HC Deb 16 April 1993 vol 222 cc1011-82

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chapman.]

9.33 am
The Minister for Local Government and Inner Cities (Mr. John Redwood)

It is a pleasure to introduce a full day's debate on local government. Local government matters a great deal. Good councils and good councillors can make a lot of difference to their counties, towns and districts. The Government are interested in promoting the best in local government and in leaving many vital issues to be settled democratically in the council chamber.

In recent months and years, the difference between the best-run and the worst-run councils has become marked. Successful Conservative councils get out of debt, collect their money efficiently, contract out and provide excellent value for money. Councils such as Wellingborough, Hambleton and. Huntingdon are offering their taxpayers refunds in the current year because they have been so successful at managing. Hampshire county council has succeeded in setting the lowest county council tax, while at the same time recruiting more carers and teachers.

Some Labour councils, in contrast, set high council taxes, pile high the debts and fail to provide value for money. Those are the issuers which electors will shortly be able to judge in the county campaigns.

The public sector that we wish to advance is there to organise services for those in need whom the market has passed by, to regulate the market so that it remains open and competitive, and to provide leadership and representation for communities. Good local government provides, or sees to it that there is provision for, care for the elderly and disabled. It plans our physical and built environment—for example, to prevent the noisy sawmill being located next to the old people's home. It acts as leader for the local community, creating a place in which people are prepared to invest, to create jobs and to enjoy their leisure time.

In the current year, local government will receive financial support from Government grant and business rates of more than £33,000 million. My first message today is that plenty of choice and diversity is possible within that large sum of money. The House should remember that the money goes to local government in the form of a block grant, and councillors and councils are left to make the important decisions about how to spend that money, what the priorities should be and how efficiently it delivers the services.

The private sector is there to supply wants. It is there to make money, as profits are the lifeblood of new enterprise and the means of remunerating savers, and to provide the funds to invest in new plant and equipment. Without profits, businesses cannot innovate or adapt to changing customer needs, and they soon fall behind with the provision of opportunity and employment in their local communities.

Throughout my business and political life, I have found things of excellence in both the public and private sectors. As a one-time chairman of an industrial company, as a former director of a merchant bank, as a previous director of small companies, I learned a great deal about the best that the private sector can offer. I learned to admire its flexibility, its speed of reaction, its preparedness to take calculated risks, its ability to make decisions in an uncertain world with imperfect information, its attention to detail, its ability to put the customer first, second and third, its interest in quality and its enthusiasm for new ideas and for innovation.

As a senior civil servant, as a Government adviser and, more recently, as a Minister, I admire the public sector at its best, when it is judicious, fair-minded and open, and prepared, before acting, to debate the issues before the people, capable of helping those most in need and giving hope to those whom the competitive market leaves to one side.

Sometimes, in both sectors, life does not work out for the best. In the private sector, there is the Labour party's caricature, where speed leads to sloppiness and the pursuit of profit can lead to spivvery. In the public sector, things can degenerate into bumf and bureacracy, where nothing happens for interminable months or years, where letters go unanswered, problems are unresolved, and instructions, regulations and counter-instructions are issued, as if half translated from Latin into a kind of official double-Dutch.

At its worst, the language of the private sector is costive or monosyllabic. At its worst, the prose of the public sector is shambolic, confused and inchoate. Language without cadence and clarity is good neither for governing nor for doing business.

The Conservative agenda followed over several years aims to make government work better. One of the biggest breakthroughs, in our approach to government came with the introduction of the idea of the enabling council. Such a council decides how much service the community requires, but does not necessarily itself employ all the people providing it. This idea, despite its somewhat ungainly name, has been adopted across the country by councils of differing political persuasions.

Many have come to recognise that business is better at organising service provision through a competitive market; only government can decide how much service and how many public goods to buy on behalf of people who lack the income to compete in the marketplace. So we believe that councils should make the best use of what the marketplace has to offer.

An increasing number of councils are pioneering putting services out to tender voluntarily before statute and regulation require them to do so. The London borough of Bromley has already market tested more than a third of its revenue costs. Lincolnshire county council is planning market testing of property surveying, project management and building maintenance. The London borough of Brent is entering on a vigorous programme of market testing. That usually results in better quality and in lower costs.

In the United States of America, part of President Clinton's new agenda have been christened "reinventing Government". The titles may be different from those that we are using, but it looks rather similar to what we are doing here. His Administration, according to the proponents of the new agenda, want government to concentrate on steering rather than rowing; on leading societies instead of providing services themselves.

We are told that President Clinton wants government to provide competition between service providers and to empower citizens by pushing control away from bureaucracy into the community. The United States Administration wish to measure the performance of their agencies by not the amount of money that the agencies spend but the achievements that they record. The Administration wish government to be mission-driven rather than ruled by regulations. They wish to concentrate on preventing problems as much as on providing solutions; they wish to put energies into decentralising authority. Above all, they prefer market mechanisms to bureaucratic ones.

I therefore hope that, in responding to the debate, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) will tell us whether he and his party welcome those Democratic party initiatives in America. It is time we knew whether the Labour party is full of Clintonite reformers at its top or not. Are they now in favour of the market and what it can offer, or do they continue to pursue their vendetta against it?

Labour councillors in council chambers throughout England need to know the answer. They need to know where they are being led by the Labour party here in the House of Commons. Are they, like the President of America, to welcome competitive tendering and private partnership, or have they to resist doggedly and unsuccessfully our proposals for reform and improvement?

Public-private partnership in Britain has a long and successful history. It is not even something entirely dreamed up by successive Conservative Administrations since 1979, good though the ideas of those Administrations were. Its provenance goes back much further and its acceptability spans the political spectrum.

Although, in the 1980s, the Labour party nationally in the House fought tooth and nail against the idea of contracting out, around the country in practice some more sensible Labour-led councils were doing it, as they had been for many years. So we need to know whether the national party has caught up with that strand of thinking.

In a Municipal Journal piece, the hon. Member for Newcastle upon Tyne, North implied that the Labour party was catching up. He said, or was reported as saying: In principle, there is nothing wrong with local authorities deciding to what extent they are providers of services and to what extent they buy in the service to provide for their local residents". Indeed, even the hon. Member for Blackburn (Mr. Straw), who is sharper of tongue in such matters, seemed to announce his conversion to the advantages of contracting out in a recent interview in Tribune. I believe that there was some dispute about whether it accurately reflected his views, but the House might like to be reminded what Tribune thought he had said. I can understand the difficulties between a Labour Member and Tribune, but there we are. Tribune reported the hon. Member for Blackburn as believing: There is wide acceptance that the division between contractor and provider that compulsory competitive tendering has produced has been sensible". That is praise indeed from the hon. Member for Blackburn.

Many members of the Labour party have recognised for a long time that contracting out and using the market can be sensible. It has rarely made sense for councils to employ top-rate barristers in case the council should be called into serious litigation; they have always relied on the marketplace when they need those skills.

It has rarely made sense for councils to employ their own financial and investment specialists. They have often called upon advisers in the City when and where they need them. Seeking provision from the marketplace is not simply a way of cutting costs or even dealing with the problem of peaks and troughs. It can also be a way of improving service quality. Management of a service is usually strengthened, whether or not an outside group wins the contract, by the very process of competitive tendering.

This was well known in the 19th century, when the Government had a problem with the unreliability of their international mail service. The Government's solution then was to let mail contracts to private sector shipping companies. By so doing, they built incentives into the system to deliver the post. Many more letters were subsequently delivered rather than allegedly being "lost at sea", as had happened under the public sector monopoly.

Similarly, under modern contracting out, service quality has often been better specified for everything from dustbin collection through to the running of the local swimming pool. This service revolution, based on quality and the use of the market, will continue in the next few years. Central Government are now pitching in. They are contracting out many of their functions and grouping many of their staff into executive agencies and trading funds.

The problem in a large amorphous civil service can be that individual branches or divisions lack esprit de corps or a clear sense of purpose, swallowed as they are by a greater whole. Market testing allows the Minister to answer more precisely to Parliament for the policy and allows some responsibility to be clearly delegated to managers for the day-to-day running of the service.

Large organisations need delegated responsibility, as well as the buck resting on the desk of the most senior person for the big issues. The idea that the Minister is directly responsible for every facet and every action, every letter written, every benefit administered by local government is Labour nonsense that we often hear from the Opposition.

Of course the Minister in Parliament should be responsible for the general policy on local government, for the amount of money voted and for the framework of law. Parliament should expect to debate those matters vigorously and to criticise the Minister if it feels that he has failed to respond. But should the Minister be responsible for every benefit cheque that goes missing, every piece of litter in the local park or every poor school result?

Mr. Doug Henderson (Newcastle upon Tyne, North)

The Minister's last few sentences implied that local government should be given more opportunity to make its own decisions. Does he feel that they run counter to the Government's policy on capping and their view that local government is not able or sufficiently responsible to make those decisions?

Mr. Redwood

The hon. Gentleman cannot have followed my earlier argument, in which I said that £33,000 million gave enormous choice, scope and discretion. I wish to strengthen the choice and scope of local councils in administering that money by encouraging responsibility in councils and reminding the Labour party that many of the issues should properly be debated in the council chamber and not brought to the House of Commons. Ministers should not be blamed for matters that are clearly within the competence and responsibility of the local authority.

In the many layers of management between the park attendant failing to pick up the litter and the Secretary of State for the Environment, responsibility is held by people elected or appointed, who can and should often be held to blame. In a vigorous democracy, an Opposition will naturally wish to blame the Minister for everything. In their view, everything can be related to the amount of money available and the Minister can always be blamed for the total amount of money.

The Opposition in this Parliament, as the hon. Member for Newcastle upon Tyne, North has just shown, delight in arguing two entirely contradictory propositions. They argue that local government should be independent, but, at the same time, they bring every shortcoming to local government to the House, claiming that it has happened only because the revenue support grant was not large enough. They should learn that the obverse of the coin of local autonomy is local responsibility.

Many councils throughout the country are managing well within the large block grants allocated to them. The question is, why cannot the others do so and what will the Labour party do to encourage better management of some of the Labour-controlled councils that claim that they cannot manage so well?

Within budgets of £70,000 million this year, local government has considerable scope to do good and great opportunity to make mistakes. Believing in local freedom underlines that. The adoption of more businesslike practices can make partnership between public and private sectors easier. The partnership must extend, especially in the inner cities, to creating a climate in which business can invest and prosperity can return. Exciting new developments are now under way, with the provision of private sector roads, railway lines and other transportation systems, through the development of joint venture projects and private sector projects in their entirety.

The link of the world's busiest international airport, Heathrow, to one of the world's largest cities went unmade by the nationalised industry over 45 years. Private capital will put that right. Even the shadow Secretary of State for Transport, the hon. Member for Kingston upon Hull, East (Mr. Prescott), welcomes the principle behind that development—

Mr. John Denham (Southampton, Itchen)

My hon. Friend proposed it.

Mr. Redwood

That comment is a bit rich. The Labour party spent the whole of the early 1980s claiming that the private sector was full of rogues and villains and had no role to play in such developments. The hon. Member for Kingston upon Hull, East and his hon. Friends have learnt from what we have been saying over the past 10 or 20 years —that the private sector has a role and that private capital can be most important.

The public sector's task is to handle the community's aspirations and fears and to provide the necessary permits and rights. Some of the projects may well need some public financial assistance. The public sector may need to be involved in acquiring the land, granting planning permission, debating with local communities on the best routes and deciding on the correct mixture of facilities that can be provided as a result of a regeneration scheme. Such thinking lay behind the Government's launch, earlier this year, of the capital partnership and housing partnership funds. Those funds have been very successful in attracting three-way money—a three-way partnership—between central Government, local government and the private sector.

The capital partnership scheme for the inner cities, through £20 million of promised Government grant, promises £33 million of local authority receipts money and £130 million of private capital. It is a big boost for the winning areas in deprived inner cities. The housing partnership fund, with £30 million of promised Government grant, promises £29 million of local authority receipts money and £37 million of private investment. Those partnership schemes show how private and public sectors can work together in the best interests of urban regeneration.

In the Foleshill area of Coventry, £2.6 million of urban partnership grant will be used alongside other central Government grants and almost £17 million of private sector investment to redevelop a former warehouse, textile factory and other sites, to provide workshops, light industrial units, new private and housing association dwellings and training opportunities. More than 2,000 new jobs have been promised from that scheme alone.

In Southwark, the local authority is using £5 million of its capital receipts, alongside £1 million urban partnership funding, to bring in an estimated further £5 million of private sector money to regenerate central Peckham. That project is a good example of private-public sector partnership which will increase retain space and improve leisure facilities and the environment for the benefit of local residents and businesses.

In Huddersfield, slightly more than £1 million urban partnership resources are expected to attract more than £23 million from the private sector, which, together with more than £3 million of local authority capital receipts, will provide a major retail and leisure park. That ambitious and imaginative project will develop sports facilities with regional, national and international potential.

The present state of the property market presents enormous opportunities. I asked property specialists when they thought that they would next be able to buy properties and undertake developments at current high yield levels and current low interest rates. Why did so many clamour to buy land at £1 million or more an acre in 1988, which they would now turn down at £250,000 an acre? Is not it time for them to think again and recognise the opportunities? There has rarely been a better conjunction of rental yields and borrowing costs.

The economy is growing again and, as we approach the middle 1990s, there will be demand from tenants for commercial space and industrial property in our major cities. There will be more demand for affordable homes from a new generation of potential home owners.

Central Government, urban development corporations, councils and city challenge partnerships can sketch the ideas and point the direction. The private sector can respond by recognising the opportunities and by working in tandem with public bodies. We now have some experience of our city challenge rounds. Taking the two rounds together, and adding up the promises, we recognise that they can make a huge difference to the inner city areas that they are targeting.

The 31 city challenge winners are forecasting, over five years, 70,000 new or improved dwellings; 91,000 new jobs being created; the improvement and reclamation of 2,831 hectares of land; more than 3 million sq m of new and improved business and commercial space and 7,000 new business start-ups. They anticipate bringing in more than £3,000 million of private sector investment. That is a huge task and those projects alone will make a very big difference to large areas of our inner cities. I am sure that that will be as welcome to the Opposition as it is to me.

Great cities are not built on public grants alone. The period of urban expansion in the Victorian era saw the erection of some great municipal buildings, but mostly the architectural and commercial fabric of the city came from vigorous and competitive private enterprise. The era of maximum expansion of the railroads came in a period of private capital provision. All the canals, all the main railway lines and many of the original turnpikes were built using private money. The comely inheritance of red brick warehouses, private quays and Victorian suburban villas showed the vigour of the private sector, organised within a planning and public utility framework set out by central and municipal government.

Partnership unleashes a variety of decision makers and a variety of tastes, styles and approaches. Variety is important to the architectural, cultural and street life of urban England. Just how drab Government and local government patronage in London can be is seen in the construction of the concrete festival hall, the Marsham street towers and the tower blocks of the east end. In contrast, how lively are the colours, shapes and forms of many of the new docklands developments on the Isle of Dogs and in Surrey Quays and Wapping, as the private sector has unleashed new architectural talent.

Two weeks ago, a new UDC began its life in Plymouth. The public sector brings organisational skills, planning, former Ministry of Defence land and the fine collection of buildings of the Royal William yard. Today, I announced two further appointments to the UDC board, making a total so far of nine directors—five from the local authorities and four representing industry, commerce and other interests. The chief executive post has been advertised and the chairman will be making the appointment shortly.

I want the private sector to bring forward the money and the ideas to create cafes, restaurants, pubs, hotels, small business workshops and offices, where before the Royal Navy victualled her ships. In the dying days of naval occupation, the Royal William yard lost some of its lustre. It was closed off from the people of Plymouth and it became a sad outrider overlooking the Sound. With the right partnership of Government, the city council and the private sector, this decade will see the renaissance of the Royal William yard, its return to the people of Plymouth for their use and the creation of a new centre of enterprise, jobs and prosperity. Plymouth is most definitely open for business. I now want the private sector to come forward with its ideas and its money.

Such partnerships are already working in many other parts of the country. In Manchester, public-private partnership is redeveloping Victoria station, and £35 million of Government money in the form of city grant will provide the Olympic arena. It will generate almost £200 million of private sector capital in the associated commercial, retail and leisure development, offering a five-star hotel, cinema, substantial office accommodation and other facilities.

Mr. Henderson

I understand that the Minister is proud of some developments in certain parts of the country, but does he accept that the way in which the Canary Wharf project in the east end of London was put together, and the Government's action in ignoring the advice of the local authorities and local people, made a major contribution to that scheme's failure? That failure is reflected in the fact that only 15 per cent. of Canary Wharf is occupied.

Mr. Redwood

Sometimes, risks are run that take time to come right. If the hon. Gentleman and I were to return to Canary Wharf in five or 10 years, we should see a flourishing and successful development, with many more tenants and businesses. I hope that the hon. Gentleman joins me in wishing those involved every success in letting that space and in developing more businesses to fill it. That will mean an even more flourishing and enterprising London and City of London economy.

Under the partnership envisaged for the Manchester concert hall site, public money could build the concert hall if the private sector could construct the offices and other facilities to complete the scheme.

At the heart of the Manchester Olympic bid is a further bold regeneration project. Many facilities will be constructed on the Eastlands site—an old industrial area in need of attention. The private sector will be harnessed to provide hotel spaces, car parks and much of the housing. There will be a lasting monument to the Olympics and facilities for the continued enjoyment of Manchester and her people.

Of more immediate interest to the hon. Member for Newcastle upon Tyne, North, the partnership on Teesside and Tyneside has taken off through the work of the urban development corporations. They successfully transformed the Tees and Tyne from rundown, derelict areas into serious locations attracting new businesses from England and around the world. The waterfront by the Tyne bridge is being completely reconstructed and the new business park has several leading companies as its tenants. New houses, new waterside facilities and a new university are all rising from the old mudflats and rundown land alongside the two great rivers of the north-east.

For partnership to flourish, local and national government need to be more responsive and alert to opportunities. The private sector needs more courage and confidence after a bruising recession, and a willingness to respond to the new climate. To the private business I say, now get ready to run the risks. To the Government I say, let us make sure that nothing that we do locally or nationally impedes enterprise, success and regeneration —for the wind is at last set fair for prosperity.

10.2 am

Mr. Doug Henderson (Newcastle upon Tyne, North)

I welcome this debate, initiated by the Government, on the provision of public services, which Opposition Members believe is a crucial part of our way of life throughout the country.

The Government claim that changing the balance between the public and private provision of local authority services is all about the delivery of those services. They have systematically made that point over a long time, and it was repeated by the Minister this morning. The Government claim that their approach to further education, schools, economic development systems, residential provision and contracted services is all about the delivery of efficient services. The Government do not need me to remind them that their actions over the past 14 years have not been about the delivery of local government services.

I suggest that it has been the Government's motive all along, contrary to the Minister's statements this morning, to dismantle local government service, curtail local democracy and undermine public confidence in local government. The Government know that changing the balance is not about delivery but about centralising power in Whitehall. They know that removing local authority responsibility for further education and handing it over to self-perpetuating boards with funding controlled by a central Government quango is not about the delivery of service.

The Government know that taking economic development and planning powers from local authorities and handing them to unelected boards with funding controlled by central Government is not about the delivery of service. They know also that changing social security rules to give an unfair advantage to private residential homes, which has led to the closure of local authority homes, is not about the delivery of service. The Government know that forcing local authorities to dismantle essential services and to hand them over to private contractors, who often then cut staff pay and conditions, is not about the delivery of service. They know that their latest idea of taking away the limited responsibility that local authorities have in respect of police facilities is not about the delivery of police facilities.

Mr. Redwood

Can the hon. Gentleman explain why senior Labour councillors come every year to see the holder of my office or the Secretary of State for the Environment to say that in the ensuing year they need considerably more money to deal with all the extra responsibilities that Parliament and the Government have asked them to adopt? How does that square with care in the community, environmental and other measures that the Government have added to local government responsibilities in the past? If the hon. Gentleman's thesis is correct and local authorities have fewer responsibilities, why do councillors argue that they need more money to meet extra responsibilities?

Mr. Henderson

The Minister does not need me to answer that question because he knows the answer himself. If there is any economic growth over a period of time—and even under a Conservative Government there has been some, though not as much as in the 1970s—there must also be growth in public sector expenditure. Local authority leaders such as Jeremy Beecham, on my own council, have been knocking on the Minister's door because the damage done—as in Tyneside and Newcastle—by Conservative policies over the past 10 years has produced many more calls on local government to ameliorate that damage, to make life better for the people in their community.

Mr. Patrick Nicholls (Teignbridge)

Does the hon. Gentleman agree with the remark made by Jeremy Beecham in the Municipal Journal in May 1992 that compulsory competitive tendering has brought some cost effectiveness and genuine saving which might not otherwise have been achieved"?

