§ Mr. Deputy Speaker (Mr. Michael Lord)I advise the House that Madam Speaker has selected the amendment in the name of the Prime Minister.
§ Dr. Liam Fox (Woodspring)I beg to move,
That this House believes that Scotland requires financial stability and ethically sound local government; recognises the need for public confidence in advance of the establishment of the Scottish Parliament; and therefore calls on Her Majesty's Government to initiate an independent inquiry into the conduct of local government in Scotland.It is fair to say at the beginning of this debate that, whatever twists, turns and controversies it may give rise to, it will provoke less anxiety than the one and a half hours that we had to sit through earlier today. If I had had a prescription pad close by me during the second half of the Scotland game, I could have made a fair bit on prescriptions for valium.
We have secured the debate to bring to the attention of the whole United Kingdom something that is well known in Scotland: the Labour party in parts of Scottish local government is rotten to the core. Council after council has thrown up tales of junkets, maladministration and financial deficit.
Why is it that a Prime Minister who seems to take such an interest in everywhere from Islington to Tuscany, and in everything from Britpop to Frank Sinatra, has so much to say on so many subjects but so little to say about the corrosive nature of politics in his own back yard? We hear plenty of comments on Oasis, but not on Ayrshire. He seems to want to deal with luvvies, but not with Lanarkshire. We seem to have a Prime Minister who wants to be leader of the Government without having to be leader of the Labour party.
We can give only a lukewarm welcome to the Secretary of State's investigation into direct labour organisations.
§ Dr. FoxBecause it is inadequate and comes far too late. Perhaps the Secretary of State will tell us when he, his officials or senior Labour party officials first became aware of the problems in North Lanarkshire. An editorial in today's Daily Record—which I am sure the right hon. Gentleman will agree is hardly a Conservative newspaper—states that they knew a considerable time ago exactly what had happened in North Lanarkshire. I must confess, perhaps for the first time, that I agree that
nothing less than a full public inquiry rooting out all the unsavoury facts and naming all the names will do".Many sections of the Scottish electorate plead for such an inquiry.
§ Mr. James Wallace (Orkney and Shetland)When did Conservative Members first realise that something was wrong with local government in Scotland? Many hon. Members recall arguing with Conservative Ministers that there should have been a full public and independent inquiry before they proceeded with reform of local government. Is not his plea for an inquiry coming a bit too late?
§ Dr. FoxThe list of wrongdoings that I shall give in the debate demonstrates not only that it is not too late for 195 an inquiry, but that we require an immediate and thorough investigation into events in Scottish local government. However, the problem is not DLOs themselves or the structure of local government, but the culture of Labour in local government. The Labour party cannot be the solution to the problem—it is the problem.
Although we can examine the structure of DLOs, the fact is that they are the creatures of whichever council they belong to. DLOs make contracts with the client part of the council and provide services. If they run up excessive bills, the client will simply provide more money. Such a practice certainly would not be accepted in the private sector. Nevertheless, such practices demonstrate the prevailing culture in specific councils.
As the Government were so desperate to end the compulsory element of compulsory competitive tendering, they gave us the nebulous concept of best value. Perhaps it would help the House if I gave some examples of the operation of that concept.
As part of best value in this year's housing maintenance contracts for the City of Edinburgh's council tax payers, tenders on an open-market basis were sought in only two areas. Tenders in other areas were "negotiated" with selected contractors, the largest of which was—surprise, surprise—Edinburgh Building Services. That "negotiation" led to an increase of approximately 14 per cent. over previous prices. That negotiated price increase allowed Edinburgh Building Services to make an unrealistically low tender of 67 per cent. in four tendered areas, effectively precluding all private sector bids from being considered. That reveals what best value means to the Labour party—best value for its friends in local government.
§ Ms Rachel Squire (Dunfermline, West)Does the hon. Gentleman agree that a prime example of a council failing to give best value to its council tax payers and of a council being guilty of gross mismanagement and overspending on various services was none other than Tory-controlled Westminster city council?
§ Dr. FoxIn so far as the wrongdoings of Westminster have been exposed, I of course criticise them, but the hon. Lady is not going to deflect the argument. We are talking about local government in Scotland. The Labour party is in government now, and it is time that it faced the problems caused by its mismanagement of local government in Scotland. It is time that it had the courage to start dealing with those problems. It is no good Labour Members throwing into the debate one council in England as they will no doubt do this evening—that is usually what happens when they attempt to defend their appalling record in local government in Scotland. Yes, I condemn wrongdoing in local government and shall do so at length this evening.
§ Mr. Dale Campbell-Savours (Workington)Will the hon. Gentleman give way?
§ Mr. Campbell-SavoursWhy will he not give way?
§ Dr. FoxI will not give way to the hon. Gentleman. I shall give way to hon. Members who are better mannered than him.
§ Mr. Campbell-SavoursWhy will he not give way?
§ Mr. Deputy SpeakerOrder. It is not for the hon. Member for Workington (Mr. Campbell-Savours) to question why hon. Members do or do not give way.
§ Dr. FoxI am keen to give way to Scottish Members who can defend what Labour is doing in local government.
§ Mr. Campbell-SavoursOn a point of order, Mr. Deputy Speaker. 1 am an English Member of Parliament. Will you confirm that the Opposition spokesman will not allow me to intervene because I do not represent a Scottish constituency, although he represents an English constituency, too?
§ Mr. Deputy SpeakerOrder. I shall confirm what I have already told the hon. Gentleman. It is for the hon. Member who is on his feet to decide to whom he will or will not give way. That was not a point of order.
§ Dr. FoxPerhaps I should have written one or two extra prescriptions for sedatives this afternoon.
If we are seeking problems in local government in Scotland, we need look no further than the west of Scotland. In North Lanarkshire, an internal auditor's report has unveiled a catalogue of financial incompetence leading to a £4.5 million debt being discovered. Included in the auditor's findings was the case of a plumber—it has been well documented in the newspapers—who received payments totalling £54,000 despite being on a basic salary of £10,600. It also found that £800,000 of stock had been written off. Council chiefs have confirmed that the police will be called in if further investigations show that the stock was not written off but stolen.
In the same council, a lollipop man has said that he earned £17,500 a year for 10 hours' work a week. Commenting on that, Mr. John Gillen said:
it was the best job I ever had … I couldn't believe my luck, during my stint as a lollipop man I took my wife and two kids to Gran Canaria, bought a new Escort and did up my flat.It appears that the council tax payer will have to pick up the tab for Labour's mismanagement in North Lanarkshire.The Minister who is winding up the debate—the Under-Secretary of State for Scotland, the hon. Member for Western Isles (Mr. Macdonald)—has said that the North Lanarkshire deficit could be covered by a £50-a-head rise in the council tax in North Lanarkshire. That might be fine for those on the same salary as the Minister, but will not be much comfort to those who are finding it difficult to pay the already inflated council tax imposed under Labour. That comes on top of previous scandals that have afflicted the council.
In 1996, the Labour leader of North Lanarkshire council had his office decorated with wallpaper costing £271 a roll which, as the Lord Chancellor would say, you 197 don't get at B and Q. His carpet cost £51 per square metre, and he had a new bidet installed—very PC—as part of a £600,000 refurbishment of Motherwell civic centre. In addition, the same council has spent £700,000 on an exclusive car park for councillors.
Following the revelations in North Lanarkshire, amazingly, a shortfall of £3.5 million has been discovered in the DLO budget in East Ayrshire. East Ayrshire is also a very interesting council. There have been allegations of drunken junketing by Labour councillors. A council official, the deputy director of the commercial operations department, was threatened with the sack and challenged to a fight for refusing to buy councillors a drink on his expenses at a conference. The councillors concerned—James Carmichael and James O'Neill—were the vice-chairman and chairman of the commercial operations committee and effectively his political bosses. According to a report in The Herald, when the official concerned—Charles McIvor—refused to buy a drink, one East Ayrshire councillor said publicly:
Why the … do you think we bring officials to conferences?I notice that there has not been the slightest challenge to the report in The Herald. The official's boss, Des Tierney, was then allegedly telephoned at home and told to order his subordinate to buy a drink for the councillors or his job would be on the line, too. The two officials have been suspended since February pending an internal inquiry into the running of the department, although it has emerged that they themselves were asking for an investigation as long ago as December last year.Perhaps more serious are the calls for an investigation into the relationship between the council, Cumnock municipal bank and the Cumnock and Doon Minerals Trust. Councillors control the bank and act as directors. Four of the same group act as trustees of the minerals trust, which was set up to improve leisure facilities in the Cumnock and Doon valley area affected by mineral operations. There is a clear conflict of interest, with councillors sitting on planning committees determining applications from opencast coal developers who contribute to the trust which invests in the bank which in turn gives loans to the council that it serves.
§ Mr. Desmond Browne (Kilmarnock and Loudoun)If the hon. Gentleman's research for his speech had gone slightly further than press reports, he would have realised that East Ayrshire council instigated an investigation into the financial management of the DLO in November. It is hardly surprising that a response to a request by Mr. Tierney in December was of little consequence.
§ Dr. FoxThe exact timing of an investigation is not the point. The point is the culture that exists within that council, which is obviously permeating all levels of management in the council and blurring the distinction between the duties of councillors and the duties of officials of the council.
Perhaps the best-publicised recent example has been that of Glasgow. Glasgow city council has for years been rocked by allegations of Labour councillors trading votes for trips and of bitter factionalism between the Labour power groups. The votes-for-trips allegations spurred the Labour party into action that was billed as 198 one of the many attempts to clean up the city. Scottish newspapers were full of stories about sleazebusters coming in to clean it up and about hit squads but, of course, nothing ever seems to happen. Like many other investigations, this one showed that the Labour party's actions failed to live up to its rhetoric.
The Labour party in Scotland confidently predicted that the very public suspension of and disciplinary procedures begun against its councillors in Glasgow would be an example to elected representatives everywhere, but today disciplinary action remains completely stalled in legal uncertainty. However, those are by no means the only problems facing Labour in Glasgow.
In February 1998, it was revealed that David Moxham, a Glasgow city councillor, owed £3,748 in unpaid council tax dating back to 1993. Because of those arrears, he is legally barred from voting on any financial matter. The council and the Scottish Labour party have constantly argued about who is responsible for any disciplinary hearing. The Scotsman revealed on 25 November that another Glasgow Labour councillor and her husband who are at the centre of a political storm had moved into a £55,000 private home after leaving behind rent arrears of nearly £1,300 on a council flat, while raking in almost £40,000 of public money in the form of council allowances and urban aid-funded jobs. What is going on? Where is the discipline? Where is the clean-up that was promised time and again?
Furthermore, the stories of Glasgow's wasteful expenditure are legendary. In 1997, when Glasgow was cutting key public services, it managed to find the funds to send some councillors on the following foreign trips: Rostov-on-Don for the Rostov city days event; St. Petersburg for a symposium on cultural policy in Europe; Rome for an international rose exhibition; and Hong Kong for a meeting of the International Badminton Federation. I am sure that all those trips were welcome for those involved, but difficult for a party that was having to cut essential public services. The council also found £810,000 in the same year to run its fleet of 28 luxury cars. Something is rotten there and it is time that we got to the bottom of it.
Renfrewshire demonstrates par excellence why Labour cannot be trusted in local government in Scotland. As my right hon. Friend the Leader of the Opposition pointed out at Prime Minister's Question Time recently, a senior police officer has said that if that council's chamber were a pub, it would have to be closed down for public order offences, so often have the police had to be called.
§ Mr. Michael Connarty (Falkirk, East)Will the hon. Gentleman go further and tell the truth? Every time that the police have been called, it has been to eject the Scottish National party members, who parade on the top of the tables, abuse council officials and disrupt proceedings until they are thrown out by the police. The problem is caused not by the Labour party, but by the SNP.
§ Dr. FoxI am grateful to the hon. Gentleman for lobbing a grenade into the debate, which will no doubt go off later. It is a strange defence to say that there is a party that behaves even worse than Labour in local government. It is hardly a defence for Labour's conduct in that council.
The most serious issue in Renfrewshire is the Ferguslie Community Business security company, about which many questions remain unanswered. I hope that the 199 Secretary of State will tell us some facts about it. The report in The Daily Telegraph of 16 August last year—which was not challenged—says that more than £320,000 is believed to have disappeared from two of the firms in the now defunct FCB, which, as most hon. Members know, was allegedly used to launder drug money. Some £321,500 was supposed to have been used to pay casual workers who apparently never existed, according to a leaked report by the FCB's liquidator, Colin Hastings. Are there ghost workers in Paisley, or is there something more sinister?
The FCB security company was set up in 1987 with almost £200,000 of public money from the Scottish Office, the former Strathclyde region and Renfrewshire district council. It is well known that local Labour activists were heavily involved in the company. We have never got to the bottom of what went wrong with the FCB. It is a serious matter that would not have been brought to public attention without the courageous stand taken by the hon. Member for Paisley, North (Mrs. Adams), who is not in her place at the moment. We all applaud her courage.
Is it not slightly—no, perhaps I am being cynical and should not say it. Is it not surprising that on the day that the Government are dragged kicking and screaming to the House to give an account of their stewardship of Scottish local government, we finally hear the decision on the suspension of the hon. Member for Renfrew—the hon. Member for Greenock? Perhaps we shall be told the truth. The Labour party has taken 10 months, with two investigations carried out by two different teams, to come to today's stunning conclusion that there should be another Labour party inquiry.
§ Mr. Tam Dalyell (Linlithgow)On a point of order, Mr. Deputy Speaker. My hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) is often in his place in front of me and certainly has not been suspended for 10 months.
§ Mr. Deputy SpeakerThat is not a point of order for the Chair.
§ Dr. FoxI am grateful for the opportunity to check the constituency of the hon. Member for West Renfrewshire (Mr. Graham).
When will we be told the truth about the issue?
§ Mr. Malcolm Savidge (Aberdeen, North)On a point of order, Mr. Deputy Speaker. Am I correct in believing that it is usual that if one hon. Member is going to attack another by name, they should inform him beforehand? Has the hon. Member for Woodspring (Dr. Fox) done so?
§ Mr. Deputy SpeakerIt is normal in the House if one hon. Member is going to mention another hon. Member that he informs him beforehand.
§ Dr. FoxI accept that I should have written to the hon. Member for West Renfrewshire. If he is ever available in the House to pick up his mail, I am sure that he will get that letter.
