Local Government Bill [H.L.]

HL Deb 18 November 1991 vol 532 cc707-97

3.9 p.m.

The Minister of State, Department of the Environment (Baroness Blatch)

My Lords, I beg to move that this Bill be now read a second time. The Bill covers three important aspects of local government—the performance standards of local authorities, the extension of compulsory competitive tendering, and the restructuring of local government. Before explaining the objectives of the Bill in detail, I should like to emphasise the thread that runs through all these provisions. It is that local government should be responsive to the needs and wishes of the people it serves.

Local government has made great strides already in the provision of efficient services and in achieving value for money. But there is much more to be done, particularly in encouraging, and perhaps sometimes cajoling, some councils to seek to emulate the performance of the best local authorities.

Part I of the Bill deals with measures implementing aspects of The Citizen's Charter. The White Paper sets out a major programme for the 1990s to improve the quality of service offered to the public and to make the public sector more responsive to the wishes of its customers. The programme sets out the mechanics for improving choice, quality, value for money and accountability. The citizen may not know or even care how services are organised, or exactly who provides them. But the citizen will almost certainly care very much about the way in which a particular service affects him or her personally. The charter will involve ordinary citizens in the process of improving local services by giving them the power to insist on value for money.

The provisions in Part I of the Bill, dealing with the performance standards of local authorities and the extension of compulsory competitive tendering, mark another step forward in turning our Citizen's Charter commitments into action. The first seven clauses of the Bill refer to measuring and reporting the performance standards of local authorities; local authorities' response to their auditors' reports and recommendations; and the publication of information by the Audit Commission. I shall deal with each of those aspects separately.

The first point is that at present there is a wide gap in quality between the best local authority services and the worst and a wide range in the costs at which any given standard of service is provided. The White Paper promised legislation to require authorities to publish information showing what standard of service they are providing and at what cost. This reporting would be on a common basis so that meaningful comparisons could be made between authorities, bringing out the disparities between levels of services and cost. It is only by measuring both standards and costs on a common basis that the public can properly assess whether a local authority service represents value for money.

The second important point was that the Audit Commission would be given power to identify individual authorities by name when comparing one authority's performance with another's. We believe that establishing the facts and publicity will encourage authorities to achieve better value for money and the public to make judgments about their local authorities.

The requirement to be placed on the Audit Commission to give directions to bodies to publish information on their performance is descriptive of what they have achieved, not prescriptive of what they are to achieve. Bodies would be required to report standards and costs against a common yardstick. It may help to allay the fears of at least the noble Lord, Lord McIntosh, to point out that the comparisons of performance could take account of the particular standard of service chosen by an authority, as well as costs. It is important to emphasise that it will continue to be for local authorities to determine the specific standard of service they provide. The new information about standards and costs would be published in a common format so that the public would be able to make clear comparisons between one authority and another for a given standard.

Your Lordships will have noticed that a number of bodies are excluded from the proposals. That is because either their expenditure is minimal or because the nature of their work precludes meaningful comparisons. The one significant exception is health service bodies, which are excluded because they are directly answerable to the Secretary of State for Health. For health service bodies, performance standards can be achieved by administrative means, as I explained in the debate on the gracious Speech (at col. 204 of the Official Report of 5th November 1991.)

There are two points about the detail of directions to be given by the Audit Commission to which I should like to draw your Lordships' attention. First, directions may apply to specified activities and to a limited range of bodies. That is necessary because of the different duties and functions of different bodies and because time will be needed to formulate and phase in the directions.

The second point is that the Audit Commission is required to issue its direction only after consultation and must allow a minimum of three months before the start of the financial year. This will allow bodies to set up the necessary record keeping systems. If a longer period were needed, the Audit Commission would of course allow for that—if not, I am advised, it might well be challenged on the grounds of unreasonableness.

Auditors will be given a new duty to ensure that proper arrangements are in place for bodies to give effect to the directions. The provision has been carefully framed to minimise costs; it would not require the auditor to undertake detailed checks. It would, however, require the Audit Commission to undertake the studies needed to determine what directions to make on standards of performance and what information the Audit Commission should itself publish.

The second aspect of The Citizen's Charter to which I referred was local authorities' response to their auditors' reports and recommendations. All too often bodies take no action on auditors' reports and recommendations which are designed to achieve better value for money or tighter control in the interests of preventing financial irregularities. The Bill would impose a new duty on bodies to respond promptly, formally and in public. The duty would apply to what are commonly called auditors' public interest reports, which are made under the Local Government Finance Act 1982. The duty would also apply to such of an auditor's recommendations as he decided merited such treatment. Most recommendations deal with the minutiae of an auditor's work and would be expected to be left outside the scope of these proposals. Provisions are also included which would seek to ensure that the public could be fully informed about auditors' reports and recommendations.

The Bill would enable the Audit Commission to disclose information on three matters; first, which bodies fail to comply with the requirements on performance standards; secondly, which bodies contravene the accounts regulations, for example, by failing to publish their accounts on time; and, thirdly, which bodies are subject to an auditor's report, the contents of that report and the body's response.

The Bill also contains several enabling provisions relating to requirements for competition in the provision of local authority services. These provisions serve two principal objectives: first, we wish to implement the commitment in The Citizen's Charter White Paper to ensure that contractors have a fair chance to compete for local authority work; secondly, we wish to extend competition requirements to professional services.

The Government's objective is to ensure value for money in the services which local people receive. We believe that competition is the best way to secure this.

The Government's policy of requiring competition for manual services provided by local authorities has proved highly successful. Marked efficiency improvements have been achieved in most of the services subject to competition. And this has generally been achieved without diminution in the quality of services. On the contrary, in many cases tighter contract specification and monitoring arising from the competition requirements has led to an improvement in quality.

Competition does not necessarily mean contracting out of service provision to private firms. Local authorities' own workforces may continue to win contracts if they demonstrate that they can deliver services as efficiently and as effectively as the private sector. Indeed one of the principal benefits of the Government's policy of compulsory competitive tendering has been the marked efficiency improvements which have been achieved by local authorities' own workforces.

Notwithstanding these successes, the Government are concerned that the framework in which competition operates has not always given the private sector a fair chance of winning contracts. Too many authorities have sought to bend the rules and cushion their in-house service organisations from the disciplines of competition. If private sector contractors do not believe that they have a fair chance of winning, they may no longer consider it worth their while to go to the time and trouble of bidding for work. The Government are determined to take action where it is necessary. We wish to secure consistency in local authority practice. Accordingly, the Bill provides for the Secretary of State to define what is or is not anti-competitive behaviour.

The Citizen's Charter White Paper also indicated the Government's desire to extend competition to professional services. We have now looked at the experience of local authorities which already use the private sector to provide a range of professional services. We believe that there are immediate benefits available from introducing competition to engineering, architectural and property management services, arts facilities management, library support services and management of parking services. For most of these services, a well-developed private sector market exists which local authorities already use extensively.

The Government welcome the positive spirit in which many authorities have responded to the competitive challenge. A number of local authorities are leading the way in using the private sector to provide a range of professional and technical services. But other authorities have shown less enthusiasm. Noble Lords opposite will no doubt in the course of this debate tell me that competition should be voluntary, and that we should allow authorities to come to it in their own time. But the truth is that some authorities prefer to measure their power by the size of their workforces. They have not the least intention of extending competition voluntarily. The Government believe that all local taxpayers have a right to receive value for money in local services. We therefore propose to require all local authorities to subject the professional services which we have identified to competition.

Some of our proposals can be implemented under existing powers. But the Government recognise that tendering for some professional services may require modifications to the present tendering arrangements. We accept that for professional services such as architecture, considerations of quality are more complex than for manual services. Current procedures already allow for consideration of quality to be taken into account. But we judge that it may be appropriate to introduce into the procedures laid down in secondary legislation a quality threshold for the assessment of tenders for professional services to ensure that quality issues are addressed explicitly and fairly.

That is why the Bill contains enabling provisions for tendering procedures to be modified. We propose to use these powers when competition is extended to the construction-related areas.

The Bill contains a number of other measures aimed at improving competition and accountability. It provides for a quicker and more effective basis for action where a local authority fails to comply with the statutory requirements.

It contains a provision to require local authorities to make a copy of the detailed specification available for inspection by the public throughout the period of the contract. That will allow local people to judge for themselves whether services are being delivered to standard.

The Bill does not, however, contain provisions covering all services. In the longer term we propose to require local authorities to open up to competition core services such as finance, legal, personnel and computing. As a necessary first step, we propose that local authorities should be required to establish internal trading accounts so that the true cost of providing each discrete service within the core services may be identified. We intend to introduce separate legislation for these proposals once we have considered the responses to our current consultation exercise.

Part II of the Bill provides for the establishment of a new Local Government Commission for England. The new commission's main task will be to review the structure of local government within the shire county areas. We intend that the commission should carry out a rolling programme of reviews, examining the shire counties area by area with a view to moving to unitary authorities in these areas.

The commission will be looking for the most suitable administrative structure for each area which it examines. Responses to our consultation paper The Structure of Local Government in England from principal local authorities showed that the majority of them were keen to achieve unitary status. But while we believe that unitary authorities will provide a better structure than exists at present, it will be open to the commission to recommend that there should be no change to the existing structure—that is, if appropriate, that a two-tier structure should continue in some areas. We have already made it clear that we do not intend that there should be wholesale abolition of either county or district councils.

We believe that the best local government is local government which is built on communities and which reflects people's sense of identity with the place where they live. Local authorities based on real communities will be stronger local authorities, better able to voice local views and respond to local needs and circumstances. The Local Government Bill places a new emphasis on the importance of communities in shaping the structure of local government.

The new Local Government Commission will be required to have regard to the need to reflect the identities and interests of local communities as well as the need to secure effective and convenient local government in carrying out its reviews. The commission's terms of reference as laid down in the Bill are necessarily brief; the commission will obviously need further help in tackling the complex and detailed issues in each area.

Therefore, my right honourable friend the Secretary of State intends to issue guidance to the commission about the matters to which it will be required to have regard in carrying out reviews. We shall shortly be issuing to the local authority associations and other interested organisations a consultation paper about what this guidance should contain. We look forward to receiving their views on the matter.

We consider that the guidance should require the commission to assess community identities and the impact and effectiveness of any proposed new structure. It will be important for the commission to consider the most effective exercise of functions and delivery of services consistent with community identities and the wider public interest. There must be proper justification for the inevitable upheaval and costs involved in reorganisation. Any change to structure should be both worth while and cost-effective.

The Local Government Commission should consider the costs and benefits of change and the economy and effectiveness of service arrangements. It will be able to obtain advice from other expert organisations, in particular the Audit Commission, to assist it with its work. The Audit Commission will be able to advise the Local Government Commission on the likely impact of any proposed structural changes on the economy, efficiency and effectiveness of service provision.

We appreciate that the prospect of any change to local government can appear alarming, particularly when it is uncertain what the outcome of the commission's reviews will be. Many of the responses to our consultation paper The Structure of Local Government in England commented on priorities for review, and we are still considering what would be the most balanced and manageable programme for the commission, including the areas where we know that there are strong feelings about change. We firmly believe that a rolling programme of reviews offers the best chance for the commission to look carefully at each area of the country and properly reflect the views of local people.

