HC Deb 25 February 1992 vol 204 cc872-89


  1. (1) The Secretary of State, after consulting such bodies representative of existing local authorities or of staff employed by such local authorities as appear to him to be concerned, shall by order establish one or more staff commissions and such a commission may be established either for the whole or any part of England.
  2. (2) An order made under this section may contain provisions as to the transfer of any person who is, on such date as may be specified in relation to him in the order, the holder of any office or employment and who is affected by any provision of, or of any instrument made under, this Act and shall contain provision for the protection of the interests of such persons.'.—[Mr. Blunkett]
Brought up, and read the First time.

Mr. Blunkett

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Paul Dean)

With this, it will be convenient to take the following: New clause 18— Establishment of Staff Commission (No. 2)

  1. '.—(1) The Secretary of State, after consulting such bodies representative of existing local authorities or of staff employed by such local authorities as appear to him to be 873 concerned, shall by order establish one or more staff commissions and such a commission may be established either for the whole or any part of England.
  2. (2) Such a commission shall have the purpose of—
    1. (a) considering and keeping under review the arrangements for the recruitment of staff by local authorities affected by orders under this Part and for the transfer, in consequence of the provisions of any such order, of staff employed by such authorities;
    2. (b) considering such staffing problems arising in consequence of such an order, and such other matters relating to staff employed by any such authority, as may be referred to the staff commission by the Secretary of State; and
    3. (c) advising the Secretary of State on the steps necessary to safeguard the interests of such staff.
  3. (3) An order made under this section may contain provisions as to the transfer of any person who is, on such date as may be specified in relation to him in the order, the holder of any office or employment and who is affected by any provision of, or of any instrument made under, this Act and shall contain provision for the protection of the interests of such persons.'
Amendment No. 6, in page 21, line 14, leave out clause 23.

Mr. Blunkett

The greatest asset that any service has is the people who work for it. The idea that to promote the interests of the public service and to be concerned about the quality of the staff who work in it is somehow to be committed to the interests of the provider as against those of the consumer or user is a great mistake.

In the years ahead, we need to restore a commitment to, and faith in, the whole concept of public service. We need people who are willing to serve their local communities and who can give more than simply what is expected of them in exchange for the remuneration that they receive in their wage packet. We need to stimulate and motivate people and make them want to do a good job and provide something for the community, not simply because they are paid but out of a desire to serve.

That is why I make no apology for saying that, if we are to reorganise local government and to ensure a satisfactory transfer of employees from one authority to another, we must establish a mandatory staff commission. The retention of high-quality staff is a prerequisite of high-quality services. If we are to put the interests of users and consumers of the services at the top of the agenda, those who deliver those services and provide for those users and consumers must be considered a key priority.

The establishment of a staff commission is not only about the interests of staff but about the interests of those who use the services. The Government have made a great mistake in believing that, if one privatises essential local services, one can retain the commitment to the job of staff who related to those whom they served and to the communities and neighbourhoods in which they worked. Much has been lost in the scrabble to disentangle local services and their providers from local authorities and the community. The most obvious examples are the village and neighbourhood schools, where the contractorisation of services has meant that, instead of the staff being part of a team—part of an integrated whole—they are merely the servants of a company or organisation that has placed them there to do a job. Another example is the cleaning of buildings. Anyone who has experienced the transition from an in-house service, made up of people who were part of the organisation and who felt some affinity with it, to a service provided by a private company will have discovered to his cost and peril that the staff are no longer committed to the job and the provision of the service but merely to finishing the task as fast as possible and getting off their shift and out of the building.

We live in a society in which motivation depends on bonuses and pay, rather than on commitment to doing a good job on behalf of the people. The Opposition will seek to restore that commitment to public service and the morale and motivation that existed 20 or 30 years ago in local government when the approach was completely different. People took pride in what they were doing. They cared enough to stay on after their normal hours of work were over. They gave a damn about the people with whom they were dealing and would put themselves out in the evenings and weekends to help them. They had an affinity with the neighbourhood and knew what people's needs were.

That approach has been lost, but we believe that the establishment of a staff commission would be one small step towards restoring it. It would reflect the need to ensure that the interests of the community were served by an orderly and sensible transfer of employees from one authority to another. We could thus ensure a degree of stability so that people stayed in their employment long enough to be able to be transferred to the successor authority and did not simply leave the sinking ship while the going was good, taking whatever opportunity arose for them—perhaps in another part of the country.

High-quality staff at every level—from chief officers and senior white-collar staff to those at the sharp end in the delivery of public services—would feel that it was worth their while staying on, keeping the quality of service going in the existing authorities and being willing to transfer in an orderly fashion to the new authority.

The mistake that may have been made back in the early 1970s when the mandatory staff commission was established was that the need to provide quality to the consumer was not set alongside the needs of the provider. The commission was rightly given the clear instruction that it was to look after the interests of those who worked in the service, and the 1974 transfer and compensation package was very fair to staff. That fairness to the staff needed merely to be seen to be complemented by fairness to customers and users.

Taken together, the two priorities make sense; one cannot have one without the other. Users cannot be served without decent, highly qualified and motivated staff and staff cannot be provided with employment or with a task worth undertaking unless quality is a key word on their agenda. Perhaps we have not engaged local government staff enough in debate and discussion about their role in the quality development of services. We have regarded them as pawns who can either be transferred to new employers or replaced with people who have been taken on at a lower cost and for lower wages. Perhaps it is time to ensure that the staff are engaged in the debate and feel that their task and future are bound up with the service that they provide.

It is in that spirit that we wish to promote the concept of a mandatory staff commission, which will not just deal on a piecemeal basis with individual localities but will be seen as essential to the arrangements for the country as a whole. Staff could then feel a continuity of service in the neighbourhood in which they worked and in the work that they were undertaking, but would also know that there was a wider context in which their service could be valued and that their transfer to another authority could be acquired if that were more appropriate.

