Clause 17 (Hansard, 26 April 1990)

§ Mr. Kirkwood
I beg to move amendment No. 29, in page 17, line 13, leave out 591 'may be agreed between it and that person' and insert 'the Secretary of State may by order made by Statutory instrument provide'.

§ Mr. Speaker
With this it will be convenient to consider Government amendments Nos. 18 and 30.

§ Mr. Kirkwood
I wish to detain the House further, essentially on a constituency basis. I did not have the opportunity earlier to make a contribution to the Bill, which will have a significant effect in my constituency and in the borders of Scotland. The amendment is intended to set out the delegation powers that would be subject to parliamentary approval through a statutory instrument, which would have to pass both Houses. Clause 17, as unamended, would allow Scottish Enterprise and Highlands and Islands Enterprise to delegate functions and powers to others, except powers such as the compulsory acquisition of and entry to land, and the power to obtain information.
The amendment is a probing amendment. I want to see whether there is any scope for persuading the Government, before the companies take effect, to publish the set-up contracts between the Government and the local enterprise companies and to put them into the form of an Order in Council or a statutory instrument, which would be subject to the affirmative resolution procedure in both Houses. That would have the effect of allowing the House to consider in some detail the set-up terms for the local enterprise companies. A number of issues should be addressed in that procedure and in the statutory instruments, if the Government accept the amendment.
I do not ask—I hope that the drafting of the amendment is not defective in this respect—that every working contract entered into by local enterprise companies be subject to parliamentary scrutiny. That would take us back to a position far worse than the old nationalisation days. I seek to set out a procedure that would allow Parliament to scrutinise the original terms of reference within which the local enterprise companies operate as they are individually created.
There are compelling reasons for considering that proposal. The contracts should set out the terms under which the local enterprise companies will be accountable to the House of Commons and to the communities they seek to serve. The statutory instrument procedure, which I advocate in the amendment, would allow Members of Parliament to raise issues relating to particular local enterprise companies. In the debate on amendment No. 28, I adverted to some important aspects of the provisions affecting the Borders local enterprise company. I am also concerned with specific training functions. It might be possible, for example, to investigate the lack of a tourist remit for some of the other important local enterprise companies that may be set up.
I say that with more force in light of a recent survey into tourism training. It examined the position throughout Scotland and came to the conclusion that neither the quantity nor the quality of training in the tourism industry achieved a high standard of performance because of a combination of low demand from employers, a poor perception of tourism careers and the supply-driven nature of the existing provision of training. That is an example of 592 an issue that we could examine through the statutory instrument setting up the individual local enterprise companies.
I should very much like to be able to scrutinise any provisions made in my local Borders LEC for rural areas. We heard the arguments about the possibility of a social obligation when we discussed amendment No. 28 and that is an important consideration, although that argument is now over. We should also want to consider the small business provision, for example, to ensure that the local enterprise companies embrace the needs of small businesses. Although I make no complaint about it, there is a feeling in my area that small businesses will not be properly represented in the constitution of the prospective board for the company that will run the Borders local enterprise company. We cannot ignore the proper concerns of small businesses, especially in rural areas. Scrutiny of such issues would be possible if we had the statutory instrument procedure.
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There is also the question of the amount of finance that is available to local enterprise companies. As far as I am aware, the amount of taxpayers' money in the pot is not subject to any direct or explicit questioning under the Bill as it stands. That is lamentable. I am not saying that that money will not be properly applied, but the House deserves the statutory right of scrutiny over the financial arrangements that are made by and the finances that are deployed by the local enterprise companies in the future.
The question focuses on how individual LECs are to be made accountable to their local communities. When the Bill is enacted, the Lowland LECs will have between £5 million and £70 million of taxpayers' money to deploy; and the highlands and islands area will have between £1 million and £5 million. We are talking about substantial sums of money. The House has the right to demand some machinery to scrutinise the details of how the money is spent. That could be achieved by the statutory instrument procedure.
We had an interesting debate earlier about the quality of training, which could be dealt with by setting up a system of parliamentary scrutiny. We require guarantees about a proper quality of training before the LECs have any chance of succeeding in performing the tasks for which they are being set up.
The statutory instruments that I am advocating could also relate to details of how LECs will be given the opportunity to earn additional funding. I was not a member of the Standing Committee and some of these matters may have been discussed in detail then, but I am worried about the prospect of the operation of performance bonuses. I have heard of a civil service discussion document suggesting that almost £6 million—nearly 2 per cent. of the current budget of the Training Agency's programmes in Scotland—should be spent on performance bonuses for LECs that exceed the stipulated minimum training targets. That was reported in Scotland on Sunday on 25 March 1990.
I apologise for repeating this point if the Minister dealt with it in Committee, but the House will want to know about it, because it is a basic point. As I understand it, the basis for some of the performance targets will be competition between LECs based on their efficiency to process people through YTS and ET schemes. The performance measures that are being talked about are 593 based on percentages of, for example, leavers of YTS and ET schemes who find jobs, go on to further education or become self-employed, or who achieve certain qualifications and credits towards those schemes. Some of those matters deserve further consideration and are the sort of thing that can be dealt with in a statutory instrument procedure.
Performance monitoring is a desirable concept, and I wonder why the Government did not look more closely at the scheme that was suggested by Community Business Scotland, which suggested in its original submission on the White Paper that monitoring could cover more broadly based factors such as the overall impact of the LEC; the quality of the board of directors; the LEC's breadth of coverage—especially in poorer areas—the extent to which there is a genuine partnership among the public, private and community sectors; the quality of the training provision; and the management of innovation.
The House needs further to consider the ability of the LECs to render themselves accountable to the communities that they serve. Some of the quotations that I have seen from Mr. Bill Hughes and Mr. Lex Gold are simply not good enough. They suggest that, as long as they are as accountable as the best private companies, that is good enough. I do not agree. I hope that the Minister will assure us that the House will have an opportunity to consider that before LECs are set up.
People in my area are worried that parts of the Bill will subvert the democratic planning permission process, as LECs will effectively be able to submit directly to the Secretary of State for approval proposals for development, redevelopment or improvement anywhere within their jurisdiction. I should be grateful if the Minister could bring me up to date on any development in that regard, if there have been any, since the matter was discussed in Committee.
The machinery that I have described may not be the best, but the House is entitled to better guidance from the Government about the legal terms in which powers devolved to LECs are couched. If none is forthcoming before LECs come into effect, the Government will be doing the House a great disservice and short-changing it in an important area of public policy that will have a dramatic effect in every constituency.