The Bill sets out a framework for the procedures the commission will follow in conducting its reviews, including the arrangements for consultation with local authorities, local people and other interested organisations.

The commission will initiate a review with publicity and, if appropriate, outline proposals or options. There will then be an opportunity for local authorities and other interested parties to put forward their views and, if they wish, to submit proposals to the commission. The commission will then prepare draft recommendations and invite comments upon them. We are very anxious that local people should put forward their views about the local government structure that they want to see.

Once it has considered comments on the draft recommendations, the commission will draw up final recommendations which it will publish and submit to my right honourable friend the Secretary of State. If necessary, he may ask the commission to carry out further investigations or to supply more information. Finally, he may lay an order implementing the commission's recommendations before Parliament.

As well as its reviews of local government structure, the Local Government Commission will also take on the work of the Local Government Boundary Commission. It will he responsible for any reviews of boundaries and electoral arrangements which are needed as a consequence of structural reviews and will also be able to carry out separate reviews of local government boundaries or electoral arrangements at the request of the Secretary of State. As now, there will continue to be reviews of electoral arrangements at mandatory intervals of not less than 10 years and not more than 15 years.

The Bill also provides for the abolition of the Local Government Boundary Commission for England. Any reviews begun by the boundary commission but not completed by the time it is abolished will be transferred to the new commission. The Bill also contains provisions to ease the transition between the two commissions by enabling the Secretary of State to implement recommendations submitted by the boundary commission before its abolition; and to direct the Local Government Commission, if it takes on a review which the boundary commission has begun, to dispense with any procedures which have already effectively been gone through by the boundary commission. Naturally, we are working with the boundary commission to secure an orderly transfer of business.

I have described how the Local Government Commission will operate once it has been established, what its functions will be and how it will arrive at its recommendations. The Local Government Bill also sets out the procedures for implementing the commission's recommendations which the Secretary of State for the Environment will follow.

Our aim is for the Local Government Commission to consider the structure of local government area by area in order that it can put forward recommendations tailor-made for each area on the most appropriate structure to meet its particular needs and circumstances. That calls for flexibility. The Bill, therefore, provides for the Secretary of State to make orders changing the structure of local government area by area. Such orders will be subject to affirmative resolution procedures.

Part II of the Local Government Bill also contains enabling powers for my right honourable friend the Secretary of State, subject to Parliament, to set up a residuary body or bodies or a staff commission or commissions. Such bodies have been found to be helpful in previous reorganisations; but I should add that we intend to set them up on this occasion only if the need for them is absolutely clear.

The object of the Bill is to put people first. Part I of the Bill seeks to implement important parts of the Citizen's Charter. For the first time electors would be given information in a readily understandable form which would enable them to reach judgments about the performance of their local authority. The result can only be an enhancement of accountability.

The Government believe that the ordinary citizen will also benefit from the extension of competition to additional council services. People have a right to expect their local authority to discharge its functions efficiently and at reasonable cost. That is what should matter—providing the best service to their area—not whether the service is provided by the council's own employees or by the private sector.

Finally, I cannot, of course, predict what the outcome of the proposed new commission's review will be, but we are all, I am sure, aware that many people are unhappy with the structure of local government in their area. For the first time electors will be consulted about the shape of local government that they want, and I believe that that will be widely welcomed.

I look forward to engaging in further debate as the House addresses the Bill in more detail. I beg to move.

Moved, That the Bill be now read a second time —(Baroness Blotch.)

3.30 p.m.

Lord McIntosh of Haringey

My Lords, the House is grateful to the Minister for her exposition of this complex, although short, piece of legislation. We should like to support the Bill. That will come as no surprise to those noble Lords with a sense of history. It was as long ago as 1921 that Herbert Morrison—I cannot bring myself to call him Lord Morrison of Lambeth—published a pamphlet called A Citizen's Charter in which he said that the wise elector would not only press for a wise policy; he would vote for the candidates who really believe in that policy.

Even if it is 70 years late, the Conservative Party's conversion to citizens' rights is most welcome. It will not have escaped the attention of noble Lords that more recently than 70 years ago the Labour Party, which, after all, knows a great deal more about local government than the Government ever will do because it runs most of it, has not just been putting forward proposals for greater accountability and efficiency in local government, it has been doing something about it. In April 1986, my right honourable friend the Leader of the Opposition introduced Labour's Charter for Local Services. We have had numerous pamphlets on the subject—Opportunity, Quality and Accountability; Devolution and Democracy; London: A World Class Capital; and many more—and we have been showing how accountability and efficiency can work.

Labour councils have been taking the lead, as I shall show, in giving effect to citizens' charters. It is Labour councils that have developed the concept of guaranteed delivery; that have been taking the lead on customer contracts; producing citizens' charters for the citizens in their areas; producing information on best practice in local government services and giving advice about the progress towards that best practice across the country.

It is easy to say that we should like to support the legislation; it is much more difficult to agree with many of the provisions outlined—I use the word "outlined" advisedly—in the Bill. I wonder whether the Government paid enough attention to the difficulties which will arise when they implement the different parts of the Bill, especially those dealing with the Citizen's Charter.

I shall deal with the issue of league tables which are inherent in the way in which the Audit Commission will be expected to implement the Citizen's Charter. I understand that a good deal of debate is going on now in the Audit Commission as to how league tables can be implemented. There are those who believe that it may be possible to make do with as few as 80 measures of efficiency and equity. There are others who believe that as many as 400 different measures may be required.

It will be necessary for performance indicators for local authorities to take account of service costs, efficiency, and effectiveness and of the interests of what are called customers, although I believe that it is right to continue to call them citizens in the traditional way. We shall have to consider the amount of service provided; the use made of those services; the quality of service provided; the value for money; and, last but not least, the cost. Again, I say, "last but not least" advisedly, because it is not that we are opposed to including costs in the calculation of value for money; but there is a serious danger with the way in which the legislation is drafted that cost may be the be all and end all, at the expense of quality.

Those are difficulties which the professionals in local government, who have been trying to achieve those ends without much credit from the Government for many years, have already identified. So we shall have to come forward with many significant amendments to the Citizen's Charter provisions. Above all, we shall have to look to the Bill to do what the White Paper proposed in July and which, unaccountably, has been omitted from the Bill. I remind the Government that that White Paper talked about explicit standards of service and standards which are published and displayed prominently at the point of delivery. The Bill merely provides that they will be available for inspection by interested persons. Later in the Bill there is a great hoo-hah about what is an interested person. We shall introduce amendments to reinstate in the Bill the Government's proposals for the Citizen's Charter published in July this year.

We shall also put forward amendments to require that not only should national objectives be set and published, but that there should be local objectives. Again, there should be no surprise at that: The Patient's Charter for the NHS which the Government have put forward and which the NHS itself proposes provides explicitly for local criteria as well as national criteria.

The Government's antipathy to any independence in local government is well known. Why are those provisions which are considered appropriate for the NHS not extended to local government? We shall be putting down amendments to ensure that local as well as national performance objectives are taken into account, are published, and are part of the range of information available to citizens about the performance of their local authorities.

We shall be putting forward amendments to ensure that the Audit Commission reaches agreement with the local authorities, and the local authority associations, on what the measurements should be. We shall also put forward amendments to exclude from the Bill those matters which are commercially confidential under compulsory competitive tendering.

We support, and we shall be able to do so without much difficulty, the proposed publication of auditors' reports and local authority responses. We support the publication of information on non-compliance by local authorities. But we believe that the Government's late conversion to a form of a Citizen's Charter for local authorities still smacks of the unhappy history of relations between central government and local government during the Government's lifetime. It still appears to us that the emphasis of the Citizen's Charter is on slapping down local authorities rather than on producing improved services for the people whom they represent.

I turn now to the issue of compulsory competitive tendering. As the Minister rightly said, we want the compulsory aspect removed from competitive tendering. We are not happy with many of the provisions relating to that matter. It is difficult to say that, because there is nothing in Clauses 8 and 11 which gives any indication of what is in the Government's mind so far as compulsory competitive tendering is concerned. We are used to Bills which say that the Secretary of State, "may by order" do this or something "as he thinks fit", and may specify items which can or cannot be taken into account, and what are competitive or anti-competitive conditions, and all that. That is commonplace. The Bill goes much further. This is the closest approach to the simple rule of government—that ideal legislation is that the Secretary of State shall do what he likes—that I have seen for a long time.

Clauses 8 to 11 are entirely enabling. They give all the powers to the Secretary of State; there is no indication whatever to the House or to Parliament as to what this part of the Bill will contain. That is for a very good reason. On the day the Bill was published there was also published a consultative document going out to local authorities and others seeking responses by the end of January. I do not believe that the Whips will deny that it is the intention of the Government that the Bill will have left this House before 31st January. In other words, whatever may be the opportunity for another place to consider the Government's position—and I doubt whether it will have much chance to do so—as the Bill goes through this House, we shall have no idea what we are voting for or what we are being asked to support.

When the Minister rises, two weeks from now, to move that the House do resolve itself into a Committee upon the said Bill, I give notice now that I shall seek to amend that resolution to propose that the House do resolve itself into a Committee on Clauses Ito 11 and 12 to 27 and Schedules 2 and 3 of the Bill, but to exclude that part of the Bill which simply gives the Government power to do what they wish.

I know that there are countries in the world, even in Europe, where the government can put forward legislation which is not effectively debated by parliament. That is not our way, nor the way in which your Lordships would wish us to consider legislation of this kind. Anything I say about the detail of the Bill must be taken in that light; that the way in which the Government seek to proceed is entirely unsatisfactory and contrary to the responsibilities of the House as a revising Chamber.

Even if that were not so, even if the Bill were explicit and the clauses explained what the Government wished to do, what justification has been put forward for the extension of compulsory competitive tendering? Is it on the basis that savings have arisen from the compulsory competitive tendering that has taken place so far? Not at all. The Government have only collected evidence on the tender price of the newly competitive tendering process. They have not collected information on the actual expenditure, nor on the expenditure involved in letting the tenders, nor on monitoring the quality of service provided by the tenders. There is no objective, independent satisfactory evidence for the Government's assertion that compulsory competitive tendering so far has resulted in savings.

What about abuses of the competitive tendering procedures? I remind your Lordships that the Local Government Act 1988 provided for the Government to exercise sanctions if they were not satisfied with the tendering procedure. I ask the Minister to explain to the House when she winds up why there has been so little use of these sanctions. Can it be because the Government are satisfied with the bulk of tendering procedures? There is no other acceptable or plausible answer. Is compulsory competitive tendering to be extended because of improved standards? Here again, there is no evidence whatever to show that there are improved standards in local government services as a result of compulsory competitive tendering. Indeed, all the evidence is that the standards imposed by local authorities as a basis for tendering are the same as the existing standards rather than improved standards.

What is happening is that when the tender goes outside lower costs are being achieved by lower wages, less security, less effective monitoring of quality, less contract compliance, and no account being paid to the fair wages resolution. Again, I remind the House that when starvation wages are imposed on local authority workers, particularly women and part-time workers, that is the occasion when the burden shifts from the local authority to the family income supplement and to the social security budget. There is no real saving. What we have is misery and a benefit-dependent state; something the Government have in theory always set their face against.