It is in acceptance of their role and the ability to enable people to continue doing the job and to be able to transfer to that job within the new framework that we believe that the smooth handover—the transition—can best be maintained by ensuring that everyone is committed to it. If they are not, people will he afraid of the change. Change in this country has always been seen as a threat. In one sense, that has led to a conservatism that would otherwise not be present. That can be avoided in the way that I have described, and with the staff commission working alongside the reorganisation to be undertaken by the local government commission.

That is why we are committed to the notion of the staff commission. We are committed to undertaking it in a more positive way than in the early 1970s. However, there was a commitment by all sides to making it work, and there was success in managing the operation, the compensation regulations and the fair treatment of staff.

7.30 pm

Not all staff will be required to remain in the service. Their severance is important to them and, in terms of good industrial relations, it is important to the wider community. We want the matter to be handled smoothly. In that case, we need it to be done without a backlash or a negative reaction and without the danger of a dispute arising, which would dislocate the new authorities before they started and, of course, would undermine the continuance of the quality of service.

We know that past Ministers have agreed with that—from Sir Keith Joseph, as he was at the time of the reorganisation of local government in London, and his successors under the right hon. Member for Worcester (Mr. Walker) in the early 1970s. They understood then and we should understand today the importance of ensuring that the regulations are enforced, that people's fears are put aside and that people can be seen to work together to ensure that the new changes are not a threat to individuals working in a service, but are a promise of better things to come for those who receive the service.

For those reasons, we have moved new clause 4 and are promoting the idea of a smooth and sensible transfer from one set of authorities, from one set of employees to new circumstances, and protecting staff, pensions and the things that matter to the local community, and ensuring that that can be done in a way that would make sense to anyone outside who was asked what he would do if he were in charge of the process.

Mr. David Bellotti (Eastbourne)

I hope that the Government will be persuaded to accept the new clause because the House should send a message of support, concern and understanding to all the people who serve our local authorities. That message will be crucial, because those people will have to face a tremendous amount of change. It is important at this stage that we say to them that we have not only valued the contribution that they have made in the past but that we expect the easiest possible transition to whatever lies ahead and that if the local government commission does its work properly, whatever the change and whatever the future is, we value their work now and we will value it in future. Nothing can quantify in monetary terms that message of support.

We have had a decade in which the Government have been sending different messages to those who work in our local authorities, and we have an opportunity tonight of sending a message of support to them.

I shall demonstrate why that message is so important. This morning, I was speaking at a full meeting of East Sussex county council, when the information was given that the county council, in trying to position itself in advance of the local government commission going to Sussex, has taken an extraordinary decision. It will probably conclude at the end of that debate that the agency agreements with four districts within East Sussex for highway matters should be abandoned and that it should take back into the centre of the county council what has run very successfully since 1974—responsibility for employing all staff and undertaking all agency agreements. In other words, it will be a centralisation of the county.

It is obvious why the council is doing that. It hopes that one of the strong cases for devolution to districts will be that they were already successfully undertaking highway matters. One can see the tactic involved. Unfortunately, the pawns are the people who are doing such good work in maintaining our roads and pavements in East Sussex through agency agreements.

I do not know whether the Minister could even intervene. If local authorities throughout the country are to change the supervision of the staff in such programmes in advance of the local government commission being set up, perhaps the Minister should consider whether he has the power to stop local authorities changing their existing arrangements in advance of the commission's work. It seems high-handed of East Sussex county council that it should do so. Having had the matter drawn to his attention, the Minister will want to look at it carefully indeed.

I raise that issue because it is linked with the staff commission. If we have a staff commission and send a message of support to the staff in our local authorities, at least it would be a message of encouragement, whereas the county council's action is a message of complete disruption to the lives and work of people in highways departments.

My right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) asked me to convey Tweeddale district council's concern that the proposals will lead to not only a reduction in the influence of local authorities but a disruption of staff. That council—my right hon. Friend says that he concurs with it—condemns the Government's continued interference in the affairs of local authorities and their continual and unjustified assertion that local authorities are inefficient. Those are commonly held views. They are held not only by Tweeddale county council and my right hon. Friend, but by many people in England, Wales and Scotland. The Government must do something to change that perception.

I shall give one or two more examples of why a statement in favour of a staff commission would send the right messages. The wrong messages are going out at the moment, not just from central Government but from local government. Again, in my own county council, we are aware that the Association of County Councils has already spent £0.5 million on lobbying about the Bill. The Association of District Councils has spent a considerable sum, and the staff are observing what is going on. They want the Government to give some reassurances.

My own county council has spent £30,000 on redesigning its logo. The difference between the old and the new logos is the addition of the two words "county council". Local people who work for the county council, trying to deliver a cost-effective service, are saving money left, right and centre and are very concerned when they see their employer wasting £30,000 on a new logo just to add the words "county council". The county council formed a consortium with five other Conservative county councils in the south-east to make representations to the Government.

Those things are happening all the time. We must say to the thousands of loyal, hardworking local government staff who have been with us for years that that nonsense will stop and that the Minister will give a reassurance that their jobs will not go as a result of the profligate lobbying which is going on nationally and by some local authorities.

For those reasons, I warmly commend for serious consideration the idea that the staff commission should be supported.

Mr. Allen McKay

I support the new clause and I hope that the Government will also do so. It is common sense to include a staff commission when considering the reorganisation of local government. I went through several reorganisations, both at the receiving and reorganising ends, while working for the National Coal Board and I appreciate the feelings of the people affected. Not only their jobs but their livelihood and that of their families are affected. People may also be worried about their pensions. Some people may have to retire early and may be worried about the pension that they are likely to receive. Those are just some of the points that a staff commission would take on board.