Mr. Henderson

It will be better for the debate if I deal with the hon. Gentleman's question at the appropriate point in my speech. If I fail to do so, perhaps he will remind me of his question.

Government actions in taking power away from local authorities related to the provision of services and not to their delivery. I ask the hon. Gentleman to join me in expressing concern at the proliferation of quangos that have been established throughout the country to administer public services. In a democracy, the people best placed to judge the needs of a community and whether those needs are met are those elected by the community and who are accountable to it, yet democracy has been offended by an avalanche of public sector appointments.

In my district of Tyneside, it is well known that the same unelected people are often given four of five quango appointments on non-elected public boards. It is often said that many local Tory worthies on Tyneside have more appointments on unelected boards than there are air ticket promises in a Hoover salesman's pocket.

The Government know that few of their actions, whether establishing unelected public boards or contracting out public services, are ultimately about delivery. If the Government are honest, they should admit that all such moves challenge the concept that community provision has validity and local people have a right and ability to determine the level and nature of the services that they want. If the Government have any honesty, they will admit that those measures during the past 14 years of Tory government have been a cynical and systematic strategy to break up the power of, and services provided by, local authorities.

Will not the Government admit that the reason that they begrudge community provision is that, in many cases, it means more money for the ordinary, vast mass of people in this country than for the very rich? The Government find that inconsistent with the philosophy of "Put yourself first" in Tory Britain. Are not the Conservatives frightened of local democracy? They believe that it is a highly dangerous counterforce to central Government control, as it allows local people to be responsible for the policies in their communities. That policy often poses a direct challenge to both the position and views of Tory central Government.

The Minister said that he now felt more sympathetic towards local government. He recently issued a press release from his Department—on 25 March—containing the following welcome comment: Local Government is not just in the business of providing services. It should also be a natural leader of local communities. Opposition Members would have no difficulty in supporting those sentiments.

Earlier this morning, the Minister said that he liked to refer to the 1970s and drew some comparisons between now and the 1970s, when his writings about local authorities and local authority provision were prolific. I am pleased to remind the House of what the Minister said about local authorities when he was a councillor in Oxfordshire in 1977, and pleased that the Government welcome further references to the 1970s. Writing in the "National Westminster Bank Review" in February 1977, he said: It would be quite possible to repeal community land legislation, to put an end to structure planning, to cease providing public recreational facilities, to cease policing trading standards and to abolish a whole range of local authority services … Radical reform"— The Minister has a reputation as a radical— would include the cessation of all public housing and a return to market place decisions.

Mr. Piers Merchant (Beckenham)

indicated assent.

Mr. Henderson

I see that those comments have the approval of some of the Minister's Conservative colleagues. The Minister was not content with those remarks, because the review continued: the welter of corn-dolly making courses and swimming pools"— contrary to what he said this morning— are no longer feasible in the new financial climate. Like me, the House may find it interesting to compare those views with those that the Minister now expresses. It may be helpful for the Minister to clarify his position. Is he now saying that he was right in 1977 when he said that it was possible to repeal community land legislation, end structure planning, cease providing recreational facilities, cease trading standards, cut out vocational evening classes, close swimming pools and abolish public housing? Is he saying that he was right then and is wrong now?

Mr. Redwood

Some of my words were prophetic because when the Conservative Government came into office they scrapped community land legislation, which was a tax on success and regeneration. The Conservative Government got rid of two-tier planning in London, which was an unnecessary and burdensome cost. In the conditions of 1976–77, when the article was written, the country was bankrupt thanks to the Labour Government, which meant pulling in our horns over some desirable schemes. Now that we have had many years of Conservative prosperity, we can take a more relaxed view of some of those matters.

Mr. Henderson

I do not know how the Minister has the gall to say that the country was bankrupt—

Mr. Tony Banks (Newham, North-West)

We paid it all back.

Madam Deputy Speaker (Dame Janet Fookes)

Order. Sedentary observations, particularly from the Front Bench, are to be deplored.

Mr. Henderson

I do not know how the Minister has the gall to say that the country was bankrupt in 1977 when unemployment was a third of what it is today, there was growth and the social fabric of our country was in much better health than it is today.

Is the Minister saying that he was right then and is wrong now, or is he saying that everything that he said then was wrong and the action that flowed from it, providing the philosophical base of Tory policy in the 1980s, was wrong? Is he saying that he now believes in local government and that the policies of the Conservative Government of the 1980s were at best inappropriate and, more likely, damaging to our British way of life? What is his real view of and honest position on local government and the provision of local government services? I am happy to give way to the Minister if he wishes to reply.

On the issue of the provision of resources for local authority demands in the current year, the Secretary of State for the Environment said on 26 November 1992 that provided that local authorities manage their resources efficiently, they should be able to maintain the full range of services they provide."—[Official Report, 26 November 1992; Vol. 214, c. 1011.] There are now clearly cuts in services and jobs in many parts of the country as a result of the restrictions in the budget settlement. There are also cuts in services and job losses in many Conservative-controlled authorities.

Does the Minister agree with his boss, the Secretary of State? If he does, what is he saying to those Conservative-controlled authorities? What will he say to his hon. Friend the Parliamentary Under-Secretary of State for the Environment about Barnet council, which faces a £7 million cut, and where a residential home has been closed and a day nursery has been threatened with closure? Is the Minister saying that what is happening in Barnet has everything to do with delivery? Is he saying that Barnet council is inefficient?

What is he saying to Enfield council, a Tory-controlled authority in north London, in which his hon. Friend the Member for Chipping Barnet (Mr. Chapman) may be interested? That council faces a £10.7 million cut, 400 jobs have gone, the discretionary award scheme for students is being threatened, and the youth service is being threatened with cuts. Is the Minister saying that Enfield council is inefficient and that that is why it finds itself in difficulties?

What is the Minister saying to Conservative-controlled Castle Point council, which has been capped? Is he saying that it has been capped because it is inefficient? If he is not saying that, does he accept that his right hon. and learned Friend the Secretary of State misled the House when he made his statement last November?

What would the Minister say to Bill Dixon-Smith, the Conservative leader of the Association of County Councils, who said on the BBC television programme, "On the Record", on a Sunday a few weeks ago: Because of the capping regime, local government no longer has any room to manoeuvre. In effect, even the level of the Council Tax is also set by the centre. As I believe in independent local government, that is wrong. So in an absolute sense it must and always will be wrong and personally I will always fight against it. The man who pays the piper calls the tune. The Government is paying up all the money, they say 'we have an absolute right to say what should happen'. Now I find that obnoxious. The purpose of local government is to judge what is necessary locally and do it. But at the moment we don't have the independence I think we ought to have. Does the Minister agree that, because of the capping regime, local government no longer has any room to manoeuvre, as Mr. Dixon-Smith, the Conservative leader of the Association of County Councils, says? Does he agree that local councillors are better placed to judge what is necessary locally? Does he understand why Mr. Dixon-Smith finds it obnoxious that central Government believe that they have the absolute right to say what should happen?

The Prime Minister said at the Tory local government conference that an end must be put to wrangling between central and local government and that local government should be left to get on with the job. The Minister has made similar comments in recent weeks. Does he recognise that those who face cuts in services in communities throughout the country and those who are either threatened with the loss of, or who have already lost, their jobs in councils throughout the country—perhaps people in Barnet and Enfield—are aware, as Mr. Dixon-Smith seems to be aware, that there is a huge gap between the Government's rhetoric, the Prime Minister's rhetoric, the Secretary of State for the Environment's rhetoric and the Minister's own rhetoric and what is actually happening in councils throughout the country? Does the Minister agree that if that gap is to be narrowed, and that if conciliation is to be genuine, a major review of local government financial structures is necessary?

Mr. Redwood

If the hon. Gentleman had an increase of 3.7 per cent. in the current year, would he be plausible if he went round saying that he had had a cut? Local government has had a 3.7 per cent. increase in respect of business rates and grants from the centre.

Mr. Henderson

The Minister and I have had this argument before.

Mr. John Sykes (Scarborough)

The hon. Gentleman has lost the argument.

Mr. Henderson

No; the Minister has lost the argument. It has been shown clearly that the figure of 3.7 per cent. is an accountancy figure, a notional figure. The real increase in cash resources between what local government spent last year, based on capping regulations imposed by a Conservative Government, and what local government needs to spend this year to stay within the law is very much lower than 3.7 per cent. Independent sources have estimated it to be a 1 per cent. increase in cash resources at a time when inflation is about 3 per cent. That is clearly a reduction in real resources.

Does the Minister agree that a fundamental review of the standard spending assessment system is urgently needed if any sense of equity among the competing claims for resources is to be restored, so that we do not end up in the ridiculous position whereby Huntingdon—the Prime Minister's area—is considered to be more socially deprived than Chester-le-Street? Anybody who took a walk from the railway station to the local hotel in those two places would immediately observe that that is not the case.

Does the Minister also agree that capping regulations should be changed now in order to give more democracy to local authorities and that there would then be a need to remove those capping regulations completely in the next financial round of financial settlements in the autumn statement?

I am not here this morning just to outline where I think that the Government have got things wrong in recent months and during the past 14 years. Conservative Members will be pleased to hear that I am also here to outline Labour's position on a number of these issues. I shall return to the point that was raised earlier by the hon. Member for Teignbridge (Mr. Nicholls).

The Opposition believe that if local democracy means anything—as the Minister is beginning to suggest he is adopting as a policy and as his friend, Mr. Bill Dixon-Smith, clearly believes is essential—capping should be ended and the system of distributing Government grant should be subject to a major review and overhaul. We say that because we believe in local democracy. Individual liberty requires the guarantee of democracy. Our nation's democracy is offended if there is no balance of power between central and local power structures. That balance requires more vigorous, independent and better-resourced local government.

Some Conservative Members, as evidenced this morning by a flurry of observations relating to the 1980s and Conservative philosophy during that period, have argued that community provision holds back individual liberty. Individual liberty and opportunity for the vast majority of people are enhanced by community provision of education and training, by community regulation of our environment, our space and our transport systems, by community provision of law and order forces and social action to tackle crime, by individual advice services to our citizens and by the provision of care services to our most underprivileged and vulnerable people. Our citizens, however, will not be empowered to have more control over their own lives unless their liberty is protected. Their liberty can be guaranteed only by community provision, which can be guaranteed only by local democracy.

Our citizens are entitled to the efficient use of public resources. Value for money must be assured by sound auditing procedures. Where inefficiencies are identified in services provided either directly or indirectly by subcontractors, they must be put right. Councils must decide—here I come to the point raised by the hon. Member for Teignbridge—as they have decided for more than 100 years, how best they can meet their responsibilities. If they judge that direct provision is most effective, they must be allowed to make that choice. If, on the other hand, they judge that the subcontracting of services is better, tendering should be on the basis that the council determines the quality of the service and that legal obligations are met in relation to the terms and conditions of the staff.

Mr. Nicholls

I do not believe that the difference between us on this point is as great as it might seem, but it is in one crucial respect. How on earth can it be decided that a council has made the right decision in contracting out its services unless it is required to go through the process of competitive tendering?

Mr. Henderson

The hon. Gentleman raises an important point. What is crucial is not just that services that have been contracted out are measured in relation to efficiency but that services that have been provided directly are also measured in relation to efficiency, and that the overall efficiency of the council is not broken down by having too great a division between those services which are contracted out and those services which are not. A recent London Business School survey, reported in the Municipal Journal, reinforces that point.

The Labour party is not against councils tendering in the private sector for the provision of services. Councils have always tendered in the private sector. The important point is that councils should make the right judgment on how best they can provide services by means of a combination of direct provision—some services cannot be contracted out and have to be provided directly—and indirect, subcontracted provision.

If one believes in local democracy, which I thought the Government suggested earlier in the debate they had been converted to, one has to resolve the conflict between central Government telling local government how it should provide its services and local government having the democratic right to decide on the best way to provide those services.

The important point for central Government to understand, contrary to the impression that has been given during the past 10 years, is that central auditing procedures should be tightened up, as should the reporting procedures, so that everyone in the community, both those involved at local government and central Government level, are fully informed about what is actually happening in local authorities. Then decisions can be made about whether the Government need to change the regulations that govern the way in which the provision is made. That decision cannot be made until they know how efficiently services are being run at local level. That is what the quality commission, for which the Labour party argued at the last election, would have been responsible for finding out. I concede to those who exaggerate the productivity impact of compulsory competitive tendering that it can improve efficiency, but it has not always done so. In some instances, compulsory competitive tendering has reduced the quality of service and, in many instances, it has reduced the wages and conditions of the staff who have to provide those services. In some cases, it has been adopted as a cover to break up the integrity of community provision; it starts by cutting the corners and finishes by cutting the services.

The only guarantee of effective delivery of service is good management. That is true of services that are directly provided and of subcontracted services. In the spirit of their recent mutterings, I challenge the Government to strive to obtain the most effective way of delivering local services and to stand up for the principle of local people deciding local services. If the Government agree to no more than what many Conservative councillors are demanding, they will revoke the current rules on the standard spending assessment, end capping and seek to restore democratic local government. That is what the Labour party demands, and it is reasonable to do so. I believe that the majority of the British people support that demand and that the majority of those who live in county council areas will support it on 6 May.

10.30 am
Mr. Patrick Nicholls (Teignbridge)

I begin by declaring my interest as a parliamentary adviser to the Federation of Associations of Specialists and Sub-contractors and the National Sub-contractors Council. I also hold a partnership in a firm of solicitors called Dunn and Baker.

The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) forgot to mention Mr. Beecham. He was so generous in giving way that I did not want to remind him yet again. In case that troubles him, I shall refer to Mr. Beecham again, and if by then he has understood what he said and wants to intervene again, I shall happily let him do so. By then he will have had a long time to work out the answer to the point.

Like many hon. Members, I have experience of local government. I served on a district council and now work as closely as possible with my own district council in Teignbridge. Teignbridge district council, like the council on which I served, is not perfect, but it is extremely good. Like any council, its performance must be judged against the service that it provides to local people.

Ultimately, the only test that can be applied is, how good is the service and how much does it cost? There is nothing wrong or contradictory in saying that a council is judged by its services and how much they cost because, directly or indirectly, local people pay for the service.

Even under the arrangements for the council tax, 14 per cent. of the money that is spent by local government is raised locally. That represents an inevitable but substantial burden on local council tax payers, and obviously the burden of inefficient services will fall on local people. Therefore, the ultimate test of councils must be whether they provide that service and at an appropriate price.

That may sound relatively uncontroversial, but it can go slightly deeper. Labour Members sometimes express their belief—perhaps more than we have heard today—that councils have a further role as job providers and that their worth can be assessed by how many jobs they provide.

That point was put honestly, if somewhat starkly, in a radio programme about three weeks ago. A COHSE trade union official was being interviewed about the national health service and he said that it was the responsibility of the national health service to provide work for the people who work within it. I waited for the qualification that I thought would follow about service to the consumer, but it did not come. I do not criticise him for that—he obviously felt strongly that the NHS has a role as a job provider—but I disagree with that assessment. A council is not entitled to justify its performance by saying, "We do a range of tasks for which we may not be well fitted, but we provide jobs."

Where do we go from there? It must be in the interests of local people that, where possible, services are put out to competitive tendering. It is such a common-sense proposition that one wonders why one must argue about it at all. In an earlier intervention I mentioned Jeremy Beecham, the Labour chairman of the Association of Metropolitan Authorities, who said, straightforwardly: compulsory competitive tendering has brought some cost-effectiveness and genuine saving which might not otherwise have been achieved. That tribute to the effectiveness of a process that the Labour party has opposed throughout and apparently opposes today is all the more impressive for having been said through clenched teeth.

But it is not just Mr. Beecham. The chief executive of a Labour authority, Kieron Walsh, writing on competitive tendering for local authority services seems to have gone beyond the clenched-teeth stage to positive enthusiasm. He said: There is an awful lot that comes from it"— compulsive competitive tendering. There is much greater knowledge of particular service areas. It exposes an awful lot of inefficiencies formerly taken for granted. We are a more efficient, slimmer organisation. It has had real and definite benefits and not just in defined services. There is nothing particularly surprising in those comments. It is no more than the practical conclusion that one would draw from a common-sense proposition.

Mr. Colin Pickthall (Lancashire, West)

It is interesting that the hon. Gentleman chose to quote a chief executive who is probably earning more than £60,000 a year. Has he any quotes from workers at the bottom end of services, whose wages are being cut and many of whose jobs are disappearing altogether as a result of what he repeatedly calls compulsive competitive tendering?

Mr. Nicholls

If the hon. Gentleman is troubled about the salary of the chief executive of a Labour authority, his questions might be better addressed to that authority. I should have thought, but I will stand corrected if the hon. Gentleman thinks that I am wrong, that it has probably said that it has to pay that sum to get somebody of suitable quality for such a responsible job. If the hon. Gentleman had said, "No, we give those salaries to our cronies," that would have been a different point that I had not anticipated.

It is perfectly obvious that it is in the interests of those who live in a local community that services should be provided cost-effectively. I hoped to hear today, but we have not heard it, the Labour party's attitude to that. My hon. Friend the Minister said that the hon. Member for Blackburn (Mr. Straw) does not seem to understand quite where he stands on this. In his interview with Tribune, he seemed to be saying that there is something to be said for it, but later he is quoted as saying there is not so much to be said for it.

In the Tribune article, the hon. Gentleman says that he sees the case for CCT for the provision of basic services such as refuse collection, and at the launch of Labour county council election campaign in response to the question, Are you still opposed to CCT? he said: Yes we are, because it does not lead to great increases and improvements in efficiency. That is the position of the mugwump through the ages. Labour Members will recall that Lord Shinwell defined that as someone who keeps his mug on one side of the fence and his wump on the other.

One cannot have it both ways. The problem is that Labour has not said how it feels about CCT. It is quite straightforward. Going out to tender produces the information that a council needs to know whether it is providing its services efficiently. It is worth spending a moment or two considering what happens when councils are asked to go through that process, which even Labour politicians and Labour appointees believe serves their community well.

I shall give only two brief examples, one from Bristol. As it was obliged to do, Bristol council recently put its services out to tender. It put out a single huge tender for its refuse collection services, street cleaning, public convenience and building cleaning. Not surprisingly, no one private firm was able to come up with a contract which would have been worth more than £6 million.

Rather more interesting is what happened in the Nottingham area in 1990. The Labour-controlled council put out to tender its road-sweeping and refuse collection services, and awarded the contracts to its own workers despite two lower bids. To celebrate the triumph of compulsory competitive tendering, it was announced that a party would be held to mark the awarding of the contract. That party cost about £2,000, but I do not know whether the catering went to outside caterers. However, the example shows that, even if at times lip service is paid to observing the law in the first instance, it is often not observed throughout the process. I hope that the Minister will be able to say what is being done to prevent such flouting of the law.

Although the case is well made for proper compulsory competitive tendering, there are two aspects on which one must ask whether the application of the general rule works as it should. The first aspect is that of specialisms, of which two are especially important—the provision of legal services and education services. I am sure that there are others of which other hon. Members will have experience.

Teignbridge district council has told me that the legal services provided by a local authority are often specialised. Local authority law is not the mainstream law with which solicitors in private practice are usually involved. Clearly, in a major city such as Exeter, there are a number of extremely good firms of solicitors which provide a full range of services. As such firms operate in large cities, they have the expertise to provide competent services across a range of subjects.

There are many excellent firms, but it has been pointed out to me that, in smaller areas, it may not be possible for smaller firms of solicitors to compete and offer the same level of expertise as exists in-house in local authorities, because those firms cannot offer the same specialism.

Hon. Members know that law is an increasingly specialised business. The fact that one holds a legal qualification does not mean in practice that one can deal with a particular class of work as competently as it should be dealt with. That may sound odd coming from a solicitor in private practice, but it is a fair point which has been well made to me by my own district council. I hope that the Minister will refer to specialised services.

The second specialism that concerns me was mentioned by my county council. Although there are transitional arrangements to enable the county council to offer the services of its own educational psychologists to grant-maintained schools in its local authority area, they are time-limited and, in due course, the council will not be able to offer those services. To some extent, it is the mirror image of CCT, but it reinforces the main point that certain in-house specialisations and skills in local authorities may not be available outside. That problem should be taken into account.

Another point that has been mentioned briefly and has caused some misunderstanding is the provision of part III residential retirement homes in the private or local authority sector. From the comments that one hears— usually from the Opposition—one would think that there was only one way to provide part III residential accommodation for retired people, and that is through a particular outfit. The classic way of providing a retirement home structure is through the local authority. Clearly, those who work in the local authority believe that to be so because, understandably, they are thinking of their jobs.

