappear, and then arrangements will have to be made to enable the superannuation arrangements to be administered. Other bodies, meanwhile, have reached agreement and wish to make alternative arrangements.

As I said at the outset, we shall not divide the House on this issue. It is essential that we explore these matters because they are vital to those who live in the areas that hon. Members have mentioned. I hope that the Minister will deal with the two important questions that I posed towards the end of my remarks.

10.33 pm

Mr. Allen McKay (Barnsley, West and Penistone)

I have a question for the Minister, and in a way I hope that she will not answer it tonight. I say that because it would probably not be the answer I want, as the matter requires much thought, now that the abolition of counties is upon us.

When I asked the question previously I received what I would describe as a negative answer. While that answer may have been factually correct, I regarded it as morally wrong. The difficulty to which I refer can be put right when future instruments appear, especially that for south Yorkshire.

In the payment of redundancy, compensation or severance, a vast difference can occur among people in the same grades doing the same jobs, simply because of the date set for the cut-off point. I hope that the Minister will consider this matter carefully because many people who come within tonight's instrument will be treated differently from those who will come within future provisions.

People can receive, say £20,000 compensation in one instance, yet because arrangements over and above the statutory minimum for compensation were not made in other instances, people—for example, this will apply in south Yorkshire —may receive only £9,000. I accept that the whole issue is complicated and needs great thought. I hope the Minister will ensure that people are treated equally.

10.35 pm

The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold)

I should like to attempt to help the hon. Member for Houghton and Washington (Mr. Boyes) and then to deal with the point raised by the hon. Member for Barnsley, West and Penistone (Mr. McKay).

I was little surprised, at the start of this short debate, that the hon. Member for Houghton and Washington suggested that the time allocated for discussion of the Local Government Act 1985 was inadequate, because he admitted that at least 200 hours of Committee time was spent on that measure. In fact, the parliamentary time allocated for that Bill was significantly more than that allocated either to the London Government Act 1963—which reorganised the whole structure of London government, creating the Greater London council, the Inner London education authority and the 32 London boroughs—and longer than the time given to the Local Government Act 1972, which restructured the whole of local government in the rest of England and Wales.

Throughout the discussion of the Local Government Bill, the Opposition have consistently refused to use the time to discuss the detailed provisions of the Bill, which I should like to discuss now in respect of the order. The Opposition continually repeated the same debate on the principle of abolition and they have little to complain about in terms of the time spent discussing the many issues involved in the Local Government Bill.

In the White Paper, in October 1983, setting out the Government's proposals for reorganising local government in Greater London and the metropolitan counties, we explained our attitude to the administration of the local government superannuation funds.

The Greater London council and the metropolitan county councils are administering authorities under the local government superannuation scheme. In the case of the metropolitan county councils, they also act as administering authorities in relation to the district councils in their area.

In the White Paper, we rejected the idea of making each district council in the metropolitan counties an administering authority for its own employees and pensioners. That would have meant splitting the existing funds, plus a large increase in the number of administering authorities. We felt that there were strong arguments on grounds of efficiency for not breaking up the funds, and for transferring the responsibility to a single body in each metropolitan county.

We took the view that, in the metropolitan counties, it should be possible for one of the district councils within a metropolitan county to take on the responsibility. In London, where the London borough councils are already the administering authorities under the local government superannuation scheme, responsibilities in relation to existing GLC pensioners could not be distributed to the boroughs. We proposed in this case that these responsibilities should go to the London Residuary Body.

In a document on abolition published in July 1984, we confirmed our intention to give the superannuation function in London to the Residuary Body. For the metropolitan counties, we said that we would still prefer the function to be taken on by one of the metropolitan district councils where the districts can reach agreement between themselves on such an arrangement. But to make sure that there would be adequate arrangements in case the districts could not reach agreement, we decided to draft the legislation in such a way that the task could be taken on by a district council or by a residuary body.

Accordingly, section 60 of the Local Government Act 1985 provides that the local government superannuation function shall pass to the appropriate residuary body on 1 April 1986. But section 66 allows my right hon. Friend the Secretary of State, in the case of the metropolitan counties, to make an order designating a district council to assume that function instead. An order designating a district council can be made only where all the district councils within a metropolitan county agree.

Agreement on the designation of a district council has been reached in three of the six metropolitan counties. They are West Midlands, West Yorkshire and Tyne and Wear. In the three counties in which agreement has been reached among the district councils, the districts chosen to exercise the superannuation function were Wolverhampton, Bradford and South Tyneside. Applications for designation were made by those three councils and they explained how they proposed to exercise the function. The designation order which we are debating tonight provides for the local government superannuation function to go to those districts on 1 April.

The order makes provision for the way in which costs incurred by the designated councils in exercising the functions are to be borne. Costs which cannot be met from the superannuation funds will include pensions increase payments and existing county council liabilities for compensation for their former staff.

In so far as those costs are not otherwise chargeable to another authority, they will be split among all the district councils within the county. The basis of the apportionment included in the order is that agreed by all the districts concerned. In the case of Bradford and south Tyneside, it is on the number of pensionable employees of the districts within the local government superannuation scheme. For Wolverhampton, it is on a population basis in the same way that the costs of the residuary bodies will be apportioned. That was entirely a matter of choice.

The way in which those designated councils arrange to discharge that function must be for them to decide. Each of the councils is arranging for participation of the other districts within the county on the appropriate committee or investment panel which will be established. Each council is also naturally concerned to retain appropriate expertise of the county council's superannuation staff.

Our general policy on staffing in the abolition exercise has been that it is for the successor authority to decide whether to ask for staff to be transferred to it by order. In the event, the effect of a staff transfer order is that the staff concerned retain their existing terms and conditions. At the request of Wolverhampton and south Tyneside, most superannuation staff of the West Midlands and Tyne and Wear county councils are included in a staff transfer order which has been laid before the House. Bradford decided to recruit county staff and has sent letters offering posts to those involved. The county staff will be recruited on their existing salary, but they will have the same conditions of service as the Bradford council staff.

Those arrangements are bound to vary in the light of local circumstances, but I know that the districts are taking steps to smooth the transition. Bradford and Wolverhampton are, for example, arranging for superannuation work to remain at the county halls for the time being.

On the first question that the hon. Member for Houghton and Washington asked, there is no provision for the function to go to another body where it is given to a designated district council. District councils have been designated because all the districts in the county are agreed.

Where the district councils within a metropolitan county agree on one of their number having the superannuation function at abolition, the Government believe that it is right to provide for that, so we have provided in this designation order for Bradford, South Tyneside and Wolverhampton to assume the superannuation function on 1 April.

I should like to answer the hon. Gentleman's second question. I have already explained the Government's view that the superannuation function of the metropolitan counties should be exercised by a single district. We do not favour the setting up of a joint committee which would, in effect, be a joint board. There are no powers in the Superannuation Act 1972 or in the Local Government Act 1985 to enable the superannuation function to be given to a joint committee of the districts on the abolition of the metropolitan county councils. At abolition, the alternatives are for the function to go to a designated district council or to the appropriate residuary body.

There is plainly a good deal for the designated districts to do to ensure that they can effectively take over the function. The continuing payment of pensions is clearly of the utmost importance. I have no reason to think that the plans of the district councils are not proceeding satisfactorily. I hope that the House agrees that that is the case.

I have taken note of the point that the hon. Member made, and if he will allow it, I shall write to him on that matter in due course. I ask the House to approve the order.

Question put and negatived.