The history is not good. I see that the noble Baroness, Lady Carnegy, has moved from Lour to Troon, according to the list of Speakers, but she will recall that in Tayside the school cleaning contractors appointed by the Tayside regional council had to be sacked. It is a Conservative council like Harrogate where the council was unable to enter for the "Britain in Bloom" competition because the private contractors were too late. It is in Conservative councils like Croydon that 76 per cent. of people have expressed dissatisfaction at the quality of street cleaning.

The Government must decide whether their objective is, as they claim, to get the best value for money for local authority services or whether, as we suspect, their real purpose is to ensure that services are provided by the private sector.

There are many difficulties about the privatisation of professional financial and technical staff. I do not have time to go into them, although it would be easier to debate them and put down amendments about them if the Government would publish the PA Consulting Group report on the subject. I hope that the Minister will be able to indicate in her closing speech that the Government will do that.

Above all, in compulsory competitive tendering procedures we have a conflict between the Government's proposals in the Bill and the proposals in the Citizen's Charter. I remind the House again that in the charter, published only in July this year, the whole thrust of page 33 is that the buyers shall set the standards. The whole thrust of the Bill is not that the buyers—that is, the local authorities and the people who elect them—should set the standards but that the Secretary of State should set them. That is what the Bill is about and it is what the Bill makes it possible for the Secretary of State to do.

There are other difficulties about what is called the "double envelope" procedure. I should have thought that after the shambles of the Broadcasting Act 1990 and of the competitive double envelope procedure the Government would shy away from opening one set of envelopes about quality and a second set about price. However, like the Bourbons, they learned nothing and they have forgotten nothing. There are alternatives and we shall constructively and helpfully seek to put them forward at Committee stage. Our intention is that at the end of the day we should have proposals which provide value for money and are not simply in pursuit of political dogma.

I turn finally to the major issue of Part II of the Bill which is structure. Here again we want a bipartisan approach, not only because it is in the interests of us all nationally that anything that is agreed should be robust and should not be reversed after the general election when we win it, but also that it should be robust locally. It should command the genuine confidence of local authorities and their electors. It should provide a period of stability in local government which is what so many of the people writing to us now are crying out for.

Unfortunately, there is little evidence from the history of this Conservative Government that they understand the need for stability and for consensus on structure. Their approach throughout has been to take away powers and responsibilities from local authorities, but impose on them duties defined by central government. They describe this politely as producing enabling authorities.

I close with this point. In truth, the definition of enabling authorities as seen by, for example, Mr. Ridley —who saw the local authority as meeting once a year to sign the contracts and have a good lunch—is simply not adequate. The truth is that throughout the past 10 or 15 years the Government have ensured that our society has become too centralised. If one compares us with our partners in Europe, Germany has always had a federal structure. France and Spain have been moving towards a more decentralised structure. However, in this country every move taken, including many moves in this Bill, have been towards a greater degree of centralisation.

We are not opposing the setting up of a Local Government Commission. We welcome, and have welcomed, that suggestion for many years, long before the Conservatives started to speak about that. We welcome the thrust towards single tier authorities. We welcome the thrust towards greater flexibility in line with people's own wishes. Above all, we welcome the thrust towards small authorities. The theory inherent in Conservative local government reform in the 1960s and 1970s that big is beautiful has now been thoroughly exploded. However, we are worried about the assumption in the financial memorandum that the changes in structure will be virtually cost free. They will not be cost free either financially or in terms of the protection of citizens' rights. What will happen, for example, to county structure plans if we have small single tier authorities?

I note and appreciate the concerns of the Council for the Protection of Rural England on the need for consistency in environmental planning. These are difficult questions and they cannot be solved simply by setting up a Local Government Commission of five to 15 members and letting that commission get on with it. Of course the Government will not let such a Local Government Commission get on with it. The Government will lay down—one fears for party political reasons—the way in which the Local Government Commission will work. The whole programme of work of the Local Government Commission will be dominated by the directions of the Secretary of State.

I cannot envisage how the Local Government Commission for England, as planned, will work. The commission needs to be much bigger and it needs to have panels which work on a regional basis. It needs to have an explicit assurance that its representatives will contain those with experience of local government; particularly those who have been councillors, but not for the area under investigation. The Local Government Commission needs to be representative of the wider community; in other words, it needs to be composed not purely of white, male, recently retired chief executives. Above all, it needs to be non-partisan. However, there are no assurances that that will be the case.

Careful thought needs to be given to the powers of the commission. At present the programme of work is to be determined by the Secretary of State. The commission should be making its own plans and it should be doing so with the deliberate intention of seeking experience in different parts of the country in terms of the different kinds of needs that exist. Many justifiable concerns have been expressed by the historic cities on the possibility that a rolling programme without any time limit may lead to confusion and even chaos. Clause 15(7) of the Bill allows far too wide a latitude to the Secretary of State in giving directions.

The commission is only to concern itself with England. By contrast, the Secretary of State for Wales in effect announced his decisions as regards local government structure and has not set up an independent commission. It seemed to many of us at the time that there was a good deal of consensus on what the new structures should be. However, I have been advised by the Association of Welsh Counties that there is no agreement. We shall have to reconsider whether Wales should have the same kind of local involvement and local decision-making as that which ought to be provided by the Local Government Commission.

I can hardly let this occasion pass without referring to London. It is extraordinary that there is no explicit proposal on whether London should remain the only capital city in Western Europe and the developed world without a city government. We shall certainly seek to ensure that there is a city government for London.

As regards the national parks, the Government agreed as recently as September that there should be independent authorities for the national parks. I have no doubt there will be amendments to that effect in the Bill.

One point about the structure debate that is dear to me concerns the issue of local neighbourhood and parish councils. I note from Clause 4 of the Bill that the Secretary of State can extend the Citizen's Charter provisions to parish councils. However, there is no indication that parish councils will be invited to take part in the restructuring of local government. There is no suggestion that they should on occasion—and where local people want this—take over powers which are now held by district councils. Local people should have that right and they should have the right to have parish councils in the cities and towns of England where—uniquely—they are denied those privileges.

This whole matter comes back to the Government's misinterpretation of what is meant by enabling local authorities. On the one hand, there is the view of Mr. Ridley to which I have already referred—I hope accurately —and, on the other, there is the view we hold of enabling local authorities. Our view is that such local authorities should have the will and the power to identify community needs and the resources to provide cost effective and imaginative responses to community needs. Such authorities should be encouraged to have good relationships with other agencies in local and central government. Above all, they should be encouraged to be responsible on a day-to-day basis for the citizens who live in their areas. Those concerns will he reflected in the way in which we approach the passage of the Bill through this House

3.56 p.m.

Baroness Hamwee

My Lords, I, too, thank the Minister for her careful and complete exposition of the contents of the Bill. The Long Title of the Bill refers to economy, efficiency, effectiveness and to structural and electoral changes. I hope that implicit in that are the concepts of fairness, accountability and democracy. I am sure we would all agree those are aims we should work to achieve.

None of us can be complacent that in local authorities run by our own parties those aims have necessarily been achieved. I hope I may pick up a point made by the noble Lord, Lord McIntosh. We cannot be complacent where our local authorities are run by the Conservatives. I freely admit that we cannot be complacent in every case where local authorities are run by my party, the Liberal Democrats. I would have liked to have achieved as much innovation as my colleagues in Tower Hamlets. I suggest to the noble Lord, Lord McIntosh, that we cannot be complacent about what is happening in every Labour run authority in the country. That applies particularly in London.

I welcome the fact that citizenship is firmly on the political agenda now. However, I cannot help feeling that we are misusing language. Do the provisions of this Bill and of other legislation support citizenship or do they seek to support something which is quite different, that is consumerism? The aims of the proposals should not just be to make for happier subjects but rather to give true rights to citizens. The term "charter" has an honourable history and perhaps the longest history in our constitution. However, that term is hijacked when it is applied to the half giving of half rights. The provision we see now is nothing like a Magna Charta and it is hardly even a parva charta. The currency is being devalued if we accept that what we are discussing is a true charter.

It is fortuitous that in the same Bill we have proposals for local government structure because open, representative and accountable government is the first stage in giving power to citizens. I prefer to use the term "empower" rather than "enable" as "empower" suggests what we should be working for in our local government. If we talk about a charter, we should also talk about rights. When we talk about rights we should be talking about something that is legally enforceable. Perhaps it is not surprising that the first criterion is not legally enforceable rights. Many parts of the Bill are based on work produced not directly by the Government but by a firm of management consultants. I am not criticising that firm, as, like other firms in its field, it does its work well. But the firm's brief concerns management. Are we to have a country that is to be run by management consultants?

Please do not misunderstand me. I believe very firmly in performance indicators, and in monitoring trends. However, the indicators have to be highly refined. They are not simply a crude weapon with which to compare different local authorities. They should not simply be a means of assessing a national standard. Otherwise we run the risk of working towards the lowest common denominator. Above all, they have to reflect local needs. The most important indicator is customer or client satisfaction. One hopes one can indicate that the performance of the local authority is increasing and improving year on year.

High spending may not mean inefficiency. It may reflect the composition of the community that is served. With an elderly community one will have to spend more on certain services. Most important of all, it may reflect local choice. The local authority may be spending because its community is telling it that it should spend.

Perhaps I may give a word of warning. The information on which comparisons are based must be valid. Otherwise the system rapidly goes into disrepute. In my authority I have often heard officers commenting on how easy it is for different authorities to use different criteria or to forget to take certain factors into account. Unless the system is sensitive and care is taken, we shall have more confusion. That will be to the disservice of our communities. I welcome too the input of the Audit Commission. I have often found it extremely helpful. But are its members the best people to advise on quality?

We must not delude ourselves that the measures in Clauses 1 to 7 will not significantly increase expenditure. If the job is done properly, it will cost money. That is not necessarily a bad thing. It may be appropriate to ask the Minister at this point whether she is able to give us news today which will help us all in serving our citizens; the point has been made to me several times over the past few days. In the interests of local authorities which are trying to do their job properly and which are planning not in the long term but in the medium and short term, may we please have an announcement of the SSAs? If the Minister is able to give us news today of when the announcement will be made it will be most gratefully received.

The logic of citizens' rights does not necessarily lead to compulsory competitive tendering. Every conscientious local authority will consider competition. However, it is the element of compulsion that takes us from good practice into the area of dogma. The Government should practise what they preach. They should allow local authorities to enter into competition when the Government go out to tender. I believe that the Minister knows what I mean by that. The privatisation of the royal parks is being considered at present. But local authorities are not allowed to tender. Almost above all others, local authorities have experience in running environmentally sensitive open areas.

Should we have the debate during a consultation period? Is anything more calculated to give the impression to the consultees that they are not being listened to than knowing that primary legislation is being passed at the same time? In the debate on the Queen's Speech I asked the Minister what answer she would give if the response to the consultation was, "No, this is not a path to be gone down". I hope that she will be able to reply today, if only to reassure the consultees that it is worth their responding to the consultation. I hope too that we shall have full consultation not only with local government representatives but with professional organisations and all who feel that they have a contribution to make. I am glad to see that the Minister nods.