The debate is important, because local government will play a central role in the new constitutional relationship in Scotland. If Labour fails to take clear, decisive and public action, Scottish voters will assume that Labour in 200 a Scottish Parliament will merely be an extension of Labour's rotten boroughs in local government in the west of Scotland. The Secretary of State must take all the necessary action, not just some of it. The Prime Minister must take responsibility for his party. Sadly, the Secretary of State responds too lamely and too late. The Labour party treats Scotland as its private fiefdom and the Prime Minister treats the Scottish Labour party with disdain, putting as much space as possible between him and it. We need no more words, no more promises and no more time wasting. Labour is the problem, so Labour cannot be the solution. Someone must clean up the act and Scotland will demand that that starts tonight.
§ The Secretary of State for Scotland (Mr. Donald Dewar)I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
notes with concern losses in a number of direct labour organisations within Scottish councils; and commends the swift action taken by the Secretary of State for Scotland to deal with them.I must start by congratulating the hon. Member for Woodspring (Dr. Fox)—I shall not say reluctantly, because that would be discourteous to him and to the House—not on his speech, but on his appointment to the Front Bench. We can all safely assume that he is the first representative of Woodspring to hold the position of Opposition chief spokesman on Scottish affairs. I am afraid that I am coming to the conclusion that the view from Woodspring is a little distorted. There may be a plea of mitigation, given the distance, but the situation is unfortunate.
The hon. Gentleman has obviously read a lot of newspapers. I am not complaining about that—Opposition spokesmen read newspapers. However, when making such serious charges, it is important that he should go beyond press cuttings. He referred to legendary stories. Some of the stories that he mentioned are legendary-they are not well founded in reality. I accept that the Opposition will make what political points they can, but, having read his charge sheet, I am disappointed at the lack of a single constructive suggestion. He did not discuss the future of local government or consider the realities of any of the problems. I regret that, because I would have been interested in something more than simple political knockabout.
I accept that serious issues have arisen recently. The debate should be taken seriously by all those participating and spectating. For good reasons, I cannot comment on the security company in Ferguslie Park. The hon. Gentleman must know that the issue has properly been in the hands of the police for some time for investigation. We do not know the outcome of the investigation, and it would be improper of me to speculate, but I assure him that the proper authorities will act if evidence of wrongdoing emerges from the inquiry.
What matters in local government is what works. I accept that there is clear evidence of some difficulties in local government in Scotland. Those difficulties must be addressed. The Government will not tolerate failure and inefficiency in local government, and will act swiftly—as we have done—to deal with such cases. There is a need for change in Scottish local government. I want to say something a little more constructive about that later. We have acted, and will act, on impropriety and the falling away of proper standards, as well as on the agenda for change. 201 The only precise question that the hon. Gentleman asked was when I first knew about the difficulties in North Lanarkshire. It was on 27 May. If he follows the chronology carefully from there, he will see that we have acted with speed and decision. If there have been any longueurs, it is because of the strictures of statute.
We have proceeded under the provisions of the Local Government, Planning and Land Act 1980 and the Local Government Act 1988. First we had to tell the East Ayrshire and North Lanarkshire councils that they had a specified period—in this case three weeks—in which to offer an explanation and give full information about their direct labour organisations. That was done. I assure the hon. Gentleman that, when we have that and the other information that we require, we shall take what we regard as suitable and–1 hope—appropriate action.
§ Dr. FoxWill the Secretary of State further clarify the matter? The management services officer, Alex Haggerty, said, as the right hon. Gentleman will be well aware, that the council knew of problems concerning losses in the DLO in March 1997. When did the Scottish Office first become aware of that?
§ Mr. DewarI first became aware of Mr. Haggerty's report—I am neither accepting nor rejecting it—when I came across it in a daily newspaper this morning. To the best of my knowledge, we in the Department did not have access to the document. I have already told the hon. Gentleman—I hope that he will take this from me as fact—that my first intimation of the difficulties was on 27 May. Indeed, a very senior civil servant to whom I turned learned about it from me. We have certainly not been sitting on information about the activities of DLOs and refusing to act on it.
§ Mr. Alex Salmond (Banff and Buchan)The precise suggestion in Mr. Haggerty's report, which is published in today's Daily Record and which I have read, is that four Labour councillors had known for some time of the situation concerning the North Lanarkshire DLO. If that suggestion proves to be correct, how will those four councillors stand vis-a-vis disciplinary action in the Labour party?
§ Mr. DewarThe hon. Gentleman will have to wait and see, as I will. I do not know who the four councillors are; none of them was referred to by name. I have not at this stage had any evidence about the contents of the report.
I do not at this stage know very much about Mr. Haggerty, except that he has left the employment of the council. I rely for that information on the press cuttings to which the hon. Gentleman referred. It is not helpful to build great theories, or to speculate on such reports. Obviously, I intend to try to find out about the situation, and we shall take appropriate steps in order to do so. I was replying to the specific question of the hon. Member for Woodspring, who I hope accepts my reply.
§ Mr. WallaceThere has been some speculation, and it would be helpful if the Secretary of State could clarify matters. I have been led to believe that the post of chief management accountant in North Lanarkshire was created 202 last year following expressions of concern by officials about the accounting system in the department that is now giving rise to concern. Does the Secretary of State know whether that is so? If it is, does it not suggest that councillors should have monitored what was happening?
§ Mr. DewarI am not in a position to answer such detailed questions at this stage. We have taken steps to establish the facts, which I shall explain in a moment. Perhaps we can take the matter forward on that basis.
I stress to the House that North Lanarkshire and East Ayrshire are two out of 32 authorities; there are 30 other authorities with DLOs. We have, of course, been trying to check the position in order to establish the extent of the damage and the problem. Other DLOs have deficits either on part of their operations or overall, but the distinction is that none of them is unknown. They have all been established for a purpose—for the management of funds—and are, to that degree, under control.
One can argue about tactics, but there is a sharp distinction between that and what appears to have happened at the two councils at the centre of the storm, where undoubtedly matters ran out of control. On the face of it, there was a collapse of financial discipline, and a quite substantial failure of management systems.
In North Lanarkshire, it looks as though the deficit is about £4.2 million. The provisional figure in East Ayrshire is £3.5 million. Even though there are variations on the figures, they give some idea of the scale of the problem. In both cases, there have obviously been very serious failures of management and financial control. As the House will know, DLOs are required, very properly, to meet a 6 per cent. return on the capital they employ. It is deeply worrying that deficits in these two cases were not detected or monitored at an early stage. Both became fully evident only after the end of the financial year in question.
My first and immediate reaction in both cases was to ensure that the councils called in their external auditors to verify financial figures and try to establish the position. As I have said, I also used my statutory powers to require information and explanation of the councils. That is a necessary step, which I stress is to pave the way for further action. I shall return later to what further action I may take.
On the face of it—I will not conceal this—there has been an unacceptable and intolerable level of failure and mismanagement in the two councils. It is indefensible; no one on the Labour Benches, or indeed in local government, is attempting to defend it. It raises three important questions: first, what is to be done about the cases; secondly, what is to be done to avoid repetition; thirdly, what broader lessons can be learned about the future of DLOs and, indeed, of local government as a whole, especially as we begin to consider the relationship between local government and the Scottish Parliament that will come into being in the middle of next year?
I have already initiated the statutory process. I expect a response from the councils later this month. It is already painfully clear that the contracts under which the DLOs have made such losses cannot be allowed to continue. The councils concerned have already acknowledged that, at the minimum, the work will have to be re-tendered. I am not yet convinced that that is enough. The question clearly arises whether the organisations can deliver a proper 203 service in a controlled way without an unacceptable impact on the council tax payer. Before making up my mind finally on that, I will want to hear what the councils themselves have to say. We are waiting for that information.
I want to make it clear today that I am perfectly prepared to use my powers to require the council, if necessary, to wind up the DLO and obtain services from the private sector in either or both of the cases. I intend to come to an early conclusion after I have considered the information provided by East Ayrshire and North Lanarkshire councils.
I want the reassurance that we do not have similar breakdowns in management and control elsewhere. My Department has already approached every DLO; we have asked that external auditors be brought in. The Scottish Office has written to every council in Scotland asking them to check the operation of their bonus systems in direct works departments, and to report back. It appears—at least on the face of press reports-that something went very far wrong with the bonus system in North Lanarkshire particularly. I have certainly no wish to see any repeat of the bizarre anomalies that seem to have emerged in that council, which have been so widely noticed in the press.
§ Dr. FoxLeaving aside the two DLOs in question, does the Secretary of State draw a conclusion about the whole system of DLOs from the fact that a more direct relationship with the private sector may be the answer? Will he organise an investigation into how they operate in their entirety?
§ Mr. DewarI certainly said—I am sure that the hon. Gentleman was listening—that lessons would have to be learned in local government in a wider sense. I shall come to that later.
§ Mr. Andrew Welsh (Angus)Although the Secretary of State is understandably dwelling on the downside, does he acknowledge that there are well-managed, well-run direct service organisations, such as that in SNP-controlled Angus, which produced a surplus of £250,000 last year while providing top-quality public services at low cost?
§ Mr. DewarThe hon. Gentleman can always be relied on to paddle his own canoe—or perhaps his own coracle—in such matters. I do not want to comment on individual councils that are not at the centre of the matter with which we are concerned; we might get into some difficulties. The hon. Gentleman is making a party point. He could consider the DLO in Perth and Kinross, for example, where he might find a rather different situation.
§ Mr. WelshI ask the Secretary of State not to destroy the whole system, but to accept that, where it works well, it does so in the public interest. Bringing in the example of Perth and Kinross is rather pathetic, since it had £1.1 million in reserves and has produced a surplus elsewhere in its accounts. That does not compare with the real problems on Labour councils, on which he has dwelt. That is where the difficulty lies. Well-run and efficient DLOs should not be wiped out.
§ Mr. DewarWe are not talking about wiping out anyone. I have no wish to go into this, but I understand 204 that Perth and Kinross faces a deficit of £450,000 in respect of its DLO and services. I do not make too much of that, but if we are talking about perfection in every respect, 1 mention it as a corrective.
§ Mr. DewarPerhaps we can agree to disagree, on that as on so many other things.
We have brought the external auditors in, and will closely examine their results. We want final conclusions by September. We have asked the Accounts Commission for Scotland, an important safeguard that is totally independent, to conduct a rather different sort of audit starting in July. It has been asked to examine the financial and management control systems of every DLO in Scotland. It will be an important report.
That may help answer the point that the hon. and learned Member for Orkney and Shetland (Mr. Wallace) made by implication. The commission has the power not only to investigate but to comment on fault and on where the problems arise, and, if necessary, to hold public hearings on the matter. Not only that, but it can make recommendations and findings that come to the Secretary of State, which might include recommendations for personal penalties. I do not anticipate that, or make any assumptions. The House can see that we have brought to bear a battery of inquiry and expertise to try to establish exactly what happened and why.
In answer to the hon. Member for Angus (Mr. Welsh), I accept that the two councils are, to the best of our present knowledge, alone in respect of the scale of the problem and the background to it—the loss of control that appears to have occurred. I say this with proper caution, because we have not definitively covered every angle, but we think that it is unlikely that there are any more cases. That does not detract from the seriousness of what happened. The breakdown of financial controls inside the two councils was especially worrying, because it allowed the deficit to accumulate unnoticed. I want to be sure that that is not happening elsewhere.
§ Mr. John Hayes (South Holland and The Deepings)Does the right hon. Gentleman acknowledge that this is an issue of culture, not structure? That was the point of my hon. Friend the Member for Woodspring (Dr. Fox). Is there a distinctive, undesirable Labour local government culture in Scotland?
§ Mr. DewarI do not suppose that there is any sort of Tory local government culture in Scotland. If there is, it is being carefully retained in a test tube while the antidote is produced.
I accept that there are a wide range of councils in Scotland, very different in character, scale and size. There are many different councillors, who range, no doubt, in ability and character, but the vast majority try hard to deliver good services. Across the board, they succeed in doing so, by and large. They would be as distressed as I am by the fact that the two councils in deep trouble raise questions about the integrity and competence of other councils.
It is important to ask whether, for example, it is right that the council tax payer should continue to bear the risk of failures of this sort. If something goes wrong, the risk 205 falls on the services provided by the council and on the council tax payer. It is legitimate to ask whether providing such services directly is the right way for councils to secure for their communities the provision that they deserve. I think that it can be, but I agree that there is a cultural problem.
In the days of compulsory competitive tendering, with its rigid structures, which were ill suited and which failed, people in some areas became convinced that they should keep work in-house if they possibly could. There have been cases in which people have signed up for tendering, but without having their heart in delivering the results that tendering should produce: the best possible deal for the council tax payer, and, most important, for the person who depends on council services.
In considering the introduction of best value systems, it is important that councils understand, and act on the basis, that the tendering process must not be weighted in any way, and that it should be a fair test of the market and the best way of producing the services that the users require. It is vital that we get that established, and that it happens in practice.
§ Mr. SalmondThe Secretary of State's point is fair, but does he accept that it can be greatly in the public interest to have effective direct service organisations and DLOs, because they can provide the cutting edge of competition in those areas? In most councils, such organisations work efficiently. The problem of management and uncontrolled expenditure in the two authorities should not be used to condemn the many councils where such organisations work carefully and appropriately.
§ Mr. DewarI have already said that, in many areas, the service provided is good and delivery is up to standard. I have also said that, where there have been difficulties, we must get to grips with them and eliminate them. It would be as wrong to say that there should be no in-house services as to say that there must be in-house services and nothing else. It is a matter of balance and judgment.
I am facing up to an unpleasant truth. There has been a tendency in some parts of the local government world, for perhaps understandable reasons, to be so keen to keep work in-house that we have sacrificed efficiency and not delivered services as effectively as we should have. That is what the best value regime is intended to put right.
§ Mr. David Marshall (Glasgow, Shettleston)My right hon. Friend said that services may not have been delivered as well as they could have been. After 17 years of continual cuts by the previous Government, local government was reorganised two years ago. It was a shabby, gerrymandered, ill-conceived, politically spiteful and politically motivated reorganisation.
Was not the problem that all the new councils and councillors, regardless of party, had to face the serious underfunding by the previous Government of all the essential costs of reorganisation? They put in some £36 million when an independent report by the Convention of Scottish Local Authorities and the Chartered Institute of Public Finance and Accountancy stated categorically that reorganisation was underfunded 206 by more than £200 million. How can we have perfection, with such underfunding caused by the activities of the previous Government?