In Committee I argued for some considerable time that architect services, for example, should not go out to tender. Architects are a classic example of people who work in local government not because of the money but because, first, they like the job that they do; secondly, they believe that the service that they provide is a public service; thirdly, they get a great deal of satisfaction from their job. Such people are looking around at present because they know full well that they could obtain a much better salary by going private. Many private firms are eager to pick up local government architects because of their expertise. A staff commission would help to allay the fears of people such as architects and stop them from moving prematurely, and perhaps unnecessarily, because they would at least have some assurance that all their problems would be taken care of during the reorganisation.

A staff commission is also needed because the local government commission will not just examine local government structure for a few weeks and then give up. Its examination of local government will be an on-going process. Indeed, when the Minister was asked to give an end date for the reorganisation, he said that no end date could be envisaged. I think that that is wise. We do not yet know what will be the terms of reference of the commission. If we do not know what it is to do or what it will examine, there can be no end date. The sheer length of time the commission will deliberate on local government is even more reason to create a staff commission.

Another reason for a staff commission should endear itself to the Government. The 1972 reorganisation of local government was a costly business. No one could believe the amount of money that was spent on officers' salaries in that reorganisation. The cost of local government increased tremendously. It took a long time to find the right balance. All of a sudden, chief officers in local authorities found themselves on the second or third tier of larger authorities. They were happy because their salaries increased to four or five times more than what they received on the old urban authorities. The reorganisation was costly because it was based on the chief officers' salaries. Salaries were enhanced because the area for which the authority was responsible was enlarged and all salary levels increased accordingly. The staff commission could also deal with salaries. It is a question of protecting ratepayers' money.

Local government and therefore local government officials have been under pressure since 1979. There has been a continual battle between central and local government on many aspects. Central Government have squeezed local authority finances and have sought to streamline local authorities. All sorts of pressures have been brought to bear on local government officers. How local government finance officers have stood, and still stand, the problems which the poll tax brought and which the new council tax is bringing, I do not know. Their loyalty to their local authorities has been stretched beyond believable limits. Yet they have coped.

There is great expertise in the finance divisions of local authorities. Finance officers could move out to private enterprise easily and earn lucrative salaries. If those people moved out, the difficulties for local government would be severe. They are the people who spearheaded the financial changes that have taken place recently in local government.

In Committee I also spoke about housing in my area. I cannot comprehend some of the views on housing management expressed both in Committee and in the House today. Why it is not possible for a local authority to manage 60,000 houses, I do not know. No one tells ICI that it is too big to manage. No one tells international firms that they are too big to manage. They are managed. It is effective management that counts.

In my area, all our housing management is devolved to the bottom. Only policy is formulated in the town hall. Once policy is formulated, the tiers below are expected to carry out that policy. Only in overstaffed areas of housing management are town hall officials needed. But people in all the tiers of that management structure will wonder what is to happen to the jobs that they had just settled into.

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If we send out from the House the message that we acknowledge the work that local government staff do and the strains that they are under, that we recognise what will happen in the reorganisation of local government and that some of the fears of staff could be put at rest by creating a staff commission to examine the problems that are bound to arise in the reorganisation, we could keep the loyalty of staff to local government. As my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) said, it seems inconceivable that people of the calibre of local government officials have stood the pressures for so long for the salaries that they receive when they could obtain much more outside. They have done it because they like local government, but central Government are stretching local government credibility too far and some officers are beginning to wince under the strain.

Some local government officers have left for other areas or other jobs simply because they could see no future in their existing jobs. I do not agree with them. I believe that there is a great future in local government. But if the reorganisation goes wrong, we shall have failed local government staff again, as we failed them in 1972.

The Minister should accept that while the local government commission goes ahead with the reorganisation, a staff commission should be working alongside. The staff commission should be akin to the local government commission. Through those two commissions we could bring local government reorganisation to a successful conclusion.

Neither in Committee nor in the House today did anyone say, "We must get it right this time—we have been too wrong too many times before, and it has been costly in money and staff, and costly in local government work". We now have the chance to get it right. A staff commission will help us to get it right, and that is why we need one.

Mr. McCartney

Not for the first time in the past decade or so, the question of the career structure of local government staff has come before the House. In 1972 the reorganisation of local government caused a major upheaval and there was a redistribution of staff in local authorities. When I talk about staff, I do not mean only chief executives. I am talking about a range of people from the highest to the lowest paid. There is no local authority area in Britain where local government staff do not make a major contribution to the local economy. Therefore, changes in the distribution and size of local authority staff has a direct consequence on local economies as well as on the size of the local authority itself.

The reorganisation is not merely an academic exercise of redistributing jobs in local government from one tier to another or between tiers of local government. In 1972 and 1973 the Government made a commitment to redistribute and protect jobs in the transfer from urban and rural district councils to the new metropolitan county and borough councils and the non-metropolitan county and district councils. There was a mainly smooth transition.

In 1985 we had a reorganisation of metropolitan areas. County councils such as Greater Manchester, Merseyside and West Midlands were abolished. A major disruption took place. In that reorganisation services at county level were completely removed. Local authorities were left with the job of running previously county services. It was up to them to make decisions about the staff that were to be transferred. Luckily, in the mid-1980s local authorities still had the financial and resource base to absorb much, if not all, of the redistribution of staff that had to take place when the metropolitan counties and associated organisations were abolished. That is not the case with this reorganisation. In the past six years there has been a major disruption in the levels of service provided by local authorities and the resources provided to finance them.