Mr. Hugh Bayley (York)

Does the hon. Gentleman agree that the best test would be to ask elderly people and allow them to choose whether to go into the private or public sector? Should there not be a level playing field so that the same rules for the financing the care of the elderly in residential homes apply to both sectors? Does he agree with the Select Committee on Health's conclusion that the present rules need changing because they discriminate in favour of the private sector and against the public sector, which is what some elderly people chose?

Mr. Nicholls

I would agree, if it were not for my own experience. Often, when it is proposed that there should be greater provision of private retirement accommodation at the expense of local authority accommodation, the public sector unions tells people that they are being privatised, will have to go into inferior accommodation and will end up as the product of someone's profit motive.

Mr. Bayley

indicated dissent.

Mr. Nicholls

The hon. Gentleman may shake his head, but I am speaking from my experience of my county. He will speak from experience of his county, but I know how the public sector unions opposed plans in Devon to replace the substandard accommodation that it was providing with better private sector accommodation.

I understand that people working in the public sector in county council homes regard the greater involvement of the private sector as a threat to their jobs, but that should not ultimately guide us. We should be guided not only by the job prospects of those who work in the homes but by the standard of accommodation being offered to retired people. That is the ultimate test. The idea that suitable accommodation can be provided only by a local authority is entirely wrong.

I have probably spent more time in retirement homes than many people of my age, because my mother was the matron of a county council part III residential home. One of the things that I picked up over the years, having lived in homes in the private and public sectors, is that elderly people need the comfort and security of a service well delivered.

To tell people living in retirement accommodation that services would be better delivered in another way will not automatically appeal to them greatly in the twilight of their days. It is important that we can tell them that they are not being farmed out to provide profits for wicked entrepreneurs but that they are being provided with a service better than that which they would receive in the local authority sector. That is the ultimate criterion.

Mr. Bayley

Is not it wrong for the council, the Government or anyone other than the elderly person and his family to decide whether one provision is better than another? Does the hon. Gentleman agree with my earlier point, that it should be for the elderly person himself or herself, with the support of the family, to choose where to go, and that there should be a diverse range of provision from which to choose? After all, we are talking about elderly people's homes; the hon. Gentleman knows that from his experience of the residential care sector. Should it not be for elderly people to choose where they are to live in the last few years of their lives?

Mr. Nicholls

The hon. Gentleman is clearly most well meaning, but he is also an innocent abroad. Does he think that that is the way in which the matter was put to people when Devon county council was phasing out some substandard accommodation? The hon. Gentleman comes from a gentler part of the world than I do. What I saw going on in my county was public sector unions ruthlessly exploiting the fears of people who were about to be given a choice, by terrifying the life out of them and telling them that they would be in all sorts of trouble if they found themselves—

Mr. Bayley

Will the hon. Gentleman give way?

Mr. Nicholls

I shall give way to the hon. Gentleman again in a moment, because he makes my case even more effectively than I do, which frankly is saying something.

What I found especially interesting during the general election campaign was meeting a number of people who had moved into private retirement homes from the county council sector and said that they had had no idea how good it would be and that they only wished that they had had the opportunity earlier.

We have managed to give people that opportunity. Those who back the public sector unions, following their own particular interest, know the business that they are in. The problem for the hon. Member for York (Mr. Bayley), for many of his hon. Friends and for all Labour Front-Bench Members is that, if one is sponsored by the whole range of public sector unions, one cannot act objectively on the matter.

Mr. Bayley

I thank the hon. Gentleman for his generosity in giving way three times. I wish that he would not cloak his argument in spurious attacks on trade unions, and I wish that he would stick to the point—the welfare of elderly people.

Before I came to the House, I was a health economist. I carried out a survey in a Conservative-controlled county council of care for the elderly in private sector residential homes and nursing homes, in national health service long-stay beds and in the county's part III publicly owned residential homes. I interviewed more than 1,000 elderly people about their preferences.

Fewer than one in 20 in the public sector homes said that they would have chosen, when they moved into a home, to move in a private sector home. Fewer than one in 309 in private sector homes said that they would have considered moving into a public sector home. The choices of those individuals should be respected, whichever home they have chosen.

Will the hon. Member for Teignbridge (Mr. Nicholls) therefore answer my question, not with vague references to and smears about trade unions, but by referring to consumer choice? Does he believe in consumer choice? Does he believe that elderly people, like any other people, should choose where they live?

Mr. Nicholls

The hon. Gentleman's aspirations would lead him to cross the Floor of the House, even if his logic did not. In Devon, people were not being offered a choice by the public sector unions. They were told, "If you leave the secure accommodation provided by this county council, you will be exploited in the outside world." The hon. Gentleman says that I was attacking trade unions. I was careful to say that I understood why those who are in public sector trade unions and who work in part III residential homes within the county council structure are concerned. I did not attack them for one moment.

Let me make it clear to the hon. Member for York that the people I have been attacking are the local politicians —politicians ultimately like himself—who are irredeemably compromised. On the one hand, they are sponsored largely by public sector trade unions. On the other hand, they know that a choice can be provided for elderly people who could benefit from it, to the possible detriment of the job interests of those who put them here. That was my attack. I promise the hon. Gentleman that I reserve my attack entirely for the politicians, and not for those who operate within the public sector.

Mr. Harry Barnes (Derbyshire, North-East)

Is there free choice when only the Government have free speech?

Mr. Nicholls

No. In this sector and in many others, there will be an element of choice only if the House ensures that there is an element of choice. If it were left to local authorities, and especially if it were left to Labour authorities, there would be no choice. The whole history of compulsory competitive tendering shows that it benefits the community and that it has been opposed to the hilt by the Labour party.

All this debate has to be judged against one criterion only: do the processes of CCT and the other processes about which we have talked produce a benefit to the consumer? If they do, that justifies them. The fact that, in the process, vested interests may find that their noses are put out of joint is neither here nor there. Ultimately, it is local people and the service that is delivered to them which should be the final judgment on the processes that we have discussed.

10.54 am
Mr. Simon Hughes (Southwark and Bermondsey)

I welcome the debate greatly because the subject is timely and also generally important. I welcomed the summary of the Government's position—if it is now to be reflected in their policy—when the Minister said those three simple but often repeated words, "Local government matters". It matters greatly. It matters that more and more people of high quality are involved as councillors and as officers in local government. Many good people are already involved in local government, as councillors and as officers. However—I know that the Minister shares this view—there are some who are not involved because the present structure is not conducive to such involvement. One target that we have to seek to achieve in debating and regularly deciding the question how we develop local government is to maximise the best use of the best people so that the best services are delivered to the widest number.

The Minister made one other statement with which I partly agree. In large measure, the job of local authorities should be to enable rather than to provide. That does not, of course, mean that often they should not provide. That is where the Government begin to get into some difficulty. One of the Minister's phrases, which Hansard will record accurately, suggested that local government services should be principally for those in need. That depends on definition. I would not support the Minister if he said that the free provision of public libraries should be for those in need and then defined those in need as those who could not afford to buy books. There is a range of services which should be freely available at the point of delivery and to which people should contribute according to their ability to pay through local and central taxation but which should be freely available for everyone. Many of the services that local government provides are such services. To take up an exchange earlier in the debate, people may choose to opt into local authority accommodation for the elderly and such accommodation should be available for people to choose.

In his peroration, the Minister said that the wind was now set fair for prosperity. Ministers always live with hope triumphing over reality. He may be right.

Mr. Redwood

I am.

Mr. Hughes

The Minister is never modest. Whether he is right is not yet entirely clear. Let us hope that he is right. The more prosperous the nation, the more we can ensure that local government provides higher quality services because there will be more money to spend.

This debate raises not only the question of what the balance between public and private provision should be, and how much the private sector should be a partner, but other fundamental issues. For my lifetime and for decades before that, there have been battles over local government. As our constitution gives no guaranteed place to local government, and as we have a sovereign Parliament which can do anything, unrestrained by a constitution or a supreme court, local government could be abolished by this place tomorrow. For local government, that is a fundamental weakness because it allows Parliament to interfere regularly with local government, and not always to the advantage of the provision of local services.

The history of the Tory party and local government over the past 30 years has not been glorious. The Tories created the metropolitan county councils and the Greater London council in the 1960s. They reviewed the shire structure and created new counties in the 1970s. They abolished the metropolitan counties, the GLC and the Inner London education authority in the 1980s. Now central Government have realised that they did not get it right when they reviewed the counties in the 1970s and propose to abolish some or all of them and other councils as well. That whole process has hardly been conducive to the stability of local government. My fundamental theme today, which has already been hinted at, is that Government have often acted without the consent and co-operation of the people in local government and of the people on whose behalf services are delivered.

There has been regular central Government interference in the financial regime under which local government works. The revenue support grant and the standard spending assessment have both been decided by the Government and not as a result of a collaborative decision or, better still, a decision by local authorities. Local government should itself be asked to agree the formula for the allocation of money. We had the rates and the poll tax and we have just started with the council tax—a series of different local financial regimes that have not generally taken into account the views of the people delivering the service; indeed, the poll tax did not take those views into account at all. These people have argued strongly about the foolishness of the Government's proposals. Now, as the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) said, all this has also been circumscribed by capping so that no local authority has the freedom to decide how much it wants to raise and spend without certain decisions having severe adverse implications.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robin Squire)

The hon. Gentleman expressed concern about the method of grant distribution and said that local authorities should be able to determine the basis of that distribution. He should anchor his argument a little closer to the ground. As he knows, the Government are undertaking a full review of the SSA this year in the light of the new census output, and we already circulate provisional SSAs each year. The hon. Gentleman must accept, however, that there will never be a way of distributing money that will be 100 per cent. popular with local authorities, for the understandable reason that every change that is made brings benefits to some and disbenefits to others. That will ever be the case.

Mr. Hughes

Of course I understand that, and I accept that it will ultimately be the responsibility of central Government to decide the total sum, inasmuch as this concerns money that central Government hands back to local government—leaving aside the money that local government can raise. My hon. Friends and I have long argued, however, that it should be left to local government —unless it fails to do so—to work out the formula. What local authorities actually get will depend on the total, but the formula should be left to them to determine. I believe that if we had a system similar to the election of the Pope and locked local government away and waited for the white smoke, it would eventually reach agreement on its own formula and prefer that to one imposed by central Government of whatever party. That formula would be better for some local authorities than others, but, in any event, everyone would be forced to reach agreement.

A further question that is central to the debate is how we can ensure quality and value for money in the delivery of local government services. That involves questions of audit and accountability. Although we have an audit process, the public do not see the results clearly; they are not given regular independent information, statistics and audit review results in respect of their local government services. Those involved in the auditing process ought to be able to report back to the public, local authority by local authority on a regular basis.

As yet, there is not adequate accountability either, although the extent of accountability varies in different parts of the country. Of course there are elections, but the more that local government services have been put out to quangos, which are not accountable, the less accountability there has been. As the Minister realises, I know about that specifically because for a decade many of the decisions in my borough—and, indeed, in my constituency—have been in the hands of the London Docklands development corporation, a body appointed entirely by the Secretary of State for the Environment. In every case, the majority of those serving on the LDDC have come from outside local government. That is not an accountable service. The LDDC's planning committee is in no way accountable to my constituents or to me. That is not good local government and does not produce democratic results.

I believe that the Minister for Local Government and Inner Cities is considering proposals that will in part improve accountability in London, and I hope that something will happen sooner rather than later in that regard. I understand that serious consideration is being given to the proposal that elections to borough councils should be annual as opposed to four-yearly. That would bring London into line with the rest of the country and would improve accountability. I hope that the legislation to allow that to happen is introduced soon.

The hon. Member for Newcastle upon Tyne, North will know that we share his view that capping should be ended and that there would be a revision of local government funding. That is fundamental. We also share his view—and this is perhaps his most important point philosophically—that individual liberty is enhanced by good community provision rather than demeaned by it. That is important. I mean no criticism of the hon. Gentleman when I say that it is important that those in the Labour leadership, who understand these things, should ensure that their local authority colleagues also understand them. I speak from bitter experience when I say that they seem still not to be the views of many Labour councillors or in many local Labour parties.

The hon. Member for Teignbridge (Mr. Nicholls) was right in stating that the job of local government is not to provide jobs for people in local government. It may be to provide jobs in the community to assist regeneration, but the defence of self-interest in the form of local government jobs is not its purpose at all. I would qualify my remarks, however. Suppose that—as has happened in my borough—there is a threat to remove wardens from sheltered housing units and the elderly people respond by saying, "We want the wardens." The retention of certain jobs is fundamental to the provision of the service. Certain jobs—the jobs of home helps, care assistants, social workers, teachers and residential wardens—are fundamental to an integrated local community service. People sometimes prefer to deal with staff employed by the local authority than with a contractor who sends different agency staff from one day to the next. That makes for a far less good quality service.

Local government has had many problems over the past 14 years, but its main problem has been that the Tories have put dogma first rather than need. The Government's privatisation policies for local government have brought some benefits, but they have also often brought hurt, no cost saving and no satisfactory result. It is not necessarily the case that jobs can be done better by the private sector; there is no evidence for that. It is not necessarily true either that the cheaper the tender price is the better the job will be. It is quality, not cheapness, which should be the determining factor. It is in their subservience to the principle of privatisation come what may and compulsory competitive tendering that the Tories have gone wrong. Of course competitive tendering should be allowed, but local government should make that choice rather than having competitive tendering forced on them.

Mr. Nicholls

The hon. Gentleman will know that I have embarrassed both of us before by saying how much I agree with him and I shall do so on this occasion, too. Surely the hon. Gentleman is saying that competitive tendering can produce benefits. It would surely be common ground between us that, if it were not compulsory, there is no way in which a number of Labour-controlled authorities would ever do it, for the reasons to which he alluded. If, in particular cases, the process of compulsory competitive tendering has not delivered a service, it has failed in accordance with its own terms of reference. There is no question of Conservative Members justifying that, as we would be as concerned about it as the hon. Member for Southwark and Bermondsey (Mr. Hughes).

Mr. Hughes

I understand that important argument. It is a fundamental principle of democracy that people should be allowed to make mistakes. I believe that the people made the mistake of electing the wrong Government in the past four general elections. I am consoled only by the fact that a minority of people voted for the Government, so it was a minority mistake and not a majority mistake. The system delivered the wrong result. We must allow the same principle in local government.

If we have a very good auditing system and the report of the auditing process reaches the people, if a local council —for example, my Labour-controlled Southwark council —does not have a competitive tendering process in leisure provision or the management of parks and it therefore provides bad value for money, the audit process should expose it and that would influence the electorate at an election. I understand the arguments, but there should be a reaction by the local people instead of an imposition by central Government who know much less about the needs of Southwark or Teignbridge than the people who live there.

Mr. Robin Squire

Does not the history of the past 10 years or so demonstrate that what the hon. Gentleman has described does not deliver the, goods? Indeed, no less than one of the then Labour spokesmen pointed out that without CCT Liverpool would not have cleaned its streets.

Mr. Hughes

The Minister understands the point that of course we sometimes end up with a bad service if we leave it to people who are not good at running the service. However, the ballot box exists to enable people to kick out the bad service providers.

For example, Labour-run Lambeth has had a history of the worst excesses of Labour local government. There were recently two by-elections in Lambeth—one in a solid Labour ward and one in the ward just over Westminster bridge—and my colleagues won both of them from Labour because those voters said that they would no longer put up with Labour in Lambeth. I hope that that continues next year and that Labour in Lambeth is swept from office because Labour deserves to go. However, we must leave that to the electorate. If the electorate decide that they cannot be bothered to change things, we must live with that. Indeed, the Minister, at his level, has been the beneficiary of that for the past few years.

To finalise the point, the Audit Commission and many other experts in local government have made it clear that the private sector does not necessarily deliver a better result. The Audit Commission has made that point regularly when considering urban policy and other matters.

I believe that the partnership between the good in the private sector and the good in the public sector must, however, include the vital third element: a partnership with the people who must make the choices. If the people do not comprise the third partner, and if we believe we can take the decisions for them, we are not doing what is best for local government.

Local government should not be a battlefield between public and private dogmas. My colleagues and I, and our predecessor parties, believe in a partnership approach which brings together the public sector, private business, community and voluntary groups and, most importantly, the local people in each local council area.

Liberal Democrats believe that local government should be accountable through local, democratically elected representatives. We do not believe that better service can be achieved if local government is increasingly fragmented through more quangos created by central Government which sidestep the process of local accountability. Ours is the kind of partnership, coupled with accountability, which delivers the best results. We believe that it gives the plurality of service provision that a country, with all its diversity, requires. It also allows the different communities and community mixes to be reflected in their local government services.

I accept that the Minister has become much more measured since his earlier and obviously more headstrong days in the 1970s. Perhaps that is the result of the sobering experience of first being a parliamentary candidate in the constituency of Peckham. That was not a particularly successful part of the Minister's political career before he went to the leafy shire seat of Wokingham—at least, in comparison to Peckham, Wokingham is a leafy shire.

I hope that one of the things to come from the Government's review is that we shall establish the core duties of local government so that we can agree the purpose of local government. Many people in local government do not know what local government is for. The police do not know, as they are about to have local accountability taken from them—apart from in London where at last, after a very long time, we are to have a little local accountability. Teachers do not know, because in many cases schools are becoming grant maintained and moving outside the local authority system, as further education has also just done.

There must be some security about the obligation and duty of local government. Of course, that can be the subject of local debate, but we must be clear that, unless everything that is provided locally is provided adequately, we are not providing the service that local people want.

There is another fundamental flaw in the present system. We regularly legislate for local government to provide services. The latest large-scale example of that relates to community care which is in force from this month. The Minister wanted to know why people always ask for more money from local government. They do that because when we tell local councils, through legislation, to do something, no one guarantees that they have the resources to perform that task. It is a fundamental failing in our system that we can pass any law that we like without guaranteeing the money to carry out what we require people to do.

Until we sort that out, local government will always fail to deliver, in a way that is different from central government, because central Government ultimately have the power to collect the money to do whatever they want. That is why 92 per cent. of the directors of social services have just said that the Government are not funding community care adequately. That is why the standard spending assessment structure, which is based, as I understand it still is, on the level of spending in 1985, has been so criticised. The Minister looks doubtful as I say that, but I understand that the fundamental structure is based on that pattern. Obviously, we know that it has been tinkered with. Indeed, it is tinkered with every year, as we all know to our cost. However, we must try to establish that financial relationship on a more secure basis.

In the world of local and central government, particularly in the run-up to elections such as this year's county elections, there are always discussions of where there will and where there will not be pacts. I observe that there are discussions in Berkshire, no doubt in the context of the Newbury by-election. I believe that there should be many more pacts. However, the pacts that I am talking about today are clearer and more secure pacts with the people for whom social services should be provided.

We must ensure that we enable the local government that local people have chosen. We must ensure that we do not impose on people local government structures that we believe are best for them. Whitehall and Westminster do not know best.

Tomorrow I will attend the launch of the vote to establish the largest tenants' management co-operative to be set up from local authority property in Britain, on the Tabard Garden estate in my constituency. There are 35 blocks of council properties on the estate and a community of 1,500 or more people. They will decide to take on their own management. They have opted to do their own thing. That is a choice exercised by them under legislation.

Our job should be to legislate to allow local government to make choices and to allow people to make choices from the services provided by local government. That is the way to secure that we get the best quality of service and the best people to provide it at the best possible cost. I hope that in the future we have less dogma and are more responsive to what people say that they want.

11.18 am
Mr. John Sykes (Scarborough)

I am pleased to be called to participate in the debate, because for some years I was a councillor on Kirklees metropolitan council. That council was spawned by the Local Government Act 1974. Probably no one knows where Kirklees is, but everyone knows the location of Huddersfield and Dewsbury. Those two towns were fused, like reluctant Siamese twins, by that same Act which sought to destroy the Ridings in my county. I hope that that situation will soon be rectified.

When I left school in 1974, I joined our family company, which was established in 1845. One way or another over the past 150 years, our company has seen many changes in local government. In the context of the debate, it is interesting to examine the meaning of the phrase "private enterprise". At its simplest, private enterprise is the best system yet devised by mankind for the supply of goods and services.

When my grandfather used to rock me on his knee, he told me about the Labour party and its plans for nationalisation. What an old-fashioned word that seems today for an old-fashioned creed. He told me how Labour regarded business and business men. If he were alive today, would he recognise the present Labour party? He would not, but only because, in his day, that party was made up of genuine working-class socialists, whereas the present rulers of that ailing party tend to be middle-class adherents to sociology rather than socialism. Its councillors want to impose their modish views on race, sex, education and feminism on our local and national life.

Labour is a party of left-wing teachers and lecturers, but even they cannot ignore the fact that, in 1993, from Moscow to Manchester, all around the world, the market is the best possible method of supplying goods and services. The opposite method, the public sector, has been proved beyond all doubt to be the worst possible method of supplying goods and services. Today of all days bears witness to the truth of that. Of all the 47 British companies that the Government have put back in the private sector, which one has downed tools today? There is a deathly silence in the House. The answer is that none of them has downed tools, because they are all getting on with the job.