§ Mr. DewarMy hon. Friend put his point passionately. I have much sympathy with the difficulties of local government. No one has denied them. We must get the right balance and framework in which services can be efficiently delivered. Best value, on which we have worked closely with COSLA, seems to offer that opportunity. If it is to be taken, we must deal with some of the difficulties that have arisen and that have dramatically struck down the management and financial control system in two important local government areas.
I agree that compulsory competitive tendering did not work, because it was based solely on compulsion. I agree that it encouraged the creation of an evasion industry. That is why we have abandoned it, and asked local authorities to sign up to the best value regime and implement it willingly and with full co-operation. That is the road that we still intend to travel.
However, part of that process is a tendering procedure—testing the market in the interests of ensuring that we are delivering services effectively. I am sure that I carry most of my hon. Friends with me when I say that we must adopt a straightforward, uncomplicated approach to get the best tender for the services, and, if they are in-house, to ensure that they are delivered efficiently and effectively as advertised. Apparently that has not happened in Ayrshire and Lanarkshire, and I regret that.
I make it clear that we must now move forward and examine the whole basis on which local government now operates. The House will know that the public perception of the many able and dedicated people in local government is often undermined by the few who fall short of the standards that are expected of them. There is no doubt about that, and local government deserves better.
As the House will know, we have suggested a new ethical framework for local government, to rebuild public confidence in its probity. Especially important in that respect is a clearer national code of local government conduct for Scotland, and a new national standards commission for Scotland with powers to investigate and to come to conclusions about the validity or otherwise of complaints that may be made about councillors or officials thought by some to have fallen short of the required standard.
The commission will have the power to take decisions, and I hope that, when it is in place, it will approach the task with impartiality and consistency. I hope that that will reassure the public that, if there are complaints, they will be dealt with expeditiously. It will also offer an element of protection for councillors against ill-founded allegations—and there are many of those in currency at the moment. The development of best value on the basis that I have tried to outline, the new ethical framework, will do a great deal to help to deal with the problems.
We must also consider some of the other difficulties that local government faces. For example, we are working co-operatively with local authorities on community planning, on the role of councils in community leadership, and on the way in which they can establish a good and positive working relationship with the Scottish Parliament that is to come. 207 We want to examine local government's standing in the community. If less than 40 per cent. of the people turn out to vote in local government elections, clearly that undermines the legitimacy of mandates, and makes it more difficult for those who operate on elected councils.
§ Mr. DewarI have read the Liberal Democrat motion, so I do not think that hon. Gentlemen need to put their point to me. I accept entirely that this is not simply a Scottish problem. It is worth noticing that, at the English local government elections a few weeks ago, the average turnout was 26 per cent., which suggests that the problem goes far beyond Scotland.
That may point to at least some of the arguments that will be advanced about changes in voting systems. It will be on the agenda of the McIntosh commission, which was set up in fulfilment of an election manifesto promise by the Government. No doubt its members will have heard the arguments, and will want to consider them.
I do not intend at present to go down a technical byway, but I am by no means sure that the single transferable vote is likely to be the answer. However, I realise that we are all thirled to the baggage of the past to some extent—none more, and none in more distinguished ways, than the Liberal Democrat party. Undoubtedly there are questions to be answered, and we shall come to them.
There is also the possibility of considering, as we considered in the past, the traditional committee system through which local government has operated over many generations. The system was endorsed by a Conservative party committee in 1993, but since then it has been under constant attack.
I was interested to read a Convention of Scottish Local Authorities working party report that at least opened the door to change in that respect, by looking with some favour at some of the arguments for a Cabinet system within local government. Beyond that, there is the possibility of elected leadership in the cities.
There is a great deal to consider, and, as I have made clear in several recent speeches, I am anxious that all those matters should be on the agenda. I do not want to rush to judgment today, but I believe that the McIntosh commission has an important remit, and that we have to consider all those possibilities, as well as how to attract talented people back into local government and broaden its basis.
Local government is a vital democratic bulwark, and a level of accountability between central Government and the ordinary citizen is essential. It is also responsible for a wide range of services in Scotland. As the House will know, its total expenditure equals almost half the Scottish block.
What we cannot have in local government is inadequate systems, inefficient management or an apparent lack of effective scrutiny. Those are cancers, and if they were to spread, they would do great damage to the whole fabric of local democracy. The Government are determined to put the mechanisms in place to ensure that they are rooted out. I am sure that I will carry the House with me when I say that this is an issue not between right and left but between right and wrong.
At the heart of the problem may have been a culture of complacency in some areas, but that is something we can change. It does not lead to the conclusion that there is no 208 need for local democracy, or that we can in some way wipe out large parts of the remit and responsibilities of local government. However, it does put upon us a real and heavy responsibility to work with local authorities to put local government's house in order.
As for the tendering process, I repeat that the overwhelming priority must be to get the best deal for those who use the services and for the council tax payer. The head count in the DLO is not necessarily the true test when considering such matters.
Those are all important and serious questions, which go well beyond the immediate problems of two buildings and works departments in two Scottish local authority areas. Those represented very serious breakdowns in financial and management discipline, and I believe that I have taken the swiftest possible action to deal with them—action that I shall not hesitate to carry through.
Those two examples point up a need, which the Government have always recognised, for a different and modernised local government in Scotland, marching alongside a new Scottish Parliament. We want a local government elected by more local people, properly accountable to them through new ways of doing council business, and attracting a different and wider range of members who demonstrate the highest possible standards of probity. Such authorities will lead their local communities through vision and influence, and will not automatically run all services as an extension of the municipal machine.
We want a local government focused on performance and on improvement in quality and cost—in total, something of which Scotland can be proud. Despite the problems that we have seen, I believe that we are beginning to move in the right direction, and that many of the preliminary steps have been taken.
We must learn the lessons of the unfortunate events in East Ayrshire and North Lanarkshire, and make the transformation. Those problems should be a challenge—a challenge for central Government certainly, a challenge for the new Scottish Parliament inevitably, but above all a challenge for local government itself. I am convinced of the importance of local government's place in our life in Scotland, and I believe that the transformation that is needed can certainly be achieved.
§ 8.7 pm
§ Mr. James Wallace (Orkney and Shetland)I agreed with the Secretary of State when he expressed a view probably shared by the whole House—that there is a danger in such debates that the efforts of honest, decent, hard-working councillors will be undermined and tarnished because of problems that arise in a few councils. That is especially important as we move forwards towards a Scottish Parliament; one of the critical relationships that will have to be established is that between the Parliament and local government. Local government is concerned that the Scottish Parliament will attempt to suck powers into the centre. I know that that is not what any party in this House wishes to see, but it becomes easier to do that if local government has been undermined and given a bad name.
The hon. Member for Woodspring (Dr. Fox) said that a prescription for valium might be required during the Scotland-Norway match this afternoon, but I wonder whether he needs a prescription to treat partial amnesia. 209 Reading the motion leads one to suspect that he has forgotten everything in local government for which the Conservative party was responsible. It is hard to believe that the words
Scotland requires financial stability and ethically sound local governmentwere written by the party that presided over Westminster council in the period when some of the greatest abuses ever in local government were perpetrated. The Conservative motion demands "an independent inquiry", but many of us argued that there should be such an inquiry before the unwanted Conservative reforms of local government went ahead.The hon. Gentleman admitted that perhaps it was too late now and that the independent inquiry should have taken place earlier—it is always welcome when a sinner repents. The hon. Member for Glasgow, Shettleston (Mr. Marshall) was right to point out that some of the problems facing local government arose from that reorganisation. The Conservative Government deliberately underestimated the costs of that reorganisation and today's local government and council tax payers are having to pick up that bill. In addition, I am informed that Strathclyde region left a debt of £79 million, which is also having to be paid by council tax payers. The Secretary of State has said that those responsible for running up the debt must accept that serious responsibility.
It is undoubtedly true that there is a problem in local government. The Secretary of State was frank in saying that there was inefficient management and that there had been a lack of scrutiny; he even conceded that there had been complacency. He concentrated on two councils—East Ayrshire and North Lanarkshire—but never once acknowledged that they were councils on which the Labour majority was overwhelming. No doubt, Labour Members had been happy to go out campaigning for individual councillors in local elections and to claim great credit and triumph on the nights Labour swept to power in those councils. If there has been inefficient management, lack of scrutiny and complacency, it is Labour inefficient management, Labour lack of scrutiny and Labour complacency, because on councils with such overwhelming Labour majorities, there is no one else to blame.
It is not just those two councils, as the hon. Member for Woodspring said. In Dunbartonshire, the Convention of Scottish Local Authorities had to be called in to arbitrate; in Glasgow, there was the case of votes for trips in the cause of municipal tourism—"Glasgow's miles better", but Barcelona's miles further; and in Renfrewshire, as we heard, the police have to be on standby at council meetings. I sat with the Liberal Democrat candidate in the Paisley, South by-election, Mrs. Eileen McCartin, who is a councillor on Renfrewshire council, when she described some of the things that went on there; it was a real eye-opener to the journalists who heard the full extent of the trouble. The problems are not confined to two councils, but let me repeat: not every councillor should be tarred with that brush.
§ Dr. FoxDoes the hon. and learned Gentleman accept that there is a fear that what the Secretary of State 210 wants—bad councillors brought to account—has been undermined by the fiasco of the Labour party's internal disciplinary action in Glasgow? That makes it hard to believe that the Labour party can tackle the problem effectively.
§ Mr. WallaceIt is fair to say that a series of inquiries have been set up which never quite come to a conclusion. As long as that hiatus or state of limbo persists, the problems, the suspicions and the general undermining of local government will likewise persist. My own party got into serious trouble when there were allegations of racism in Tower Hamlets. We set up an inquiry under an independent chairman and we as a party were prepared to follow the recommendations in the report. The report was produced promptly and we responded decisively, but we received an awful lot of political flak—perhaps rightly so—into the bargain. However, we have not seen the same decisiveness when the Labour party has set up its inquiries.
It is easy to use local government and direct labour organisations as scapegoats for what is, in fact, underfunding disguised as council inefficiency. The current Government must take some responsibility for the underfunding of services. It is also easy, when things go wrong, to say that the Secretary of State must act. The Secretary of State has, rightly, taken powers to act, but the tendency to centralise power must be guarded against. We recall that, not long ago, the Secretary of State was only too anxious to tell the Grampian police force what action to take in respect of its chief constable, and politicians and pundits on all sides were clamouring for the Secretary of State to be given more powers. It is easy to fall into the trap of centralisation, even in matters such as the democratic local control of police, which is strongly rooted in our traditions and should not be so easily given up. We must always be wary of the trap of wanting more power to be drawn to the centre, whether here at Westminster or, eventually, in the Scottish Parliament at Holyrood.
Like the Secretary of State, I am greatly concerned about the increased cronyism of Cabinet-style local government and elected provosts, because it could lead to greater lack of accountability. It can be argued that a Cabinet style of government already exists on East Dunbartonshire council. The Labour administration there strives to conceal as much information as it can from opposition groups. Budgets have been allowed to escalate, without anyone keeping an objective eye on what is going on. The council set up a budget monitoring group—very laudable, one might think, until one discovers that it is comprised solely of Labour councillors. The efforts of opposition councillors to be involved in that group have been thwarted and cast aside by the ruling Labour group. Councillors have been able to take it for granted for too long that they will continue to be re-elected even if the affairs of the council do not run smoothly. The solutions must lie in setting up mechanisms for effective scrutiny, whereby councillors from all parties are involved in monitoring council performance, in addition to the sometimes highly effective external monitoring from the Accounts Commission.
I make no apology for mentioning the importance of proportional representation. I do not object when a party that receives more than 50 per cent. of the vote gets a majority on the council, as happened in North 211 Lanarkshire, East Ayrshire and Glasgow; however, no party should have more than 90 per cent. of the seats on 60 per cent. of the votes, as happened in Glasgow. That makes accountability near impossible and makes extremely feeble the opposition's ability to keep the administration up to the mark. Under a system of proportional representation, there would be a greater opportunity for opposition councillors to hold the administration properly to account and to restore credibility.
Without proportional representation for local government, there is a serious danger that a Scottish Parliament elected by proportional representation will not treat local government, if it is still elected under a distorting first-past-the-post system, with the respect that it should receive. Indeed, Scottish local government could be diminished vis-a-vis the Scottish Parliament if it does not change its electoral system. I also believe that, under a system of proportional representation in which there is voter choice, there will be no hiding place for the lazy and incompetent councillor, which is why we favour the single transferable vote system. Councillors who are simply not up to the job will soon find that the greatest indignity of all is to lose a seat to a member of their own party. At the last two sets of Scottish local elections, the Liberal Democrats have polled votes in roughly the same proportion that we have gained seats, so I can say without fear of being accused of seeking party advantage that the introduction of proportional representation would be to the advantage of democracy.
It might seem strange when, in a debate that has focused on the mismanagement of local government finance, I say that local authorities and councillors should be given more responsibility for raising their own finance, but that will be essential if local government is to restore in any meaningful sense the concepts of local democracy and local accountability. The Secretary of State talked about low turnouts, which are of concern to us all, but I do not believe that the strength of local government or the re-creation of local democracy will be advanced by elected provosts or committees. What will be of considerable influence is the relationship between local government and central Government. If local authorities are dependent on central Government for 80 per cent. or more of their funding, the relation will always be unbalanced, so we must look for ways to shift that balance.
That is why it is almost inconceivable that the independent committee set up under Neil McIntosh to consider the relationship between the Scottish Parliament and local government has specifically excluded from its remit the opportunity to consider the financial relationship between the Scottish Parliament and local government. If the Government do not change their minds about referral of the question of local government finance to the McIntosh committee between now and the establishment of the Scottish Parliament, one of the first things that the Scottish Parliament should do is to ask the committee to consider that important financial relationship—indeed, it is almost inevitable that the Parliament will do so. 212 Without that, an important link will be missing from the effort to ensure that local government in Scotland becomes more robust than it is.
§ Mr. DalyellThe hon. Gentleman's remarks reveal that he believes that a Scottish Parliament will inevitably intrude and meddle more and more in local government.
§ Mr. WallaceI have that suspicion, which is shared by many people in local government. I would want strongly to resist that trend. Devolution should not stop at Edinburgh. Where we can devolve more power to local authorities, we ought to do so, but that must mean that local authorities are established on a sound financial footing and on a proper democratic and accountable basis.
