§ Mr. Paul Murphy (Torfaen)I beg to move amendment No. 4, in page 19, leave out lines 21 to 45.
§ Madam Deputy Speaker (Dame Janet Fookes)With this it will be convenient to discuss also the following amendments: No. 3, in clause 26, page 20, line 23, after '1996', insert `and
(c) hold public meetings in their areas to discuss the service delivery plans.'.No. 9, in page 20, line 26, at end insert—?(3A) A council's service delivery plan shall be published in English and in Welsh.'.
§ Mr. MurphyI hope that these amendments will not occupy the House for long.
The three amendments which lie in my and my hon. Friends' names refer to cross-border trading or tendering, to clause 25, which we discussed at some length in Committee, and to service delivery plans. I refer to the arguments that the Government made in Committee. We said then, and we say today, that the Opposition agree with the idea of cross-border trading or tendering. We believe that there is an opportunity for different local authorities in Wales, not only to trade with one another, but to give one another their skills and the expertise that all our local authorities in the Principality have established over many years. In Committee, Ministers said that they would reconsider the operation of clause 25.
Our reservations about the clause were twofold. First, we thought that the geographical restrictions that the Government were to impose on cross-border trading were too restrictive. We said that if it were possible, for example, for the skills in Anglesey to be used by a council in south Wales, that should be a reality. I believe that it was the Parliamentary Under-Secretary of State who said that he would re-examine those geographical limitations.
The other limitations, which may be more serious, referred to those parts of the clause which, in turn, refer to compulsory competitive tendering. Effectively, those 822 sections say that cross-border trading cannot operate if the services concerned are covered by the Government's regulations regarding compulsory competitive tendering.
There are two problems. The first is that, as recently as this week, the Parliamentary Under-Secretary of State for the Environment, the hon. Member for Banbury (Mr. Baldry), in reply to a written question, said:
Compulsory competitive tendering is being extended to six professional support services, in a phased programme—legal services, professional construction and property services, IT, finance, personnel, and corporate and administrative services." —[Official Report, 14 June 1994; Vol. 113, c. 346.]Some of those are the very services which, we believe, could be offered by one local authority to another.
§ Mr. David Hanson (Delyn)Is my hon. Friend aware that on 27 April 1994 the very same Parliamentary Under-Secretary of State for the Environment said at a seminar that he believed that it should be possible for cross-border tendering to take place? I should be interested to hear later whether the Parliamentary Under-Secretary of State for Wales agrees with that presumption, which has already been put forward by the Department of the Environment at that conference.
§ Mr. MurphyI hope that in reply the Minister will take those facts into account because they seem to be contradictory. I hope that the Parliamentary Under-Secretary of State for the Environment was right and that cross-border trading could operate in the sectors that I mentioned.
The other aspect of CCT that is affected by clause 25 is that of the areas that are already covered by compulsory competitive tendering. The most significant one is that which refers to the highways functions of our present county councils. The Minister will recall that, in Committee, he and his right hon. Friend the Secretary of State jointly announced eight what they called "centres of excellence" in Wales. Those would relate to the highway functions, and they would also have taken over much of the work of highway DLOs in Wales, which are currently run by our county councils. The Government agree—and we agree with the Government—that they are centres of excellence.
The problem is that if those centres of excellence are unable to take part in cross-authority trading and tendering, their viability would be put at serious risk because they would be restricted to the management of trunk roads, motorway networks and only 35 per cent. of the work within the local authority's boundaries. There is some doubt about whether those centres of excellence of highways provision could then apply.
The Government also said that they would consider the Council of Welsh Districts' safeguards, which were outlined in Committee because obviously, as the Minister said in Committee and might say again this evening, they were worried about the risk that would be accepted by the local authorities were they to undertake cross-border trading. I said in Committee—the CWD indicated its support on that issue—that the district auditor, the work of the council through its committee system, and the Secretary of State's powers under sections 13 and 14 of the Local Government Act 1988 are sufficient safeguards to protect, not only local authorities that engage in trading, but other local authorities.