The criteria that we have to consider relate not just to price but also to quality. It will take little skill to predict some of the responses in two areas of service. I hate to say this, but with regard to legal services I believe it likely that the charges made in the private sector will be a great deal higher than the cost of running legal services in the local authority sector. Recent research has shown that they are about three or four times higher. An Audit Commission paper was recently published on that.

Quality is difficult to assess. It involves confidence in the service that is being offered. As many noble Lords know, architects are concerned that quality, not cost, should be the prime factor. Cost is a factor, not the factor. Architects are anxious, and rightly so, that if cost is the criterion we shall see a major decline in the standards of public building. The architects have noted that in the Autumn Statement the Chancellor made provision for an accelerated school building programme. I hope that it will come about. But what will the schools be like?

There is much for consideration at Committee stage. However, the CCT provisions open the way for developments which reduce and do not add to citizens' rights. We have to recognise that democratic control over service delivery is in the best interests of the citizens. Restricting user involvement in service provision is not. Tendering can be costly. It can be an inefficient way to achieve small savings and may not achieve value for money. The noble Lord, Lord McIntosh, referred to openness with regard to competing for quality. I hope that the Government will decide to publish the PA Consulting Group report on which the proposals are based.

Finally, I refer to structure. I too have noted how differently England is to be treated from Wales. I am glad that in England we shall have the greater opportunities that a commission will provide rather than a mere 21-week consultation period, of which 13 weeks was in the parliamentary Recess, as occurred for Wales.

The right structure can be achieved only after first considering the service, functions and responsibilities of local government. It is time to reassert the constitutional role of local government. The review must not ignore that. A wide representative basis and a well developed consultative system give the community ways to express its views and to make choices. It is vital that the review carries out the widest possible consultation so that we have local choice in the structure. Everyone who has an interest in that consultation should be able to contribute at a local and strategic level. I fear that we shall become so locally oriented that we shall lose sight of strategic concerns.

Those who have a stake in the subject but do not live in the area must have the opportunity to contribute, for instance in the environmental area. Consultation is not easy, as I am sure every politician knows, probably to his cost. It requires an initial process, a recommendation and further consultation on potential recommendations. It is not a private process. The consultees need to know what each is saying. The best vehicle might be an inquiry. I am sorry that the Bill does not allow for an inquiry.

Local choice may tell us that there should be a unitary authority or multi-tier authorities. The debate will focus on the counties and districts. The word is "and" not "or" because it may be appropriate in some places to have both. However, those are not the only possibilities. The commission must be authorised to recommend functional change. One cannot redistribute functions between the tiers without considering those functions and being able to recommend changes to the functions of parish and town councils too. Many parish and town councils do a valuable job throughout the country. When we consider the role of a higher tier, we must allow for parish and town councils to develop to reflect the diversity and richness of our country.

Perhaps it would be surprising if I did not spend a little time on this subject. We must he able to recognise regional government if that is what people want, and they do want it in London. It is perverse not to allow strategic government for London. It must he rare for people to say that they want government. They say it in London because they have seen what central government are doing to London. It is central government who govern London and people do not think that they are serving our capital city well. Strategic government should be minimal, but it is vital that we learn the lessons of recent years, both from London and metropolitan counties. Without wishing to be too anecdotal, perhaps your Lordships will permit me to reflect aloud on my experiences in chairing a joint authority in London for the past five years. As I said, this may sound anecdotal, but I mention it as an awful warning because the proposal for joint authorities looks to me as if it may be the answer to the bits that are left undone as a result of the commission's activities. The authority that I have chaired—the London Planning Advisory Committee—is generally accepted to have worked well. We have reached a consensus on almost everything that we have done. The committee consists of representatives of each of the London boroughs and the City of London. The fact that we have reached that consensus partly justifies the argument that, if they are faced with a necessary task, the boroughs will join together to perform that task, but, frankly, LPAC has done better than anyone had any right to expect.

Politics and government depend crucially on those involved being able to work well together. LPAC has succeeded because a small number of people—here I pay tribute to my opposite numbers in the Conservative and Labour groups—have managed to find a formula and to work together. When the main committee meets, rather than a sub-committee of those who know one another well, there are often new members or deputies attending. Those people, not understanding the culture of the committee, are the most aggressive and proclaim their own dogma, but I do not blame them. LPAC does not operate in a context—and there is a danger that new joint authorities will not operate in a context—which helps people to understand the committee's role. Our members meet four times a year. They meet perhaps an hour before the committee meeting for a group meeting. They attend the committee meeting and then go off again. They may even go before the end of the meeting because they have evening meetings on their own patches which must take precedence. There is no chance to develop the relationships that are necessary if an item on the agenda stands any chance of being changed through debate. The members are chairmen of their own planning committees—that is sensible as we are a London planning committee—but they have no primary responsibility for financial matters. They cannot speak with any confidence on financial matters, except perhaps to say no.

Politics is about priorities and priorities mean hard decisions is about spending. Our members have to put the case to colleagues who have little feel for the work that my committee does. I do not think that one can disaggregate different policy areas. You must look at your policies generally and the thrust of what you are aiming to achieve for the community that you serve. On the model of London, there could well be joint author: ties for planning. We quickly found that you cannot separate land use planning and transport. Anyone who looks at Docklands must agree with that. However, planning is only a means of taking forward policies for education, economic development, social services and so on. They serve the same function and the same client group; for instance, education impacts on recreation. I could give a list of such examples.

The present joint authorities have no proper context. They do not operate under an agreed umbrella. We see in London the nonsense of a research committee which is run separately from other services. It is dependent on the boroughs agreeing what they want and, if the budget is tight, you need to be extremely altruistic to fund something that you know is important but is not of immediate importance to your authority. We must learn from our mistakes. In London the grants committee has had appalling problems, but no one should he surprised at that. Its members have had to make, more or less on the hoof, wide-ranging social and other policy decisions. There has been no parent authority to set priorities and it has had to decide whether, for instance, housing is to take precedence over the arts.

The professional staff serving new joint authorities are unlikely to have a large establishment. They will have to involve officers from the contributing councils. It is good to have fresh blood and not to be too incestuous, but those officers tend to be self-selecting or to be selected simply because their local authorities are able to release them. That is not a healthy way of carrying on.

However, my major criticism is that joint authorities are undemocratic. Indirect appointment means that they are not accountable and are poorly understood by the public who do not know where the buck stops. They are bureaucratically complex and inflexible. They are difficult to construct and hence probably even more difficult to change. The members find it hard to take decisions that are in the best interests of the whole area. They were not elected to do the job that they find themselves doing, so they are bound to lack a strategic vision and to express themselves in terms of local views. Quite crudely, they are there because they are the people who have time to do the job.

I hope that this does not sound as if I or my colleagues on these Benches would take a paternal or centralist view. On the contrary, we believe that government must be at the most appropriate level, which is usually the most local level. However, there are arguments for some strategic government. At whatever level, government must be representative and accountable and must command respect. The best way of commanding respect is to have an electoral system of fair votes—proportional representation in the more technical jargon—which makes the authority representative, gives it stability and helps to avoid electoral swings and extremism. The Bill seeks to provide for electoral changes. The most important electoral change is to make local government answerable to the whole of its electorate because they have voted for it by what should be the fairest of systems.

4.18 p.m.

The Lord Bishop of Guildford

My Lords, like other noble Lords, perhaps I may express my gratitude to the Minister for her introduction to the Bill. I found much of what she had to say reassuring, particularly in the way that it showed an openness of approach to unitary authorities and to other matters. I certainly welcome that.

Local government is complementary to and undergirds national government. If we get local government wrong, parliamentary government will be weakened. For many people, services provided by or through local government—education, planning, social services and so on—are more immediate and significant than what comes to them through national government. Local government provides accessibility to people whose decisions affect their lives. Local government can create or impair a sense of local community, loyalty and identity which makes all the difference to whether people feel that they belong or whether they just feel alienated. It is therefore heartening to find in Clause 13 of the Bill that any structural changes proposed by the Local Government Commission shall: reflect the identities and interests of local communities". Sound local government is an essential element in people's confidence in government as a whole.

I wonder whether we should talk rather about local democracy than local government. It is the direct accessibility and accountability of local democracy that is so valuable. I fear that we may overlook that. When we come to the Further and Higher Education Bill I shall want to express my concern that it seems that further education is being withdrawn from local democracy and put into the hands of appointed regional councils. If so, that undercuts local democracy and hence will weaken accountability. If we are to have a system of education in every area, surely there has to be a democratically accountable local education authority, however much reformed.

The Bill moves towards local government becoming an enabling rather than a providing authority. That surely is sound in so far as some services can be more effectively and efficiently provided by private concerns in competition. But if a local authority is only an enabler and is not allowed to be a provider, what about those areas and concerns where there is no adequate provision and no-one is anxious to provide it? The White Paper states: The task of setting standards, specifying the work to be done and monitoring performance is done better if it is fully separated from the job of providing services". Surely that assumption needs to be challenged. For instance, it would lead us to say that a headmaster should not himself teach but should stand aside, set the standards and monitor others. However, the fact is that often it is his style and enthusiasm in the classroom which set the standard. To push local authorities into becoming enablers only and never to be providers seems to me to weaken provision on doctrinaire grounds which are as presumptuous as the idea that all services must be provided by the local authority itself. I plead for a more cautious and reasonable approach in this area.

Furthermore, a local authority has a wider value than just as a service provider or enabler. It is concerned with the quality of life in the area and it should represent that concern to other public bodies, the private sector, and indeed anyone, in order to secure a desirable environment and quality of life in the locality. It should be free to voice such concern and to have some clout in so doing.

Setting up a Local Government Commission to look at the country area by area is welcome. It runs the risk of creating a blight over those areas which must wait some time before they can be looked at, but in principle the flexibility of approach that is implied is admirable. When it comes to the crunch, in many areas the question is: at what level should local authority operate decisively? Some districts have a natural social cohesion and could be effective and acceptable authorities. But others are arbitrarily drawn and some are not large enough to escape from the risks of parochialism and personal lobbying.

In many areas away from the metropolitical centres counties still command loyalty. They evoke a continuous sense of history and are big enough to take the larger view while still remaining locally accessible. I hope that the continuing value of the county will not be underestimated in the reviews by the Local Government Commission. However, I have to add that I am not convinced that the present system, which gives room for both county and district, is necessarily far from what we need. Unitary local government may be economically slicker but I am not yet convinced that it would necessarily be socially better.

The Bill provides for the Audit Commission to require the publication of information on the performance of local government. There is much to be said for that in the interest of cost effectiveness. But the weakness may be that the information is produced on too narrow a front, although I take seriously the points made by the noble Lord, Lord McIntosh. But just as the performance of schools cannot be evaluated merely on examination results and truancy rates—they should be based on other factors, such as provision for children with special needs and extracurricular activities—so local authorities should not be judged solely on one-year efficiency. What about longer term planning? What about encouragement for the arts? What about the quality of local life? What about the valuing of local history and tradition? Surely those, too, must be looked at if we are to compare and evaluate local government. Must we be relentlessly pushed into thinking that the only criterion for evaluating local government is efficiency?