Local government is the level at which most ordinary citizens have the opportunity to participate or influence decisions that affect their community. It is important that local government in Scotland is robust, democratic and accountable. There are many question marks hanging over local government at present, and some of the ideas that Liberal Democrats are putting forward would go a long way toward ensuring a regeneration of local democracy in Scotland.
§ Ms Sandra Osborne (Ayr)I speak from the perspective of someone who, until very recently, was a local councillor in South Ayrshire and who suffered the stresses and strains of local government reorganisation. Local government in Scotland cannot be discussed outwith that context or the culture of compulsory competitive tendering, which has existed for several years, and the constant attacks from previous Conservative Governments over 18 years.
I am proud to have been a member of Kyle and Carrick district council and of South Ayrshire council. However, like many current councillors, I have recently felt exasperated, disappointed and stunned at the way in which local government and public service are brought into disrepute. I very much welcome the swift action that the Secretary of State has taken to investigate outstanding matters.
I cannot remember a time in the past decade when local government was not in crisis, and the sustained attack over 18 years by previous Tory Governments is the root cause of that continuing crisis. I make no excuse, because there is none, for any failure to ensure that all duties are performed in compliance with the highest standards of probity and integrity. However, the Government have taken swift and immediate action to deal with problems and the Secretary of State has given an assurance this evening that he will not hesitate to use his powers, should that be appropriate, when the investigations are complete.
Not for the first time, I have had cause to reflect and compare local government with activities in the House. Was the same swift action taken in the past to consider standards in public life as they affect the House, or was there considerable resistance to increasing public accountability through the disclosure of information on Members' financial affairs and activities? Members who have been here somewhat longer than I have may be able to answer that question. How many drinks on the house and free lunches do hon. Members obtain? Obviously, I accept that public servants, nationally or locally, should 213 behave appropriately, and I very much reject the macho bullying that has been reported in the press. However, machismo is the same whether it comes from the upper class or from the working class.
In the Scottish Grand Committee earlier today, I heard described a scenario of local government out of touch with local communities. As a former local councillor, I do not recognise that scenario. Nor do I recognise the claim that local councils do not want to relinquish power to local communities. First, I take issue with that, because it is a sweeping generalisation. As a former community worker with Strathclyde regional council, I am well aware of the efforts made in the past to empower communities, particularly in the poorest areas. I am aware also of the work of voluntary organisations, funded by councils, to support voluntary provision of services and policy development. That wealth of experience is now being utilised under the new deal and policies on social exclusion.
As a local councillor, I spent many evenings attending community groups in my council ward and initiating new groups to assist me in securing resources to meet the needs of my area. I was by no means unique. I know that many councillors work in a similar manner, which is why they have retained the trust of the people who elected them. Over the years, I have received much advice, wisdom and experience from many of the older generation of councillors, some of whom, sadly, are no longer with us. It grieves me a great deal to think that such sterling public service could be undermined in any way.
One of the main problems that we face today is that many younger people gave up their involvement in local councils in the face of an increasingly centralised Government. People feel that local government has lost its influence; it has the power to raise only 15 per cent. of its revenue. The constant battleground that has existed for years between central and local government has taken its toll. Local government services became a political hot potato instead of a focus for community leadership, which they should be. Councillors and officials became more and more pressurised—but from an ideological onslaught, not from a genuine attempt to consider how councils could retain the important role of sustaining community pride and citizenship.
The new Government are pointing the way ahead with partnerships that will give local government influence again—in particular, a partnership between the Scottish Parliament and Scottish local government. I agree with the comments of the hon. and learned Member for Orkney and Shetland (Mr. Wallace) about increasing the powers of local government. Local government will in future reflect the wishes of the Scottish people, not impose Tory policies that nobody in Scotland wants, as happened in the past 18 years. I should like there to be a more constructive approach and wider involvement in politics at all levels. I have raised that matter in the House in relation to the Scottish Parliament, much to the disgust of some Conservative Members.
It is my experience that, given the chance, most local councillors want to do what is best for the local community, regardless of their political affiliation. I have represented an area that has traditionally switched between Conservative and Labour support. I say with all 214 sincerity that, in my experience, councillors from all parties are very committed to the electorate whom they serve.
I welcome the radical proposals from the Commission on Local Government and the Scottish Parliament, which have been put out to consultation, to look at various voting systems and to consider how a wider range of people can become involved as councillors, including, of course, how more women can become involved.
One of the major problems in recent years came with local government reorganisation. Many very experienced staff were lost to early retirement. There was chaos in the disaggregation process. Many of the new council areas are far too small to deal effectively with the strategic issues for which they are responsible. As I understand it, the decentralisation plans that all the new unitary authorities were asked to produce have sat on a shelf in the Scottish Office because they did not fit in with the Tories' plans and were only a paper exercise in the first place.
In spite of all that, I can certainly vouch for the fact that in my area an incredible effort was made by councillors and officials to make the new unitary authorities work despite the difficulties. In South Ayrshire, a lean management structure was put in place and council departments such as housing and social work, and education and leisure were merged. Genuine attempts have been made to provide greater input by community councils, and a citizens' jury has been set up to examine council policy and debt.
It is laudable to talk about empowering local communities, but those who have been involved, over the years, in making painful decisions know that with power comes responsibility. Democratic accountability is also a factor. If we are to involve local people in decision making, we must ensure that they have more than just a nodding acquaintance with all the facts.
The citizens' jury is an interesting example. It recently began to examine the issue of drinking in public places. At first, the majority of the citizens' jury in South Ayrshire were in favour of a ban. However, after consideration and a realisation that many complex issues were involved, the jury has thought again and decided that a more in-depth inquiry is needed. That realisation quickly dawns on anyone who is involved in the privilege of representing others and exercising powers within constraints, only some of which are financial.
I am very much in favour of widening involvement, and I am fearful of too much work— never mind too much power—being placed on the shoulders of one person. For that reason, I would be reticent about Cabinet-style local government. Councillors should be enabling, but not in the Tory definition of enabling, which meant washing one's hands of responsibility. The leader of East Ayrshire council has said that he will accept responsibility if the investigation shows any lack of responsible action and places it at his door. I commend him for that responsible attitude.
I have every faith that the Secretary of State will ensure that any current difficulties are dealt with in no uncertain manner. The Labour party has an agenda for local government's future; I should like to hear more from 215 Opposition parties about that future. None of the Conservative Members present has any experience whatever—
§ Mr. DalyellI hate to interrupt my hon. Friends truly excellent speech. She talked about the Tories washing their hands of responsibility. I place it on the record in her speech that, during the reorganisation of local government, some of us pleaded, begged and went on our proverbial knees to Ian Lang and Lord James Douglas-Hamilton to ask them to listen, and we were absolutely spurned.
§ Ms OsborneIt comes as no surprise to me that that was happening in the House as well as in local government, where our words also fell on deaf ears. In South Ayrshire, the boundaries that we got were not the boundaries that the local area needed, but those that the Conservatives believed would gain them more seats. As it turned out, they got four seats out of 25, so it did not work—but they tried.
It is notable that, by definition, none of the Conservative Members present has any experience of local government in Scotland. I find some of their attitude and some of their remarks about local councillors in Scotland very patronising and deeply offensive to those who do a very hard job on the community's behalf.
§ Mrs. Maria Fyfe (Glasgow, Maryhill)Does my hon. Friend agree that the comments of the hon. Member for Woodspring (Dr. Fox), arguing that there was a culture of corruption within Labour local authorities, were deeply offensive? I do not remember any of us saying, when some Conservative Members were accepting large amounts of cash in brown envelopes, that it was a Tory culture and they were all at it. Why, then, are the official Opposition launching this attack? It is deeply offensive to honest, decent, hard-working councillors, who have a majority.
§ Ms OsborneThat is a well-made point, which will be noted by the people of Scotland as well as those present tonight.
The Commission on Local Government and the Scottish Parliament will report, and I believe that that will lead to radical change. For the sake of the Scottish people, it is vital that we go ahead on the basis of a revitalised local authority system, which has the credibility of civic pride—which has very much been enjoyed in Scotland—but in a way that reflects the needs of today's local government.
§ Mr. Andrew Welsh (Angus)I support the plea made by the hon. Member for Ayr (Ms Osborne) on behalf of the very many hard-working local councillors from all parties who—week in, week out—do tremendous work for local communities. On their behalf, we should all condemn anyone who lowers the standard and brings the system into disrepute. My background, also, is in local government and I know its value and worth. Due praise should be given to the hard-working, honest councillors who work for their community.
The Tory motion smacks of hypocrisy. The Tories starved Scottish local government of resources. When they were in power, they placed extra statutory burdens 216 on local councils and forced through a root-and-branch reorganisation against the clearly expressed wishes of the Scottish people. The Tories started the process of movement toward enabling authorities, with the consequent destruction of service departments and the loss of tens of thousands of jobs that affected communities throughout Scotland.
Since their total rejection by the electorate, the Tories have apologised for their treatment of local government. I suppose a death-bed confession is better than nothing, but it is no consolation to local authorities, the remaining staff or the communities they serve. It is an almighty insult for the Tory motion now to call for an investigation into all local government and every aspect of local government in Scotland when the problems of direct labour organisation incompetence relate to a limited number of very badly managed Labour one-party states. The efficient, professional, well-managed many should not be lumped in with the incompetent, corrupt few.
The North Lanarkshire report—an internal document from the North Lanarkshire council management services section—condemns the Labour-run direct labour organisation for its appalling "runaway Bonus Scheme". Taxpayers poured millions of pounds into a gaping financial hole that Labour councillors chose to ignore for more than a year. That damning report shows that the Labour party in North Lanarkshire swept away even the checks, balances and accountability procedures of the old Monklands and Cumbernauld and Kilsyth district councils, replacing them with the worst elements of the discredited Strathclyde region.
Under the system used by the district councils, the doomed bonus system could not have been created, nor could its effects have gone unnoticed. The report clearly states that no fewer than four elected members were aware of the situation; moreover, it refers to a report of March 1997 that levelled the same criticisms at the bonus incentive scheme.
Why on earth did those Labour councillors turn a blind eye and allow a system to continue which they surely knew would cost taxpayers millions of pounds and seriously undermine confidence in local government throughout Scotland? It is a fair question, and they should answer it.
Those Labour councillors are guilty of cheating the people in their local wards and of discrediting direct labour organisations throughout Scotland, which perform as best they can under new Labour's punitive financial regime.
§ Mr. Deputy Speaker (Mr. Michael J. Martin)Order. Terms such as "cheating people" are not expected in a parliamentary context. The hon. Gentleman is free to say what he wants, but he should bear it in mind that those men and women have families and that they have their own integrity. I therefore appeal to the hon. Gentleman for moderate language in these matters.
§ Mr. WelshPerhaps the strength of my feelings has led me to express them rather too strongly. However, these are serious matters that affect everyone and they lead to strong emotions. I should like strong action to match those emotions to solve the problem wherever it 217 exists. I certainly do not wish to attack individuals in such a way, but I do wish to attack the problem that has been created.
§ Mr. ConnartyThe hon. Gentleman has used strong language. Would he say that a member of a political party who is found guilty of fraud and stealing from the public purse should be kicked out of that political party and never allowed back into it?
§ Mr. WelshI think that if a person is guilty of fraud, a criminal prosecution should follow and they should be answerable for their own actions.
The crisis in Scottish local government not only exists at local level, but has been inflicted and encouraged by central Government. The Conservative party began the attack on councils with compulsory competitive tendering and effective privatisation of council services; new Labour has done nothing to reverse that trend. Best value retains the worst of CCT and imposes a top-heavy, bureaucratic structure that weighs the whole system down. It used to be said of some departments that they used to go out and cut the grass; now they appear to go out and measure it.
Councils must meet the demands of the Accounts Commission rather than those of the electorate and the community they serve. Unfair and inflexible comparisons are made between authorities in socially and geographically diverse areas. Crucially, best value is being implemented against a climate of severe local government budget cuts. The Labour party has clearly and unambiguously taken up the reins of local government cuts where the Tories left off.
In the last two years of Tory rule, council finances were cut by some £300 million. In Labour's first year, they have cut budgets by a further £150 million. The burden of pay increases was shifted on to councils and numerous additional financial demands were placed on local authorities without the money to back them up. That is at the root of the present crisis in local government. In addition, increases in pension costs, the effects of the Children (Scotland) Act 1995, the landfill tax and the true cost of local government reorganisation have hit local government. All that has come against a background of swingeing budget cuts.
The inevitable result has been a reduction in staff and an increase in work load. Among the first casualties have been the checks and balances that existed to prevent financial irregularities. Coupled with some rather inadequate actions, that has created fiscal and democratic disaster in North Lanarkshire, and it is repeated in too many other Labour one-party states. North Lanarkshire is a mess of Labour's own making, but it is now being used as a stick with which to beat every other council in Scotland.
In opposition the Labour party was quick to attack moves that stripped councils of their powers and of their ability to provide services. Since coming to power, the Labour Government have subscribed to the Tory idea that councils should be little more than enabling bodies or 218 local management companies. The Under-Secretary of State for Scotland, the hon. Member for Western Isles (Mr. Macdonald), has said that
fewer services under the direct control of councils has to be the future".I utterly disagree. Aside from the fact that that is an erosion of local accountability and local control, the evidence shows that such wholesale destruction of direct service organisations and direct labour organisations will lead to greater bureaucracy and lower standards.DLOs, their employees and the communities they serve must be protected against being undermined in that way. DLOs must be allowed to work in a framework that is efficient and transparent. The review that the Secretary of State has commissioned into DLOs all over Scotland is nothing but a smokescreen designed to cover the trail of destruction left in the wake of several disastrous and incompetent Labour councils.
It is the Labour party's responsibility to demand that its own councillors clean up their act where that is required. To hide the shame of what is going on, Labour and the Tories are calling into question every council in Scotland, as the motion shows. The accomplishment of the majority of DLOs and DSOs, which include many in Labour councils, in the face of severe pressure, is threatened by Labour's determination to erode local government from above and by inefficient management by certain Labour councillors.
The Secretary of State should realise that the problem is not with the DSOs or DLOs, but with his own party's inability to manage its resources efficiently and effectively. Local government in Scotland has been plunged into crisis and, instead of pulling it out of the mire, the Labour party seems to want it to sink for good. Fortunately, the people of Scotland now have an alternative. These are serious matters that bring into question local government as a whole. I want a strong, effective, accountable local government system. The sooner the problems are cleaned up, the better for everybody.