823 I do not think that cross-border trading will harm the viability of our local authorities. It can bring only good to all our authorities in Wales, especially now that they are becoming smaller. We fear that some of the excellent services that are provided, especially by the county councils, should be safeguarded and given to those other local authorities. The last thing that we want is for it to be used as a means simply of privatising more local government services. I do not think that that is under consideration at the moment. What is under consideration is the best delivery of services by the 20-odd—I am not quite sure how many it is now—unitary authorities in Wales.
The purpose of amendment No. 3 is to widen the public debate about service delivery plans. The Government—in our view, rightly—are indicating that those plans should be published. We are saying that those published plans could well be the subject of public meetings. At those meetings, the public who are worried about county council services such as adult education and other matters with which the county deals would be safeguarded by the service delivery plans of the new unitary authorities.
It is also important because the service delivery plans should include the safeguards that the Government intend for the voluntary organisations in Wales. We believe that the Government should give proper guidance to the new transitional committees, and that that guidance should contain recommendations for transitional funding for voluntary organisations in Wales. That has been discussed at length in Committee and I do not want to elaborate today.
Those are our arguments. The Government said that they would return to the Floor of the House to answer the arguments that we and the local authority associations had made to them about CCT.
§ Mr. HansonI do not wish to detain the House for long, but I hope that the Parliamentary Under-Secretary of State will answer a couple of arguments.
I shall not revisit the discussion that we had in Committee. There was an extensive discussion about the Government's original intentions for lead authorities, which were outlined in the White Paper and which indicated the possibility of having centres of excellence within local authorities and thereby allowing some cross-border trading. A centre could be established with a lead authority providing a service which other authorities, such as my own county of Clwyd, could buy in to improve their own local services more efficiently and cost-effectively. As a result of the discussions in Committee, the Government agreed to consult various authorities and agencies in Wales on how best to overcome the matter.
It was obvious from what Lord Rodger of Earlsferry said in another place that the Government intended that cross-border tendering should no longer be part of the fabric of local authority organisation—for reasons, it appeared to the Committee, of pure dogma. I hope that the Committee convinced the Under-Secretary that the Government's objectives for CCT would not be negated by cross-border tendering because everything that could be done under CCT would remain the same and the protections would be in place, but there would be the opportunity to provide what we believe the Government 824 want, which is cost-effective and efficient local services in a number of areas, highways being the one that we discussed most.
I want the Under-Secretary now to tell us the results of the consultation. I understand from a parliamentary reply that letters were sent out on 23 May with replies being sought by 7 June. What response did the hon. Gentleman have from local authorities and organisations on the issue of cross-border tendering? That is relevant to our debate today and I want their responses placed on the record.
The arguments that we advanced in Committee are still valid today. There is no good reason why there should not be cross-border tendering within the new local government structure. The Government have expressed several fears if cross-border tendering is allowed. The first is that the private sector would not be able to take part in certain services in which it is currently involved. That is a fundamentally misconstrued belief. With CCT, anyone who offers a cross-border service, whether from Flintshire, Wrexham or Denbighshire, will do so on the basis that he will win the tender because he has been competitive. Private organisations can still bid for that service and if they are the most cost-effective, the most efficient and in the best interests of the ratepayers, they will win the contract.
Secondly, the Government suggested that the lead authority would place a burden on its own ratepayers. For example, a lead authority such as Flintshire might set up all the infrastructure and expertise in-house to provide a highways service to Denbighshire and Wrexham, but at the end of the day those authorities might decide not to purchase the service. The ratepayers of Flintshire would then suffer a loss. However, local authority organisations have explained to the Government that the district auditor can step in and the Government's powers can be used to stop such a situation dead in its tracks if a local authority provides a service that then begins to lose money. Therefore, the Government's argument is negated.
The arguments for negating cross-border tendering do not hold water. The private sector, which the Government want to compete, can still compete and, if it is efficient, it will win. If, for whatever reason, a local authority finds that it is losing money on a service that it provides, the Government have the power via the district auditor, via councillors who would not wish to be surcharged, or via the Secretary of State's powers to end that service and provide an alternative method of service delivery.