In conclusion, I suggest that getting local government right is crucial if people are to have a sense of loyalty not only to the local community but to the nation as a whole. Unless people feel that they are heard and understood locally they will have little sense of loyalty to the nation. For that reason it seems to me that the Bill touches on crucial elements in our national life and we must work hard to get local democracy right.

4.27 p.m.

Lord Boyd-Carpenter

My Lords, all noble Lords will have listened with great attention to the right reverend Prelate. I guess that almost all your Lordships agree with the very fine peroration with which he brought his remarks to a close.

I should first congratulate Her Majesty's Government on their courage in coming forward with legislation on this subject. Perhaps I may read a short extract from a speech which confirms how longstanding are the problem and the difficulties with which the Bill seeks to deal: I am well aware that there is probably no more ticklish question to be dealt with in the Bill than this question of areas. It invariably arouses jealousies, feelings, local passions and local rivalries in a way which has proved very embarrassing to every government which has endeavoured to deal with the complexity of existing local areas and which has, I am afraid, stood in the way of many important and useful reforms". Those words were spoken in another place on 23rd February 1899 by Mr. A. J. Balfour. In fact they still reflect the position; namely, that being prepared to tackle the whole structure and system of local government, as this Bill proposes, remains a matter involving considerable courage. I am sure that the Government are right to tackle it.

As the right reverend Prelate said, local government is of very great importance. It employs rather more than one million people. It spends annually some £50 billion and supplies some of the most important services to our fellow countrymen. Therefore it is of the greatest importance that we should get it right. The one point which seems to be generally agreed in this debate is that it is not right—certainly not completely right—at the moment. Therefore I begin by congratulating the Government on their courage in seeking to tackle the problem.

One can have different views. The noble Lord, Lord McIntosh of Haringey, who I thought had almost lost the power to astonish me, amazed me by his statement that local government was a matter in which the Labour Party was expert. I do not know how he can say that when he reflects on the mess which the Greater London Council made under Labour control; of the mess which Labour made and is still making of the affairs of the city of Liverpool; of the mess that it has made in the city of Manchester; and of the damage and injury which Labour majorities in a number of local authorities have inflicted on the people. Indeed, were it not for the fact that it would be tactless, in addressing the noble Lord, Lord McIntosh of Haringey, to point it out, the borough of Haringey is not itself a very good example.

The Bill is of very, very great importance; it is clear that radical reforms are needed. I can say—it is a wholly non-party comment—that the 1972 Local Government Act has not worked out well. The several counties that were created under it have not even now been generally accepted. One of them was the county of Avon. Your Lordships may recall the splendid observation of that great man, the late Duke of Beaufort, who said at the time that it was sad for him that he would have to pass his declining years in a four-letter county. He was of course right.

It is therefore extremely important that we should get it right this time. I hope—and here I address my noble Friend the Leader of the House—that no attempt will be made to rush debate on the Bill or to obtain its quick passage by dint of late sittings. It is really far too important a matter for that. And your Lordships' House is so full of people who really know what they are talking about in regard to local government that it should have every opportunity to debate the issues that arise over the Bill, even if that happens to be somewhat disruptive in its effect from the point of view of the House's business managers.

As we have been told, the Bill deals in Part II with structure. That is of very great importance indeed. I find it very difficult to justify a system such as we have in many parts of the country where, by the use of a precept, one senior local authority decides on the financing of its public expenditure and then a subordinate authority is compelled to raise the money, whether under the old rating system or under the various new taxes now being devised, from the ratepayers, from the public generally or from contributors to local finance. It is really quite wrong that you should have members of one body undertaking expenditure and then simply securing the means to finance that expenditure by precepting a subordinate authority, which is bound to levy its citizens not for money that it regards as necessary but for money which the superior authority regards as necessary. It undermines the whole doctrine of accountability if people on the higher authority can conduct matters in this way. It must at least tend to induce them towards expenditures which, if they had themselves to stand up and justify it to local citizens, they might be disposed to keep at a lower level.

I can give a very good example of the way the two-tier system works from the part of the world where I have my home. I am very glad in this context to see that the noble Earl, Lord Carnarvon, is to speak later in the debate, since he not only resides in Hampshire but was a most successful chairman of Hampshire County Council for many years and has a great knowledge of the area. Your Lordships may feel that the structure affecting my home is a good example of the need for the Bill. My home is located some six and a half miles from the town of Newbury but it cannot be included, for local government purposes, in Newbury because the county boundary of Berkshire comes between us. We are just on the Hampshire side. It is, I may say in parenthesis, a fantastic position since the Post Office always insists on our mail being addressed finally with the word "Berkshire" although we are, for better or worse, a couple of miles inside Hampshire.

What happens is that we are allotted now to the borough of Basingstoke, some 18 miles away to the north-east. Basingstoke levies the usual taxes or demands on us on the precept of the county of Hampshire which is located at Winchester, some 20 miles in the other direction. It is not a system of local government which is easy to defend; nor does it work particularly well for the rural areas such as the one in which I live. Indeed one gets the impression that neither of the local authorities, but particularly the one which we are technically within—the borough of Basingstoke—has any idea whatever of the problems or the situation of the rural areas. Basingstoke is a large, busy and bustling town. It has many merits, but it is not an authority with any knowledge of rural matters.

The other day an official arrived from Basingstoke to require me to put in order a rather nice old water pump. Unfortunately for Basingstoke, it is not on my land. Basingstoke did not know that; it did not bother to inquire either by post or by telephone but sent an official who, for the greater part of a day, investigated futilely a position which could have been cleared up in five minutes on the telephone. That is a good, if small, example of the disadvantage of the two-tier system. I am very glad that the Bill provides over a large part of the country, or so at any rate it would appear, for the abolition of the two-tier system. That does not mean, as I understand it, the abolition in general of counties or of county councils. Indeed some of the smaller counties may well constitute rather useful single-tier authorities. Nor does it demand the abolition of the counties as geographical expressions, with their Lord Lieutenants and other positions and their general ethos. But it does suggest that the larger counties, at any rate, are too large and that it would be better to have a single tier of somewhat smaller authorities.

Of course, there has to be a compromise—everyone accepts that—between a really small and really representative local authority and an authority which is big enough to undertake the very important duties which local authorities do undertake in this day and age. Therefore it will be quite a problem for the commission, which the Bill proposes, to achieve over the country as a whole the right size of authority. As I said, it does not necessarily involve the abolition of counties in the strict sense but it means that the larger ones should not be a higher-tier authority in the exercise of local government duties. The Bill, which will take years to work out, will give the an impetus to a good reform of our local government system. That will be a major contribution by this Government to the well-being of the country.

I do not wish to detain your Lordships and therefore I shall say only a few words about the provision that, where appropriate, work should be put out to tender. The noble Lord, Lord McIntosh, was again a little extreme in saying that where work was handed over to outside bodies it was done by people earning starvation wages. The noble Lord under-rated the strength of the trade union movement in suggesting that the contractors would receive starvation wages. The Bill extends to the professions the tendering for contract work. Few members of the professions are living on starvation wages. The truth is that in many cases they are more efficient and therefore cheaper in operation than are the local authorities' services. The local authorities which reduce the scale of their set-up and put out more work to competitive tender are in general saving a great deal of money for their taxpayers or ratepayers—whatever one must now call them. It is a useful additional provision. It will not be required by some of the best authorities but it will be needed a great deal by some of the less-efficient ones.

This is a good Bill. No doubt, as always, your Lordships' House will improve it during its passage. I hope that we shall be given the opportunity to give the Bill full and detailed discussion and so, in accordance with the tradition of this House, render a real substantial service to our fellow countrymen. I support the Bill.

4.43 p.m.

Lord Stoddart of Swindon

My Lords, I must preface my remarks by declaring that I am an adviser to NALGO.

The noble Lord, Lord Boyd-Carpenter, described my noble friend Lord McIntosh of Haringey as being astonishing and extreme. I agree that my noble friend is astonishingly good at the job he performs for the Opposition in respect of the environment. However, I do not believe that his worst enemies would accuse him of being an extremist. I agree with the noble Lord about one issue; that the House should be given adequate time properly to consider the proposals in the Bill. We should not be rushed nor should we be stuck in this Chamber late at night simply and solely to meet the Government's convenience. Certainly we agree on that matter.

I support my noble friend's complaint that the Bill has been introduced before the response to the consultation paper about the proposals has been received and evaluated; that was in respect of Clauses 8 to II. The Government have stated that secondary legislation is an appropriate vehicle for the implementation of the proposals. That certainly is not the case, because Parliament's influence on final decisions will be minimal—it can be only minimal. The noble Baroness, Lady Blatch, must know that an order cannot be amended; it can only be opposed and voted down. Therefore, this House and another place will not have the opportunity to amend the Government's final proposals. The assurance that local government must be consulted again before orders are made—that is Clause 8(3) of the Bill—is hollow bearing in mind that earlier this year the Government commissioned PA Consulting Group to investigate possibilities for extending competition but have flatly refused to publish the findings. If the Government really mean that consultation must be meaningful why do they not publish those findings? Perhaps the noble Baroness will answer that question.

I welcome the Bill in so far as it sets up the new Local Government Commission. I agree that the general presumption that future local government units will be based on unitary authorities is correct. I also believe that in general the unitary authorities should be based on existing district councils. However, the Bill does not make clear how the Government see the future of local government. If their proposals—restricting, as they do, the power of local authorities to manage their own administrative affairs—are taken together with the intention to embark upon the widespread rate capping of councils, it appears that local authorities will simply become agents of Whitehall. The real partnership that existed between local authorities and central government when I was involved in local government has been so whittled away that one almost believes that the Government would like to appoint local gauleiters to carry out their bidding. However, at the same time they must pay lip service to elected local authorities in order to keep up democratic appearances.

If that suggestion sounds far fetched one has only to examine the clauses dealing with compulsory competitive tendering and its application to professional and technical services to see that it is not so. The powers to regulate CCT under Clause 9 are extremely wide and will introduce unnecessary and cramping rigidity into the whole process of tendering. Furthermore, Parliament will have virtually no input into the regulations because they will be introduced not through the affirmative procedure but through the negative instrument procedure. The powers will regulate the extraneous costs which a local authority can or cannot take into account in evaluating tenders. They will require local authorities to take account of government guidance on compulsory competitive tendering; they will make it possible for the Government to move against the local authorities which they believe are not doing their bidding; and they will lay down the kind of publicity that local authorities must give to CCT specifications.

Those provisions are an unprecedented and unwarranted intrusion by central government into the legitimate affairs and responsibilities of locally-elected councils. There is no evidence of public demand for these additional powers nor evidence to show that they will bring any tangible benefits. That has not been shown.

There is then the issue of quality which the Government have seen fit to introduce at a very late stage. It seems to me that the only reason why that new obstacle should be brought in is that, on the previous CCT basis, in-house bids for professional and technical services would win hands down. In fact, the quality element is simply a ruse to further tip the scales against in-house services.

Decisions on those matters depend on a wide range of considerations and local government, no less than any other organisation, should be able to make its own decisions on the basis of local circumstances and knowledge. It need not and should not be subjected to the straitjacket of detailed central control as envisaged by the Government.