§ Mr. Michael Connarty (Falkirk, East)The motion is a false attack on the Government. It attempts to smear anyone who happens to wear a Labour ticket in a local authority. As other hon. Members have said, by imputation, anyone who serves in local government is smeared by the Conservatives. That is entirely consistent.
As my hon. Friend the Member for Linlithgow (Mr. Dalyell) pointed out, the Conservatives attacked Scottish local government during debates on their Local Government Bill in an attempt to destroy the credibility of local government by making its structures ineffective. The result was that the people of Scotland rejected the Conservatives thoroughly at local government level, and then at national level.
Now the Conservatives are picking on a difficulty in a local authority that should not have arisen, as we all agree. It should have been found out through the proper structures and controls, but it is not enough to sustain the Conservative motion, which calls for an independent inquiry. In our amendment we commend the actions of the Secretary of State.
It was clear that the hon. Member for Woodspring (Dr. Fox) was using a hollow lance in his attack on my right hon. Friend the Secretary of State. It was quickly 219 shattered because my right hon. Friend had taken an honest, open and pre-emptive approach to the problem and had shown Labour's willingness to innovate in local government in line with our ambitions and the built-in errors of past structures. I am happy to commend my right hon. Friend's speech and to support the amendment.
People seem to think that every time a councillor travels or goes to a conference it is a junket. I spent 13 years in a local authority, 10 of those years as a leader. Much of the travelling that I did and many of the conferences and seminars that I attended during that period were for the purpose of disseminating best practice.
I commend the work of ADLO—the Association of Direct Labour Organisations—which was formed to resist the attacks of the Conservatives who introduced an environment of compulsory competitive tendering in which it was impossible to take into account many factors that were relevant to the recipients of local authority services. Those factors could not be counted as part of a good service provided because of the method used, which focused on the bottom-line finances and the bidding. ADLO found ways of innovating and was a leader in the discussions on best value that will be used by the Government to provide better local authority services.
Perhaps some of the trips taken by some councillors should be monitored and the councillors disabused of the notion that they can travel abroad for a jaunt, even when the trip has no great relevance to the local authority. However, that should not introduce an atmosphere of no conferences in the local authority. Councillors and officials must be encouraged to travel, to meet, to study and to learn from each other so that best practice travels across Scotland.
Local government should be judged at many levels. There is a level of competence, a level of vigilance and a level of corruption. Those who know North Lanarkshire and the authorities that made up North Lanarkshire and East Ayrshire would say that there was a great deal of competence in many areas in those authorities and that they would stand up to scrutiny beside the best local authorities in the United Kingdom and in Scotland.
The local authorities may have fallen down in vigilance. The explanation offered by the hon. Member for Angus (Mr. Welsh) for other parts of Scotland was that they adopted a system used by a local authority that was not a district authority. Perhaps that method was inappropriate and the local authority lacked the fine tuning and did not have the spy glass on the right indicators to show early enough that something was going wrong. That can be dealt with by increasing vigilance.
There have been innuendos in the tabloids that corruption was going on. The example was given of a labourer who was employed as a crossing patrol man. I was amazed by the suggestion, offered by the Opposition Front Bench, that that person had earned the equivalent of £17,000. My understanding is that he was a labourer, and that if he worked all the hours he could work as a council official at his normal rate of pay he could have earned £17,000 on any job.
It happened that the council could not get anyone to fill the position of a crossing patrol man and therefore allocated to the job those people who were available—labourers. Perhaps that was wrong, but that is the explanation—not that the person was employed for a year and earned £17,000 as a crossing patrol attendant. I was 220 amazed to learn that that man could take his family to Gran Canaria, buy a car and refurbish his house on £17,000 a year. I should like him to come and look after my finances, because I cannot do that on my salary. I do not believe that there is room for serious accusations of corruption in that case.
I shall not go over what my hon. Friend the Member for Ayr (Ms Osborne) said, but there are many excellent councils that are innovative, enterprising and efficient. If one examines local authorities in Scotland, in 90 per cent. or more of the service delivery areas, all three adjectives apply.
In my local authority area the anti-exclusion policy in local authority schools is beginning to win back pupils from that dark area where they drop out of school and into other habits. The early intervention and early literacy schemes that I have visited at Inchyra nursery in Grangemouth were the best that I have seen, and I have looked at education throughout the UK and across the continent, especially in France. Those schemes are excellent and are making great inroads in Grangemouth.
In special needs education and the attempt to raise educational achievement for all pupils at all levels, Scottish local authorities are leading the way. When there was a Tory Government for 18 years, English local authorities would not have got into some of the difficulties that they experienced if they had followed the example of the many innovative and enterprising local authorities in education in Scotland.
There has been housing reinvigoration in the town of Grangemouth—a large overspill for Glasgow—which was probably built in a way that was not suitable for the long term when people's aspirations rose. The innovation of changing the tenure mix, top-downing flats and putting people into decent houses was commended by none other than Lord James Douglas-Hamilton, who was happy to be photographed with the tenants, local authorities and me during the last Government. There are many such examples. I am sure that there are examples in Angus and where the Liberal Democrats have influence.
I agree totally with the point made by another former councillor—my hon. Friend the Member for Ayr—who said that most people from all political parties join local authorities to serve the public and to do a good job to the highest standard. That applies to all the Conservative councillors with whom I served when I was leader of Stirling council for 10 years. There were not any SNP councillors because we had taken them all out—which is why we controlled the council.
§ Mr. SalmondThere are now.
§ Mr. ConnartyYes. In fact, the Conservatives created two seats in the north that were taken by the SNP, but the majority for Labour in the Stirling area is higher than it has ever been because people realise that public service drives the councillors. I do not think that we ever fell out over which party was best unless it was an election year and we wanted to be judged by the electorate. For most of the time, in the quadrennial cycle, we worked together for the benefit of the public.
What did the Tories do? The last Government abandoned the use of housing plans. We sent detailed assessments of need to the Scottish Office, but they were 221 put on a shelf and the Government did not respond to them. That is why many of the things that went wrong in housing were allowed to go wrong.
I mentioned corruption. I have a little local difficulty in that area. I find only one part of the Conservative motion interesting. It says that we require:
financial stability and ethically sound local government".I intervened on the hon. Member for Angus, but he did not take up my point. We have a little local difficulty in our area. We had a little difficulty when the SNP controlled Falkirk council and an SNP provost, Sandy Crawford, was sent to gaol. That is looking back in history, but we have local difficulties now.An ex-SNP councillor from my constituency, Jamie Rae, was involved from October 1990 to January 1995 in criminal acts for which he was sent to gaol. He faced 23 charges over that period. I have the evidence with me today, which has been returned by the police. Between 12 May 1993 and the end of March 1994, he defrauded the local authority of £2,545 in false claims for housing benefit for someone who was not resident at the house at 20 School road, Redding in my constituency.
There are also fraudulent mortgages, including the sad story of Jamie Rae's own uncle who was defrauded out of his house at 20 School road. He thought that he had signed an application for a housing grant but he had actually signed a document that allowed Jamie Rae to take the money when his house was sold and a mortgage of £37,000 was raised. I have a letter from the lawyer, Graham McLachlan, which was returned by the police. It says quite clearly:
The writer's recollection however is that the proceeds of the sale of the above property were paid to Mr. James T. M. Rae".That is the same councillor. He was gaoled, and what did we find upon his release? On 28 May 1998, that person was accepted back into the Scottish National party. I would like the leader of the Scottish National party, the hon. Member for Banff and Buchan (Mr. Salmond), to stand up now and tell us that he will kick him out. He is the kind of person we do not want in local government. I would like the hon. Member for Banff and Buchan to do the honourable thing now and say that he will throw Mr. Rae out of the SNP.
§ Mr. SalmondDoes the hon. Gentleman seriously seek to demean a debate about the conduct of the Labour party in North Lanarkshire, East Ayrshire, Glasgow and in many councils across west and central Scotland by talking about an individual case involving someone who transgressed and has paid his debt to society? Any party in the House would have members such as that. Is he saying that that is what the debate is about? If so, it shows the desperation of the Labour party in Scotland.
§ Mr. ConnartyThat intervention shows the paucity of the hon. Gentleman's argument about good local government. The money taken from the council has never been paid back. The money taken from my constituents, who paid the housing benefit charges, has never been returned by that individual. It is in a bank account somewhere. It is important to raise the matter here because the motion refers to ethical local government. We can deal with competence and vigilance, but the 222 leader of the SNP must deal with corruption and get that person out of his party. I contend that that person would never be allowed back into the Labour party; can the hon. Gentleman say the same about his party?
In considering this debate, I would like the Secretary of State to look seriously at finding a way of stopping such individuals from standing for local government when they have clearly defrauded money from the public purse—from their own constituents—and not returned it. That matter is very important to my constituents.
On the general approach to local government, I believe that this is a false and not very well-researched debate; it seems to have come from newspaper cuttings rather than from original ideas. I notice that the hon. Member for Woodspring, who led for the Opposition, has returned to the Chamber. I point out to him that police are called so often to Renfrewshire district council because SNP members put down motions that would never be accepted in the House—for example, "The provost is a liar—discuss." That is the sort of motion that they debate. When they are ruled out of order, they march up and down the council chamber banging on the table. In fact, they climb on the table in Renfrewshire district council chamber and refuse to leave when they are ordered out. That is why the police are called. That is what the SNP is offering the people of Scotland as an alternative at present. SNP Members should be ashamed of trying to use that in this debate.
§ Mr. Salmondrose—
§ Mr. ConnartyThe hon. Gentleman should sit down. If he cannot do the honourable thing, I shall not let him intervene. On the general approach to local government, it is important that we deal with the facts and the problems.
§ Mr. SalmondOn a point of order, Mr. Deputy Speaker. Should we not move the debate from individuals to subjects such as Ferguslie Community Business in Renfrewshire? Has the hon. Gentleman ever heard of that?
§ Mr. Deputy SpeakerI have already appealed for temperate language in the Chamber. We must be careful. Hon. Members have protection in the House, but it is perhaps unfair in a debate such as this, when we are considering local government in general, to refer to individuals by name. We should try to keep to the terms of the motion. I think that the hon. Member for Falkirk, East (Mr. Connarty) has made his point and should move on. My ruling applies to every hon. Member: I ask that the debate remains at a certain standard.
§ Mr. ConnartyThank you very much, Mr. Deputy Speaker. I made a point of using only evidence that was allowed in court and on the basis of which someone was found guilty in order to stress that we need ethical local government. That means that every party must deal with its members who break that ethic and the rule of no corruption in the harshest fashion or be judged unfit to put up candidates in local government elections.
§ Dr. FoxFar be it from me to defend the Scottish National party, but this debate is about the ethical conduct of the Labour party in local government in Scotland simply because it is by far the largest party. Throughout the debate, we have discussed the way local government 223 is being run. The hon. Gentleman referred to being able to take effective action. Does he honestly believe that what has happened to Pat Lally in Glasgow amounts to effective action?
§ Mr. ConnartyThe hon. Gentleman has mentioned another name and you, Mr. Deputy Speaker, have admonished us about for using individuals' names. I shall not be impolite to you by taking up the hon. Gentleman's point.
The motion and its terms are quite clear: it is about ethically sound local government. I commend the fact that the hon. Gentleman has drafted the motion in such a way as to allow that subject to be discussed. It is important to say clearly that, while we can work on incompetence and deal with vigilance and the structures for vigilance, corruption is just not acceptable in any part of local government. That is why I made those points.
In winding up, I move to the general approach to local government. I believe that local government has a very good record in Scotland—despite the fact that errors were made before I entered local government that people would quote to me as being reasons why it was not something in which one wanted to be involved. I am glad that I did not take that advice and instead became involved in local government. We found that Labour candidates were able to take Scottish nationalists out of the council because they were able to win their seats.
I believe that I followed the hon. Member for Angus in that I represented the same seat in the council after taking it off his successor, who was an SNP councillor. We did not do what we did on the basis that we wanted to abuse them. We wanted to replace them and to do better than them, not necessarily to drag them down or attack them. That has been the basis on which most councillors have gone into councils.
If things go wrong, one of the reasons is that because of their size and structure councils can suggest—even Government can suggest—that councillors should remove themselves by going into some sort of think tank, including general policy committees and strategic committees, leaving the council officers to get on with delivering services. If councillors get the structures right and if the reporting mechanisms are correct they can, possibly, take that course, but I would argue that the involvement of as many councillors as possible and as many individual contacts as possible between officers who deliver services and accountants to evaluate the quality of those services and the cost of them, along with the performance and quality of those who are responsible for the delivery of the services, can benefit local government.
I would worry if we ever moved to a super-councillor concept—a few councillors to look after everything and the rest having no function. We must give local Government some dignity. That means that we must be more supportive as a Government. We must be more interrogative and there must be more scrutiny, but we must be more supportive. Our approach must be positive. We must try to correct errors and to give those involved good structures, good advice and good, firm rules setting out how councillors should go about things. We should then support and encourage them.
I worry that people do not turn out to vote. I am involved in a by-election in my constituency. It is the first one this year. If 32 per cent. of the people turn out to 224 vote, I will be seriously disappointed. However, I believe that that was the average turnout in the English local government elections.
§ Mr. ConnartySo it was less than 32 per cent. That is even worse.
Perhaps the problem is that the Government—previous Governments and even the present Government—have not given local government proper value and have not talked it up to make people realise that it is an important matter. It is public service. I was a teacher who worked on a half-time contract for 10 years so that I could be a councillor on a Thursday and Friday and on most evenings when I was not in school. That was my choice. I was lucky to have another salaried person in the house, which enabled me to do that. Many people are not in that position. I am not saying that I was necessarily of the calibre that we have been discussing, but people of high calibre should be attracted to give public service at local authority level.
I think that the Government should seriously consider abolishing the Widdicombe rules, which is the United Kingdom equivalent of Berufsverbot. Individuals in certain positions in a local authority area cannot stand for any political position. They cannot offer to serve. It was an honourable tradition and not a much abused one where those who were professionals served. Often local government officers served in other local authorities. That is more difficult now because of the size of local authorities. However, I believe that offence was caused to those who were willing to give public service. We should consider ways of releasing professional talent and bringing it back into local authorities. We should kick out the motion and support the amendment.
§ 9.2 pm
§ Mr. Graham Brady (Altrincham and Sale, West)At one point, the hon. Member for Falkirk, East (Mr. Connarty) suggested that this was a false debate. Far from that being the case, we initiated the debate to put the spotlight on the behaviour of many Labour local authorities in Scotland and to introduce appropriate scrutiny, which is an important democratic function. The hon. Gentleman suggested two local authorities. I think that we might suggest one or two more than that.