Local authority workers not only fear that their jobs will be redistributed out of existence but that, at the end of that redistribution, their jobs could be subject to compulsory competitive tendering, which is extended in the Bill. That adds to the worries and fears of thousands of local government workers for their future in local government. Will their jobs remain in local government in the sense that there will be an orderly transfer and protection of salary levels and pension rights? Will the number of years that they have worked for the authority be considered in connection with holiday and other entitlements? On transfer, will they lose entitlements because they are not transferred to the new authority? Having been transferred, will workers find themselves competing for their own jobs because of the introduction of compulsive competitive tendering'?

We have already witnessed the consequences of compulsory competitive tendering for local government workers, and as a result many workers fear that their jobs will be redistributed under the proposed reorganisation.

The Government have refused to accept the concept of the transfer of undertakings. Local government workers whose jobs were transferred to the private sector as a result of the Local Government Finance Act 1988—whose provisions will be extended by this Act—have no right to protection for the hours that they work, for hourly pay rates, time off and holidays. In Committee, we heard many examples of what happens when there is no protection when employment is transferred from a local authority to a new employer—weeks have been cut from annual holidays and there have been cuts of up to 50 per cent. in hourly rates of pay and cuts in pension entitlement. In many instances, workers have been transferred out of the local authority pension scheme into a new scheme, with no rights. While they work for the new employer they will have pension rights only if they can pay for a private pension plan. In reality, the right to purchase a private plan does not exist for many low-paid workers.

Compulsory competitive tendering has dragged down local authority workers' conditions of employment and has denied them rights that they previously enjoyed when they worked for the authority.

Given that that is the Government's history, what guarantee do we have that they will not use this redistribution to attempt to undermine the rights of masses of workers in local government? Members of Parliament who have worked for local authorities, as I did for many years, believe that that is precisely what will happen. The Government will use the local government review as a massive shake-up of the numbers of people employed in local authorities, of how much they are paid, and of their conditions of service.

My hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) is right to say that the proposed staff commissions are important in trying to improve the morale of local authority workers, which is at its lowest, and to reassure them. However, in reality, the Government will not accept the establishment of staff commissions. In the long term, only the return of a Labour Government will help local government workers to maintain their levels of pay and conditions. That is the bottom line.

Given that the Government want the House to approve this legislation, it is important for them to set out precisely their intentions for the transfer of jobs between county councils and unitary authorities, or from former county borough areas to new unitary authorities in the non-metropolitan areas. Will the Government give clear guidelines on the protection of salaries, conditions of employment and pensions'?

In Committee, I twice mentioned pensions and Government policy on them. The response from the Minister was unsympathetic, to say the least. If his pension rights were involved, he would not be so unsympathetic. Our pensions are protected. The Government have failed lamentably to protect the pension rights of tens of thousands of local authority workers. This review will affect not merely tens of thousands but hundreds of thousands of local government workers. Will the Minister give a clear sign that the huge reserves in local authority pension schemes will be maintained? Will employees have an absolute right in law to remain in schemes, or, if they have to be wound down because the local authority unit of organisation is removed, will those rights be transferred into a new scheme so that irrespective of whom the employee works for after the decision to amalgamate or to eradicate their previous employer, at vesting day when the new authority takes over, their pension rights will be maintained? That would mean that people who had worked for a local authority for 25 years and had paid into the pension scheme would be able to take their contributions with them to the new employer. It is vital that we are given a clear understanding that that will be the case.

What will be the Government's policy on the protection of salaries? I do not argue that people should maintain the same salaries throughout their working lives. I accept that salaries may go up or down. I am at a period in my career when my salary is increasing considerably. I do not suggest that local government workers should be absolutely cushioned, but it would be wholly wrong both in principle and in practice if, by virtue of a change in local government boundaries and therefore a change of employer, a worker found himself substantially worse off overnight, having been transferred to a job with a lower salary. That means a salary reduction, not merely for the worker but for the family unit, with all the consequences. Will there be rules and regulations to protect salaries? They should be protected at least for a few years so that there is no cut-off point and local authority workers are not forced to transfer into new employment and to accept a major cut in their salary.

I hope that the Minister can give us some satisfactory replies. If he can, some local government workers may feel more reassured than they do at present.

Mr. Key

I must start by saying something which I think will be deeply unpopular on the Opposition Benches. I have great faith in local government. I have a high respect for local government staff, whether senior officers or people who have worked for years and often decades in lowly positions to make local authority services work. Far from local authorities suffering the death of a thousand cuts, which I suspect Opposition Members would like us to believe in, local government has a bright future. I envisage local government having an enhanced status, the like of which has not been seen this side of 1945. As a result of measures that have been difficult and unpopular in local government—including the operation of compulsory competitive tendering, changing local authorities to an enabling role, and crucial areas of change such as the city challenge—in the future there will be more responsibility for officers and staff at all levels. They will have more influence over the communities we all seek to serve and there will be more status for people who work in local authorities. That is how I see the future.

Mr. O'Brien

While the Minister is completing his vision of the future for people employed in local government, will he assure us that he will not countenance the discrimination that currently takes place? Officers in local government suffer political discrimination, but officers who work for private-sector organisations or consultancies, which will take over the duties and management of local authority services, will not be politically disfranchised. If the Minister believes in local government, will he remove such discrimination?

Mr. Key

It is always a pleasure to spar with the hon. Gentleman and I give him the same answer that I gave in Committee. We are talking about two entirely different types of provision of services. There can be no question of private-sector contractors being subject to the same political constraints. As I tried to demonstrate in Committee—and the Committee agreed with me—local government officers give policy advice to elected politicians; therefore, they operate under a completely different set of circumstances.

Mr. McCartney


Mr. Key

I do not wish to give way to the hon. Gentleman, but if I do not I know that the debate will begin to break up.