I ask the noble Baroness whether quality considerations will be extended to earlier defined services; for example, leisure management, refuse collection, catering and so on. I should also like to ask about services which have been suggested for future subjection to CCT. Where will the line be drawn, especially where statutory regulatory functions and the maintenance of confidential records are involved? Where will the line be drawn for future services which may be involved in CCT?

I am not convinced of the benefits of CCT. Indeed, my own experience of local government in Reading tells me that we must beware of it. The noble Baroness has served as a leader of a county council. Is she telling me that she and her colleagues did not consider those matters? In my time we looked at the architectural services. We wanted to see whether we could buy architectural services from the private sector more cheaply than could he provided by our own depart vent. We found that we could not. Further, we found that if we set up our own quantity surveying department we could save a lot more money. Why do we not leave those decisions to the people on the ground who are people of commitment and intelligence?

I turn to Part II. I have already expressed my preference for unitary authorities based on districts but clearly the commission will have its own views and will co consult others. However, the commission—I hope the noble Baroness will confirm that she agrees with this-must be seen to be completely impartial. Therefore, it must be established on a broadly based non-partisan foundation and must operate and be seen to operate free from any political interference. Its chairman or chairwoman must be politically independent. The commission should comprise people with acknowledged expertise in local government and it should be balanced in its composition.

Furthermore, the commission should, through the Bill, be made aware of the criteria against which its recommendations will be judged. Only two factors are mentioned in the Bill: the need to reflect the identities and interests of local communities and the need to secure effective and convenient local government. However, as I have already mentioned, there is a widespread and understandable fear that the Government intend to strip local authorities of any real power and to reduce them to mere agents of central government.

The proposals in Part I will undoubtedly put local authorities in an administrative straitjacket. Combined with the steady erosion of local government power over the past 10 years, that is bound to make local government fear for its future. What assurances will the noble Baroness give to local authority associations and the trade unions that local democracy will not be further undermined by this Bill? Will the noble Baroness give assurances when she replies to the debate?

How is consultation with local people to be carried out? It is essential that the views of ordinary voters are sought, not just the views of those people who have a great interest in local government. It is essential that ordinary voters are consulted. How are they to be consulted? Will there be local public meetings and polls? What means do the Government have in mind to ensure that the people on the ground are able to put forward their views?

In my view, and that of many others, the proposals that local government reorganisation should proceed piecemeal is a recipe for administrative chaos. Furthermore, it will prolong disruption of services especially among local authorities not included in the early proposals. Staff morale under those circumstances is likely to be damaged and it must be self evident that the new local authorities will attract the best staff. Those authorities reviewed at a late stage will find it difficult to recruit and retain staff. Therefore, I believe that if local government reorganisation is to be a success it is essential that there should be a thorough national review followed by implementation on a single vesting day.

The proposal to establish staff commissions is to be welcomed. However, it should be strengthened. The staff commission should be given unequivocal powers to enforce a jointly agreed code of conduct on all local authorities involved in the reorganisation process. Furthermore, a major objective of the staff commission must be to ensure the smoothest possible transition to the new system by maximising the transfer of existing staff and minimising competition for posts.

I feel sure that the Minister will have no difficulty in giving me an assurance that an explicit commitment to the principles of equal opportunities will be written into the commission's terms of reference. Perhaps she will confirm that when she replies.

Finally, this is not the Bill which the Labour Party—at least, I hope it is not—would have brought forward to achieve a lasting reorganisation of local government. We would have sought to expand the role and responsibilities of local government. That is what is needed at present. Furthermore, our proposals for the future of local government would restore its confidence; indeed, that in itself would engender more interest in local democracy by the voters.

I shall join my noble friends in their attempts to improve the Bill during its subsequent stages. I hope that the Government will be receptive to our ideas and amendments.

5 p.m.

Baroness Cumberlege

My Lords, I should like to start by thanking my noble friend the Minister for the way in which she introduced the Bill. She is aware that local government is complex, a fact that I discovered when I was elected to a rural district council at the age of 23. I was greeted by a quorum of retired admirals, generals and a few terrifying matriarchs. At an early meeting I was told with great firmness by those present that it was the policy of the council and all its committees to be unanimous. That was a warning that dissension was not to be tolerated. Although perhaps unanimity is no longer fashionable, it has an attraction when we legislate for local government. I was delighted this afternoon to learn from the noble Lord, Lord McIntosh of Haringey—who I see is not in his place—that his party supports the Bill. Local government enters all our lives and achieving consensus is important if we are to show due respect for the intimacies of people's daily lives.

There are three points in the Bill which I hope will be addressed either through future guidance or clarification in the debate by my noble friend the Minister. First, there is the timetable. Nothing saps morale as quickly as uncertainty. I have served as a parish, district and county councillor and as a district and regional health authority chairman. Each has been reorganised and I have enjoyed the challenge of change, the only exception being the parish council, which has survived unchanged and is probably unchangeable. But successful change has had to be achieved swiftly, with urgency and a clear vision.

It is a fallacy to think that we can say to councils, "Go ye forth and evolve into unitary authorities when you feel like it". I welcome the consultation and the opportunity for local people to shape their destinies. That is important. But the Local Government Commission, once it is established, I hope will be set a tight timescale for its reviews and work at a spanking pace.

Secondly, I share the concerns expressed in your Lordships' House this afternoon that there is little recognition in the Bill of the need for strategic planning. Planning for the future of the environment, for industrial growth, for roads and traffic must be done at a level which does not require the setting up of joint boards. I have grown old sitting on joint consultative committees. Like the noble Baroness, Lady Hamwee, I am ambivalent as to their worth. In my experience they are ineffective and cumbersome and they dilute accountability, which is perhaps the most important point.

As more local services are put out to contract local authorities will primarily become purchasers of services. Here again there is a parallel between local government and health authorities. As district health authorities cease to become providers of hospital services, that role being taken over by trusts, so there is a strong case for fewer district health authorities. We should learn from that and make sure that unitary authorities are large enough to carry out their new purchasing roles.

I hope too that the commission, when carrying out its review, will look at the existing county council-sized structure first and then only where necessary break it down into smaller unitary authorities rather than look piecemeal at district and borough councils and decide where and with whom they should amalgamate.

One of the great changes in our health and social policies is to encourage care in our own homes. When we get old and a bit dotty the majority of us want to stay at home and not be whisked away to an institution for safekeeping. Success in this policy is dependent on health authorities and local authorities working closely together. At the moment changes are occurring in district health authorities. As their roles change so some are amalgamating—a job which greatly concerns me in my role as regional chairman. In our region we have hesitated to go full steam ahead until the Bill is law. We need to know that our boundaries will be coterminous with the new local authorities, otherwise it will mean joint working will be very difficult indeed. We cannot afford in the NHS to wait indefinitely to make proper savings on administration. But it would be disastrous to end up with our boundaries not coterminous with local authority boundaries.

Perhaps I may again draw on my experience of both local government and the NHS for my third and last point. Recent changes in the NHS have introduced two excellent management tools: first, short-term contracts for top management and, secondly, performance related pay. I myself am on a short-term contract and I must say that it concentrates the mind wonderfully. It is an extraordinarily strong incentive to perform. So too are all the health authority chairmen throughout the country at all levels and the regional, district and family health service general managers. We expect these public servants and managers of huge budgets to perform. Non-performers cannot be retained as passengers, nor should it be exorbitantly expensive to rejuvenate their contracts. I firmly believe that we should urge the Secretary of State, when appointments are made for the new authority chief executives, to ensure that they are all on three-year renewable contracts.

Secondly, I believe that a system of performance related pay should be introduced for all chief executives and senior managers; many are on that now but not all. We should set out to reward the achievers and encourage others, and that should be linked to the Audit Commission's findings. In the case of local government the ballot box is the arbiter of the elected member's performance. When I was chairman of social services I awaited with trepidation the publication of the league tables produced by CIPFA and published annually. I know that my views are contrary to those expressed by the noble Lord, Lord McIntosh of Haringey. But I found that they triggered major and painful changes to improve performance in some areas where we were not achieving. I am sure that the new powers of the Audit Commission will enhance that process.

I want the House to be unanimous for there are many here with a great knowledge of local government and concern for its future. But we must eliminate from the Bill uncertainty. We must insist on a timetable for the commission. We must have a structure for strategic planning, and we must have an idea of what the new map for local authority boundaries will look like to enable health authorities to fall into line and deliver better health and social services in unison with their local authority partners.

Finally, we must reward achievers and be able to replace non-achievers. The statutory functions of local authorities must be efficient and effective. But at parish, town or city level we must never forget or underestimate the importance and benefits of civic pride. I fear that if we lose that, vandalism will flourish, voluntary organisations will falter and local prosperity will decline.

5.8 p.m.

Lord Howie of Troon

My Lords, I regret to open with an apology that I must leave the debate for a time to attend to another engagement. However, I hope to return to hear later speakers and certainly the wind-up speech by the Minister.

Like my noble friends, I welcome the Bill in general terms but oppose it strongly in specific terms. One specific term, if I may concentrate the Minister's mind—Clause 8(1) (a)—deals with compulsory competitive tendering for professional services, principally those for architects and engineers. I believe it is a great mistake. My noble friend Lady Hamwee touched on the matter earlier and I approve of what she said.

I was approached by the Royal Institute of British Architects, by the Association of Consulting Engineers and by Michael Manser, the past president of the RIBA. In any case, my views are generally identical with theirs and I should have spoken without being approached.

The Association of Consulting Engineers is slightly more in favour of compulsory competitive tendering than the architects. However, that is only in the limited sense approved of by the noble Lord, Lord Boyd-Carpenter; namely, that the consulting engineers like the idea of competing against local authorities for work. I am inclined to agree with the noble Lord, Lord Stoddart, that they may not always win the contract.

The consulting engineers and the RIBA agree on the undesirability of competitive tendering between professional companies. They fear that that would lead to a reduction in quality. I felt that the Minister in her opening remarks somewhat exaggerated the zeal with which the construction professions approve of the proposals. Her attitude is most clearly stated in the letter from Michael Manser published in the Financial Times on 29th October.

The background is that he draws attention to the distinction between everyday services which can be measured and those which cannot be measured. The services that can be measured are such everyday things as street cleaning, dealing with dustbins and other things of that nature. The professional services which the Bill is attacking are intellectual services which cannot be measured in that way. To my mind they are wholly inappropriate for price bidding, which is what the measure amounts to. They are services which deal with intellectual, emotional and sometimes even artistic quality. That is wholly different from the kind of services that I mentioned earlier on.

In his letter Michael Manser repeats what I have said about services including intellectual property, which is not easily evaluated by fee bidding. He continues: The architects fee, for instance, in a large construction project, is about 3 per cent. of the total capital outlay. The success of the project, commercially, in use and aesthetically is dependent upon the quality of his initial concept; if this is bad, the building will be flawed and not easily retrieved at a later stage. Because the scope of tendering is no more than about 0.25 per cent. either way, the project will be jeopardised to save perhaps 0.125 per cent. of the budget. This does not make investment sense". I concur entirely with Mr. Manser's sentiments. The saving is infinitesimal but the aesthetic qualities in danger are vast.