§ Mr. John Home Robertson (East Lothian)
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said that the objective of the amendment is greater local accountability for LECs. I am sure that we all applaud that aim, but requiring guidelines for the work of LECs to be put to a Committee on Statutory Instruments is a funny way in which to achieve it.
I realise that this is a probing amendment, but what the hon. Member for Roxburgh and Berwickshire said about it and in the previous debate was entirely fair. There is a clear need for local considerations to be the driving force behind decisions on the development of training and enterprise in local areas. That is especially true of rural areas such as those that the hon. Gentleman and I represent.
One of the things that has been wrong with the work of the Scottish Development Agency recently is that so many decisions that would once have been devolved through the SDA seem to have been required to go across the Minister's desk. I have had some local cause for concern on that count recently in regard to the painful amount of 594 time it has taken to process applications for assistance from the SDA for the valuable work of the Dunbar initiative, which is a joint operation involving private enterprise, local authorities and the whole local community, which want to redevelop a rural part of my constituency that has suffered considerably from a range of problems that I shall not go into.
I take this opportunity to thank the Minister in advance. I am advised that the SDA is likely to make a fairly substantial contribution to the project, but we could do without central decision-making. We want to get such decisions off Minister's desks and into the forum of local decision-making. I think that that is what the hon. Member for Roxburgh and Berwickshire wants. We want LECs to be genuinely locally accountable.

§ Mr. Lang
I shall have to disappoint the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), because I cannot accept his amendment. I hope that he will forgive me for being brief, because of the hour, in my explanation of the thrust behind what we are seeking to do. We want to decentralise power, through Scottish Enterprise and Highlands and Islands Enterprise, to the local enterprise bodies.
The hon. Member for East Lothian (Mr. Home Robertson) put his finger on it when he said that the amendment runs counter to such an aim, as it would bring to the House, on the annual scrutiny basis, detailed accountability of the expenditure and budgets of LECs. There is also the practical point that it would be difficult to debate 22 different affirmative orders each year Each would have to be debated separately, because each contract would be different. Whether he acknowledges this or not, that is what the hon. Member for Roxburgh and Berwickshire is calling for. The provisions of the amendment would be counter to our philosophy of decentralisation.
I accept that the scrutiny of expenditure is important. The structure that we are setting up, in which LECs contract with Scottish Enterprise, and have their contracts carefully monitored, will create greater accountability than exists through the SDA.
It is important to have performance targets and to reward the successful delivery of performance, but it is important to go for quality, not just quantity, and for that reason, the performance targets will embody a recognition of qualifications gained and of jobs secured. It will reward success.
It is our purpose that LECs should be answerable to the community. I shall send the hon. Gentleman copies of chapters 6 and 7 of the handbook for LECs, which sets out clearly the accountability procedures that we envisage operating. I think that that will answer his point.
I shall write to the hon. Member for East Lothian about the Dunbar initiative, to bring him up to date, and I am grateful to him for raising the subject.
For the reasons that I have given, I hope that the hon. Member for Roxburgh and Berwickshire will not press the amendment.