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Mr. McCartney

The Minister is so kind. Will the Minister tell us about the position of a private solicitor who is employed when compulsory competitive tendering occurs and is asked to give policy advice on legal matters? He would be allowed to stand in an election for whatever party he wished. However, a local government solicitor who works for the same or another authority, but does not give such advice, is prevented from even putting up a poster at election time.

Mr. Key

The private-sector solicitor would be operating under a specific contract, for a specific job and for a specific period. The local government officer, who has qualified to be a solicitor, is in a completely different position.

I wish to reply to the points raised by the hon. Member for Makerfield (Mr. McCartney). I accept that, perhaps, one of the things that has beeen lacking in local government has been the opportunity to pursue a proper career. I have seen that for myself. In the first weeks of becoming a Minister in the Department of the Environment when I was responsible for housing, I was shocked to discover the lack of training available for people in housing management. The Government are now dealing with that problem. Motivation is a crucial factor. If staff do not have motivation because they do not see a career ahead, they will inevitably and understandably not give of their best.

In order to dispel another myth, it is important to recognise that the number of staff employed by local authorities is almost the same now as it was 10 years ago. The number of local authority personnel has not massively withered away. The figures for local authorities bear that out. Pensions and salaries will be dealt with by clause 26 (5)(b).

The hon. Member for Barnsley, West and Penistone (Mr. McKay) made a typically telling comment. He is right that local government officers and their families form part of the community. Their children go to school with our children, and so on. I recognise that they are part of the fabric of the community which they serve, in the same way that the hon. Gentleman and I are members of the community that we represent.

It is true that local government officials have experienced considerable pressure in the past decade. I recognise that, but that is a good thing. As a result of what has happened over the past 10 years, we have a vigorous local government service that has a quite different standing in the eyes of the people who pay for and receive the services that it provides. I pay tribute to local government staff who have responded robustly and with vitality over the past 10 years. That is why I was so robust in my opening remarks. I care about local government staff and acknowledge their fears, but local government has a great future.

The hon. Member for Eastbourne (Mr. Bellotti) said that we should send out a message of support, concern and understanding. I unreservedly join him in that. Over the years we have not heard Conservative Ministers castigating local authority employees. We may have been rude about local councillors because they direct and make the policy that their officers carry out. I note what the hon. Gentleman said about East Sussex county council and I shall consider that. He said that the work force tend to be the pawns and I recognise his concern. I listened to the comments that the hon. Gentleman relayed to us from the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) on the problems of Tweeddale district council. He said that his right hon. Friend was worried about interference in local government. I ask him to convey to his right hon. Friend my belief in the future of local government and how 1 think that it has a strong future with a high status in our community.

I believe that the relationship between central Government officials and local government officers is perhaps better than we have any right to deserve. They work closely together. We at the Department of the Environment are anxious that such co-operation should be improved still further. We have a programme of secondment between the Department and local authorities which is valuable, and chief officers of local authorities meet permanent secretaries and other senior officials on a regular basis.

In common with the hon. Member for Eastbourne, I am concerned about what he described as profligate lobbying about the future of local government. I have had something to say about that in the past. I do not believe that glossy publications and brochures should be produced by different councils. They have a right, of course, to consult their local people and to explain what is going on, but I suspect that the local government commission will not be swayed by glossy brochures and flashy publicity.

The hon. Member for Sheffield, Brightside (Mr. Blunkett) said that the greatest asset a service has is the people who work for it and I say "Hear, hear" to that.

Mr. Blunkett

Hear, hear.

Mr. Key

We are in stereo.

We mean to restore commitment to and faith in the public services, but our vision is fundamentally different from the hon. Gentleman's provider vision. I believe that there is a desire to serve among local government staff and officers at all levels. The status of local authorities is different from that perceived many years ago when the hon. Gentleman and I were children. Then, there was a somewhat cosy atmosphere in local government that did not necessarily mean that the best standards were always adhered to.

The hon. Member for Brightside also said that a prerequisite of any good service was the retention of high-quality staff. That is true, but my approach is slightly different from that of the hon. Gentleman. I want exchanges to take place between the private and public sectors. I do not want to lock local government officers to their particular jobs. It is entirely healthy that there should be such exchanges. Sometimes people leave local government service to work in the private sector. Sometimes they go back to local government work when they discover that the bright lights of London and the London weighting that went with them were not what they should be. We in central Government have also learnt that lesson, because more of our jobs are being moved from London to the country.

The hon. Member for Brightside also spoke about career development and the importance of in-service management and training, with which I agree. However, we have a long way to go. I believe that local authorities should be examples of the very best management practice. It has always struck me as astonishing that anyone should be prepared to accept that what is good for the best private-sector companies, such as ICI, which has been mentioned today, should not be equally applicable to local government. I want local government to bear fine testimony to best management practice.

We already have a high standard of management in local authorities and that standard is constantly improving. That is one reason why there is such a strong exchange programme between some local authorities and the emerging democracies of eastern Europe. That is why their local government Ministers come here to discuss with us the problems that we face and the programmes for change that we are instituting.

I hope that I can demonstrate that there is no wide gulf between us on the issue of staff commissions—it is a matter of different emphasis. Any such commission would have three duties. First, it would be required to consider the arrangements for the recruitment or transfer of staff by the relevant authorities affected by the orders under part II of the Bill. Secondly, it would have to consider any staffing issue referred to it by the Secretary of State. Thirdly, it would advise the Secretary of State on the steps necessary to safeguard the interests of the staff.

The clause also provides for the Secretary of State to issue directions to any relevant authority affected by an order under that part of the measure about the implementation of any advice given by a staff commission. There is a separate provision, to which I have referred, in clause 26(5)(b) which would allow the Secretary of State to make orders for the transfer of staff, compensation for loss of office, pensions and other staffing matters.