Those companies are not interested in political strikes led by maniacs from the 1970s, who dream of the days when they brought this nation to its knees. The only companies in which strike action is taken nowadays are in the mollycoddled public sector where people are led by union bosses who think that everyone owes them a living, a guaranteed job for life. We see that today in the actions of the National Union of Rail, Maritime and Transport Workers, and the National Union of Teachers, the Confederation of Health Service Employees, the National Union of Public Employees and the National and Local Government Officers Association are adopting the same appalling attitude.

That brings me neatly to the subject of local government, which remains largely the preserve of the public sector. The rigours of the market have been brought to bear in many areas of our previously semi-nationalised public life, with resulting benefits, and it is clearly in the interests of the public to extend such benefits to local government. They need to be extended by the bucketful, especially in the metropolitan areas.

I admit that dozens of councils have already seen the light, but there are many more Labour councils in which there is an inconceivable hostility to business and enterprise. In those councils, the threads of mistrust, rivalry and envy among councillors and officers alike frequently curdle into malice. In such places, the prevailing attitude is that if the council cannot get its nose in the trough, it is not worth going to the trough. While the rest of us in the real world have to get on with making a living by competing in the real world, the vast, gridlocked structure of municipal socialism has clamped itself securely to almost every aspect of local life.

Talk of partnership with private enterprise sounds hollow in the corridors of such town halls, but most services for the public can be better handled by the private sector. Business men seeking partnership in such areas are wasting their breath. In the meantime, people living in the areas have to deal with the council across a bewildering range of everyday activities that would be better done by the private sector. It is frustrating to hack one's way through the permafrost of local government processes whose icy grip has atrophied town centres all over the land. There is nothing dynamic or vital about Labour councils and officialdom. They toil between two masters—politics and financial constraints.

Some people say that the Government should give more money to Labour councillors, but those councillors have a voracious appetite for spending other people's money and the worst record for spending it unwisely. It is taxpayers' money, not the Government's. Business has different priorities and invigorating qualities.

Mr. Bayley

The hon. Gentleman represents a constituency in the same county as mine. Why is the borough of Scarborough charging a higher average council tax than Labour-controlled York, and why did it charge a higher poll tax than Labour-controlled York? Under the old rating system, why did it charge a higher average rate per household than York?

Mr. Sykes

I shall answer that with great pleasure, because the hon. Gentleman makes my case. Perhaps he is not aware that. Scarborough borough council is Labour controlled. That is why the rates are so high.

Mr. Bayley

I do not think that it was Labour controlled when rates existed. It was Conservative controlled at that time, as it was during the period of the poll tax.

Mr. Sykes

The hon. Gentleman should know that the rating system was completely unfair. That is why a Conservative Government had the guts to destroy it and substitute a fairer system.

As I have said, business has different priorities and invigorating qualities that our towns desperately need. The last thing that business needs is a committee, a sub-committee or even an executive sub-committee, because usually anything that a Labour committee touches turns to stone. That is why there are now so many badly run towns, whereas at the turn of the century our local government was an example to the world.

In those days, there was a true partnership between the public and private sectors. The great men who built our great town halls, which by and large are now occupied by left-wing pigmies, built and ran them as a matter of pride and service. It was not because no one in the private sector would employ the people who worked in them, as is sometimes the case today. If a true partnership is to arise, it is vital to get local government back to basics.

Some people could be forgiven for wondering how on earth we ever managed before the Local Government Act 1974. Just as in the private sector, local government needs a bank manager breathing down its neck all the time and, as in the private sector, it needs true competition. Why is it that one can return almost anything to a Marks and Spencer shop if one is not satisfied with the goods, whereas, if one has more than a bin full of rubbish, one has great difficulty in trying to get council bin men to take it away?

Local government needs to realise that the customer is king, which is 'what the private sector has realised. Like it, before voting for expenditure, councillors must ask themselves, "If I had to dig my hand into my own pocket for this money, would I vote for this measure?" Councillors should be forced to meet in their own time. If that happened, the public would see how dedicated some of their Labour councillors were. Because of the partnership working properly between local government and the private sector, there would be less for councillors to talk about.

I have little hope that many Labour councils will ever come to terms with the importance of consumer-led services. They are interested only in producer-led services. They have closed minds and are interested only in closed shops. It is all done in the name of local people, but never in their interests.

The plain, unvarnished truth is that the vast bureaucratic structure of socialist local government has become one gigantic gravy train. It is saturated at almost every level by Labour party activists, and its top Labour councillors, many of whom one would not pay in washers, are clambering over one another for chairmanships, or chairs as we are supposed to call them these days, or for any committee place as long as it has an attendance allowance plus expenses.

County council elections are looming. Conservatives believe in partnership with the private sector and that consumer-led services are the most important of all. We believe that the consumer, the customer, is king, and that taxpayers' money is precious. The public also believe in those things. They share our vision, and that is why they will vote Conservative on 6 May.

11.29 am
Mr. Hugh Bayley (York)

I have no objection to partnerships between the private sector and the public sector. Indeed, such partnerships have been a feature of local government for decades, if not centuries. Many of the most imaginative and innovative partnership schemes have been brought in by Labour authorities.

For example, in economic development, metropolitan counties such as West Yorkshire pioneered job creation partnerships between local government and the private sector and brought jobs into their regions. The Greater London enterprise board was established by a Labour-led Greater London council. However, the metropolitan counties and the GLC were abolished by the Conservative Government, partly because the Government did not like those public sector/private sector partnerships.

District councils also have a good track record. My district council, York city council, has brought in innovative schemes that have tied together private sector finance and council finance to build homes for homeless people.

No Conservative Member can give Labour Members any lessons about partnership between the private sector and the public sector. However, it is important that talk about partnership does not become an excuse that masks poor performance by local authorities, whether Conservative or Labour-controlled. Sadly, all too frequently, Conservative-led local authorities fail to perform or deliver value for money.

As I said a moment ago, as the Member for Parliament for York, I live in North Yorkshire county council, which is Conservative led. Its home help service is underprovided—constituents come to me seeking and needing a home help service that they cannot obtain—and hugely over-priced. For people in North Yorkshire on income support, the cost is £2.40 for two visits a week. Home help visits are built on one-hour blocks, but, in a rural area, travelling times mean that the actual visit is probably only half an hour.

For people on incomes low enough to entitle them to housing benefit, the charge is £4.80 for home help services, if they can get them. For people on a slightly higher, but still low, income, who do not receive benefits, the cost is £7.20 a week. Those are high costs for a badly needed service. In a neighbouring shire county—Labourcontrolled Humberside—2 million hours of free home help service are provided to 16,000 people in need.

Let us take the example of the provision of nursery education for three and four-year-olds. In neighbouring Cleveland county council, to the north of North Yorkshire, 90 per cent. of three and four-year-olds attend nursery education provided by the council. In Humberside, more than 60 per cent. of three and four-year-olds receive nursery education, but in Conservative-controlled North Yorkshire, the figure is less than 40 per cent.

I can tell the House of my experience as a parent—I say to the hon. Member for Scarborough (Mr. Sykes), unashamedly, a middle-class parent. I wanted my children to have nursery education and we were fortunate enough to obtain it, although not for the whole of the three and four-year period, in the one nursery school in York. That meant a journey across the river, through the city centre to the other side of town for two hours of nursery education for the earliest months and a slightly longer morning period afterwards.

My children were able to benefit from that experience because my wife was not in paid employment at the time, and she drove the children, through the rush hour traffic, to the nursery.-She drove home, had an hour or so there and then drove back again to pick up the children.

That service was available, if one was lucky, to people who had the time and resources to travel to obtain it. That is in the urban centre of the county in York. The situation in rural North Yorkshire is worse, and the Conservative-led county council has slashed the programme for increasing the availability of nursery education. Labour authorities like Humberside and Cleveland do not need lessons from Conservatives about the quality of services.

Nursery education matters. A recent study—I admit to the hon. Member for Scarborough that it no doubt came from the sociology department or educational sociology department—by Leeds university showed that children who had had the benefit of nursery education performed significantly better at key stage 1 maths and English. The Government have set up the key stages as a way to measure the performance of children, of schools and of local authorities. If they believe in increasing the opportunities for individuals and in the quality of education, they should be doing what the Labour party promised in its election manifesto—establising a programme to provide nursery education for every three and four-year-old whose parents want it.

Such an objective cannot be achieved instantly, but we said in our manifesto that we believe that it would be possible to achieve it by the end of the decade. The rate at which North Yorkshire is going means that we shall be a quarter of the way into the next century before that pledge can be met by that Conservative authority. However, in Labour-controlled Cleveland, it is already met.

Let us look at the police service. In 1979, according to the chief constable's report, just over 20,000 offences were reported to the police, and the figure had fallen for three years running. The most recent figures for North Yorkshire show 50,000 recorded offences, and the number is significantly increasing year after year. Crime in North Yorkshire is spiralling out of control.

What has been the response of the Conservative county council? In the five years of the last Labour Government, North Yorkshire received an authorised increase to the police establishment of 155 officers. In the first 10 years, that the Conservatives were in power, from 1979, North Yorkshire received not one single extra police officer, but crime in that period rose from 20,000 to 35,000 reported offences a year.

For the first seven of those 10 years, the council did not even put in a bid to the Home Office for more police to curb crime in the county. It was only when Labour county councillors organised a campaign that it did so. Now, after 14 years, the Conservative Government have provided the county with 50 extra officers, compared to the 155 in the five years of a Labour Government.

It is all very well Conservative Members decrying the efficiency of public sector provision, but what other branch of a public service would be expected to deal with a 2.5 times increase in work load with a 4 per cent. increase in officers available to deal with it? Not to devote resources to curbing crime is a false economy for local authorities, for the people—every one of those 50,000 crimes had a victim—and for businesses. It is in everybody's interest to put the resources into supporting the police in their efforts to tackle crime.

I have compared quality of service. I have compared the quality of nursery education, policing and the home help service provided by Labour and Conservative authorities. People say, "Yes, but there is a price to pay." We heard from the hon. Member for Scarborough about spendthrift Labour councils. We were told that they are always prepared to spend other people's money.

Let us look at the facts. According to the statistical section of the House of Commons Library, which provided some figures for me, the average council tax precept per shire county was as follows. Councils with no overall control had the highest average, with £394 per household; councils under Liberal control—I see that the hon. Member for Southwark and Bermondsey (Mr. Hughes) has left the Chamber—had the second highest, with £378 per household; then came Conservative councils, at £372 per household; cheapest of the lot were Labour-controlled shire counties, at £366 per household.

In my local area and that of the hon. Member for Scarborough, Labour-controlled Cleveland's average council tax per household is £359, Labour-controlled Humberside's average is £366 and Tory North Yorkshire at £368 is the highest of the three. So the statement by the Prime Minister at the Conservative local government conference that Labour councils cost people £100 more is —I am not allowed to use the word in the House—a Scrooge-like economy with the truth. It simply is not so.

Mr. Redwood

The hon. Gentleman has used an entirely specious argument. Is he not aware that, band for band, Conservative councils cost considerably less? My right hon. Friend the Prime Minister drew the right comparison—£100 less in the middle band compared with Labour councils. All that the hon. Gentleman is telling the House is that there are more low-band properities in some Labour areas. We give them much more grant to compensate for the fact that they have more low-band properties. Let him come clean with the House and tell the truth to the nation: Conservative councils always cost less, and band for band a lot less.

Mr. Bayley

Bluff and bluster will not do. What the Minister is saying—

Mr. Irvine Patnick (Lords Commissioner to the Treasury)

Give us facts.

Mr. Bayley

Yes, I will give the facts. If we compare one group of council taxpayers in band D with another, the Minister's figures are right. But an independent group of advisers such as the House of Commons Library statistical section, which does not bear allegiance to the Minister's Department or his party, or to the Labour party, says that the Government's figures are fallacious and specious, because they simply look at band D.

The truth is that the cost per household is lower in Labour counties. That is what people have to pay and that is what matters to them. They are not interested in airy-fairy averages for one band. The Library has given the independent, unbiased figures, which show that overall Labour councils cost us less.

In my area, too, the Labour councils cost people less. The Minister's argument that Conservative-controlled authorities are in the south where house prices are high, and Labour-controlled authorities are in the north where house prices are low, does not hold water, because the three examples that I have used are all in the north.

The Minister's argument does not stand up. He can bluff and bluster as much as he likes, but it is not true that Conservative councils cost less. We should go to an independent source for the true figures, and that is what I have done. I have used not a Labour party source but an independent source.

Mr. Redwood

Does the hon. Gentleman agree that it is unfair to bring the House of Commons Library service into the argument? It has provided extremely good information in response to the questions asked by hon. Members. Of course, if he asks what are the averages, without taking into account different house values for different bands, he will get one answer. But it is an entirely misleading answer to the question, "Which council gives better value for money?" Band for band, the Conservative councils always set lower council taxes than Labour.

Mr. Bayley

All I can say is that the Minister is a better politician than a statistician. I am comparing across all the bands. The Minister is selecting certain groups of the population and comparing them. I am comparing across the board. The figure that matters is the figure that people pay, and that is the figure I am using.

The choice is not only between cheap and expensive services—although services cost less in Labour areas—but between better and worse services. As I have shown in my examples, people receive better services in Labour county councils such as Cleveland and Humberside. Those councils provide nursery education for a greater proportion of the population. Humberside provides a home help service free of charge for a greater proportion of the population.

How can the trick be achieved? Labour authorities provide better services at lower cost. The answer is obvious. Anyone who has been in business as I have—I set up and run my own business—knows the answer: it is achieved by being more efficient. The figures prove that Labour authorities are more efficient, because they provide better services at less cost.

Conservative Members talk about the need for a partnership between the private and public sectors, because they believe that private sector provision will always be more efficient. They should look to Labour authorities, some of which have resisted compulsory competitive tendering yet have produced better services at less cost than Conservative authorities that have fallen head over heels for CCT.

If Conservative Members are looking for efficiency, they should tell their colleagues in Conservative-led local authorities to look at the efficiency record of Labour-led local authorities, as well as looking at the private sector. Conservative councillors have a lot to learn from better-run Labour local authorities, and they should learn those lessons if they are serious about improving the services to people in their areas.

11.46 am
Mr. Iain Duncan-Smith (Chingford)

I am grateful to the Government for giving me the opportunity to discuss services in local authorities. Perhaps I should say first that one of the greatest problems for Labour-controlled authorities is that they have a split view of what their role is in life. They seem to be confused about whether it is to provide services or jobs. Time and again, we hear the cry that they are defending the jobs of those who work in local authorities. Time and again, they are caught having to decide between providing services and supplying jobs.

Labour authorities have the confused idea that if they do not provide the jobs, no one else will provide them. That is a great fallacy, because the private sector will take on the jobs that are required to provide the services. Surely the most important factor is that it is the role of the local authority to provide good quality service at the cheapest price possible for those who live in the area.

The key is the amount of money that is spent or given by Government to local authorities. I was glad that my hon. Friend the Minister mentioned in his excellent opening speech that some £33,000 million is raised and given to local authorities. That is hardly what one would call a small amount. It is a substantial amount. It is high time that local authorities understood that they should spend the money carefully and provide a good service.

I am a great supporter of contracting out through compulsory competitive tendering, as all Conservative Members must be. It has forced authorities that, until we pushed the measure through, refused to entertain the thought that the private sector should have any involvement in providing services. As we heard earlier from my hon. Friend the Member for Teignbridge (Mr. Nicholls), Mr. Jeremy Beecham has said that CCT has opened his eyes to the improvements in cost and quality of delivery.

That is important because it is the compulsory element which has changed matters dramatically for many people in the Labour party. It has made them realise that there are other ways to deliver services and that the private sector is capable of delivering them at least as well as local government, and in most cases much better.

The Local Government Act 1988, which extended competitive tendering to six areas—including refuse collection, street cleaning, buildings cleaning, ground maintenance and catering services—is to be greatly welcomed, not least because it has opened the eyes of many Labour-controlled councils to the idea that services can be contracted out.

I was intrigued by the results of the research on compulsory competitive tendering commissioned by the Department of the Environment from the Institute of Local Government Studies at Birmingham university. It showed some significant benefits. More than 20 per cent. of contracts have now been awarded to private companies; competition has led to the streamlining of the direct service organisations of local authorities, thereby cutting waste and bureaucracy; and there has been a manual staff reduction of between 17 and 20 per cent., achieved largely without compulsory redundancy. We should remember that initially the doom and gloom merchants in the Labour party were shouting about massive compulsory redundancies, but that has not happened. The research also showed annual average cash savings of more than 6 per cent. and an improvement in the quality of services.

I want to dwell for a moment on the record of my local authority, Labour-controlled Waltham Forest. It has fought the concept of competitive tendering tooth and nail. Because it has dragged its heels, it now needs to search for savings. It failed to find those savings by embracing the excellent concept of CCT initiated by the Conservative Government.

The council imposed a series of very high community charges, but its inefficiency in collecting them resulted in its having to impose additional surcharges year after year on my constituents in Chingford—yet they tend to be the sort of people who pay their community charge on time and in full. The council continually refuses to embrace competitive tendering to make the necessary savings, despite the fact that there have been some significant savings in other councils.

It is interesting to note that, although the allotments section of the council's recreation department has a budget of only approximately £50,000 a year, the overheads for running that section are some £26,000 a year. By anybody's standards, that is absurd. It is one area that just illustrates how the intelligent use of competitive tendering would help. It also highlights the nonsense of the policies followed by the Labour-controlled council.

By comparison, when that council was forced to contract out the Leyton leisure lagoon, great savings were made. Pressure had to be put on the council to do that because it had fought the idea tooth and nail. The savings meant that the subsidy per swimmer dropped from £6 to £3, and I hope that eventually it will disappear altogether. The council did not want to do that, but it was forced to do so under great pressure from local people and the local Conservative group, resulting in a saving of £156,000.

Mr. Harold Elletson (Blackpool, North)

I am interested in my hon. Friend's remarks about his local council. My local council in Blackpool is also Labour controlled. In the old, happier days, it had a Conservative council, which proposed the introduction of CCT. I well remember the howls of anguish from the Labour party; it was as though the Conservative party had tried to introduce some new form of Armageddon. Of course, no one now talks about the standard of service being provided because there are excellent street cleaning and parks services, which are provided by private sector organisations. In the old days, when we suggested the introduction of street cleansing services, from the reaction of the Labour party one would have thought that we were trying to introduce ethnic cleansing.

Mr. Duncan-Smith

I agree with my hon. Friend, who is right in what he says.

I have been trying to show that had my Labour-controlled council embraced CCT a little earlier and more vigorously, it would not now be in such financial difficulties. It would have already made the necessary savings while improving the quality of services, which in so many areas are well below standard.

I must tell my hon. Friend the Minister that the experience of Waltham Forest shows that centralised services such as the direct service organisation and direct labour organisation have not been restructured. We must do something to force local authorities to do that. It is all very well to make savings by contracting out building and highway works, catering and so on, but the central organisations remain staffed and manned very much in the same way and in the same numbers as before. All the other areas therefore have to bear the extra costs of still having a large group centrally administering something which, to a large degree, no longer really exists. We must find ways to force local authorities to change the structure across the board. If they will not do it through common sense, they must be driven to do so, or the council tax payers of Chingford will end up paying extra for services from which, quite frankly, no one reaps any benefit.

The old DLO in Waltham Forest did not send out its invoices for well over a year, or even longer, with the result that when it finally did so it was not paid because people said that they could not recall ever having had the service, leaving £3 million of unpaid invoices. The commercial acumen of some of those organisations is quite staggering. There is a whole mine of information like that sitting in Waltham Forest.

I am glad that the Government are considering extending CCT and have set out some of the key areas in their document "Competing for Quality". Private firms will have a fair chance to compete for local authority contracts. There will be a separation of client and contractor responsibility to ensure that those conducting the competitive process have no direct interest in the result. The timing of various stages within the tendering process has been laid down to ensure that outside contractors have sufficient time—that is important—to prepare bids. One of the ways in which local authorities have managed to get around CCT has been by giving contractors little time to put a sensible bid together.

Again looking back to the Waltham Forest experience, prior to the local mananagement of schools, the council was very quick to get out the four-year school cleansing contracts—but it did it for all 70 to 80 schools in the borough, so that any contractor that did not have the necessary capability at that stage found it impossible to bid for the contract at such short notice. I am glad that the Government intend to ensure that the contractors will have time to prepare their bids. To ensure a level playing field for those tendering, the items that a local authority can or cannot take into account in the tender valuation will be specified. I am glad that local authorities will have to publish rigorous internal accounting covering any white collar work that they undertake.