The debate has produced a particular and welcome advantage because we have given the people of Scotland a foretaste of what the Scottish Parliament may hold in some of the exchanges between Labour Members and Scottish nationalists in the Chamber this evening.
§ Mr. BradyI did not mean to suggest that particular individuals in the Chamber may be participants in such exchanges in the Scottish Parliament.
§ Mr. SalmondApparently the hon. Member for Falkirk, East (Mr. Connarty) will not be going to the Scottish Parliament because he did not wear a tie for his interview in the Labour party and was turned down.
§ Mr. Deputy SpeakerOrder. The hon. Member for Banff and Buchan (Mr. Salmond) pleaded with others to keep within the terms of the motion but he is now outwith its terms.
§ Mr. BradyIt is welcome and important that the Labour party is at least prepared to set some standards in some things, if not in local government. I may actually welcome that, although I am sure it is a great loss to the local Scottish Parliament that the hon. Member for Falkirk, East will not be represented there.
The hon. Gentleman defended the payment to a lollipop man of £17,000 a year. I would not wish to comment on that. I notice that he did not bother to defend the record of a plumber earning £54,000 a year. Perhaps he thought that there was nothing exceptional in that and that it was a typical income for someone in that profession. That may be true.
The hon. Member for Ayr (Ms Osborne) referred properly to the many very good councillors. A number of hon. Members have referred to the many people who have given sterling service—no pun intended, and no credit intended to the Stirling local authority—to local authorities and to the people in Scotland, as in the rest of the country, over a number of years. The hon. Lady is right to highlight that.
It is unfortunate that, whenever parties, hon. Members or people outside the House draw attention to the bad behaviour of a few people in public life, the reputations of others are tarnished, but that does not detract from the fact that it is essential to apply proper scrutiny to what is happening in local government in Scotland. It would be wrong to avoid debating subjects because they might detract from the good work that people do.
The Secretary of State made a gracious speech, and fully and frankly admitted that something must be done about the state of local government in Scotland. He is absolutely right, but he did not go nearly far enough in his analysis of the problem or in examining ways in which it should be addressed. Uncomfortable as it may be, Labour Members must accept that their party, not the structures of local government or the systems with which they may want to tinker, is, in many ways, at the root of the problem.
The new charge that the Secretary of State levelled at Scottish local authorities was most interesting. He suggested that they had systematically flouted the law on compulsory competitive tendering over a number of years—something that many of us had suspected at many junctures. It was interesting that he emphasised that, and appeared to admit and accept it.
The debate brought from my hon. Friend the Member for Woodspring (Dr. Fox) an appalling litany of incompetence and corruption on the part of many local authorities in Scotland and many councillors. We have heard about the situation in North Lanarkshire at length, and I shall not dwell on the more ludicrous examples of conduct there. It was not brought out, however, that council employees owe more than £1 million in council tax. The appalling incompetence of a council that allows its employees to be in such a position beggars belief.
We have heard that two Labour councillors in East Ayrshire threatened a council officer with the sack if he did not use his allowance or expenses to buy them drinks. The hon. Member for Ayr, rather disingenuously, suggested that that is comparable to hon. Members occasionally accepting free drinks or meals from outside bodies. I should imagine that all of us present in the Chamber have declined superficially attractive engagements involving free drinks or a meal, and had a 226 much more enjoyable and fulfilling time than we would have done had we succumbed to those temptations. What has happened has nothing in common with someone from outside the House offering hospitality to a Member of Parliament or to a councillor. The onus would be on such an hon. Member or councillor not to be influenced in any way by hospitality, but accepting such hospitality is simply not comparable to the rather disgraceful allegations that have been laid against those councillors. They abused their position in the most appalling way and, what is more, placed council officers—their employees—in a terrible position.
We all know of the votes for trips allegations in Glasgow. I understand that not council employee but a councillor owes £3,748 in council tax arrears. That is another disgraceful disregard for office. Another Glasgow councillor, who is, I understand, in receipt of £40,000 a year of taxpayers' money through various allowances and urban development work, has bought a new house, but has not repaid £1,300 of rent arrears on a council house.
§ Mr. DalyellWill the hon. Gentleman name the councillor to whom he is referring?
§ Mr. DalyellIt is all very well to rely on press reports, but I know to whom the hon. Gentleman is referring. It is a poor press report that does not give the full story, if the right person has been identified. Members of the House of Commons should not make unspecified allegations about individuals of whom they know nothing.
§ Mr. BradyI thank the hon. Gentleman for his remarks. If the press reports are inaccurate, I apologise unreservedly to the individual concerned.
§ Mr. HayesBefore my hon. Friend continues his combination of a sermon and a travelogue, will he consider this point? The litany of misdeeds that he describes is part of a local government culture that is peculiar to parts of Scotland. It will damage the good name of local government in Scotland and, as a consequence, people will become disillusioned with the democratic process. The serious issue is not the individual cases, but the effect that they have on Scottish Labour local government culture.
§ Mr. BradyI thank my hon. Friend for his helpful intervention. That is the point. If the hon. Member for Linlithgow (Mr. Dalyell) knows that press reports have been misleading, he is right to correct any false impression. That does not alter the fact that the sheer volume and weight of the allegations in all parts of the Scotland that have appeared in the press for some time and that are frequently subject to investigation show a picture of incompetence and corruption. Given the large number of allegations, it would be reprehensible of us not to draw attention to them.
In East Dunbartonshire, even Unison has attacked councillors as fat cats and suggested that they pay themselves too much money. The picture is one of arrogance and disdain in far too many parts of Scotland. 227 There is disdain for the public and for democracy. The Secretary of State was right to refer to a culture of complacency. It would be wrong to contemplate further relaxation of the ban on political office for senior employees, as the hon. Member for Falkirk, East suggested. One of the causes of this difficulty is the blurring of the distinction between councillors and officers: between public office and the services that councils control. The background to compulsory competitive tendering and the fact that some services did not go out of council control was unfortunate: it might have lessened the problem if they had.
What has happened in Scotland is unfortunately reminiscent of what happened in other parts of the country over many years. I shall not dwell on the loony left in London, because you would rightly call me to order, Mr. Deputy Speaker. This is an old Labour story of municipal sleaze. It occurs in many places. I am sympathetic to the many Labour Members who are properly ashamed of the bad conduct of members of their party.
When one party is in control of a local authority, often with insufficient opposition from other parties—in effect, a one-party state—it can lead to abuse. We have seen that happen in many of the great cities of the north. Labour control of Liverpool has recently ended. Sadly, the electors in Liverpool moved only to the first stage: it is now under Liberal Democrat control, and it will not return to its former greatness until it is once again under Conservative control.
In my city of Manchester, we are wary of what has happened in Scotland. Manchester city council wants to expand its boundaries to include parts of my constituency. My constituents tremble with fear at the prospect of being subsumed by the kind of one-party state that we see in local government in Scotland.
Labour has had too much power for too long in too many town halls in Scotland. The only hope for democracy lies with the Scottish people. They can reduce the dominance of Labour in Scottish local government. That will happen over time. The only thing that concerns me greatly is that they may turn to the Scottish National party to remove Labour from office, as it seems they intend to do for the Scottish Parliament. That will give the impression that they want full independence for Scotland, and I hope and believe that that is a false impression. The only answer is for them to turn to other parties in Scotland that do believe in the Union. I firmly hope and believe that they will begin to return to the Conservative cause, which will start to redress some of the difficulties and imbalances that we have debated this evening.
§ Ms Rachel Squire (Dunfermline, West)I trust that, at some stage, the hon. Member for Altrincham and Sale, West (Mr. Brady) will ask himself why, at the most recent local elections, the people of Scotland decided to get rid of the few Conservative-controlled councils that remained.
I have mixed feelings about today's debate. Along with, I think, hon. Members on both sides of the House, I wish that it had not been necessary: I wish that there had been no sign of mismanagement in any Scottish local authority. Again along with hon. Members on both sides, I think, 228 I believe that any misconduct on the part of local government, or indeed central Government, should be dealt with appropriately and fully.
Like others, I emphasise that the majority of elected representatives, whether they are Members of Parliament or councillors, are honest and hard working, and that it is in no one's interest for a cloud to hang over the conduct and credibility of elected representatives. Unlike one or two earlier speakers, I well remember how, in the last Parliament, many hon. Members felt that our reputation was being tarnished by sleaze and suspicion generated by the conduct of certain members of the then Government party, particularly their appalling practice of accepting cash for questions.
I do not believe, and I do not think that the public believe, that there is anything to be gained from using the debate to score cheap party political points. If we are completely honest, we must say that every political party that is represented here tonight has had, at one time or another, to investigate allegations of misconduct among its own members and elected representatives—and rightly so. The public expect the highest standards of conduct from those who hold public office. It is important for us to demonstrate tonight that our common objective is to uphold those standards, and to praise and give credit to those who have conducted themselves so well for so many years.
§ Mr. HayesI respect much of what the hon. Lady has said about ensuring that the highest standards are upheld, but what tangible proposals has she for putting that in place? The Secretary of State mentioned a commission for complaints and a new code of conduct, but what about other statutory measures?
§ Ms SquireI shall refer later to some of the actions that the Government have already proposed and, indeed, taken. First, however, let me praise the swift action taken by my right hon. Friend the Secretary of State in relation to North Lanarkshire and East Ayrshire councils.
§ Mr. Allan Rogers (Rhondda)Will my hon. Friend reflect on the fact that the present system of local government, and the present structure that controls it in this country, were set up by the Conservative party? During their 18 years in office, the Conservatives passed more local government Bills than any other Administration, and what exists now is a result of their Government.
§ Ms SquireMy hon. Friend makes some relevant points.
It demonstrates the determination of the Secretary of State that he has not only acted swiftly in respect of two councils, but taken the opportunity to review the operation of all direct labour organisations in Scottish local government. He has ensured that external auditors go through the books of each and every one of them to reveal whether there are any further causes for concern. In reply to the hon. Member for South Holland and The Deepings (Mr. Hayes), let me say that this Government have already published a new ethical framework for Scottish councils and are endeavouring to ensure the highest standard of conduct.
Opposition Members have said quite a lot about culture. I clearly remember some aspects of a culture where people were desperate to retain jobs in the public sector. 229 They were desperate as they saw tens of thousands of jobs in the mining industry, in the heavy engineering sector, in the steel industry and in manufacturing destroyed by the previous Government, who must accept some responsibility for making councils feel that the priority had to be to try to maintain some reasonable level of employment in local authorities.
This Government have already demonstrated their commitment to ensuring that councils are efficient and provide quality and best value services. The Secretary of State has issued a notice to councils over concerns and instructed them to come back with a rationale. He will look at what they have to say and issue the necessary directions. Every council in Scotland will be required to introduce a new code of conduct for councillors and, as has been mentioned, the independent commission is already examining the future relationship between a Scottish Parliament and local government.
Despite the impression that may have been given by some Opposition Members, I want to mention some of the excellent actions that have been taken by councils in Scotland, particularly the council that I deal with as a Member of Parliament, Fife council. To use the words of my hon. Friend the Member for Falkirk, East (Mr. Connarty), it has been innovative, enterprising and efficient in many respects.
Let me cite one or two examples. In the budget-setting exercise for the financial year 1997-98, Fife council undertook the largest consultation exercise of any council in Scotland. It involved all of its council employees, hundreds of community groups and local residents. The council also held more than nine public meetings to discuss directly with the people of Fife how they thought that the council's expenditure could best be spent.
The council decided not to wait for further action from central Government but immediately to take seriously the work of the Nolan committee; it has already adopted the national code of conduct for elected members. It has shown its determination to develop an integrated, one-stop approach to local services. I recently had the pleasure of opening the local services office in High Valleyfield in my constituency; the council had directed money there to provide such a local service.
Fife council and other councils should be applauded for the action that they have taken on so many matters—such as providing education, especially pre-school education, and on domestic violence—[Interruption.] The hon. Member for Epping Forest (Mrs. Laing) scoffs. Perhaps she finds it difficult to accept that Labour-controlled councils can provide first-class services to the people whom they represent.
I am looking forward to developing new ways of working—which could be one of the positive consequences of today's debate—in ensuring that we change the face of politics in both central and local government, in building a positive and constructive relationship between local government and the Scottish Parliament and in demonstrating the House's commitment to giving the people a voice that will be heard—in contrast to the way that the voices of the many were ignored, for 18 years, by the few in the previous Government.
§ Mrs. Eleanor Laing (Epping Forest)I am ashamed that today's debate is necessary and, from his eloquent speech, I rather suspect that the Secretary of State is also ashamed that such a debate is necessary. Although he was careful in dealing with the specifics of the motion on the Order Paper, he was also careful to distance himself from the culture of Labour in local government in Scotland.
I am ashamed because the once good name of Renfrewshire and Paisley—which is my home—has been tarnished by the behaviour of some of the elected representatives. I care about what happens to the people of Paisley and Renfrewshire. Although I should like to say that they do not deserve their local government, I cannot say it. They deserve their local government because they persist in voting for Labour, and sometimes for the Scottish National party.
I remember Paisley and the villages around it as a prosperous and proud area. The hon. Member for Ayr (Ms Osborne) was wrong—although she had no way of knowing it—in saying that Conservative Members know nothing about local government in Scotland, because I do. My father was a member of Renfrewshire district council for almost 20 years—for the whole of my early life. However, those were very different days.
§ Ms OsborneI am grateful to the hon. Lady for giving way, especially as I—as a Paisley buddy myself—seem to have something in common with her. If she will tell me her father's name, it may be that I knew him.
§ Mrs. LaingI must, because of time, make some progress.
Those were very different days—I am talking about the 1960s and 1970s, so I very much doubt that the hon. Lady knew my father; but that is not really the point—when the object of seeking election was to serve the local community, not to line one's own pockets or to get jobs for one's friends and family.
I am not suggesting—Labour Members will agree with me—that simply electing more Conservative councillors in Scotland will make the difference. I can think of several decent old-style Labour, SNP and independent councillors who, although I would not agree with their policies, were decent people doing their best for their own local community. Indeed, a member of my family was a prominent Glasgow Labour councillor for many years. Today, however, I would not embarrass him by asking him what he thinks about the necessity of this debate or the behaviour of his successors. He, too, must be ashamed of them.