I do not doubt that staff commissions have been important in the past. We shall not hesitate to establish one or more should that prove necessary. But the practice in the past has been for a major reorganisation to be put into effect on a single day—what has often been referred to as the big bang approach. We have learned from the lessons of 1972, to which the hon. Member for Brightside referred. That single vesting day inevitably caused considerable upheaval, and an important task of the staff commission was to try to lessen the impact on the interests of the staff.

On this occasion it is different. The local government commission will review local government in England on an area-by-area basis. We do not know what the commission's recommendations will be, nor how extensive a reorganisation of local government will eventually result from the review in each area. So where the Secretary of State decides to make orders following recommendations from the commission, the changes will be implemented in stages.

I accept that there will be a significant period of uncertainty for staff. Whereas some people have maintained that the single vesting day led to considerable upheaval and uncertainty, the opposite case is now being made out—that a piecemeal approach would lead to even greater uncertainty. As I said in Committee, I recall well —I was a teacher of economics—what happened in 1972.

Mr. Alan Amos (Hexham)

Hear, hear.

Mr. Key

I am pleased to hear my hon. Friend agreeing with me. I recall that my hon. Friend the Member for Hexham (Mr. Amos) came on teaching practice and took over my sixth form for a happy term. The A-level students benefited enormously from that experience. I was grateful to him at the time for taking a load off my shoulders for a term. Now he is doing the same as he sits on the Bench behind me.

The area-by-area approach that the Government are proposing should reduce the amount of uncertainty that the staff will have to put up with. We believe that the process of review of the whole country will take at least five years. The hon. Member for Barnsley, West and Penistone said he recognised that it was unlikely that we would seek a definite end date for the process. I believe that it will be at least five years. If there were a big bang approach, we would have to specify that after two, three, five or however many years there would be a single changeover.

The need for a staff commission will depend on the scale of the changes proposed in any one area. In some areas, the changes are likely to be minor, and I believe that it would be unnecessary to set up a staff commission to deal with relatively minor problems which local authorities are perfectly competent to cope with among themselves. But we accept that where there are major structural changes, we may need to establish one or more staff commissions.

I have given an assurance that we will establish a staff commission where necessary. I have explained that we take on board the need to keep in mind issues of pensions, salaries and so on. As proof of my good faith, I can report to the House that I had a good discussion with NALGO last week. The union asked to see me about the matter and I was happy to oblige. I appreciate that it is not affiliated to the Labour party—I shall not fall into the trap of saying otherwise—even though NALGO may be spending a lot of money promoting the interests of my political opponents.

I had a good meeting with a number of NALGO officials, including Alison Mitchell, the deputy national officer in the local government section, and I asked whether the union would help us by submitting some proposals on how a staff commission should work. It has agreed to do so. We hope that proposals will come out of discussions between the local government associations and local government unions, based on our legislation. I hope we can agree that there is not a wide gulf between us and that we recognise the problems. I hope that I have managed to lay to rest once and for all the unwarranted belief that in some way we do not see anything other than a bright future for local government.

8.15 pm
Mr. Blunkett

There is nothing between us, except whether we believe a word of what the Minister has been saying.

Mr. Key

That is unworthy of the hon. Gentleman.

Mr. Blunkett

Is it? I remind hon. Members that the Minister said that he had an undying commitment to local government, which he claimed had a brighter future than at any time since 1945. He said that far from detracting from and constraining local government—by capping, regulating or in some cases diverting parts of it to the private sector—the Government were fully in favour of local government. He reminded me of the man who said that he liked little lambs and their fleece, and above all he liked eating them. I thought of the Minister in that light when he spoke about how much he liked local government. He was almost drooling as he said it, as though holding a cleaver in one hand and a microwave in the other.

The truth is that whether there is a piecemeal or comprehensive approach to reorganisation, if there is good staff at any level, we must ensure that they are transferred in a reasonable fashion. But if unitary district authorities are established and the county in that area is abolished, there is a danger that the highest quality staff at the county level in some of the most key services will find themselves excluded. That would be tremendously detrimental to local government. Indeed, the whole issue of transferring politicians will prove a major problem if we wish to ensure quality of service and the highest possible functioning of local government.

For those reasons, we regard the issue as important enough to press to a Division. I look the Minister in the eye as he smiles unwaveringly and assures me that local government has an unending future under his knife.

Question put, That the clause be read a Second time:—

The House divided: Ayes 181, Noes 247.