In looking for that kind of quality, whether it is architectural or engineering quality—at this point I should say that "quality" is a word that does not appear in the Long Title of the Bill or among its objectives and it would be a good thing if at a later stage it could be put in—it is interesting to note that developers and such public benefactors as the Sainsbury family do not look to fee competition in choosing their architects and engineers.

Stuart Lipton and Geoffrey Bradman may well be hard-nosed capitalists, but they did not turn to fee competition at Broadgate or anywhere else. Neither did the Sainsbury family in their very generous act in rescuing the National Gallery extension a year or two ago turn to fee competition in choosing their architect. They chose what they considered to be an architect of quality and they got quality. To my mind they got the wrong quality, but it was not the cheapest. Their approach to the construction was correct. Under the terms of this Bill there would be an entirely different arrangement and an entirely different architect. Presumably the National Gallery would have been housed in Portakabins.

Does quality matter as against saving money? Of course it does. For instance, noble Lords should think of the Burrell Museum in Glasgow. It is now the third most popular public building in Scotland. It is certainly part of the reason for Glasgow being chosen last year as Europe's City of Culture. The reason why the museum is as popular as it is is not principally the Burrell collection, which is an interesting but slightly idiosyncratic collection. In many ways it is not as good as the collection which has existed for many years in the City Gallery in Glasgow and which was already very popular.

The attraction of the Burrell collection is the setting in which it appears. I refer to its physical setting in terms of landscape and its architectural setting. It was an architectural quality which was chosen in competition for quality and not fee competition. We speak of quality, and Michael Manser mentions the dangers of the decline in quality which might well follow from fee competition. I wish to illustrate that not merely by asserting, as he does, that it might happen, but by drawing the attention of the House to an example where that kind of thing has already happened. In the words of a very famous Member of another place, "Why gaze into the crystal when you can read the book?".

The "book" I am going to read from is an issue of the New Civil Engineer magazine dated 29th September 1988. That is three years ago which is long enough for the news to have filtered through to the Government. The magazine reports the collapse of part of a supermarket near Vancouver in April 1988. I believe that some injuries were caused but not deaths. The collapse was the subject of a report called for by the provincial government, which I imagine was British Columbia. It states: The influential report blamed underdesigned roof beams for the failure". The important factor is this: And the oversight is in turn blamed on cut throat competition and unrealistically low design fees in the local market". The effect was that the report recommended that minimum fees should be restored and fee competition effectively abandoned.

I look at this proposal with considerable dismay. I see in it just the slightest whiff of ideology. I just detect it. It seems that the Government are again urging the market wherever the market can be urged, whether appropriate or not. It is part and parcel of a longstanding animus by government against the professions and against the idea of the profession.

I wish to end today by defending the construction professions against this attack. I do that very simply by quoting a definition of a profession which was coined as long ago as 1921. My noble friends—and especially my noble friend Lord McIntosh on the Front Bench—will remember the author, R. H. Tawney. They will also remember the book in which the definition appears, The Acquisitive Society. That was and still is a bible for some of the older ones among us. The definition reads: A Profession may be defined most simply as a trade which is organised, incompletely, no doubt, but genuinely, for the performance of function. It is not simply a collection of individuals who get a living for themselves by the same kind of work. Nor is it merely a group which is organised exclusively for the economic protection of its members, though that is normally among its purposes. It is a body of men who carry on their work in accordance with rules designed to enforce certain standards both for the better protection of its members and for the better service of the public". That is a wholly admirable way of carrying on business. It is a great pity that business does not carry on its business in a like manner. It is impossible to sustain those standards under a system of compulsory fee tendering. For that reason, those provisions of the Bill must go.

5.20 p.m.

Lord Beloff

My Lords, I hope your Lordships will forgive me for returning from imperfect buildings in Vancouver to the problems of setting up a new structure for local government in England. I wish to confine my remarks to Part II of the Bill and the proposed commission.

One is taken far afield—even further than Vancouver—when one becomes involved in considering local government. I found myself, at a time approaching midnight last Thursday, which is very late by my standards, engaged in what could only be called a postprandial socratic dialogue with the leaders and officers of my county council about the nature of democracy. I should like to suggest that until we have an understanding of the principles that should govern the operations of such a commission, its work will be as temporary as the operations of the Local Government Act 1972 which it is now desired at least in part to correct. That is not present in the Bill and has not, alas, been made sufficiently or emphatically clear by my noble friend the Minister.

There are four necessary components of a solution to the problem of the best organisation and structure of local government. The Bill refers to this point and the right reverend Prelate has reminded us of it. The first is that there should he a community. Only a community can effectively govern itself or would wish effectively to govern itself. Secondly, there has to be a permanent appreciation, or at least a long-term appreciation, of the functions which this structure and the bodies created under it are to perform. It is difficult to contemplate a structure without knowing what its job will be.

The third element is the role of finance. Is there to be a correlation between the structure and its ability to raise the money necessary to carry out the decisions that it takes on the functions that are allotted to it? If there is to be no such correlation, the citizen will lose the most important information available to him—information about where the money is to come from, how it is to be raised and what is to be his appropriate share of it. That point was made by my noble friend Lord Boyd-Carpenter. Lastly—and this is true in all democratic countries—there must be some understanding of the fundamental relationship between local and central government. If they are not in harmony, if they cannot work together, whatever structure is decided upon will not fulfil the requirements.

I shall begin with functions. The right reverend Prelate rightly reminded us that it is proposed in a Bill coming before your Lordships on Thursday to remove from local government further education colleges and sixth form colleges. Those are essentially local creations. They meet essentially local needs and make no sense except in relation to the schools from which they draw their sixth formers or their followers of further education courses. It may be—it will be a miracle if he can do so—that the noble Lord who proposes the Bill on Thursday will be able to give a rational educational reason for subtracting these colleges from the local scene. It is suspected in local government circles that there is no educational argument for doing so, a point with which I would agree, but that it is simply a device for lowering the demands of local taxation by replacing one important feature of local expenditure with central expenditure. If that happens it will make nonsense of our trying to discuss an appropriate structure for local government. The councillors in my county want to know whether they will have sixth form colleges and further education colleges. They want to know whether those colleges will be taken away, and if they are, what they will then be supposed to do about fulfilling their educational responsibilities.

I shall give another example from the same ill-fated Bill—I hope ill-fated—which is to come before us on Thursday. It concerns adult education. This point has been made in the press and by noble Lords who have spoken on the subject on other occasions. As far as one can see—and the language of the Bill and the language of the commentaries on the Bill are both obscure—the responsibility for what is laughingly and absurdly called leisure education, by which we mean culture, non-vocational education and genuine study, is to be taken over by local government. It may be said that local government is the right instrument because those who attend such classes presumably live locally. But there is no provision—at least there is no proper provision—to enable local government to meet the costs without piling on to students fees which many of them—all noble Lords must have had endless correspondence on this subject—cannot afford to pay. At one stage responsibilities are being taken away from local government and in the same Bill new burdens are being placed on local government. We are then asked seriously to consider what the structure of local government should be.

There are perfectly good and understandable reasons for wanting a commission on the structure of local government. However, unless it is inspired by some policy, which preferably should be one with a great measure of national consent and which sets out what central government and local government should do—as my noble friend Lady Cumberlege pointed out, this is where the interface between the health service, which is after all a local service if not part of local government, and local government comes—the elected members of local authorities, let alone their officers, will be placed in an impossible position. I cannot understand why that has not been considered.

What is proposed is an improvisation to meet some perfectly understandable complaints from people who live in four-letter counties and one or two others—complaints which could have been met by specific legislation. If there is to be a commission, it should not be representative of people with experience of local government, as noble Lords opposite suggest. It should be a commission not necessarily of political philosophers but of people who are not committed by experience, by friendship or by co-working to local government in any of its forms. It should be a commission which can look at the issues as a Royal Commission would have done in Victorian times, when we were so much better at preparing great Acts of Parliament. It should be a commission which can look at the problem in general terms and which can bring to bear upon it—this point was made by the noble Lord, Lord McIntosh of Haringey —some of the experience of other countries, which seem to do these things in some ways better than we do now. Therefore, it should have the scope to review matters together; for example, where is the community, what can it best do, what is the structure and what are the financial arrangements? If we had such a commission, it would be worth waiting for. I say that because we might then achieve a solution to this problem which would actually be enduring. A mere temporary patching up does not seem to me to be something worthy of the attention of Parliament.

5.30 p.m.

The Earl of Lytton

My Lords, I wish that I could I speak with half or even a quarter of the conviction and authority of the noble Lord, Lord Beloff. I am really trespassing on an area that is only partly within my province. Indeed, other noble Lords have much greater knowledge of the subject of local government than I have. I cannot claim a local authority background, but I shall just say that my comments are my own. I have not consulted with anyone on matters relating to this Bill.

In my view the Bill is to be welcomed; its modest size belies the very real opportunity which it presents to make progress on matters of local authority structure and business conduct. My comments relate primarily to Part II of the Bill and the parameters under which the proposed Local Government Commission may operate. The question of whether there should be a two-tier or a single-tier system is of less importance from my point of view, in the sense that it is not really something upon which I am competent to comment in detail.

However, there is at least one area where I think that the adoption of a unitary structure could be advantageous; namely, within national parks. At this point I should declare an interest because I farm within one—the Exmoor National Park. I am probably in the habit, rather unkindly, of referring to it as a wholly-owned subsidiary of two county councils, with all the difficulties of policy and direction which that entails. But there is another problem. In this particular instance, competition with other government organs and quangos in terms of policy and implementation materially interferes with its proper job; the differing policy objectives which it has to meet are applied differentially by other bodies. There is a case there, possibly, for the devolution of some of the functions of central government to a unitary local authority. However, I accept that the case may be a special one.

I should like to pay tribute to the invaluable work carried out by our local authorities and to the councillors who serve on their committees, many of whom are represented here today in an existing or past capacity. It is often a very thankless task. It seems that councils attract more criticism from the man in the street than sometimes is warranted. However, having said that, I hope that my next remarks will not be misinterpreted. If, as I am suggesting, there is a case —I do not say that it is a general case—for unitary authorities, then there is also a compelling case for strengthening the mechanisms of public protection in the face of a substantial potential increase in locally exercised powers.

There seems to be mounting public concern—at any rate it appears to be so from the voices that I hear—about standards of honesty, integrity and competence which are being applied in the exercise of local authority powers. In many cases it is no more than people trying to get their own back on a local authority. But, in other cases, standards certainly appear to have slipped very badly. Everyone I meet, both professionally and privately, has some account to give me about the shortcomings of a local authority somewhere. Cases which have been reported in the press recently or not so recently, including those of Wiltshire and Merseyside to name but two, cannot be wholly discounted as isolated cases when popular belief holds that malpractice and worse in some local authority matters are commonplace.

Again, I can only point to what I have heard from people who make representations to me. But these matters include such things as suspect property transactions, financial irregularities and overt political manipulation. That is not the stuff on which sound and trusted administrations at local level are built. At best, it looks as if there may be a practice of sailing a little close to the wind. At worst, we may actually have a very grave problem on our hands. But, either way, it seems to me that there is something of a crisis of public confidence in the system. Further, when major decisions are taken by a small cadre behind closed doors, and discussed in open council committee only when the matter is effectively decided, citizens are deprived of the most basic elements of local democracy.