Since the Committee stage, I have discovered that on 27 April the hon. Member for Banbury said at a conference that local government reorganisation would provide fresh opportunities for the delivery of services. He also said—and it is significant for this debate—that there were cases where a council's DSO should be able to deliver services to another council's area or for a joint body of several unitary authorities to provide a service.
I return to the point made often by my hon. Friend the Member for Caerphilly (Mr. Davies): if the hon. Member for Banbury intends to include in the forthcoming English Bill a facility for local authorities to provide a service, in co-operation with each other, to beat the system of competitive tendering—to allow, perhaps, Rutland to provide a highways service to a neighbouring authority such as Huntingdonshire—why will not the Welsh Under-Secretary do the same for Wales?
I am an Englishman representing a Welsh seat. I received the vote of Welsh constituents, but I was born in 825 England. I am a Member of a British Parliament. I reside in Clwyd. I do not want the residents of Saltney, one mile from Chester, to receive a service that is different from the residents of Chester, which is just over the border. I am acutely aware of the border as it falls in my constituency. If the Department of the Environment allows Cheshire county council to do one thing and the counties of Flintshire and Denbighshire to do another, I shall be angry and upset. There must be a level playing field between the Cheshires and the Clwyds and between England and Wales.
I rest my case. Tonight we want to hear from the Under-Secretary the detailed results of the consultation following the Committee stage. Does he agree with his Government colleague, the hon. Member for Banbury, or is Wales yet again to be the poor relation to England in cost-effective service delivery?
§ Mr. Gwilym JonesWe have had useful debates on this subject both tonight and in Committee. As we promised in Committee, we have consulted the local authority associations, although I cannot go through all the responses this evening. We believe that the powers for regulation are still needed, but I am sure that the House will welcome the fact that we do not intend to impose any geographic restrictions unless there is clear evidence of authorities abusing their freedom to provide services to authorities throughout Wales.
In the case of services subject to competitive tendering, we see no case for cross-border tendering for work such as refuse collection, building maintenance and catering. We have considered carefully the professional services that will become subject to competitive tendering after reorganisation. We have concluded that personnel, legal and financial services that are already adequately dealt with by even the smallest district council, and where there are many potential private sector suppliers, should not be used for the purposes of clause 25. However, we are still considering the possibility that authorities appointed as my right hon. Friend's agents for trunk road maintenance should be allowed to provide professional highways services to other authorities. In due course, we will consult further on draft regulations and will keep the position under review.
If genuine difficulties emerged, it would always be possible for my right hon. Friend to amend the regulations to provide a more relaxed regime. I cannot commend the Opposition's amendment to the House, principally because it would remove my right hon. Friend's regulation-making power.
On amendment No. 3, the Government believe that it is for the new councils to decide how best to publicise their service delivery plans. The publication of those plans will provide the public with the opportunity to comment on the shadow authority's proposals, and I suspect that shadow authorities will wish to consider whether a public meeting is the best way to subject their plans to public scrutiny. I am happy to consider whether the thrust of the amendment should be included in the guidance, but I am not prepared to limit the discretion of the authorities by including it in the Bill.
§ Mr. MurphyThere is a mixture of disappointment and agreement here. On the disappointment side, I do not understand for a second why some of the personnel, legal services, information technology and so on, certainly in the 826 more sparsely populated areas of Wales, could not be the subject of cross-border tendering. Nobody would have anything to lose and there would be an awful lot to gain if that were to occur.
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I am, however, grateful that the Minister has agreed to have a further look at the highways provision and I am glad that the Government have agreed that the geographical restrictions should be lifted. It is also important that the possibility of public meetings will be included in the guidance notes to local authorities.
Although I am disappointed, I am grateful for those concessions and to that end I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Madam Deputy SpeakerWe now move directly to amendment No. 56, to be moved formally.
§ Mr. Morganrose—
§ Madam Deputy SpeakerIs there a problem?
§ Mr. MorganI wanted to speak to amendment No. 59.
§ Madam Deputy SpeakerI do not think that we have got there yet. We have reached amendment No. 56.