Local authority services have become a political football in the sense that Labour authorities fought the issue on the ground that only they should provide those services and jobs. They were becoming confused. More and more, local authorities are realising that by making savings and improving services, they are doing what they are meant to do—making sure that local residents do not pay more than they should for services that are dispensed in their name to those who need access to them.

Local authorities must provide local services as cost effectively as possible. That does not mean that they must provide jobs in the local area. Those will come as a result of the local authority being the best provider of the service or of its being decided that the private sector is the best source of the relevant service.

I fully welcome all that the Government are doing and only urge them strongly to ensure that local councils such as my own can be directed further and faster in the distribution to the private sector of essential services.

12.1 pm

Mr. Jamie Cann (Ipswich)

My background is in local government, as a member of Ipswich council since 1973 until May last year. I was fortunate, or unfortunate, enough to become leader of that council at the same time that Margaret Thatcher became Prime Minister, so I know that of which I speak.

Ipswich council has an interesting history. At the time of the last war, Ipswich county borough—known then, and even today by some older residents, as the corporation —ran all the services now run by Ipswich borough council Suffolk county council, and Anglian Water. It produced its own electricity and gas, looked after the town's poor and needy, and had an embryonic health service. Nationalisation and the establishment of the Department of Health and Social Security took some of those powers away, but from the 1940s until the early 1970s the corporation ran Ipswich.

It was a partnership in that business men served on the council, and the council worked with business men. The council drained marshy areas and then sold or let that land for business use. It was a fully functioning, local democracy—a partnership between all the people in the town and the corporation. It is totally beyond me why that arrangement had to be changed in the early 1970s. It was only after the so-called reforms of 1974 created so much duplication between Anglian Water, Ipswich borough council and Suffolk county council that concern was expressed about the cost of local government. Right hon. and hon. Members in all parts of the House will acknowledge that it is true of their own areas.

Since those so-called reforms, there has been pressure on local government finance from central Government of all political colours. The situation became much worse in 1979, when Mrs. Thatcher became Prime Minister. That was partly to do with the fact that her dear dad, Alderman Roberts, was kicked off Grantham council, and she never forgave local government.

A war was waged by central Government against local government during the whole of the 1980s. I take heart from one or two comments by Government spokesmen recently to the effect that that war may be coming to an end.

One tactic was to use the word "partnership" instead of "privatisation", which is what is really meant in many cases. The Government say that they believe in partnership between local authorities and the private sector and between central and local government. I will cite one or two examples of the Government's assertions not being reflected by their actions

I refer first to compulsory—not compulsive—competitive tendering. Ipswich objected to being compelled to adopt that policy, but it was the law so Ipswich complied and got on with it. Ipswich won its own building works and street cleansing contracts—it collects its own bins. It maintains all the services provided by its own direct labour organisation.

In addition, the authority has tendered outside Ipswich and maintains Liberal-controlled Colchester's housing stock. It also landscapes parks and gardens in other areas that have Conservative-controlled councils. Competitive tendering has been a success for Ipswich council, for the moment—but if one delves deeper, one sees that it will not be that way for ever, because the Government have not established a level playing field for compulsory competitive tendering.

Direct labour organisations must make a 5 per cent. return on capital, but the private sector does not—and it does not attempt to do so in hard times. The council must make a profit every year, or it would be in danger of being closed down. That is not true of the private sector. Successful councils such as Ipswich have been threatened by the Audit Commission for competing outside their boundaries. It is said that, in effect, a council DLO can compete only for its own work in its own geographical area—and that if it loses a contract once, it will lose it for ever and the service in question will be closed down. No one can argue that that it is a fair way of asking council workers to compete against private sector workers.

As I said, for the moment Ipswich council is winning those battles, but the first battle that it loses will mean that a whole raft of jobs will be lost and the service will be transferred for ever from the public to the private sector. That is the Government's real agenda.

Ipswich council, as with councils of all political colours, has always attempted to work with the town's private sector, but has consistently found itself blocked in those efforts by Government regulations—though, to be fair, I suspect that many of them are Treasury driven. One example is Wherstead road in Ipswich, which became congested. There was a factory nearby surrounded by a large area of land which the factory did not need.

About six years ago, that factory had financial problems, so the council bought the land, which amounted to five and a half acres. Together with Conservative-controlled Suffolk county council, Ipswich council reached an agreement whereby, instead of knocking down half of Wherstead road, a new road would be taken through that open land. Agreement was then reached to have ownership of the land transferred to Wimpey, which would build a number of homes for sale, a number for transfer to housing associations to rent and a number to Ipswich council to include in a sheltered scheme.

That was a perfect example of co-operation between two authorities—one Labour and one Conservative, a housing association, and a private sector builder. The project was blocked by the Department of the Environment on the ground that it was a barter deal. Five years later, we still do not have all the homes that could have been built under that scheme. That is not an example of the Government helping, being a partner with local government, or aiding local government to work in partnership with the private sector.

I cite a more recent example. Ipswich council has a terrible homelessness problem. In line with Government thinking, the council decided to lease homes from private individuals to let, rather than put the homeless into bed-and-breakfast accommodation. It leased 100 homes for that purpose. There are a number of other homes that it wants but cannot lease because the owners want to lease them for much longer than three years. Why cannot Ipswich council lease them for more than three years? Because it runs counter to the Government's capital expenditure controls. The scheme, which would help the private sector, the council and the homeless, is blocked by the Government.

Ipswich council has a 10 per cent. stake in the Building Preservation Trust—not a big organisation which involves a group of people and the council. Every year it buys an old property of value to the town, does it up and resells it. The proceeds are then used to buy the next property—often with a profit. As that scheme involves the council, even though it is a minor party, it comes under Government capital expenditure controls, which makes it difficult for the trust to operate. All those factors show that the Government want to stop councils doing things, not encourage them to do things with the private sector.

Some 20 years ago, when I first became involved in local government, people who could not afford houses went on a council house waiting list and within a year or so they obtained one. Such houses were reasonably cheap, well maintained by the local authority and popular with the people. However, that is now a forgotten dream in Ipswich as the council has not been allowed to build homes for goodness knows how long.

We were told that the private sector would take up the slack, It did: it built many four-bedroom, two-bathroom, double-garage homes that people could not afford to buy or rent. It did not produce low-cost rental properties. The Government's housing programme is a total failure. At least they decided to transfer some resources from the councils to housing associations so that they could become the prime producer of low-cost rented homes, but that has not happened.

The homes are becoming more and more expensive, the Government grants are being reduced every year and housing association rents are starting to move out of the low-cost band. In Ipswich we are having great difficulty in allocating housing association properties. People would rather wait for council houses. The failure of the Government's housing programme has prevented us from working with the private sector to produce low-cost homes and is making the position for the housing associations even worse. It seems to many of us that when the Government talk about housing provision they believe that it is all right for the housing associations, private individuals and building firms to produce homes for sale, but never, in any circumstances, for the council to build homes for rent. Why not? We need homes and they are not being produced by anyone else.

The Government's care in the community policy has not yet come about. The Minister made great play of the fact that the Government have handed responsibility for care in the community to councils, as though that were an act of faith. In fact, they have handed care in the community to councils, but not allocated them sufficient money to do the job properly. I prophesy that in the next year our surgeries will be full of people whose needs have not been properly assessed because the council cannot afford to provide for them or whose needs simply will not be met. That will be the result of the budgetary shortfall of care in the community, which will affect hon. Members from both sides of the House. That is another example of the Government's talk about partnership proving to be nonsense.

I do not believe what the Government say about partnership. What happened in the 1980s and is still happening today is that Whitehall, quangos and the market are slowly but surely taking power away from elected local authorities. It is time to stop that.

12.15 pm
Mr. Piers Merchant (Beckenham)

Few things better illustrate the Conservatives' mastery of both the political and intellectual arguments of the 1980s than privatisation. In practical and philosophical terms, that policy has become irreversible. Once discussed only at the edges of political life, it is now firmly on centre stage. Privatisation and competitive tendering in local government form a vital part of it.

In the 1970s, there appeared to be certain unquestioned assumptions about the running of public services. It was generally believed that direct provision was the only effective way of operating, and that belief went more or less unchallenged. There was a resistance to change at both local and national level. Therefore, it might appear somewhat ironic—but when set against the lessons of history, it will be shown not to be so—that the Conservative party produced the radical changes of the past 10 to 15 years, spurred on by new thinkers such as my hon. Friend the Minister for Local Government and Inner Cities and Chris Chope, who regrettably is, temporarily, no longer a Member of Parliament.

In the meantime, the Labour party seems to have become frozen in the past—and not only in this sector of policy. It seems to be more afraid of vested interests and change itself, and has an antipathy to the private sector. Of those three reasons why, I suspect, the Labour party generally oppose the introduction of competitive tendering and private contracting in local government, the worst is the last—antipathy to the private sector. It is based purely on an ideological presumption that stems from years ago. However, it is belied by the facts revealed by any rational assessment of economic progress in the past 50 years.

Mr. Jim Dowd (Lewisham, West)

The hon. Gentleman will be aware of Lewisham council's attempts to regenerate, improve, invigorate and sustain the future of Beckenham Place park, which adjoins his constituency and mine. It is a major scheme, not without flaws, largely based on a partnership between a private company—the David Lloyd clubs—and the council, which will benefit the facilities for the people in that part of the world.

It cannot be denied that the scheme needs much thought, but why have Lewisham council's attempts to promote the scheme been faced with unremitting hostility from Tory-controlled Bromley council? Will the hon. Gentleman condemn Bromley council for its blindness and antipathy towards the involvement of the private sector, and do what he can to ensure that residents' interests are protected and that extremely imaginative, innovative and beneficial scheme for the part of south London that we both represent goes ahead?

Mr. Merchant

I am interested in the hon. Gentleman's comments about Beckenham Place park, about which I was talking to representatives of Lewisham borough only yesterday. The management of the park has been put out to a private operator, which I wholeheartedly welcome. It shows that some local Labour authorities accept the advantages of private contracting. I only wish that that lesson was followed by many other local authorities.

The specific and separate issue of the development of Beckenham Place park involves a plan to change the park's nature and has nothing to do with the privatisation of services. The hon. Gentleman should be aware that the opposition came specifically from local residents. It is not a matter of Bromley borough authority deciding to oppose a plan proposed by Lewisham borough. Bromley borough did so as a result of the major pressure that was brought to bear on it by local people.

If the hon. Gentleman is suggesting that the views of local people should not be fully taken into account and weighed in the balance, he is making a major error of judgment about planning policy. He will also know that the planning application has been called in by the Department. However, I am in danger of straying from the point and I shall return to my speech.

The Labour party's approach to competitive tendering and privatisation in local government is basically one of turning in the opposite direction, because it is locked in the past. Therefore, it has devolved upon Conservative-controlled local authorities to make all the running in this area, even though there has been some resistance to it, even in some Conservative-controlled authorities. That is understandable, for we are talking about innovative policies.

What has changed principally, though, during the past 10 to 15 years in this area? It can be typified in three phases. The first phase has been the voluntary pursuit of the various privatisation options by those particularly go-ahead local authorities which set the pace. The success in those areas led to phase 2: the compulsory application of compulsory competitive tendering, which has been necessary to overcome some of the ill-judged resistance. The third phase is that into which we are now moving—the much more wholehearted pursuit of the concept of the enabling authority, to which I shall return.

Apart from some specific earlier examples, the first major stride in this direction came in the Local Government Act 1980, which required compulsory competitive tendering to be introduced for new construction, building, maintenance and highways. Then, as my hon. Friend the Member for Chingford (Mr. Duncan-Smith) eloquently pointed out, the Local Government Act 1988 extended competition in local government services into six other major areas. What is the advantage of all that? People might say that that is purely ideologically driven. The answer to that question comes in the savings that have inevitably and indisputably flowed from these policies.

A recent Audit Commission report, "Realising the Benefits of Competition", showed that services such as refuse collection had produced savings of 12.4 per cent., and that building cleaning had produced savings of 20.6 per cent. These are not marginal savings: they are dramatic and major savings in areas of high public expenditure.

In the report "Competitive Tendering for Local Authority Services—Initial Experiences" a Labour-controlled local authority chief executive is quoted as saying: There is an awful lot that comes from CCT. There is much greater knowledge of particular service areas. It exposes an awful lot of inefficiencies formerly taken for granted. We are a more efficient, slimmer organisation. It has had real and definite benefits and not just in defined services. As for the oft-quoted Jeremy Beecham, I know him well, so I can attach credibility to the quotation in the Municipal Journal, where he said: Compulsory competitive tendering has brought some cost effectiveness and genuine savings which might not otherwise have been achieved. Knowing the difficulties that Jeremy Beecham has had over the years, struggling with the mammoth machinery of Newcastle city council, I am not at all surprised to see that he has been forced to admit that, by introducing compulsory competitive tendering, he can make considerable savings.

Mr. Duncan-Smith

Does my hon. Friend agree that the essence of that quotation is that it is the compulsory element which has forced Jeremy Beecham, and others like him, to go down that road and thus learn—not because of their desire to do so but because they have been forced to —that the reality is that there is a new world out there from which they can reap the benefit?

Mr. Merchant

Absolutely. There are some intelligent and enlightened leaders of Labour authorities who wish to go much further down this path, because they see the practical benefits that can flow to their authorities and to the citizens of their areas but who are prevented from doing so either by their groups, which fear that they cannot move in a new direction, or, unfortunately, by the local authority trade unions, which stick their feet in and can exercise far too great power within the local Labour party machine and therefore stop these reforms and changes taking place.

That was a specific problem in Newcastle, which Jeremy Beecham and his colleagues in the leadership of the council had to face. Although they might not be prepared to admit it publicly, I am sure that some of these Labour leaders privately very much welcome the compulsion that came with the Act, which has forced them to go down a road that they wanted to go down and therefore enabled them to defy the forces that tried to prevent them.

The local authority in the area that I represent, Bromley—the Minister has already been generous enough to refer to Bromley's leading role—has cast itself in the role of an enabling authority, with great success. I pay particular tribute to the excellent leader of the authority, Dennis Barkway, and his team of councillors and officers who have assiduously pursued this option with great success. They have pushed forward the boundaries in a quiet but effective way. They have not sought glory for themselves but have attempted to improve the quality and efficiency of public services for the citizens of Bromley.

The House may be interested in the list of public services that Bromley has been able to put out to the private sector. They are building maintenance, street cleaning, vehicle maintenance, refuse collection, ground maintenance, building cleaning, civic centre catering, public toilet cleaning, school meals, leisure centre management, highways maintenance, waste disposal, street lighting, social services homes, pest control.

Mr. Dowd

On the question of social services homes, will the hon. Gentleman be so kind as to tell the House how the fraud squad investigation is going into the conduct of the chair of social services in Bromley over the relationship between him and the American company that was hoping to take over those homes?

Mr. Merchant

The hon. Gentleman will know that that matter is at present sub judice. If, however, he wishes me to go into local government corruption, he might do well to investigate the corruption that was spawned by the incestuous centralisation of power in those Labour-controlled local authorities that have been under Labour control for many years.

As someone who worked for many years as a journalist in the north-east of England, I know very well the history of local government corruption in the north-east. If the hon. Gentleman wanted to do so, we could debate it for hours on end. I am sure, however, that he would find that it was not in either his or his party's interests to do so.

Let me continue with my list. I was about to reach the more interesting services that Bromley has put out to private sector. I refer to the professional services that the Government are encouraging local authorities to look at, and which can, with a little more difficulty—because of the nature of the quality definitions that need to be laid down more thoroughly—be done successfully.

Bromley has proved this—I believe very effectively. I refer to the architects department, engineering services, computers, part of the youth service, printing and stationery, and at present—one of the most dramatic—the privatisation of the exchequer services, including the collection of council tax and payroll services, which will produce a cost saving of 25 per cent.

In addition, two other major areas of local government responsibility that have now passed, at the council's wish, out of the council's direct hands, are housing, now taken over by a housing association, Broomleigh, and many of the schools that have opted to go grant maintained. Bromley may shortly reach a threshold where the majority of—indeed, all—the secondary schools will move out of the local authority's direct control. That will achieve the objective of moving all those services into a more effective private sector. Some people might think that that is an exhaustive list, but Bromley council is still trying to find other services that can be contracted out and is examining a short list at the moment.

What about the savings? I am told that the authority has calculated that it is producing savings of almost £13 million a year. Those are not one-off savings, but savings which will recur year after year, of which about £6 million is direct saving from the contracting out of services and a further £7 million of interest which has accrued as a result principally of the sale of housing stock to a housing association. On each of those services, those are average savings of between 15 and 20 per cent.—considerable savings in cash and percentage terms, which go to the benefit of the people who live in the area.

What comes next? There is a need to continue to press for greater savings, efficiency and improved quality. Of course, there is still resistance from many local authorities —few have such a go-ahead approach as Bromley. That resistance was one of the principal reasons for the White Paper "Competing for Quality", to which my hon. Friend the Member for Chingford referred and which will continue to make inroads into the options that are available for further contracting out and competitive tendering. My hon. Friend said that there were problems in some areas as some local authorities have found ways of cheating on competitive tendering, so we must ensure a level playing field for the necessary disciplines.

The White Paper specifically stresses the need to look at the wide range of professional and technical services. I believe that the Government are aiming at figures of about 90 per cent. of construction-related services, 15 per cent. of corporate and administrative services, 33 per cent. of legal services, 25 per cent. of financial and personnel services, and about 80 per cent. of computing services being available for competitive tendering. Those all seem to be admirable objectives. They are areas which were not perhaps questioned before, but, as Bromley has shown, they are not only effective but can lead to great savings for local council tax payers.

I have talked about what has happened, what is happening and what should happen, but why is it necessary? The alternative argument—that local authorities should run services directly themselves through their own departments—might at first sound quite persuasive. It is argued, first, that that is in the public good, because local authorities operate in the public good; secondly, that there is no element of profit or possibly exploitation; and, thirdly, that it enables easy long-term plananing with no uncertainty about who will provide the service and how, that it can be centrally organised and, therefore, that all the economies of scale flow from that.

Those arguments look fine on paper and no doubt appeal to tidy bureaucratic minds who see the world in terms of intricate planning. Like the Soviet central planning system, which operated in a macro-economic sense, local government planning in such an intricate form is also doomed to failure. It is no coincidence that Soviet central planning failed so spectacularly because the structure of any rigid arrangement bears within it the seeds of its own destruction. That is true of local government set-ups in Liverpool, Lewisham, Newcastle or anywhere else.

My experience in Newcastle convinced me that the overriding objective of a huge local government machine that runs a big city council becomes running the machine; the machine runs for its own benefit, not for anyone else's. The reality is that, without the pressure of a commercial ethos, competition and some division between purchasers and providers, there is no incentive to stay trim and efficient and to provide quality. Inefficiency, overmanning, poor quality and bad practices creep in. The machine ends up operating as a suppliers' monopoly dream, veering increasingly towards operating only in the interests of the machine and its staff, rather than the people for whom it should operate—the forgotten consumers and citizens of the area.

I do not want to be misinterpreted and I am not casting aspersions on individual local government officers. Perhaps not all my colleagues will agree with me, but, in my experience over the years in dealing with local government officers, I have usually found them dedicated, helpful and very efficient. The problem lies with the machine as a whole. The size and nature of the machine mean that it is not designed to ensure maximum efficiency, because there is no competitive element, no testing, no pressure and no commercial application. That is why the system has failed and is unable to provide what the public require at the cost they are prepared to pay.

Therefore, I believe that it is in the interests of local government itself, of its officers and, above all, of the ordinary citizen to press ahead with contracting out and enabling authorities, not only as best practice but as universal practice.

12.35 pm
Mr. Colin Pickthall (Lancashire, West)

I am sorry that the hon. Member for Blackpool, North (Mr. Elletson) left the Chamber immediately after his intervention on the hon. Member for Chingford (Mr. Duncan-Smith). The hon. Gentleman waxed lyrical about the qualities of the late and unlamented Conservative council in Blackpool, which was in fact notorious for its financial inefficiency and horrible planning mistakes. He should consider why, at the previous local elections in Blackpool, there was the biggest swing to Labour in the entire county. There can be only two answers and perhaps both are right. The first is that the hon. Gentleman's assessment of what people thought about the services that they were not getting from the Conservatives was entirely different from that of the electorate. The second is that the electorate in Blackpool were voting against the service that they had been getting from the Government in the previous few years. I think that both answers were true in that instance.

I begin by picking up a couple of things that the Minister said. He made a side swipe at Lancashire, as Ministers generally do whenever they get the opportunity—perhaps not so frequently as against Derbyshire, but we are still high on the list. He said that Lancashire was one of the main culprits in setting a high council tax, but I agree with the comments of my hon. Friend the Member for York (Mr. Bayley) in this connection. If we take the average precept—what people will have to pay—Lancashire comes 10th in the league of 30 or so counties. People there will pay £393.37. Of the nine counties that are charging more than that, four are Conservative controlled: in Buckinghamshire people will pay £416, in Hertfordshire £419, in Somerset £450 and in Surrey £444. Incidentally, Derbyshire is lower down the list.