Many senior Labour Members must be ashamed of the way in which their supporters have been behaving for many years in Scotland. However, we are debating not old Labour—which, however wrong in its economic and social policy, had principles—but new Labour, which has no principles, no beliefs, no standards, no discipline and no decency. New Labour is only out for itself. The new Labour party in the west of Scotland is rotten to the core. Labour Members know that, which is why they are embarrassed. I do not know why the Secretary of State is laughing—it is not funny. It is certainly not funny for the people of the west of Scotland who have to live under the domination of Labour local government. 231 I have every sympathy, however, with the people who try to combat sleaze in the west of Scotland. I am thinking of the hon. Member for Paisley, North (Mrs. Adams) and the late hon. Member for Paisley, South who, we should not forget, fought hard against the sleaze that he encountered daily in his constituency.
How amusing it was to hear the hon. Member for Aberdeen, North (Mr. Savidge) criticising my hon. Friend the Member for Woodspring (Dr. Fox) for not having intimated to the hon. Member for West Renfrewshire (Mr. Graham) that he might mention his name in the House tonight. What difference would it have made? We have not seen the hon. Member for West Renfrewshire for nearly a year. The people of West Renfrewshire are not represented in the House because of Labour sleaze in the west of Scotland.
§ Mr. Deputy SpeakerOrder. No hon. Member should be associated with any type of sleaze. I hope that the hon. Lady was not making any particular comment about the hon. Member for West Renfrewshire (Mr. Graham). Whether or not the hon. Gentleman is absent, the hon. Lady should not make such a comment.
§ Mrs. LaingThank you, Mr. Deputy Speaker, for clarifying what I was saying. I make absolutely no allegation against any particular hon. Member. I am talking about the culture of the Labour party in the west of Scotland, not about any particular person.
The Secretary of State was very swift this evening to blame the newspapers for spreading stories, but I did not have to read the newspapers—I heard directly how often the police have been called to meetings of Renfrewshire district council. Everyone in the area knows it. The Secretary of State knows that many of the reports in the newspapers are factually absolutely correct.
§ Mrs. Irene Adams (Paisley, North)Will the hon. Lady give way?
§ Mrs. LaingI beg the hon. Lady's pardon, but I cannot give way because of the lack of time.
§ Mrs. Adamsrose—
§ Mrs. LaingOh, very well. I give way briefly to the hon. Lady as she represents Paisley, North.
§ Mrs. AdamsThe hon. Lady will be aware that when the police have been called, it has been by the Labour party with the support of the Conservatives on Renfrewshire council on account of the conduct of the Scottish National party in particular and of some independent members.
§ Mrs. LaingI thank the hon. Lady, but I am aware that Conservative councillors on Renfrewshire district council have been instrumental in calling the police time and again.
The Secretary of State this evening simply swept aside many of the press reports. I shall not deal with them in detail because of the lack of time, but every hon. Member knows of the allegations concerning council officials, councillors and the people who are running the Labour party in the west of Scotland.
232 The Secretary of State and the hon. Member for Angus (Mr. Welsh) were swift to defend direct labour organisations. I attack DLOs without reservation. They were even worse before the Conservative Government introduced compulsory competitive tendering. The reason why I condemn DLOs out of hand is that they unfairly undercut small local businesses. The Secretary of State defends the public sector. The Labour party pretends to be the party of business, but it is not. It is interested only in the public sector, certainly not in small businesses in the west of Scotland.
Examination of local government in Scotland provides a tragic vision of what might happen in the future. It does not augur well for the new Scottish Parliament. I wonder whether Labour Members are aware that American companies planning to invest in Scotland are now taking out political risk insurance—that is how much confidence the Labour party inspires in the very people it wants to attract to improve the Scottish economy.
The point of the debate is what we have learnt not about individuals but about the Labour party itself, and not only in Scotland. Its leadership, the Secretary of State and the Prime Minister have been careful to distance themselves from their party's activists. They are so concerned with their image that they want to cast aside the facts. What we have learnt tonight is not about old Labour or new Labour, but about real Labour. The people of Scotland should beware of real Labour.
§ Mr. Desmond Browne (Kilmarnock and Loudoun)I am grateful to my hon. Friend the Member for Linlithgow (Mr. Dalyell) for giving up the opportunity to speak, to allow me a few minutes. I have a particular interest in the debate, because my constituency is wholly within the borders of East Ayrshire council. I share the concerns of all hon. Members about the serious deficit that my council has had to report in the accounts of the direct labour organisation. The figures reveal unacceptable management failure and inefficiency. That view is shared by the leader of the council and all its elected members, including the administration and the opposition.
To prevent the House from relying on recycled press releases, misquoted and sometimes partially quoted by the hon. Members for Woodspring (Dr. Fox) and for Altrincham and Sale, West (Mr. Brady), I had intended to go into the history of the deficits at some length and explain the actions of the council and the councillors. I do not have time to do so, but I am sure that the House will accept that I have investigated the issues as far as I can, subject to the Accounts Commission's investigation, and am satisfied that we are not dealing with a story of sleaze, corruption or the abuse of a one-party state. It is a story of elected members who do a difficult job. In November last year, they realised for the first time that there were problems, and have organised and instructed proper investigations, which have revealed the deficits.
The council leadership and chief executive have explained their decisions fully to the opposition Scottish National party councillors and have taken them with them. At no stage during the investigation has any opposition member on the council been kept in the dark about what was going on. Importantly, no opposition member has expressed any view contrary to the decisions of the administration. 233 The council prides itself on openness and accountability. To my understanding, it was the only council in Scotland to take its budgets out to public consultation in public meetings. I see some of my hon. Friends shaking their heads, so it may not be the only council, but it was certainly one of the first to do so. As soon as the extent of the problems came to light, the leader of the council issued a press release. I shall quote from it to show the responsibility that the council has taken for the issue. He said:
We instigated an investigation as soon as the deficit came to light, we called in the Accounts Commission when we realised it was growing, and we contacted the Scottish Office when the scale of the problem began to emerge.When the independent audit is complete and when all the information is available it will be made public. Further I have asked the officers of the Council if we can instruct an independent inquiry into the actions of all the elected members including myself.The leader of the council has since said publicly that if he is criticised, he will consider his position and act accordingly. He is a man of integrity. Finding themselves in a difficult position, East Ayrshire councillors have taken steps from day one to clear up the mess, inefficiency and mismanagement. They will accept the political responsibility required of their office. I commend their integrity to all hon. Members.
§ Mr. DalyellOn a point of order, Mr. Deputy Speaker. Could it be put on the record that several hon. Members would have wished to speak, so that anyone reading the debate will not draw the conclusion that there was a lack of interest? In no way do I criticise the choice of speakers.
§ Mr. Deputy SpeakerThat is not a matter for the Chair. Those who were not called will be remembered on a future occasion.
§ Mr. Oliver Letwin (West Dorset)I share the misery of many colleagues on both sides of the House at the fact that the hon. Member for Linlithgow (Mr. Dalyell) was unable to speak in the debate. He always has an interesting contribution to make.
Given what might be the somewhat sore and battered nerves of Labour Members, I shall begin by warming the cockles of their hearts. There is a very beautiful kind of old rose which grows in many parts of the kingdom and goes by the name of New Dawn. At the election, many millions of our fellow countrymen thought, rightly or wrongly, that they would see a new dawn from the Labour rose. They were told by no less a figure than the Prime Minister in various utterances, and in the manifesto, that the Labour Government would be committed to open government, cleaning up politics and improving local government. Those claims were repeated and repeated. If those claims were real, they should clearly apply in every part of the kingdom—in Scotland and in Scottish local government. [HON. MEMBERS: "And in Westminster."] Indeed, in Westminster as well.
In this debate, various very serious allegations have been raised about the conduct of local government in Scotland from every point of view. They have been raised from the point of view of financial mismanagement—admitted in great part by the Secretary of State—of 234 corruption, of cronyism and favouritism, and of the way in which the culture of local government, particularly Labour local government in Scotland, works. The accusations may be true or false; they may be partly true or partly false.
Labour Members spent time explaining that the allegations were very restricted. They tried to minimise the scope of the allegations, saying that only one or two councils are affected. I have no doubt that some were telling the absolute truth when they explained that there are many excellent councillors—Labour councillors and others—in Scottish local government who are doing good work, and that many councils are doing good work. Labour Members did not answer the allegations point by point; they merely sought to minimise them.
The Secretary of State took a different tack. He made a most interesting and, as always, a very eloquent speech. He posed as the magisterial figure, who has nothing to do with the mere squabbles of party politics. In all his awesome grandeur, he is to descend on the councils as an independent arbiter. He is to set matters right by putting in some accountants, and then by changing—or, at any rate, considering changing—structures.
The accusations that have been raised by my hon. Friends and members of other parties are not trivial. They are serious accusations, which, if they were true, nobody could claim would not warrant serious investigation and remedying. In fact, I think that the Secretary of State admits as much.
If this is the Government who are committed to open government, cleaning up politics and improving local government, is it so very much to ask them to conduct a full and open independent public inquiry into the allegations to discover how far the multitude of press reports is true, partly true or false? How can a party that proclaimed to the British public that it sought openness, purity and reform of local government not commission such an inquiry in the face of such a welter of accusations?
§ Mr. Malcolm Chisholm (Edinburgh, North and Leith)What reason does the hon. Gentleman have to suppose that the Accounts Commission is not an independent body?
§ Mr. LetwinI make no such accusation. The Accounts Commission is an independent body but it is restricted by statute. It can investigate only a narrow range of financial matters. The Secretary of State was at pains to point out that his objection to the motion, which he would otherwise have accepted, was precisely that we were seeking to widen the scope of the inquiry. I repeat the question: how can a Government and party devoted to openness and to cleaning up and improving local government resist an independent inquiry of wider scope?
On 12 July 1997, a right hon. Gentleman who does not often appear in the House but is of more importance than we poor mortals who do, the Prime Minister, told a Labour party conference:
But we are on trial. Deliver our promises, repay the people's trust, and we will be rewarded with more of their confidence. Go back on those promises, return to old ways, and we will lose that trust.He was right. There is a sort of trial, but, alas, it closely resembles Kafka's trial. The Prime Minister, as Prime Minister, is judge. As leader of the Government, he is 235 foreman of the jury. Most important, as leader of the Labour party, he is the plaintiff. That is not open government.
§ Mr. BrowneThe hon. Gentleman's vocabulary is slightly wrong. The debate is about Scotland, where we say "accused", not "plaintiff".
§ Mr. LetwinI am well aware of the hon. Gentleman's credentials. He has explained to the Competition Bill Committee that he is not a lawyer but a notary. I do not regard either point as material to the debate.
If we do not have an inquiry, it will do lasting damage not only to local government in Scotland and the Labour party but to the structure of democracy in this kingdom. It will do damage because the Labour party—I apologise to hon. Members who represent the Scottish National party—is likely, often if not immediately, to form the new Government of Scotland. I thought that the Secretary of State might appreciate those remarks. No doubt SNP Members are quietly fuming, but the people of Scotland may well elect Labour to the new Government of Scotland.
§ Mr. SalmondI do not mind the hon. Gentleman conceding defeat for the Conservative party, but can he leave us out?
§ Mr. LetwinThe issue is not the frivolous debating point of whether Labour will win, but that it may win. It is therefore of the utmost importance to the electorate not only of Scotland but of the United Kingdom to know that the Labour party in Scotland has been cleared of what the Secretary of State claims are overblown allegations. He can do that only by commissioning a full, independent inquiry. At that point, the problem will disappear. Until then, we have what was accurately described by Kafka as
a blend of fog and smoke fillingthe Chamberwith a faint smell of burning soot".
§ Mr. WallaceWill the hon. Gentleman clarify his motion? is it for an independent inquiry into the allegations that have been made, or, as appears in the Order Paper, into the conduct of local government in Scotland, in which the whole of local government in Scotland is tarred with the same brush?
§ Mr. LetwinThe sad fact is that the dominance of the Labour party in local government in Scotland, especially in the councils under discussion, is so nearly complete that the difference evaporates. It is a difference without a distinction.
We are asking whether it is true, as is alleged in press report after press report, that the culture of the Labour party in dominating local government in Scotland has reached a point at which it needs investigation. That question can be answered only by such an investigation.
§ Mr. DewarAs the hon. Gentleman is talking, as many hon. Members have talked, about Renfrewshire council and its dominance by the Labour party, could he tell us what the political make-up of Renfrewshire council is?
§ Mr. LetwinI have no intention of spending the last half-minute of my speech doing that. I shall, as the Secretary of State himself would say, write to the right hon. Gentleman on the matter.
236 The question at issue is clear: will the Secretary of State open local government in Scotland to the kind of inquiry that it deserves and needs, following those allegations? If, in the winding-up speech, we are to be told that the answer to that question is no, we must be told why not. Why will those claims made by the Labour party before, during and after the general election not be applied in this case, by means of a full, independent and open inquiry?
§ The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald)Despite its ups and downs, this has been a useful debate on the whole, and has made some things, at least, a wee bit clearer. First, there is agreement that, in two cases, direct labour organisations in Scottish local councils made unacceptably high losses, and revealed serious problems within management and control. As my right hon. Friend the Secretary of State made plain, serious failure of that magnitude is not acceptable, and will not be tolerated.
Secondly, as several hon. Members have said, it is clear that my right hon. Friend acted swiftly and promptly in response to the problems when they emerged. He instantly activated the statutory procedure, issued notices to the two councils, and called for reports from all councils on the financial status of their DLOs. He has also asked the Accounts Commission to prepare a high-level audit of all councils in July, not only on the operation of their DLOs but on the client side.
It is important to point out, as my hon. Friend the Member for Edinburgh, North and Leith (Mr. Chisholm) has just suggested, that the Accounts Commission is independent. Its findings will be made public, and in the course of its investigations it can ascribe responsibility for the various things that have gone wrong.
The action that my right hon. Friend has already taken is, I believe, unparalleled in its speed. He has made clear his intention to act effectively and swiftly in the statutory process that he has started. He has also made it clear that, if similar problems emerge in other Scottish councils, he will not hesitate to take similar action.
The third factor that has emerged in the course of the debate is the paucity of constructive suggestions from the Conservatives to tackle the crisis that they affect to describe. It has become clear that it is the Government who have the constructive agenda for reform and modernisation of local government. The proposals for a new ethical framework, for the appointment of the McIntosh commission with a radical and far-ranging brief, and for the development of a new system of best value to replace the discredited policy of compulsory competitive tendering, are all evidence of the Government's drive to improve and modernise.