Division No. 95] [8.17 pm
Adams, Mrs Irene (Paisley, N.) Benn, Rt Hon Tony
Allen, Graham Bennett, A. F. (D'nt'n & R'dish)
Alton, David Benton, Joseph
Archer, Rt Hon Peter Bermingham, Gerald
Armstrong, Hilary Bidwell, Sydney
Ashley, Rt Hon Jack Blunkett, David
Ashton, Joe Boyes, Roland
Barnes, Harry (Derbyshire NE) Bradley, Keith
Barnes, Mrs Rosie (Greenwich) Bray, Dr Jeremy
Barron, Kevin Brown, Nicholas (Newcastle E)
Battle, John Caborn, Richard
Beckett, Margaret Callaghan, Jim
Bell, Stuart Campbell, Menzies (File NE)
Bellotti, David Campbell, Ron (Blyth Valley)
Canavan, Dennis McAvoy, Thomas
Carr, Michael McCartney, Ian
Cartwright, John Macdonald, Calum A.
Clarke, Tom (Monklands W) McFall, John
Clelland, David McKay, Allen (Barnsley West)
Cohen, Harry McLeish, Henry
Cook, Frank (Stockton N) McMaster, Gordon
Cook, Robin (Livingston) Madden, Max
Corbett, Robin Marshall, David (Shettleston)
Cousins, Jim Marshall, Jim (Leicester S)
Cryer, Bob Martin, Michael J. (Springburn)
Cunliffe, Lawrence Martlew, Eric
Cunningham, Dr John Maxton, John
Darling, Alistair Meacher, Michael
Davies, Rt Hon Denzil (Llanelli) Meale, Alan
Davies, Ron (Caerphilly) Michael, Alun
Davis, Terry (B'ham Hodge H'l) Michie, Bill (Sheffield Heeley)
Dewar, Donald Michie, Mrs Ray (Arg'l & Bute)
Dixon, Don Mitchell, Austin (G't Grimsby)
Duffy, Sir A. E. P. Morgan, Rhodri
Dunnachie, Jimmy Morley, Elliot
Eadie, Alexander Morris, Rt Hon A. (W'shawe)
Edwards, Huw Morris, Rt Hon J. (Aberavon)
Enright, Derek Mullin, Chris
Evans, John (St Helens N) Murphy, Paul
Ewing, Harry (Falkirk E) Nellist, Dave
Fatchett, Derek Oakes, Rt Hon Gordon
Faulds, Andrew O'Brien, William
Fearn, Ronald O'Hara, Edward
Field, Frank (Birkenhead) Parry, Robert
Fields, Terry (L 'pool B G 'n) Patched, Terry
Fisher, Mark Pendry, Tom
Flannery, Martin Powell, Ray (Ogmore)
Flynn, Paul Prescott, John
Foot, Rt Hon Michael Primarolo, Dawn
Foster, Derek Quin, Ms Joyce
Foulkes, George Randall, Stuart
Fraser, John Redmond, Martin
Fyfe, Maria Reid, Dr John
Galbraith, Sam Robertson, George
Garrett, Ted (Wallsend) Rogers, Allan
George, Bruce Rooney, Terence
Gilbert, Rt Hon Dr John Rowlands, Ted
Godman, Dr Norman A. Sedgemore, Brian
Gould, Bryan Sheldon, Rt Hon Robert
Griffiths, Win (Bridgend) Shore, Rt Hon Peter
Grocott, Bruce Short, Clare
Hain, Peter Skinner, Dennis
Hardy, Peter Smith, Andrew (Oxford E)
Haynes, Frank Smith, Rt Hon J. (Monk'ds E)
Heal, Mrs Sylvia Smith, J. P. (Vale of Glam)
Henderson, Doug Snape, Peter
Hogg, N. (C'nauld & Kilsyth) Soley, Clive
Home Robertson, John Spearing, Nigel
Hood, Jimmy Steel, Rt Hon Sir David
Howarth, George (Knowsley N) Steinberg, Gerry
Howell, Rt Hon D. (S'heath) Stephen, Nicol
Howells, Geraint Strang, Gavin
Howells, Dr. Kim (Pontypridd) Straw, Jack
Hoyle, Doug Taylor, Mrs Ann (Dewsbury)
Hughes, John (Coventry NE) Taylor, Matthew (Truro)
Hughes, Robert (Aberdeen N) Turner, Dennis
Hughes, Roy (Newport E) Vaz, Keith
Illsley, Eric Wallace, James
Jones, Barry (Alyn & Deeside) Walley, Joan
Jones, Martyn (Clwyd S W) Warden, Gareth (Gower)
Kennedy, Charles Watson, Mike (Glasgow, C)
Kilfoyle, Peter Welsh, Michael (Doncaster N)
Kirkwood, Archy Williams, Rt Hon Alan
Lambie, David Williams, Alan W. (Carm'then)
Lamond, James Wilson, Brian
Leadbitter, Ted Winnick, David
Lewis, Terry Worthington, Tony
Litherland, Robert Wray, Jimmy
Livingstone, Ken
Lloyd, Tony (Stretford) Tellers for the Ayes:
Lofthouse, Geoffrey Mrs. Llin Golding and
Loyden, Eddie Mr. Jack Thompson.
McAllion, John
Aitken, Jonathan Fry, Peter
Alexander, Richard Gale, Roger
Alison, Rt Hon Michael Gardiner, Sir George
Amess, David Gill, Christopher
Amos, Alan Goodlad, Rt Hon Alastair
Arbuthnot, James Goodson-Wickes, Dr Charles
Arnold, Jacques (Gravesham) Grant, Sir Anthony (CambsSW)
Arnold, Sir Thomas Greenway, Harry (Ealing N)
Aspinwall, Jack Green way, John (Ryedale)
Atkinson, David Gregory, Conal
Baker, Nicholas (Dorset N) Griffiths, Sir Eldon (Bury St E')
Baldry, Tony Griffiths, Peter (Portsmouth N)
Batiste, Spencer Grist, Ian
Beaumont-Dark, Anthony Hague, William
Bellingham, Henry Hamilton, Rt Hon Archie
Bendall, Vivian Hamilton, Neil (Tatton)
Bennett, Nicholas (Pembroke) Hannam, Sir John
Benyon, W. Hargreaves, A. (B'ham H'll Gr')
Bevan, David Gilroy Harris, David
Biffen, Rt Hon John Hawkins, Christopher