The Minister also poked fun at leaders of local authorities, specifically Labour leaders, who come to London to lobby Ministers for more money. It seems an obvious thing to do if one believes that one is not getting enough money. I have been involved at least twice in lobbying directly on behalf of my authority.

Mr. Bayley

It is indeed a sensible thing to do. In my part of the country, on the other side of the Penines, Labour-controlled Humberside county council lobbied for more money and got a better settlement as a result. Conservative-controlled North Yorkshire county council did not make representations to the Department of the Environment because it did not want to rock the boat in its own party and therefore did not receive a better settlement. As a consequence, the average precept in Humberside is lower than it is in Conservative-controlled North Yorkshire.

Mr. Pickthall

That is a very instructive parable. I have been trying to point out not only the common sense of doing what my hon. Friend the Member for York describes, but the fact that Lancashire, with many other authorities, was down here to talk not about more money as a slice of the national economy, but about the way in which the settlement was calculated and the way in which it was distributed. We were arguing about the area cost adjustment, which we believe works to the disbenefit of Lancashire. We were arguing about the money that had been taken out—

Mr. Redwood

The hon. Gentleman should remember that what I said was that every year Labour leaders say that they have been given additional statutory functions by the House and by the Government. I was replying to the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), who claimed that councils were always losing functions. I said that Labour leaders pointed out, often correctly, that they had increased functions from Government. I was not ridiculing them or saying that they should not make that point. On the council tax, Lancashire's band C charge is £472. The shire average is £406 and Hampshire's is £328. That shows that Lancashire is a high-taxing authority.

Mr. Pickthall

The figures that I gave were for the average precept. I understand that one can pick a band or a different way in which to calculate and come up with different league tables. The figures that I used were from the Public Finance and Accountancy journal of 12 March 1993 and were based on Department of the Environment data. My point was that the deputations in which we were involved were concerned about the distribution and about what we believed to be a corruption in the way in which the global sum of revenue support grant was distributed—a corruption embodied in the structure of the standard spending assessments, to which I shall refer later.

Two or three weeks ago, the Audit Commission produced a draft report, which does not seem to have made much of a stir, although it should have done. The draft report says that the Government have taken such severe and detailed control of local government spending powers that local government powers are now "largely cosmetic". Coming from one of the Government's most powerful watchdogs, which was spoken of approvingly by the hon. Member for Beckenham (Mr. Merchant), that is a most salutary judgment and one which should make us shudder a little.

That judgment raises two important questions for me, for most of my hon. Friends and for those with a background in local government. First, why on earth does anyone remain a local councillor? Whether councillors are Labour, Tory, Liberal Democrat, nationalist or whatever, day by day and week by week they have to do the Government's dirty work. They are unpaid and take the flak for Government cuts. They preside over decisions that they cannot avoid because they have already been settled by the way in which the SSAs are distributed and they damage the interests of the people whom those councillors seek to defend and represent. It is hard to escape the conclusion that many councillors are motivated largely by a passionate desire to mitigate the Government's vindictiveness against the people among whom they live.

Secondly, and more importantly, there has been a fundamental shift of power since 1979 which was detailed graphically by my hon. Friend the Member for Ipswich (Mr. Cann). There has been a switch in power away from local democracy and towards central Government, and away from local democracy towards Government-appointed individuals and Government-appointed quangos responsible to no electorate. I recently saw an estimate of around 42,000 for the number of people that the Government have placed in quango positions of one kind or another. I do not know whether that is an accurate figure, but it would not surprise me if it were.

We must not underestimate the depth and significance of the process. I am not convinced—and I do not think that any of my hon. Friends are convinced—by the kinder words that the Government have spoken about local government recently. The Minister for Local Government and Inner Cities is an embodiment of the old adage, "Speak softly and carry a big stick". I am convinced that the historic system of balance and shared power between central Government and local government is being destroyed. Personally, I have no problems with the notion of dismantling venerable structures that have outlived their purpose and replacing them with better structures which serve people more efficiently and democratically, but we must consider what is being put in the place of our local government structure—and the answer is increasing centralisation.

The hon. Member for Beckenham referred with understandable distaste to incestuous over-centralisation, but that is what is going on around us now. The hon. Gentleman spoke vigorously about the size of the local government machine and said that it was the machine that was out of control and not the individuals in it. Europe apart, what bigger machine is there than national Government? It is an enormous machine which cannot be stopped or altered, save by a general election. The test of the increasing centralisation that is taking place around us must be what Ministers and Conservative Members generally would be saying if a Labour Government were doing the same thing to local government. They would be howling blue murder and talking about the Soviet Union, the former East Germany and all the rest. It would be interesting to hear any one of them honestly comment on what is happening.

I read a report in this morning's paper about the Government's plan for the teaching of English—just one aspect of life which is being taken away from the control of local government and local people—which said that the Government propose to extend their power over how English is spoken in schools and to make children study a compulsory list of great authors. I do not have much problem with the latter proposal, but in relation to the first, the article says: Understanding of regional dialects was not an essential part of English lessons, David Pascal], the head of the National Curriculum Council, said. The fact that the Government are now trying to centralise control over the way in which we speak says volumes about their general philosophy in running the country. Almost all Opposition Members present have strong characteristic regional accents while virtually no Conservative Member present has. The hon. Member for Sheffield, Hallam (Mr. Patnick), the Whip, is an honourable and welcome exception. The Conservatives talk alike and think alike and believe that the rest of us should be brought into line. Their attitude to local government is exactly the same.

My hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) made a number of points about the whole business of the creation of quangos and the removal of elected members from one organisation after another and I shall try not to repeat them.

The subject of the debate—partnership between the public and private sectors in delivering local government services—sounds fine. No one could quarrel with the Minister's list of major projects between the private and public sectors. I am sure that they are all fine projects and that they are welcome. Partnership is a good and splendid word. However, in many quarters we are actually experiencing a series of forced separations and not partnership. Whatever one's view of the principle of compulsory competitive tendering, CCT would not be complusory in a partnership. It would not be controlled by centrally imposed rules and regulations which weight the whole game against local authorities. I am desperately trying to avoid using the phrase "level playing field" because it is a particularly appalling cliché.

Local authorities should certainly be allowed and encouraged to seek competitive tendering in their own ways. They should be able to search for the best combination in their own local authorities. A great deal will depend on the character of the local area, what is happening to the economy and whether the area is industrial or rural. In a partnership, local authority service units should be able to compete on equal terms with private sector groups for both public and private services. In many cases, I believe that they would win. On the other hand, in many cases of competitive tendering we have seen jobs, working conditions and the lives of the people working in those services destroyed in order to anticipate and undercut loss-leading bids from the private sector.

I am sure that I am not the only hon. Member who has met school cleaners and school caterers who have worked in schools for many years but who have suddenly had to give up their jobs because their hours have been cut and they can no longer afford to work. In some cases, wages have been cut. That has occurred in the hospital service. I have met school cleaners who were in tears because they felt that they were part of the schools in which they had worked. In some cases, they had worked in the schools for 20 years. They did much more than what they were paid for, but that service was wiped out by the system.

According to the line taken by the Association of County Councils, where a choice is to be made between public and private provision, there should be a context which gives no financial advantage either way. Government systems are set up in such a way as to make it impossible for the public sector to compete. My hon. Friend the Member for Ipswich dealt with that point. That process is a matter of dogma and it has nothing to do with the efficiency of delivering services.

The Government's campaign to emasculate local authorities has been extraordinarily consistent across a wide range of service provision. In fact, one must almost admire that consistency. For example, in education the opting-out system has seen the Government consistently changing the rules to weight the scales against the "no" votes even though—or perhaps because—the response has in most cases confirmed public confidence in the local education authorities. That is certainly the case in Lancashire, where the majority of the ballots have been against opt-outs. As we all know—is repeated on many occasions—most opt-outs occur in Conservative local authorities.

Public sector higher education was removed from local authority control in 1989 and the colleges were confiscated and given to gangs of business men—some of them, no doubt, very successfully, but the idea behind the move is the important point: the new governing bodies are hand picked by Tory Ministers and they have the power to re-elect themselves almost in perpetuity.

Now further education colleges and sixth form colleges have been removed and placed under the same kind of control. Governors are appointed in a similar way. For example, a sixth form college in Lancashire used to have among its governors two Labour and two Conservative representatives of the local education authority. That representation was a fair reflection of the situation in the authority. The two Labour governors were dismissed while the two Conservative governors were placed on the new governing body, to be joined by the local Conservative Member, the wife of the Conservative Member next door and the wife of the Conservative Member of the European Parliament. That is a small example of what is happening all over the place, arid the appointments are made centrally. In both higher and further education, the funding mechanism has been placed in the hands of quangos which are not elected and do not even contain elected members. Those quangos specifically exclude LEAs.

We hear that the careers service is to be hived off from local democratic control and given to quangos. I cannot speak for careers services across the country, but in Lancashire the service is particularly successful and well regarded. Local authorities no longer have the right to appoint representatives to local health authorities. Again, we have been reduced to quangos which are appointed and paid by the Government whereas before the much abused and reviled councillors of all kinds did that job without payment.

For some time, local authorities have not had the right to appoint people to water authorities and water committees. Police authorities are to have their local authority representation cut. I was in a group of Conservative arid Labour Members who met representatives of the Lancashire police committee a fortnight ago. The Conservatives, magistrates representatives, Labour representatives and the chief constable all said, "Don't do this: it is anti-democratic and six councillors cannot possibly represent an authority the size of Lancashire." Interestingly, the fiercest critic was the chief constable.

An environmental pollution agency is shortly to be established. It will remove responsibility for waste disposal from local authorities. Non-domestic rates are being removed from local control. Regional tribunals—quangos —have been set up to deal with special needs appeals. I have no problem about regional tribunals, but I have a tremendous problem about tribunals that are not democratically responsible to anyone being able to impose on local authorities vast charges for special needs which the authorities may not be able to meet because they have not had the central Government money to do so.

Above all, the use and abuse of SSAs and capping has put local authorities to the sword. The cynical manipulation of the area cost adjustment has redirected billions of pounds to Tory authorities in the south-east and away from the provinces, if I may call them that. In Lancashire alone, that amounts to a Government fine of £100 on every council tax bill and it will not be much different in other northern and western counties. That range of powers destroys the democratic functioning of local government—Conservative as well as Labour. The Government are about the destruction of democratic local government and we must ask once again what their response would be if a Labour Government were the perpetrators.

The Government have become accustomed to latching on to a few local authorities that, over the years, have reacted to Government hostility. No doubt in some cases they have over-compensated with a ferocity equal to that of the Government. The Government have tried to smear all local government, no matter what the political control, and their agenda has been clear; people are told that if they vote Labour their local authority will be cut and, if possible, ruined. If electors insist on voting Labour, as they sometimes stubbornly do, the Government will destroy that Labour council. That was the campaign waged against the metropolitan authorities and it is now the function of the Local Government Commission for England to destroy many Labour shire counties.

The Government cannot cope with the reality that what might seem from London to be leafy and suburban shires elect Labour-controlled or Liberal authorities with no overall control. They will do almost anything to stifle those authorities. They have failed to realise that many of those shires, such as Cumbria, Northumberland, Lancashire, Cheshire and Derbyshire, have been fearfully damaged by Thatcherism in the past 14 years and are unlikely ever to be predominantly Tory again. Their heavy industry has been removed, their manufacturing has been decimated, the public transport infrastructure has been wrecked and when rail is privatised there will be even further damage. Now even rural and agricultural communities are being thrown into disarray and even penury.

Increasingly, shire counties, like other local authorities, have had to step in to generate economic activity to shore up the crumbling elements of the private sector, to bolster training, to help the unemployed. The hon. Member for Scarborough (Mr. Sykes) got quite worked up about the virtues of the market, which he described as the best system ever devised for delivering goods and services. I will not go into that argument with him, but he should recognise that the market is also a brutal system from which people at the bottom end of it suffer. Occasionally, and often when there is a recession, people have to be rescued from the market.

I am extremely proud to be a Lancashire county councillor, although I shall no longer be one after a couple of weeks, and to have been part of a successful and popular authority. In the Thatcher years, Lancashire trebled nursery places, despite a funding system which militates against it. All children are admitted to school at the start of the year in which they will be five. It has the best governor information service and governor support service for schools in the United Kingdom. Until Government cuts last year, it had by far the highest level of discretionary awards for students. It is the fifth lowest spender on education administration—less than 3 per cent. of its total budget. It has made a 50 per cent. increase in youth provision and has an unrivalled system of welfare rights and public information networks in every town and almost every community in Lancashire. All the key advances in public transport, such as they have been, have been to the credit of the local authority. In particular, I wish to mention Lancashire's green audit, which reached the final of the United Nation's conference in Rio and is nationally recognised as a major venture in environmental protection.

Lancashire Enterprises Ltd. is closely associated with the county council and has secured more than 20,000 jobs in the past 10 years. It has a huge programme of work with public and private sectors alike. It is involved in Europe, in training and in developing industrial premises. When the Government dumped Leyland DAF and said, "No intervention", Lancashire county council and Lancashire Enterprises got stuck in and promoted a management buy-out. Lancashire Enterprises will, we hope, be taking over much of the land—there are about 200 acres—to develop it as an industrial park. That has all been achieved despite the desperate financial situation in which Lancashire, along with all other authorities, has been put in recent years.

When I am out on doorsteps canvassing for the county elections, as I shall be doing again tomorrow, I shall be trying to persuade the electors to vote Labour and keep Lancashire Labour, but I will also be doing something that I hope Tory supporters will be doing: I will be trying to persuade people to vote for democracy, to say that the Government are instituting a Whitehall Conservative central office tyranny and that we, the electorate, will not put up with it.

1.3 pm

Mr. David Amess (Basildon)

One would sometimes think that those who reported on political matters outside this place discovered my constituency only after the events of 9 April last year. They got the events of last year wrong, and I regret the way that they have concentrated on reporting, still inaccurately, the events in my constituency since then.

Many of the reports come from quarters that I hold in great esteem. Only recently an article appeared in a Sunday newspaper all about my constituency. It seems to be the vogue to say that 10,000 people are out of work in Basildon. There have never been 10,000 people unemployed in my constituency. The figure is 6,500. That is far too many, but I am delighted to say that we had the largest drop in unemployment in the south-east last month. I hope that, with a sensible partnership between the private and public sectors in local government, that trend will continue.

The article allowed a socialist to comment on my election last year and my political future. In the middle of the article was a picture purporting to be the Conservative Member of Parliament for Basildon. I looked closely at the picture and found that it certainly did not resemble myself. It turned out to be the Liberal parliamentary candidate. So the scandal goes on. I hope that the television companies will allow me to have a half-hour slot in which I can broadcast to the nation about all the good things that have happened in Basildon since the general election and the local elections last year.

Until 11 May last year, I had to come to the House each year to talk about the capping measures and to criticise the awful, rotten socialist council that we had to put up with in Basildon. That socialist council was a disgrace and the Labour Front-Bench team knew it. Labour spokesmen and women, by sleight of hand, tried to distance themselves from that council.

Mr. Tony Banks


Mr. Amess

The only thing that the socialists knew how to do in Basildon was to spend money. They cruelly deceived people into believing that they could provide services at no cost whatever to the local taxpayer.

Mr. Banks


Mr. Amess

I shall deal with Newham in a moment, if the hon. Member for Newham, North-West (Mr. Banks) will contain himself.

It has been left to the Conservative council elected on 11 May last year to cope with the legacy of the socialist council. In that election, 15 Conservatives stood and 15 were elected. Every socialist was defeated because the residents of the district wanted a change. Why did they want a change? It was because the local socialists were hostile to private sector involvement in local government.

To the socialists in Basildon, the very word "profit" was a dirty word. One could not possibly make a profit. Everything had to be done by collecting local and national taxes. That is why we had the highest community charge in the country. Our standard spending assessment was 198 per cent. above the rest of the country. For those reasons, every year I had to come to the House during the one-and-a-half or three-hour debate to speak about the capping orders until the events of 11 May last year when local residents voted for a change.

The legacy that has been handed to the Conservatives is a local and national scandal. A large sum of money was borrowed. Now local residents are having to pay back that money at ridiculous charges, presumably because incompetent advice was given to councillors by certain individuals.

The socialists talked only about Basildon. The council that I represent is shared with my hon. Friend the Member for Billericay (Mrs. Gorman). It was not only Basildon council: it covered Billericay, Wickford and Basildon. But the socialists' mentality disfranchised everyone in my hon. Friend's constituency because those people had money. So the socialists talked only about Basildon. Even the council logo, such as it was, never mentioned Billericay and Wickford. That is why I am delighted to tell the House that the nuclear-free zone signs in Basildon have been taken down. Of course, my defeated Labour opponent is such a bad loser that he has spent the past year trying to take out a prosecution—

Mr. Matthew Carrington (Fulham)

Can my hon. Friend assure the House that his constituents do not feel any less safe for not having those signs?

Mr. Amess

My hon. Friend knows only too well that, when the signs were erected, it was said that the Labour leader of the council telephoned Mikhail Gorbachev and asked, "In the event of a nuclear conflict, can you ensure that the raid avoids Basildon?" It is ridiculous. It is insulting that one of the signs was placed outside GEC Avionics, which employs 2,800 men and women who are trying to defend our country.

My bitter, defeated Labour opponent has wasted local and national taxpayers' money trying to take out a prosecution against me and Conservative councilors because we had the cheek to take down the signs. He tried to persuade the local police that we had stolen them. I do not know where we were supposed to have hidden them, but he went to the police and accused us of theft. The police asked the council whether the signs had been stolen, and the council said that they had not. Yet my opponent insisted that the matter be referred to the Crown prosecution service. That has cost a huge amount of money and wasted the time of both the police and the CPS.

Never let me again hear a socialist in Basildon talking about law and order and about having more police on the streets. My bitter, defeated Labour opponent wasted time and money in the most extraordinary way.

Mr. Ken Livingstone (Brent, East)

Does the hon. Gentleman recall that the former Greater London council declared London a nuclear-free zone, and that three months later the Gallup poll in The Daily Telegraph showed that 54 per cent. of Conservative voters in London thought it a good idea? Does he think that they were secret lefties, or were they people whom he would not want in the Tory party?

Mr. Amess

I assume that that must have been the same Gallup poll that last year predicted that I would lose my seat and that the socialists would form the next Government. At that time, I was living in the constituency of the hon. Member for Newham, North-West, but I did not feel any safer by having the nuclear-free zone signs.

Mr. Denham

On the point about wasting public resources on police investigations, will the hon. Gentleman extend his remarks to cover the costs of the spurious allegations about election expenses made by my defeated Conservative opponent, but which led to no police prosecution? They did, however, lead to the prosecution of the Conservative agent for fraud.

Mr. Amess

I would not wish to intrude on private grief in Itchen. However, I know Christopher Chope extremely well and I should be very surprised if he behaved in an ungallant way towards the person who defeated him in the general election.

I am delighted that this week in Basildon we have unveiled new signs. They signal a new era—a partnership in local government between the private and public sectors. The signs say "Welcome to Basildon" and they have been placed on the Al27 and the A13. Above them is the new council logo, which incorporates the districts of Laindon, Wickford, Billericay and Basildon.

Unlike the awful former socialist council,. we welcome the private sector in Basildon. That is why yesterday, in the House, we launched the "buy competitive British goods from Basildon campaign". Basildon district council and Conservative-controlled Essex county council will together encourage business men and women to invest in the area, so that goods and services may be traded together in partnership.

The only employment that Basildon socialists understood was district council employment. That is what they thought jobs were all about. The former socialist Basildon district council employed 1,200 people—not to give advice on housing or to ensure that pavements were level so that elderly ladies did not trip over or that lamp posts were properly lit, but to guarantee that socialist propaganda was put out every day, every week and every month.

The socialists' message was crude—"Aren't the Conservatives awful? They are to blame for everything. Aren't the socialists marvellous?" On I I May last year, the socialists had their answer. That is why an historic and wonderful change occurred.

Of course the past year has been difficult. My hon. Friend the Member for Beckenham (Mr. Merchant) mentioned the traditional position in respect of local government officers. I know only too well from my days as a Redbridge councillor how professional were that council's officers. I was horrified when it came to my attention that the former socialist Basildon district council would on occasion appoint only officers who pledged themselves to supporting their fellow brothers and sisters. Those people spent all their time, while being paid by myself and other rates and community charge payers, putting out their vile and vicious propaganda.

When the Conservatives took over on 11 May last year, obscene telephone calls were made to Conservative councillors, which was an absolute disgrace. Somehow, my own private telephone number was given out to some lady council officers. The telephone would ring at 10 pm, 11 pm, I am or 3 am. My wife and small children were not greatly amused by those telephone calls from people—who seemed to have had a little too much to drink—arguing about the awful Conservative council and the fact that they might lose their jobs.