To pick up some of the specific points that have been made in the debate—
§ Dr. FoxDid not the failings of the two councils whose DLOs gave rise to the problem occur within what the Government have described as best value practice?
§ Mr. MacdonaldThe contracts that the DLOs now have were secured by competitive tendering. The competitive tendering was not compulsory, but it was entered into voluntarily by the local authorities, which followed the exact procedures that the Conservative 237 Government laid down. Those are the procedures that produced the contracts that led to the problems for the local authorities.
During the debate, some hon. Members advanced constructive proposals for reform and improvement in local government. My hon. Friend the Member for Ayr (Ms Osborne) mentioned the value of systems of decentralisation, and of the establishment by various local authorities of citizens' juries. Local authorities have pioneered several different decentralisation schemes, which have been submitted to the Scottish Office. While they are not actually gathering dust, the Government have no power to dictate to local authorities how to operate such schemes, which is right, because there must be space for local flexibility. The existence and experience of those schemes will be a valuable resource for the McIntosh commission.
The hon. and learned Member for Orkney and Shetland (Mr. Wallace) turned to his favourite remedy for all ills—proportional representation. We have asked the McIntosh commission to take a fundamental look at how to enhance accountability within local government, including asking questions about why people do not turn out to vote and how best to elect councillors.
I concede that there is a case for some form of proportional representation in local government elections, albeit not an unanswerable case, and my right hon. Friend the Secretary of State recognised that case in his recent Richard Stewart memorial lecture. As the hon. and learned Gentleman knows, I am not opposed in principle to proportional representation, and nor are the Government; we have introduced it for European elections and for elections to the Scottish Parliament, but we remain agnostic about its suitability for local government.
§ Mr. WallaceI did not say that proportional representation was necessarily a panacea for all problems—in fact, an important aspect of the relationship between central Government and local government, which influences the strength of local government, is the financial relationship between the two. Will the Minister explain why the financial relationship between the Scottish Parliament and Scottish local government is not within the remit of the McIntosh commission?
§ Mr. MacdonaldThere are two reasons: first, it would make the work of the McIntosh commission too unwieldy if it had to investigate those financial systems in detail; and, secondly, we are reviewing the financial arrangements for local government as part of the comprehensive spending review, and we shall publish a consultation paper on that subject in the summer. The McIntosh commission has said that it would want to look generally at the financial relationship between the Scottish Parliament and local government, which we accept is a proper and legitimate thing to do.
The hon. Member for Angus (Mr. Welsh) was rather critical of recent Accounts Commission reports, and implied that they were rather inflexible, but he is quite wrong. I would argue that those reports are an important starting point for the best value process, because they allow an increasingly sophisticated system of benchmarking and competitive comparisons between various local authorities 238 to be developed. A couple of hon. Members, including my hon. Friend the Member for Falkirk, East (Mr. Connarty), raised the question of the Widdicombe rules. Those are being reviewed, although I would not anticipate the dramatic change for which my hon. Friend argued.
The hon. Member for Altrincham and Sale, West (Mr. Brady) mentioned council tax collection. I can tell him that we expect councils to improve their collection rates, and that the Government have made special funds available to achieve that end. We expect councils to ensure that their own employees in particular pay their debts to the council. That must be an important priority for councils, as it is vital to public confidence.
Scottish local government faces a very important challenge, as it has in future to exist alongside a democratically elected Scottish Parliament. Over the past 20 years, Scottish local government has provided an important democratic protection for the people of Scotland, and the public services on which they depend, against a hostile and interfering centre in Whitehall. That is changing. Local government will now have to form a new, constructive partnership with the Scottish Parliament, which will have its own strong democratic mandate. That is why the Government have set up the McIntosh commission, and its report will be delivered to the First Minister in the Scottish Parliament.
I have no doubt that the Labour party will lead the development of new and imaginative ways of ensuring that, in future, local government makes as important a contribution to Scottish public life as it has in the past, despite the problems that we have discussed today.
§ Question put, That the original words stand part of the Question:—
§ The House divided: Ayes 113, Noes 322.
241| Division No. 306] | [10.14 pm |
| AYES | |
| Adams, Mrs Irene (Paisely N) | Bradley, Keith (Withington) |
| Ainger, Nick | Bradley, Peter (The Wrekin) |
| Ainsworth, Robert (Cov'try NE) | Brown, Rt Hon Nick (Newcastle E) |
| Alexander, Douglas | Browne, Desmond |
| Allen, Graham | Buck, Ms Karen |
| Anderson, Janet (Rossendale) | Burden, Richard |
| Armstrong, Ms Hilary | Burgon, Colin |
| Ashton, Joe | Butler, Mrs Christine |
| Atherton, Ms Candy | Byers, Stephen |
| Bank, Tony | Caborn, Richard |
| Barron, Kevin | Campbell, Alan (Tynemouth) |
| Bayley, Hugh | Campbell, Ronnie (Blyth V) |
| Beard, Nigel | Campbell-Savours, Dale |
| Benn, Rt Hon Tony | Canavan, Dennis |
| Bennett, Andrew F | Cann, Jamie |
| Best, Harold | Casale, Roger |
| Betts, Clive | Caston, Martin |
| Blackman, Liz | Chapman, Ben (Wirral S) |
| Blears, Ms Hazel | Chaytor, David |
| Borrow, David | Chasholm, Malcolm |
| Clark, Rt Hon Dr David (S Shields) | Howells, Dr Kim |
| Clark, Paul (Gillingham) | Hoyle, Lindsay |
| Clarke, Charles (Norwich S) | Hughes, Ms Beverley (Stretford) |
| Clarke, Rt Hon Tom (Coatbridge) | Hughes, Kevin (Doncastwer N) |
| Clelland, David | Humble, Mrs Joan |
| Coaker, Vernon | Hurst, Alan |
| Coffey, Ms Ann | Hutton, John |
| Coleman, Iain | Iddon, Dr Brian |
| Colman, Tony | Jackson, Helen (Hillsborough) |
| Connarty, Michael | Jamieson, David |
| Cooper, Yvette | Jenkins, Brian |
| Corbett, Robin | Johnson, Alan (Hull W & Hessle) |
| Corbyn, Jeremy | Johnson, Miss Melanie |
| Cousins, Jim | (Welwyn Hatfied) |
| Cox, Tom | Jones, Barry (Alyn & Deeside) |
| Cranston, Ross | Jones, Helen (Warrington N) |
| Cryer, John (Hornchurch) | Jones Dr Lynne (Selly Oak) |
| Cummings, John | Jones, Martyn (Clwyd S) |
| Cunningham, Jim (Cov'try S) | Jowell, Ms Tessa |
| Dalyell, Tam | Kaufman, Rt Hon Gerald |
| Darling, Rt Hon Alistair | Keeble, Ms Sally |
| Darvill, Keith | Keen, Alan (Feltham & Heston) |
| Davies, Rt Hon Denzil (Llanelli) | Kenndy, Jane (Wavertree) |
| Davies Geraint (Croydon C) | Khabra, Piara S |
| Dawson, Hilton | Kilfoyle, Peter |
| Denham, John | King, Andy (Rugby & Kenilworth) |
| Dewar, Rt Hon Donald | King, Ms Oona (Bethnal Green) |
| Dismore, Andrew | Kingham, Ms Tess |
| Dobson, Rt Hon Frank | Ladyman, Dr Stephen |
| Donohoe, Brain H | Lawrence, Ms Jackie |
| Doran, Frank | Leslie, Christopher |
| Dowd, Jim | Levitt, Tom |
| Drew, David | Linton, Martin |
| Dunwoody, Mrs Gwyneth | Livingstone, Ken |
| Edwards, Huw | Lloyd, Tony (Manchester C) |
| Ellman, Mrs Louise | Lock, David |
| Field, Rt Hon Frank | Love, Andrew |
| Fisher, Mark | McAllion, John |
| Fitzpatrick, Jim | McAvoy, Thomas |
| Fitzsimons, Lorna | McCafferty, Ms Chris |
| Flynn, Paul | Macdonald, Calum |
| Follett, Barbara | McDonnell, John |
| Foster, Michael J (Worcester) | McGuire, Mrs Anne |
| Fyfe, Maria | McIsaac, Shona |
| Galbraith, Sam | McKenna, Mrs Rosemary |
| Galloway, George | Mackinlay, Andrew |
| Gapes, Mike | McLeish, Henry |
| Gardiner, Barry | McNamara, Kevin |
| George, Bruce (Walsall S) | McNulty, Tony |
| Gerrard, Neil | MacShane, Denis |
| Gibson, Dr Ian | Mactaggart, Fiona |
| Godsiff, Roger | McWalter, Tony |
| Goggins, Paul | McWilliam, John |
| Gordon, Mrs Eileen | Mahon, Mrs Alice |
| Grant, Bernie | Mallaber, Judy |
| Griffiths, Jane (Reading E) | Mandelson, Peter |
| Griffiths, Nigel (Edinburgh S) | Marsden, Gordon (Blackpool S) |
| Grogan, John | Marshall, David (Shettleston) |
| Hain, Peter | Marshall-Andrews, Robert |
| Hall, Mike (Weaver Vale) | Martlew, Eric |
| Hanson, David | Maxton, John |
| Heal, Mrs Sylvia | Meale, Alan |
| Healey, John | Merron, Gillian |
| Henderson, Ivan (Harwich) | Michael, Alun |
| Hepburn, Stephen | Michie, Bill (Shef'ld Heeley) |
| Heppell, John | Milburn, Alan |
| Hesford, Stephen | Miller, Andrew |
| Hewitt, Ms Patricia | Mitchell, Austin |
| Hill, Keith | Moffatt, Laura |
| Hoey, Kate | Moonie, Dr Lewis |
| Home Roberttson, John | Morgan, Ms Julie (Cardiff N) |
| Hoon, Geoffrey | Morley, Elliot |
| Hope, Phil | Morris, Ms Estelle (B'ham Yardley) |
| Hopkins, Kelvin | Mudie, George |
| Howarth, Alan (Newport E) | Mullin, Chris |
| Howarth, George (Knowsley N) | Murphy, Denis (Wansbeck) |
| Murphy, Paul (Torfaen) | Soley, Clive |
| Norris, Dan | Southworth, Ms Helen |
| O'Brien, Bill (Normanton) | Speller, John |
| O'Hara, Eddie | Squire, Ms Rachel |
| Olner, Bill | Starkey, Dr Phyllis |
| O'Neill, Martin | Steinberg, Gerry |
| Osborne, Ms Sandra | Stewart, David (Inverness E) |
| Pearson, Ian | Stewart, Ian (Eccles) |
| Pendry, Tom | Stinchombe, Paul |
| Perham, Ms Linda | Stott, Roger |
| Pickthall, Colin | Stringer, Graham |
| Pike, Peter L | Stuart, Ms Gisela |
| Plaskitt, James | Taylor, Rt Hon Mrs Ann |
| Pollard, Kerry | (Dewsbury) |
| Pond, Chris | Taylor, Ms Dari (Stockton S) |
| Pope, Greg | Taylor, David (NW Leics) |
| Pound, Stephen | Timms, Stephen |
| Powell, Sir Raymond | Tipping, Paddy |
| Prentice, Ms Bridget (Lewisham E) | Todd, Mark |
| Prentice, Gordon (Pendle) | Touhig, Don |
| Primarolo, Dawn | Truswell, Paul |
| Prosser, Gwyn | Turner, Dennis (Wolverh'ton SE) |
| Quin, Ms Joyce | Turner, Dr Desmond (kemptown) |
| Radice, Giles | Twigg, Derek (Halton) |
| Raynsford, Nick | Twigg, Stephen (Enfield) |
| Robertson, Rt Hon George | Walley, Ms Joan |
| (Hamilton S) | Ward, Ms Claire |
| Robinson, Geoffrey (Cov'try NW) | Wareing, Robert N |
| Rooker, Jeff | Watts, David |
| Rooney, Terry | Whitehead, Dr Alan |
| Roy, Frank | Wicks, Malcolm |
| Ruane, Chris | Williams, Rt Hon Alan |
| Ruddock, Ms Joan | (Swansea W) |
| Russell, Ms Christine (Chester) | Williams, Alan W (E Carmarthen) |
| Savidge, Malcolm | Williams, Mrs Betty (Conwy) |
| Sawford, Phil | Winnick, David |
| Sedgemore, Brian | Winterton, Ms Rosie (Doncaster C) |
| Simpson, Alan (Nottingham S) | Woolas, Phil |
| Skinner, Dennis | Worthington, Tony |
| Smith, Angela (Basildon) | Wright, Anthony D (Gt Yarmouth) |
| Smith, Miss Geraldine | Wright, Dr Tony (Cannock) |
| (Morecambe & Lunesdale) | wyatt, Derek |
| Smith, John (Glamorgan) | Tellers for the Ayes: |
| Smith, Llew (Blaenau Gwent) | Mr. John McFall and |
| Snape, Peter | Mr. Jon Owen Jones. |
| NOES | |
| Allan, Richard | Moore, Michael |
| Ashdown, Rt Hon Paddy | Oaten, Mark |
| Baker, Norman | Rendel, David |
| Ballard, Jackie | Russell, Bob (Colchester) |
| Beith, Rt Hon A J | Salmond, Aelx |
| Davey, Edward (Kingston) | Sanders, Adrian |
| Fearn, Ronnie | Smith, Sir Robert (W Ab'd'ns) |
| George, Andrew (St Ives) | Stunell, Andrew |
| Hancock, Mike | Taylor, Matthew (Truro) |
| Harris, Dr Evan | Tyler, Paul |
| Hughes, Simon (Southwark N) | Wallace, James |
| Jones, Nigel (Cheltenham) | Webb, Steve |
| Keetch, Paul | Wigley, Rt Hon Dafydd |
| Kennedy, Charles (Ross Skye) | Wills, Phil |
| Llvsey, Richard | Tellers for the Noes: |
| Llwyd, Elfyn | Mr. Donald Gorrie and |
| Michie, Mrs Ray (Argyll & Bute) | Mr. Andrew Welsh. |
§ Question accordingly negatived.
§ Question, That the proposed words be there added, Put forthwith, Pursuant to standing Order No.31 (Questions on amendments):—
§ The House divided: Ayes 274, Notes 31.
243§ Question accordingly agreed to.
§ MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
§
Resolved,
That this House notes with concern losses in a number of direct labour organisations within Scottish councils; and commends the swift action taken by the Secretary of State for Scotland to deal with them.