Blackburn, Dr John G. Hayhoe, Rt Hon Sir Barney
Blaker, Rt Hon Sir Peter Heathcoat-Amory, David
Body, Sir Richard Heseltine, Rt Hon Michael
Bonsor, Sir Nicholas Higgins, Rt Hon Terence L.
Boscawen, Hon Robert Hill, James
Boswell, Tim Hind, Kenneth
Bottomley, Peter Hogg, Hon Douglas (Gr'th'm)
Bowden, A. (Brighton K'pto'n) Hordern, Sir Peter
Bowden, Gerald (Dulwich) Howarth, Alan (Strat'd-on-A)
Boyson, Rt Hon Dr Sir Rhodes Howell, Ralph (North Norfolk)
Braine, Rt Hon Sir Bernard Hughes, Robert G. (Harrow W)
Brandon-Bravo, Martin Hunt, Sir John (Ravensbourno)
Brazier, Julian Hunter, Andrew
Bright, Graham Hurd, Rt Hon Douglas
Brown, Michael (Brigg & Cl't's) Irvine, Michael
Browne, John (Winchester) Jack, Michael
Buck, Sir Antony Jackson, Robert
Budgen, Nicholas Jessel, Toby
Burns, Simon Johnson Smith, Sir Geoffrey
Butcher, John Jones, Gwilym (Cardiff N)
Carlisle, John, (Luton N) Jopling, Rt Hon Michael
Carrington, Matthew Kellett-Bowman, Dame Elaine
Carttiss, Michael Key, Robert
Cash, William Kilfedder, James
Chalker, Rt Hon Mrs Lynda King, Roger (B'ham N'thfield)
Channon, Rt Hon Paul Kirkhope, Timothy
Chapman, Sydney Knapman, Roger
Chope, Christopher Knight, Greg (Derby North)
Clark, Rt Hon Sir William Knight, Dame Jill (Edgbaston)
Coombs, Anthony (Wyre F'rest) Knox, David
Cope, Rt Hon Sir John Lang, Rt Hon Ian
Cormack, Patrick Lawrence, Ivan
Couchman, James Lee, John (Pendle)
Davies, Q. (Stamf'd & Spald'g) Lennox-Boyd, Hon Mark
Davis, David (Boothferry) Lilley, Rt Hon Peter
Day, Stephen Lloyd, Sir Ian (Havant)
Devlin, Tim Lloyd, Peter (Fareham)
Dicks, Terry Lord, Michael
Douglas-Hamilton, Lord James Luce, Rt Hon Sir Richard
Dover, Den Lyell, Rt Hon Sir Nicholas
Dunn, Bob McCrindle, Sir Robert
Durant, Sir Anthony McNair-Wilson, Sir Michael
Dykes, Hugh McNair-Wilson, Sir Patrick
Eggar, Tim Mans, Keith
Evans, David (Welwyn Hatf'd) Maples, John
Evennett, David Marshall, John (Hendon S)
Fallon, Michael Martin, David (Portsmouth S)
Farr, Sir John Maude, Hon Francis
Fenner, Dame Peggy Mawhinney, Dr Brian
Field, Barry (Isle of Wight) Mayhew, Rt Hon Sir Patrick
Finsberg, Sir Geoffrey Mitchell, Andrew (Gedling)
Fishburn, John Dudley Mitchell, Sir David
Fookes, Dame Janet Moate, Roger
Forman, Nigel Monro, Sir Hector
Forth, Eric Moore, Rt Hon John
Fowler, Rt Hon Sir Norman Morrison, Sir Charles
Fox, Sir Marcus Moss, Malcolm
Freeman, Roger Mudd, David
French, Douglas Neale, Sir Gerrard
Nelson, Anthony Stevens, Lewis
Neubert, Sir Michael Stewart, Allan (Eastwood)
Nicholson, David (Taunton) Stewart, Andy (Sherwood)
Nicholson, Emma (Devon West) Stewart, Rt Hon Sir Ian
Norris, Steve Stokes, Sir John
Onslow, Rt Hon Cranley Sumberg, David
Oppenheim, Phillip Summerson, Hugo
Page, Richard Tapsell, Sir Peter
Paice, James Taylor, Ian (Esher)
Patnick, Irvine Taylor, Sir Teddy
Patten, Rt Hon Chris (Bath) Tebbit, Rt Hon Norman
Patten, Rt Hon John Temple-Morris, Peter
Pawsey, James Thompson, Patrick (Norwich N)
Peacock, Mrs Elizabeth Thorne, Neil
Porter, Barry (Wirral S) Thornton, Malcolm
Porter, David (Waveney) Thurnham, Peter
Portillo, Michael Townend, John (Bridlington)
Powell, William (Corby) Tracey, Richard
Price, Sir David Tredinnick, David
Raison, Rt Hon Sir Timothy Trippier, David
Rathbone, Tim Trotter, Neville
Rhodes James, Sir Robert Twinn, Dr Ian
Riddick, Graham Vaughan, Sir Gerard
Ridsdale, Sir Julian Walden, George
Roberts, Rt Hon Sir Wyn Walker, Bill (T'side North)
Roe, Mrs Marion Waller, Gary
Rost, Peter Walters, Sir Dennis
Rowe, Andrew Wardle, Charles (Bexhill)
Sackville, Hon Tom Watts, John
Sainsbury, Rt Hon Tim Wells, Bowen
Sayeed, Jonathan Wheeler, Sir John
Scott, Rt Hon Nicholas Whitney, Ray
Shaw, David (Dover) Widdecombe, Ann
Shaw, Sir Giles (Pudsey) Wiggin, Jerry
Shaw, Sir Michael (Scarb') Wilkinson, John
Shelton, Sir William Wilshire, David
Shepherd, Colin (Hereford) Winterton, Mrs Ann
Shersby, Michael Wolfson, Mark
Skeet, Sir Trevor Wood, Timothy
Smith, Sir Dudley (Warwick) Woodcock, Dr. Mike
Smith, Tim (Beaconsfield) Yeo, Tim
Soames, Hon Nicholas Young, Sir George (Acton)
Speller, Tony
Spicer, Sir Jim (Dorset W) Tellers for the Noes:
Spicer, Michael (S Worcs) Mr. David Lightbown and
Stanbrook, Ivor Mr. John M. Taylor.
Stanley, Rt Hon Sir John

Question accordingly negatived.

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