Officers who said publicly beforehand that they would never again work under a Conservative-controlled council or a Conservative Government should behave honourably, examine their consciences, and decide whether they are right to remain local authority employees.

I pay tribute to the wonderful job that the Conservative council is doing in very difficult circumstances. Typical of the misreporting that has occurred is the case of the Town Gate theatre. That project's builders took it to 13 other local authorities, which all said no. In this day and age, who would think that a council could somehow find the money to build a huge theatre? As we all know, a theatre is used not just by local residents but is a regional facility.

There was no money to sustain the theatre—it was all borrowed. The interest charges to service the debt amount to £1.5 million a year. However, I am delighted to tell my hon. Friends the Minister for Local Government and Inner Cities and the Parliamentary Under-Secretary of State for the Environment, who have both been to Basildon, that the council is now in serious negotiations with an interested party and hopes to make an announcement about the theatre.

Huge amounts of money were borrowed to meet the costs of sports and leisure facilities. Such projects would have been better realised in partnership with the private sector.

It has been misreported that there have been local authority by-elections in Basildon that the Conservative party has lost. That is untrue. There was one by-election two weeks ago, when a socialist councillor resigned, left the country and ended up in New Zealand. It is true that the socialists retained their seats, but what did not receive publicity was the fact that the Conservatives moved up from third to second place.

On the same day as the county council elections, there is a district council by-election, caused not by a Conservative throwing in the towel, but by another socialist doing so because, believe it or not, he says that he is too busy working for a housing association—although we all know that socialists are supposed to oppose housing associations. Not one Conservative councillor has thrown in the towel, but two socialist councillors have already done so.

I pay tribute to the work that the new Conservative council is now doing. The leader of the council has announced that from now all services will be tested in the market because we owe it to people to provide high quality services at a competitive price. As a result, in years to come, when people outside the House report on political matters, I trust that they will be able to state that the new Conservative-controlled Basildon district council has led the country in a successful and beneficial partnership between the public and private sectors.

1.22 pm
Mr. John Denham (Southampton, Itchen)

The debate has been interesting, if only because we now know that the hon. Member for Basildon (Mr. Amess) has not put his telephone number in the telephone directory as I assume that the rest of us have done so that our constituents can ring us up without having to hunt to find the number.

The debate has, in many ways, been bizarre as the Government have set out their agenda in the belief that the central issue in the provision of local government services is the extent to which those services are privatised. The Government are following an agenda which, although it has important elements, does not include the central issue in the provision of local services by local, democratically controlled councils.

The myth has been constructed—although it has been shot down many times by Opposition contributions—that the idea of partnership between local government and the private sector is opposed and resisted by and alien to Labour local authorities. That is not true. Looking around my constituency, one sees a wide range of appropriate partnerships operating between Southampton city council and the city of Southampton. The waterfront has been opened up, and the town quay and Ocean Village have been created. That scheme involved co-operation between the private and public sector; private housing and commercial development have been carried out by the private sector, and social housing has been provided by the council with the housing associations.

The regional film theatre is to be provided by the council, the private sector and other public bodies. An agreement will soon be signed by a private sector company for a new development with an ice rink and a swimming pool. The finest art gallery outside London, certainly in the south-east of England, has been refurbished as a result of a public sector partnership between the city council and the county council as it is not a profit-making exercise. Partnerships with housing associations and in some cases with private developers have meant that in the past year some projects that I set in train as chair of the housing committee will result in the creation of 250 new family homes.

Those are just a few examples. Since 1985, Southampton Labour council has been acting in a way that is far more typical of the far-sighted and forward-looking role of local authorities than the myths produced by Conservative Members today. The council chooses whether it is more appropriate for the private sector or the public sector to provide a service. The one issue that strongly divides us is the idea that wage cutting should be a basic element in the approach to the delivery of local government services. When I was the chair of housing in Southampton, I was pleased that the vast majority of building maintenance work in council housing was won by the in-house bid, but I was not pleased with the fact that for skilled tradesmen in those services it was likely to lead to a loss in income and benefits worth about £1,500 a year in order to retain their jobs.

The hon. Member for Teignbridge (Mr. Nicholls), who spoke earlier in the debate, came along with a walletful of consultancies. No doubt he believes that his reward for those consultancies is the right to reduce the income of craftsmen who work for Southampton city council by £1,500 a year. Some of us believe—this may be a fundamental divide—that a moral issue is involved: that it is not moral to drive down the level of wages to whatever can be undercut by the private sector. That aside, it is clear that Labour-controlled councils work well in partnership with the private sector.

I said at the outset, however, that I do not regard that as the fundamental issue when it comes to the provision of local government services. The consumers of those services do not care very much who provides the services. They care about the quality of the services provided. They also care about whether they have access to those services when they need them. The one issue that has not been mentioned by any Conservative Member is what sort of services people get and whether they can get access to them.

A ridiculous and ludicrous situation is developing, in which an elderly lady who goes to her local social services department to find out whether she can have the services of a home carer now finds that performance marks are set down as to how long she will have to wait before she is interviewed, how quickly her letter should be answered and how soon the interview should take place, but that no standards at all are set as to whether she should obtain the services of a home carer.

As for real access to services, we find that there are enormous differences when it comes to the provision of services by local authorities throughout the country. For convenience, I have chosen to compare the performance of the bleak coastland strip of southern England from Dorset to Kent—solidly Conservative controlled—with the Labour-controlled shire counties. What a remarkable picture it presents. We must assume that in those Tory-controlled authorities the Tory philosophy that we have heard about this morning is being pursued to its fullest extent, that the full economic benefit of that approach has been gained and that better services are provided. In fact, that is not so.

It is not that there are huge differences in need between the north and the south. Unemployment is marginally higher in the north, though not greatly. Income is somewhat lower in the Labour-controlled shire counties and there are more people on low incomes in the Labour-controlled shire counties. However, when one allows for the cost of living, which is generally higher in the south, the differences are not so great. Yet despite the similarities between those areas there are enormous differences in the spread and availability of services.

Let us take, for example, a basic grassroots service—the availability of home carers for the elderly. We find that in that bleak grey Tory coastland of southern England there are eight hours of home carer time per 1,000 elderly people per week, compared with 14.3 hours of home carer time per 1,000 elderly people per week in the Labour-controlled shire counties. Only 4 per cent. of pensioners in those Tory-controlled southern counties have any access to a home carer, while 10 per cent. in Labour-controlled local authorities have access to a home carer.

Mr. Carrington

In the borough of Hammersmith and Fulham in which my constituency is situated—a Labour-controlled council—the council has a policy that denies access to sheltered housing to elderly people, no matter how poor and with no matter how little equity, solely on the ground that they live in their own accommodation and are owner-occupiers. Does the hon. Gentleman think that that is the right policy for that council to pursue?

Mr. Denham

I would not presume to comment on an allegation made about a local authority of which I have no knowledge. I have given a straightforward comparison —like for like—between local authorities with similar numbers of elderly people. Some are Conservative controlled and some are Labour controlled. On that straightforward comparison, elderly people in Labour-controlled shire councils have more than twice the chance of receiving home carer support to enable them to live in their own homes than they have under Tory councils.

If the Government believe that they have the key to the delivery of local government services, those figures need to be explained. They are simply explained by saying that Labour councils care a good deal more about elderly people in their areas, which is also reflected in more economic comparisons. Figures that I was able to obtain 18 months or two years ago show that the price of meals on wheels in those Tory southern heartland councils was £1.36 and in the Labour-controlled shire councils it was 89p. The burden then falls heavily on Labour-controlled district councils such as Southampton, to compensate for the neglect and incompetence of Tory county councils, to reduce the price of meals on wheels.

I have been able to find no significant difference in the needs of mobility and accessibility between people living in the Labour-controlled shire counties and those on the southern Tory strip. Yet in Labour-controlled authorities the average per capita support for public transport is £3.54 per head, while in the Tory-controlled area it is £2, per head. That is an example of public sector and private sector integration. Bus deregulation is now not a matter of looking after one's own bus service, but a matter of how much the public sector puts in to provide a decent transport system. There is far more commitment to public transport and mobility in Labour-controlled areas. That means that there are more buses and people are better able to travel and get around.

Another area where it is easy to measure need is the provision of nursery education. In the child neglect capital of the south, 5 per cent. of under-fives are in nursery education, but in Labour-controlled shire counties 35 per cent. are in nursery schools or nursery classes. What is the explanation for that appalling neglect of young children and their education in the Tory south of England? It has nothing to do with arguments about ideologies and public and private sector partnership. As the Minister said earlier, the Government determine the level of service. On service after service, Tory local councils offer a poor level of service and few young children and elderly people have access to a decent service. That issue is much more important than which local authority services are privatised.

I can find no evidence of the apparent savings from privatisation being fed back into the system. One would have expected that the authorities that have done the most to privatise would have fed the money back into extending services to more people who need them, but there is no evidence of that.

I am the first to accept that pupil-teacher ratios are not an accurate estimate of educational value—and neither is testing. The only question is value added in education. The Government provide no measure of value added in education, but the pupil-teacher ratio is better in the Labour-controlled shires than in the south.

I could go through many other issues, but I will not do so as I know that other hon. Members wish to speak. The point is clear, however: it is not sufficient to have an in-principle ideological discussion about the extent of privatisation of local government services. The only question that matters to people outside is whether they will have access to the service that they need and whether it will be well provided. All the evidence shows that the answer is more likley to be no in a Tory-run county than in a Labour-run county. That is what the May elections will be all about.

1.33 pm
Mr. John Marshall (Hendon, South)

I have listened with some interest to the hon. Members for Lancshire, West (Mr. Pickthall) and for Southampton, Itchen (Mr. Denham). The hon. Member for Itchen talked about poor levels of service. One of the services that the parents, children and charge payers expect of a local authority is the provision of a decent and successful education. The hon. Gentleman could have told the House which local authorities produce good A-level results and which produce poor results. I was interested to hear that he objected to the fact that the Government do not produce tables of value added in education. However, they produce tables of school results, but the hon. Gentleman did not show much enthusiasm.

Mr. Denham

There is a great difference between the results of testing, which have built into them influences such as social class and parental income, and value added, which measures the extent to which a child gains from school. A-level results and results of other testing, which do not take value added into account, are very misleading.

Mr. Marshall

Parents want good GCSE and A-level results for their children because they provide the opportunity for their children to enter further, higher and university education. It is noticeable that the local authorities that produce good results are Conservative councils and those that produce bad results are Labour councils.

It is no use the hon. Gentleman saying that one local authority spends more than another on education, because we all know which local education authority spent more than any other; the late and unlamented Inner London education authority spent a great deal, but produced some of the worst examination results. It did not care a tinker's cuss for standards, allowed schools such as Highbury Grove school in Islington to go downhill, and forgot that parents sent children to school so that they could go on to higher and university education.

The hon. Member for Lancashire, West talked about the Government reducing local authorities' democratic control. The Conservative party should take no lessons from the Labour party. It was a Labour Government who imposed on local authorities the obligation to destroy grammar schools, regardless of the wishes of parents and teachers and of the standards achieved in those schools. Under the Shirley Williams Act, there were no parental ballots on getting rid of grammar schools; it was done by diktat of the Labour Government. The reason why there are still some grammar schools is that some courageous Conservative councillors were willing to cause delays because they knew that Baroness Thatcher would give them the freedom to retain those centres of educational excellence.

How dare a Labour Member talk about democratic control when the previous Labour Government restricted the right of local authorities to sell council houses? How can a Labour Member talk about creating greater economic activity when the Labour party is committed to reintroducing a Greater London council? The GLC was guilty of waste, extravagance, duplication and delay.

When the hon. Member for Brent, East (Mr. Livingstone) was leader of the GLC, the disagreement between it and the borough councils destroyed tens of thousands of jobs in London. When he was in control of the GLC, I was a local councillor in Ealing. My council applied to the GLC for permission to create a pedestrian crossing. It took the GLC 13 months to give us the permission and took us 13 days to create the crossing. No one should say that the GLC, or the son of GLC, would generate economic activity; it would generate only delay, waste and extravagance in London.

The hon. Member for Lancashire, West also spoke about the desirability of tendering but said that compulsory competitive tendering was wrong. That is absurd, because we all know what happened in the days before CCT. It was sometimes difficult to get Conservative councils to go out to tender and it was impossible to get Labour councils to go out to tender. Does the hon. Member for Lancashire, West believe that if there were no compulsory competitive tendering the good people of Haringey would go out to tender, that Camden council would go out to tender or that Islington council, of which you were once a distinguished member, Mr. Deputy Speaker, would go out to tender? Of course they would not. Competitive tendering is anathema to the socialists of those councils which just do not believe in it.

It is true that under CCT the hours that people work have sometimes been cut. Let us consider what happened before CCT. When I was chairman of the local services committee in Ealing, I went round to look at people at work. From midday onwards, although the workers knew that we were coming, we could not find them. The excuse given was that they must have gone on to the next job. If they had gone on to the next job, I suspect that it was being done in the private sector rather than in the local authority sector because we could not find them. We all know what happened. One did not see a refuse collector in London after midday before compulsory competitive tendering.

There is no doubt that people were paid for a 38-hour week, but they certainly were not working one before CCT.

There has been a sea change in the attitude of local authorities to the private sector. In the 1960s and early 1970s, local authorities would say that they believed in the private sector, as shown by the fact that they rented out a kiosk in the park or on the beach in the summer. Local authorities were quite unwilling to do anything to generate savings through competitive tendering in their major activities. They always claimed that there could be no improvement in the quality of service. It was claimed by council after council that there could be no savings.

I heard, as I am sure the Minister heard, the odd Conservative councillor in the 1970s say, "We are not putting that out to tender because we shall not save any money." That is the arrogance of monopolies throughout the ages. It was believed that, because a particular service had been run in a particular way by a certain council for 20 years, there was no scope for providing a better service or a more economic service. Events have proved those absurd claims to be false.

I pay tribute first to Wandsworth council, the local authority in London which did most to popularise competitive tendering. I also pay tribute to my hon. Friend the Member for Welwyn Hatfield (Mr. Evans), because in his business career before he came to the House he was one of those who showed up the incompetence of direct labour organisations and the benefits that could come from compulsory competitive tendering. I also pay tribute to the former Prime Minister, Baroness Thatcher, because she was the national politician who did most to popularise competitive tendering and to point out that socialism did not work in the town hall, just as it did not work nationally or internationally.

All my experiences in local government in Aberdeen and in Ealing suggest that competitive tendering is the only way to get a decent service. I discovered that early on when I was a member of Aberdeen council and we managed to get a motion through our watch committee saying that we should go out to tender for a demolition job. We did so, having been told by Labour members on the council that we were wasting our time and that there would be no saving. When the tenders came in, we realised that the lowest tender, from an outside contractor, would lead to a saving of 40 per cent. What did Labour members of the city council do? Did they say, "Well done, we shall take that cheaper contract"? Of course they did not. They voted for the higher contract. As an Aberdeen ratepayer, I wrote to the then Secretary of State for Scotland, Willie Ross. I am glad to say that he wrote back saying that he had instructed the council to accept the lowest tender, showing that there were some sensible socialists even in those days.

I later became chairman of the finance committee in Ealing. We had two boasts in Ealing: that we had the lowest rates in west London, and that the quality of our services persuaded the then Leader of the Opposition, the right hon. Member for Islwyn (Mr. Kinnock), to leave Liberal Richmond and to come to live in Conservative Ealing. We discovered that, whenever we went out to tender, there were dramatic savings to be made to the benefit of ratepayers. Compulsory compeitive tendering has resulted in a huge reduction in costs. All the surveys show that, because of CCT, local government services are less expensive in real terms than they were five, six or seven years ago.

Moreover, a much better service is being provided for the benefit of charge payers. Penalty clauses are always attached when a service goes out to tender so that if the service is not carried out, the contractor does not get the money. Under the previous system, the direct labour department did not always deliver the goods or collect the refuse, but it still got paid. The refuse collector was paid however good or however poor the job he did and, all too often, the job was second rate. Private contractors are also more alert to the possibilities of using a facility for the benefit of individuals than the old local authority manager was.

I welcome some of the developments that have taken place in recent months. In Berkshire—a county which some of us may get to know somewhat better in the weeks to 6 May—compulsory competitive tendering is about to save ratepayers £1.3 million as a result of a £30 million deal that the authority has done with Baptis, the Glasgow civil engineering company. The Government have recognised that the most efficient way of providing gipsy sites is through private enterprise rather than through the public sector. I warmly welcome that and I also welcome the fact that the Government have recognised the validity of the claim that I have been making for a long time—that boroughs such as Barnet should not be compelled by Government diktat to provide a gipsy site. There is nowhere in the London borough of Barnet suitable for a gipsy site.

We have seen advice from the Chartered Institute of Public Finance and Accountancy—a completely unbiased body—that private contractors are now obtaining a much higher percentage of new contracts. Some 68 per cent. of the local authority contracts going out to tender now go to private contractors rather than the direct labour department. Throughout the world, people are recognising that privatisation and competitive tendering are the real engines of economic progress. It is a great tragedy that there is one place in the world where that has not yet come home, and that is on the Labour Benches.

It is because of the different attitudes of political parties to private enterprise, standards and quality of service that there is such a discrepancy between the council tax in band G, at the higher end of the scale, in the London borough of Barnet, where it is £915, and in the London borough of Haringey, just over the road, where it is £1,211—nearly £300, or 30 per cent., more. Yet in the London borough of Barnet services are very much better because the council believes in co-operation with the private sector. In Brent Cross, it can boast the most modern shopping centre in London. It was developed in the 1970s by local government and the private sector in co-operation and, because it is managed by the private sector, it is popular, successful and profitable—three categories of service which the Labour party has never yet understood.

1.48 pm
Mr. Jim Dowd (Lewisham, West)

Alhough I have been here since 9.30, It am sure that it will come as a relief to some hon. Members to learn that I propose to limit my remarks to 10 minutes so as to allow other hon. Members the opportunity to speak.

I echo what: my hon. Friend the Member for Lancashire, West (Mr. Pickthall) said about the damage that has been clone to the relationship between local authorities and the private sector, and between local authorities and the Government, as a result of the almost irrational and certainly ideologically rooted hostility on the Conservative Benches towards local authorities and public sector undertakings in particular. The comments of the hon. Member for Hendon, South (Mr. Marshall) were as clear an example of that as one could possibly imagine.

It is almost like the Orwellian image of "public sector bad, private sector good", as though the Conservative Benches are staffed by pigs that have finally learnt to walk on their hind legs. The reality of co-operation between local authorities and the private sector—and the Government, as the debate relates to co-operation between the public and private sectors, and the relationship with the Government is a very important part of that—is as old as local authorities themselves.

The role of local authorities as contractors dates back many years. The introduction of a degree of compulsion, obsessively driven by the Conservative party in recent years, is merely another development of that. If that had been introduced in an even-handed and reasonable way, such great damage would not have been caused to local authorities. It was introduced with just one purpose in mind: to take services out of the control of local authorities. The idea was not to improve the level of service and value for money, but to remove the services from local authority control.

If we need evidence of that, we need only consider the comments of the hon. Member for Beckenham (Mr. Merchant), who recounted a list of the services that the London borough of Bromley had put out to the private sector. He wore that list as a badge of pride, but he did not reflect on the quality of those services. He did not say whether they were good, bad or indifferent. He believed that getting services out to the private sector was a good in and of itself. I believe that that serves the people of Bromley particularly badly. As I said to the hon. Member in an intervention, because of that ideologically blinded and dogmatic approach, the fraud squad has taken a deep interest in some of the manoeuvrings—I put it no higher than that—of elected Tory councillors in Bromley in attempting to discharge themselves of their responsibilities with regard to the provision of social services homes.

I wish to refer briefly to Lewisham, which is next door to Bromley. Lewisham is an inner London borough—unlike leafy Bromley, which is the richest local authority in Britain with the highest per capita income of any local authority. We to the north in Lewisham are not so fortunate, having a similar population in about one third of the area in which Bromley luxuriates. Bromley truly is a leafy suburb. I wish to make my position perfectly clear. Having been a member of Lewisham council for 19 years, I am not entirely objective in my assessment of what has happened in those years, but I believe that what I say will stand up to examination.

When the Institute of Local Government reviewed well-managed local authorities recently—I am sure that the Minister and his Department have a copy of the report —it identified Lewisham as the only London borough worthy of inclusion in the top 16 well-managed authorities. In fact, Lewisham was one of the top six well-managed authorities in Britain. In part, that is probably why in recent years the Labour majority in Lewisham has been higher than it has ever been. Lewisham council has the largest Labour group in London. We also have the largest political group of any kind. Conservative representation is down to a mere half dozen, and I believe that the borough council elections next year could erode that even further.

I look on that with one joyful eye and one tearful eye. I suppose that I am a "Pymist" in these matters. I believe that local authorities need a degree of balance. All democratic institutions require that balance. The fear of losing office keeps our politicians straight—or straightish, shall we say. I believe that what we are trying to do in political terms is often best examined through the eyes of those who do not agree with us. While we may never convert them, if we can at least substantiate in our own minds the validity of what we are doing, I believe that we are at least discharging our responsibilities properly.

Lewisham is committed to a lead role in urban regeneration in the borough and the partnership includes other public sector bodies, voluntary bodies and private sector interests. In an intervention in the speech by the hon. Member for Beckenham I mentioned one of those projects—Beckenham Place park. I accept that the issue is highly controversial, but there are many such issues to be resolved and I appreciate the strength of feeling in the area. The scheme was undertaken in the full knowledge that Lewisham council was obliged to secure the future of that park but did not have the resources to do so on its own. The expenditure over the coming years is immense and the only way to protect that valuable public asset was through a partnership with a private sector organisation. Whether that is the right path and whether the scheme will make progress remains to be seen, but the partnership with the private organisation was a responsible and reasonable action by the local authority.

Unfortunately, the partnership approach is undermined by the proliferation of central Government and arm's-length agencies. Inner London probably has more of those than any other area of the country. Their remit is prescribed by the Government irrespective of the needs of the locality, and that is a cause for concern. There is an apparent lack of central co-ordination of initiatives, which results in both gaps and overlaps between the agencies. That is also perceived as part of the attack on local democracy and the increasing centralisation of power about which my hon. Friends have spoken in detail.

Lewisham council, with its extensive knowledge of the economic, social and environmental profile and the needs and opportunities in its area, is the only body with the legitimacy to determine those priorities, co-ordinate the work of the agencies and decide how best to augment services and quality of life for people in the area. The plethora of initiatives for distinct topical issues such as community safety, employment and enterprise development in the borough and their high public profile could lead one to believe that they are the sum total of urban regeneration in the borough, but, in fact, they reflect just a small part of it.

I could go into detail about what is being attempted in Lewisham town centre, which is one of London's major regional and strategic centres. To a large extent, its future has been assured, despite the recession, largely due to the council's decision to dispose of its freeholding of the centre and go into partnership with a private company to secure the future of that centre. That raised a considerable amount of money which the council was able to redeploy through a sharp—and, I hasten to add, highly legal—manoeuvre. I use the word "sharp" in its prudent sense. We were able to build a new town hall on a site acquired in the mid-1960s for precisely that purpose. The net result is that without costing the poll tax payers of Lewisham a penny they are now saving £2 million in revenue because of the savings from rents and other costs that we do not need to pay for expensive office space. Even in an unfashionable corner of London such as Lewisham, office accommodation is extremely expensive.

We achieved much through Deptford city challenge, although city challenge is a double-edged sword. Lewisham was one of the pacemaker authorities in city challenge and one of only two authorities in London to secure the first wave partnership. It was not said then that that expenditure was instead of urban programme money —it was always trailed as being additional. Unfortunately, we are now losing out because all Lewisham's urban partnership bids have been lost. That is not supporting the partnership in the way that the local authority has a right to expect. In the first year, Deptford city challenge is over-programmed by about £300,000. We were originally told by the Minister's Department that that would be met from underspend in other city challenge enterprises, but we have now been told that the money will be taken from year five—if the city challenge programme reaches year five.

The local authority in Lewisham is undertaking many other aspects of development into which I will not go because of the time. It is not simply a question of deciding who does what. As hon. Members on both sides of the House have said, it is a question of seeing who does what best. That mixture is critical in providing value for money and the quality of life that all citizens in all local authority areas have every right to expect.

1.59 pm
Mr. Matthew Carrington (Fulham)

Underlining this morning's debate is a question about the fundamental role of local authorities—whether they should be enablers or providers of services. What is clearly emerging is that local authorities should be enablers of services because only then can they make sure that the quality, the value for money and the level of services given buy the providers reach what is deemed and needed by people living in their areas.

It is essential that local authorities recognise that their primary purpose is to ensure that the money that they get in, both from council tax payers and from central Government, is spent in the most effective manner, to provide the highest quality of service in the way required by those who live in the area. There is a fundamental contradiction, in that if councils provide services themselves, their ability to demand quality of that service is severely eroded. I should like to see compulsory competitive tendering moving the next stage forward—from some services to all services being contracted out—and the removal from councils of the power to provide any services, leaving them only with the power to commission services from outside bodies. Unless councils do that, they cannot demand the necessary quality and level of services, or get the value for money, that they require.

In many areas, we are moving towards a requirement that local authorities contract out. In many sectors, that contracting out could go one stage further. We are starting to see that happen in, for example, the accountancy function, which is a natural sector for which local authorities can buy in outside expertise and thereby give a higher quality of service. There are many other sectors.

The fact that what we are looking at is the level of services that local authorities provide and the level at which they do compulsory competitive tendering should not blind us to the great weakness of the present system. Some local authorities so skew the tendering process that they ensure that any realistic outside provider of services cannot conceivably comply with the contract conditions that they insist on setting.

Let me give at least one example—I could give many more, but time is short—from the borough of Hammersmith and Fulham, in which my constituency is situated. When it gave out the contract details for providing school meals within the education service, the specification for the quality of food was admirably, but also unreasonably, high. It defined such detail as the thickness of the skin of the lemons that were to be provided by the catering service and set out the criterion that the bananas to be provided were to have no brown marks on them. I dare say that you, Mr. Deputy Speaker, regularly shop for bananas, as all of us do, and will recognise how difficult it is to purchase bananas that have no brown marks on their skin. Needless to say, no private contractors have felt able to meet the requirements of the contract conditions. Needless to say also, the in-house tender from the council won the contract.

That raises the next question, which you, Mr. Deputy Speaker, will already be asking as you are well ahead of me in the argument: how does the in-house council contractor meet the stringent conditions? The answer is that no one knows, because no one checks. The council would make detailed checks of any outside contractor's performance of his contract conditions, but, if it were checking its own work force to see whether it was complying with contract conditions, the tendency would be to be a little more tolerant and to consider that there are certain matters that need a certain time—six months, a year, two years, until the next election, perhaps well beyond it—to put right. So conditions will not be so toughly enforced for the in-house service. That also leads to fraud and corruption.

There are severe question marks over what is going on in the engineering and borough highways departments of Hammersmith and Fulham council. It may or may riot be fraud. The departments are certainly loss making. But the council's toleration of a department making severe losses in providing services is much greater than it would be if an outside contractor said that it wanted to increase the price of the contract because it was making losses in providing the service.

When a council attempts to provide services and police them, it faces a conflict of interest which it is impossible to resolve. The only way round that conflict of interest is to make councils contract out all services. That cannot happen immediately because the private sector cannot provide those services immediately. However, in time it will be possible to provide those services. I hope that the Government and, in particular, my hon. Friend the Minister will look hard at encouraging and forcing councils to contract out more services. That is the only way in which, in time, we shall achieve a better, higher quality local government service.

2.6 pm

Mr. Harry Barnes (Derbyshire, North-East)

As I may be the last Member to speak before the Front-Bench replies, I remind the House of the subject of today's debate: the partnership between the public and private sectors in delivering local government services. All the speeches that we have heard from the Conservative Benches have stressed not the need for partnership between the public and private sector but the notion that the private sector should take over from the public sector. Conservative Members said that enabling authorities should allow private bodies to operate in local areas. They said that compulsory competitive tendering should be used to push more services into private provision. They said that the boundaries of public provision should be pushed back even further.

There is a different approach, however. My hon. Friend the Member for York (Mr. Bayley) discussed developments in partnership between public and private sectors, but that has been missed by Conservative Members and particularly by the Minister, who gave us an ideological tour when he introduced the debate, stressing special examples of what was important about private provision and giving us all the pluses in the development of 19th and 20th century capitalism. The Minister spoke about the development of the railways and said how important that private development was. However, it was all one-sided. He told us what had been achieved by capitalism but nothing about the problems that had been created. The vast problems of exploitation, deprivation and unemployment had to be handled by the public sector, which had to come in to correct what unrestrained private enterprise had done. The Government's arguments push us all the time towards unrestrained private sector activity in which the role of local councillors is limited. Their role is not to be involved in the running of services or in co-operating with the private sector.

Mr. Redwood

The hon. Gentleman heard only half of my speech. I made it clear that there was a vital role for local and central government. I made it clear that some people need protecting. They need services and help from the Government against the background of market capitalism. I wish that the hon. Gentleman would recognise that there was balance in my speech. I identified the role of both the government and the private sector.

Mr. Barnes

I listened to all of the speeches from the Conservative Benches, including that of the Minister. Apart from a discussion about bananas and Basildon, all the stress was placed on the importance of the private sector coming into local government. Thatcherism has produced the notion that anything can be privatised because public money will be made available for private services in what was previously the public sphere.

Indeed, the importance of such markets is stressed continuously by Conservative Members—except when it comes to the markets in ideas, discussions and arguments with the electorate, which are pushed to one side. In the argument about the opting out of schools, local authorities, trade unions and others are constrained in what they can say because otherwise it is held to be misleading information. The Government want to put only one side of the argument when people are making up their minds.

The stress on the private replacing the public is wrong. Public services were introduced to correct the results of unrestrained private enterprise. That even happened under the Tory party with education legislation in the 19th century. Old age pensions were introduced by the then Liberal party early in this century, and the welfare state was introduced by the Labour party. None of that was done with the aim of entirely changing the basis of society or doing away with markets; it was done because it was recognised that other elements had to be included and that there had to be a measure of public responsibility.

There is considerable scope for public provision supplementing private provision. There is a problem with dioxin at Stanton plc in the Staveley area of my constituency—it spills over from the problem in Bolsover. We need a public body, perhaps an environmental protection agency, to draw together all the different threads and to assist the company from which we assume the dioxin comes. There needs also to be assistance for the farmers in the area whose future prospects have been threatened. There are plenty of opportunities for the public sector to work with the private sector to ensure the protection both of jobs and of the community.

The whole notion of civic service, civic duty and civic pride has been hit hard by a mass of Government legislation. We had reached the stage where we almost believed that the Government could not go any further in hammering local authorities. They introduced the poll tax, which was the unfairest tax system ever introduced into a western democratic system. They introduced the nonsense of standard spending assessments, which are still in operation. We thought that that was the end of the road in terms of what the Government could do to local authorities and many of us began to wonder about the role of authorities, which basically were becoming agents carrying out policies determined by central Government, but now it seems that we are to go even further down that road with the notion of enabling authorities.

In Derbyshire, there has been an examination of local authority boundaries, areas and functions, and much of the discussion has centred on what the boundaries should be. The really important discussion, however, is whether local authorities will become just enabling authorities and local councillors will have less and less input into decisions about their areas and thus become less accountable to their electorate. We should be talking about extending democratic provision. Where there are shortcomings in the work of councils, we should insist on improving the democratic arrangements so that people are drawn into the work of the local authority and can influence its decisions. It should not be a matter of the private sector coming into authorities to correct any problems.

I want to deal with the problems being faced in Derbyshire and the terrible system of standard spending assessments. Since that system was introduced, Derbyshire county council has received smaller increases to compensate for inflation than any other shire county. It has received only 60 per cent. of the provision for Berkshire or Hertfordshire. The Minister argues that the reason is that Derbyshire's population has declined while Hertfordshire's has increased, but that is incorrect. Derbyshire's population has grown by a larger percentage than Hertfordshire's over the last two or three years and bigger increases are projected. The authorities in my constituency—including Chesterfield borough council and North-East Derbyshire district council—are at the bottom end of standard spending assessment and grant provision. There is no reason for that. North-East Derbyshire is 365th out of the 366 district councils in England and Wales.

We know the system is fiddled and we want it altered. It is nonsense to go on as we are when provision needs to be made for that area. No one could describe the authorities concerned as profligate, but they are seriously hit by the present arrangements. Councils in some areas receive two or three times more in standard spending assessment and grant than does Derbyshire. How is any authority expected to manage in those circumstances?

2.16 pm
Mr. Henderson

With the leave of the House, I will comment on some of the arguments made in this interesting debate on a number of important issues affecting communities throughout the country. It is understandable that some hon. Members have had to leave early, and I thank those who informed me that they could not stay for the end of the debate.

The hon. Member for Teignbridge (Mr. Nicholls) fell short of convincing the House that he was objective in his assessment of the delivery of local authority services. If he had paid more attention to the old axiom that people who live in glasshouses should not throw stones, he might have convinced the House of his objectivity. He missed the whole point about local authority services by not paying any attention to the views of communities that are dependent on them.

The hon. Member for Chingford (Mr. Duncan-Smith) also fell into that trap, believing that compulsory competitive tendering could solve all the problems of delivering local authority services when it is clear that even the Audit Commission does not acknowledge that point. Its recent report indicated that some costs increased when compulsory competitive tendering was introduced. If I had more time, I might be tempted to give more details.

I contrast those hon. Gentlemen's remarks with those of my hon. Friends the Members for Ipswich (Mr. Cann) and for Lewisham, West (Mr. Dowd), who have no objection to the delivery of various local government services but want to see even-handedness, quality being brought to the fore, and efficiency improvements not being made at the expense of exploiting many workers who are already low paid.

The hon. Member for Beckenham (Mr. Merchant) attempted to admit that ideology had sometimes played more of a part in the argument than might be wise. That was demonstrated in the speech of the hon. Member for Hendon, South (Mr. Marshall), and even more so in that of the hon. Member for Basildon (Mr. Amess).

My hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) emphasised the damage done to democracy by the establishment of unelected quangos operating in areas affecting local authorities. The hon. Member for Scarborough (Mr. Sykes) recounted sitting on his grandfather's knee. He tried to persuade us that he was a generous character who could have appeared in a Hovis commercial, but he only convinced us that he had already played a part in "All Muck and Brass". Certainly the conciliatory approach that the Minister sometimes attempted to adopt was completely missed by his hon. Friend the Member for Scarborough.

In their excellent speeches, my hon. Friends the Members for York (Mr. Bayley) and for Southampton, Itchen (Mr. Denham) gave prominence to people's choice. The key question in the delivery of local government services is: are people being given the chance to receive what they want at the price that they are prepared to pay? The hon. Member for Southwark and Bermondsey (Mr. Hughes) said that compulsory capping had often intervened to prevent that.

My argument with the Government is that they tried to use the delivery mechanism as a smokescreen to avoid real debate about the other local government issues. There is no major disagreement on delivery mechanism between the various political parties that have participated in the debate. We all recognise that, in our economy, partnership is crucial in the development of local government services.

Tendering has always taken place and local authorities up and down the country have for many years been involved in tendering services where they believe that they can be better provided on a contracted-out basis than a direct basis. There is every suggestion that that will continue to be so. On a number of occasions, Opposition Members said that tendering itself does not guarantee an improvement in efficiency. I said that good management, whether of direct provision or contracting out, was important for local authorities.

The real issue concerns democracy and local people having the right to determine what happens to them in their communities. It involves local people having the right to determine what level of services they want and how they should be provided. The main issue involves local people having access to what is happening and the results of auditing procedures undertaken on their behalf, and a say in the way in which services are delivered. It involves stressing the importance of community provision, and enhancing individual liberty and opportunity.

Those issues are central to local government and will be to the fore in the campaign between now and the county council elections on 6 May. Those arguments and priorities will ultimately have the support of the British people, which will be shown in the county council elections on 6 May.

2.22 pm
Mr. Redwood

With the leave of the House, may I say that I am grateful to all those whose contributions have produced a good debate on the vital subject of the range of local authority responsibilities and services, and the best means of delivering them.

The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) challenged me on whether I stood by the things that I had written 16 years ago. I was flattered and not a little surprised that the Labour party researches its future policies in my articles written in 1977. I repeat what I said then. The community land legislation was wrong and the Conservative Administration were right to repeal it. Having both a structure and a local plan can be wasteful, which was why we moved to urban development plans in big urban areas and why we are asking whether each shire area needs one or two councils and whether it needs one or two plans. The answer will depend on local circumstances.

I said that housing could often be better provided by institutions and people rather than councils, which has been shown to be true. Most rented housing is made available through housing associations with a mixture of private and public finance. Some councils have stopped owning houses, but they still have excellent housing policies in their areas—often better than those of councils that have clung to the old, outmoded ideas that I was beginning to question as long ago as 1977.

Better recreational facilities can often be provided by using private expense. Local councils may wish to buy season tickets or offer help to individuals or groups who need access to those facilities. They may do better by their local communities organising it in that way than by buying and owning the facility.

Mr. Henderson

Does the Minister stand by his comment in 1977 that all swimming pools should be privatised?

Mr. Redwood

Swimming pools are often better run by the private sector. I hope that many will contract out or market-test the facilities. Many new facilities can be well provided by the private sector. I am keen to encourage it, unlike the hon. Gentleman, who seems to be saying that if something is not provided by the public sector it does not count and it is not a public facility. Those facilities that are provided at private expense are every bit as much public facilities, if open to the public, as are the others. The hon. Gentleman may want all golf courses to be municipally owned. I am happy to have a lot of private sector golf courses open to those who wish to use them.

The hon. Gentleman said that he and his party are still not in sympathy with standard spending assessments. However, both he and his party will, I believe, agree that there needs to be a method of calculating exactly how much grant each local authority receives. I do not think that the Labour party would argue the case that we should just send a fixed amount per head for every person in the country to the different local authority areas. They want a more sophisticated system than that, as well they might, because it tends to be their councils that receive far bigger grants as a result of the sophistication that we have introduced into the system.

I say both to the hon. Gentleman and to his hon. Friends who raised the standard spending assessment issue, and also to the hon. Member for Southwark and Bermondsey (Mr. Hughes), representing the Liberal Democrats, that we are now reviewing again this year the principles and the figures used in the SSA calculations. I should be delighted if the Labour party—even, perhaps, the Labour-Liberal alliance, or the Liberal party on its own—could come to an agreed view about how the SSAs should be calculated. We should be prepared to take that view fully into account in our considerations.

I have asked local government, of all parties and of none, to give the Department their best views. Again, I would hope that the local authority associations would try to bring their views closer together. I fear, however, that this year, as in past years, the interests of urban authorities will often be seen to be different from those of rural ones and that the interests of big towns will be seen to be different from those of villages and small towns. Sometimes, Labour authorities have a different view of their interests from Conservative ones, and so forth.

It is not easy to bring it all together. Ultimately, only the Government and the House of Commons can decide exactly how the money is to be distributed. But it is a genuine consultation. I have not decided what the answer should be in advance; nor has the Secretary of State. We are open to discussion with all parties that are seriously interested in SSAs.

The House might like to know that I have not yet had a communication from the hon. Member for Newcastle upon Tyne, North, or from the shadow Secretary of State for the Environment, setting out what Labour's view is. I shall, of course, keep the House posted if they come to an agreed view among themselves.

I fear also that the House did not receive a completely frank account today from the shadow spokesman on the Labour party's policy towards compulsory competitive tendering. I think that progress is being made. Many Opposition Members agreed that competitive tendering can be valuable. Some agreed that competitive tendering and market testing can produce improved quality. Many agreed that it can often produce lower costs. Many also agreed that they have often been doing it in Labour authorities. But on the crucial issue of what the Labour party would recommend doing if a local authority refused to market test anything and was demonstrably inefficient, we did not get quite the clarity that we seek. Perhaps another debate will be needed to tease out that point.

In advance of the local elections—important elections to elect people to make big decisions about local services and the expenditure of large sums of money—there is naturally some considerable interest in the cost of the services and the range of services provided by the authorities controlled by the different parties. It is a pity that today the Labour party has seen fit yet again to try to mislead the public about what exactly is the difference in the cost of the provision of services for taxpayers in Labour and Conservative areas.

It is necessary, therefore, once again to remind the House that it is nearly always dearer to live under Labour local government than under Conservative local government and that the gap is now more than £100 per household for band C and band D households throughout the country. In every case, the highest taxes are imposed by Labour authorities and the lowest by Conservative authorities. Among county councils, Northumberland is the highest and Hampshire the lowest, and the gap for a band C taxpayer is almost £150 between the two. Among metropolitan districts, Newcastle, which is well known to the hon. Member for Newcastle upon Tyne, North, sets the highest tax, and Trafford, which is Conservative controlled, sets the lowest. The gap is almost £250 between the two. Among London boroughs, Greenwich, which is Labour controlled, charges £550 for borough services, compared with Westminster, which is Conservative controlled, at £117—an enormous gap of more than £400. That is the truth.

Mr. Dennis Skinner (Bolsover)

The Government fiddled the grant.

Mr. Redwood

The hon. Gentleman says that we fiddled the grant—

It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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