I cannot help wondering why local authorities have the power to buy land and then give themselves valuable planning consent, or manipulate a commercial position through the planning system or, for that matter, engage in property development and speculation with public funds or, worse still, amass a huge property portfolio. When, as they sometimes appear to do, those same authorities set about to prejudice the legitimate interests of individuals in pursuit of undisclosed policy objectives or attempt to deny citizens the benefit of recommendations made by government departments acting under the authority of Parliament, then I know that there is something badly wrong.

The public interest surely dictates that the administration of local affairs should be governed by the highest possible standards of conduct. Yet there is often inadequate information available. I welcome the fact that the Bill sets out to redress part of that inadequacy. Moreover, there may often be no proper forum for investigation. It is now becoming clear that it is not impossible to conceal matters from auditors. Even a local authority ombudsman is not, as I understand it, in a position to do more than recommend remedial measures; he does not have the powers to insist that they be carried out.

I shall be pressing for the proposed commission to have a much more detailed brief to consider what safeguards are necessary to protect the public interest. I see three objectives in that proposal. First, the interaction of the various local authority functions needs to be examined to remove so far as is possible the occasions of conflict of interest. If that means looking at the basic principles of town and country planning administration, so be it. Secondly, officials and councillors should not be put in a position where private or commercial gain is easily obtained or ultimately beneficial. Even less should the offer of inducements, as sometimes appears to occur, be encouraged or institutionalised; for example, over the matter of "planning gain" which recent legislation is only just beginning to tackle. Thirdly, and most important, there should be an impartial and independent investigative body with real teeth—an inquisition of sorts with the power to obtain total disclosure, make binding awards and enforce payments, repayments and restitution as appropriate and to unravel webs of secrecy and insist on changes in procedures where necessary.

I turn briefly to the Citizen's Charter, which is covered by Part I. I apologise to noble Lords for dealing with it in reverse order, but without the measures that I advocate the proposals contained in Part I will be worthless. I do not see what good yet more information will bring if it is not prepared in a diligent and proficient manner as a faithful representation of what is going on in public local affairs. The Government cannot easily escape that issue. We have had recent accusations—the latest in a long line of similar accusations—of political misuse of councils' positions. That must stop. Years of eroding standards now have to be reversed.

Local government must be given the power to investigate and report on the areas that I have outlined. As we move in to the single European market, there are compelling reasons for that. Other European countries have powerful watchdogs similar to those that I advocate. The cost is a price worth paying to achieve the quality control about which we have heard so much this afternoon.

Finally, I echo something said earlier: previous local government reorganisations have smacked of political convenience of one sort or another. That cannot be allowed to recur in this instance. It must be, as the Minister outlined in her introduction to the Bill, a question of what is right and proper in terms of the diligent administration of local affairs. I shall look carefully as the Bill proceeds to see that the Government deliver just that.

5.42 p.m.

Baroness Carnegy of Lour

My Lords, I shall follow my noble friend Lord Beloff in his interesting speech about local government structure in England, but I shall confine myself to making a few remarks about Part I of the Bill, because Parts I and III apply to Scotland while Part II does not. I shall say something about what that part of the Bill will do, as I see it, to improve the economy of many areas—rural and urban, including our cities—in Scotland. I shall also comment upon the improvement that the Bill should bring not just in the services that local government develops and their user friendliness but—and this is most important—in the view that ordinary people have of their local councils and those who work in local government.

First, let me mention the economic effect of Part I. A recent important problem facing the Scottish economy and its performance as compared with that of the UK as a whole has been the historically greater domination as employers of the public sector, notably the domination of local government and the health service. That still presents difficulties. Firms and individuals in the private sector which would have liked to operate in spheres of activity covered by local government and the health service have found that there is insufficient scope in their neighbourhood and so they go elsewhere. If such firms and individuals could get started in the area they would bring a new dynamism and greater flexibility and, in time, new firms and new jobs.

In the areas of activity covered by local government, the Local Government Act 1988, which requires all local authorities in Scotland to put some services out to tender, has begun to improve the situation in some places. That is good news for everyone. Firms have come to local areas; new firms have started up; and professionals hitherto not involved in local government have become involved. But the change is far too slow. The 1988 Act deliberately provided a gentle start. Many councillors, perhaps naturally, resisted the move from running the services themselves to becoming enablers—elected representatives who act on behalf of the public in setting the nature and quality of services required and then seeking the best people available to provide them.

CoSLA has written to noble Lords based in Scotland. It assures us that its member councils have no objection in principle to the use of private sector firms for the delivery of their services. However, they do not like legislation which makes tendering obligatory. Even those councillors in Scotland who accept the advantages of competitive tendering do not find it tempting to move voluntarily into the new world of the social market. Public sector unions are strong and they can, and do, make life difficult for councillors, especially on councils controlled by the Labour Party, as many are.

NALGO underlines that difficulty in the briefing that it kindly sent me. It refers to the Bill's tendering proposals somewhat dismissively as a blind faith in unproven dogma. It may be difficult for councillors to make the change, but if Scotland's economy is to prosper within the UK's economy, and if the UK is to prosper within the European Community as a whole, this is the type of change that must be made, and made at an increasing pace.

CoSLA tells us in its briefing that during the 18 months since the 1988 Act took effect competitive tendering has not worked in Scotland. It tells us that more than half of all contracts put out to tender received not one bid from the private sector. That is not surprising. It bears out my point that in many areas private sector firms have found that they cannot survive and so they do not exist to bid. In some ways, on the other hand, it is encouraging in that getting on for half the projects did produce private sector bids. That is a good start.

CoSLA does not tell us what Scottish local authorities have so far saved through competitive tendering. Research conducted by the Institute of Government Studies at Birmingham suggests a figure of over 6 per cent. of spending. That too is a good beginning if the figure includes Scotland. CoSLA also states: Most authorities have been forced to draft detailed specifications of work and to reorganise internal structures and responsibilities". That is precisely what the 1988 Act aimed to achieve. One of the weaknesses of local government has been that far too many authorities never specified in detail the job to be done, whether they were doing it themselves or whether they wanted to put it out to tender. They therefore could not cost the job properly or monitor their own performance.

Competitive tendering does not merely introduce competition; it sharpens up a council's own procedures. Key members of staff nowadays are those capable of proper accurate specification and costing. That should not be a cause for complaint by Scottish local authorities. CoSLA adds that since no Scottish local authority has so far been called to account by the Secretary of State to justify anti-competitive action during a tendering process, it sees no need to strengthen sanctions against such behaviour. At the same time, it points out that Scottish local authorities themselves won 88 per cent. of all contracts they put out to tender. That seems a very high figure to me, even allowing for the fact that 50 per cent. of contracts were not tendered for by the private sector. I do not know whether it indicates that every tendering process was 100 per cent. fair to outside tenderers. I do not know whether the specifications were clear and full enough to create a level playing field.

The Bill will certainly help ensure fairness. It will make sure that anyone will be able to obtain a copy of the specifications and statement of the aims of a project and so check on fairness. It seems to me that if everything is all right in this respect in Scotland, then local authorities have nothing to fear.

The other important provision for Scotland is that the Scottish Accounts Commission will be able to require an authority to publish information about its performance so that, if they wish, the public can check one council's performance against another's. Councils will be required in law to consider reports made by the controller of audit and recommendations made by the Scottish Accounts Commission.

CoSLA does not comment on these last two aspects of the Citizen's Charter, which seem to me highly desirable. I note that the Community Rights Project a—voluntary organisation with which I worked when I took the Local Government (Access to Information) Act 1985 through your Lordships' House—particularly commends this part of the Bill

The longstanding domination of local authorities in Scotland in local job markets and the lack of competition for their in-house provision which still exists in many areas is not only damaging to the economy; it not only means that there is insufficient incentive to raise quality and improve value for money; it also leads Scottish people to think that they must accept what councils decide to provide, that there is no way of checking what is going on and therefore no point in pressing for something better. That is not good for local government in Scotland and it does not enhance anyone's enjoyment of life.

Yesterday, Scotland on Sunday referred to the Citizen's Charter as interventionist nonsense. One man's interventionist nonsense is another man's way to more cost-effective, user friendly services and a more dynamic economy in many local areas in Scotland. In due time, the public will find that out for themselves. Doubtless the detail of Part I can be improved in your Lordships' House, but at this stage I commend the Bill to your Lordships.

5.53 p.m.

Lord Skelmersdale

My Lords, I am sorry that my noble friend Lady Carnegy felt inhibited about speaking on local government in England because much of what she said translates directly from Scotland to England. Your Lordships will recall that Julius Caesar started his description of France with the immortal words: Gallia in tres partes divisa est". So with this Bill, divided, as it is, into three parts. To your Lordships' undoubted relief, I do not intend to comment at such great length as did my old sixth form mentor. Like other noble Lords I hope that the measure stands the test of time.

I shall not dwell upon competitive tendering. However, it would be surprising if I did not support it 100 per cent., given that I promoted it in the health service in Northern Ireland, sometimes with a little local difficulty. I knew then, and I have had no reason to change my mind since, that there is nothing intrinsically wrong in direct labour employed by public institutions. Lest that should give any comfort to the Benches opposite, I also believe that there is nothing intrinsically right about it either. What matters to me and, judging by his remarks, to the noble Lord, Lord McIntosh, and what should matter to local government councilors—it certainly matters to the ratepayers or whatever one should call them these days—is that the service, whether blue or white-collar, should be provided effectively, efficiently and as cheaply as possible to a required standard. In other words, there should be value for money.

I do not know why it came as a surprise in parts of Northern Ireland that on many occasions I was perfectly happy that the in-house tenderer won a particular contract. It happened only after I had assured myself that the financial assumptions of the in-house contract were on a fair footing with those of the out of house competitors. How the NALGO spokesman who wrote the parliamentary brief could describe it as a "blind faith to an unproven dogma" I do not know, after many of the examples we all know about and of which we shall doubtless hear later in the debate. I suppose, in the immortal words of Miss Christine Keeler, "He would say that, wouldn't he".

Be that as it may, I welcome the attempts in the Bill to achieve what has become known in the jargon as a level playing field. I fail to understand, for example, why there are extra costs in managing a private contract. It suggests to me that direct labour organisations are undermanaged at the moment.

However, to return to my muttons, we have vast chunks of a megalithic government department looking at anti-competitive practices in the private sector. There is absolutely no reason why the public sector should be allowed to get away with it. As far too often happens, the public sector is used as a method of soaking up unemployment by either keeping on or, worse, employing yet more semi-productive employees. We did not pay our rates for that. We do not pay our poll tax for that—those of us who actually pay it, that is—and we shall not pay our council tax for that.

Another reason why I welcome the Bill is the inclusion of the anti-secrecy provisions or perhaps, for the benefit of my noble friend and the noble Baroness on the Liberal Democrat Bench, I should call them the "freedom of information" provisions. I agree with them that many aspects of our national life are far too secretive. Requiring councils to publish tables of the costs and standards of the service they provide is a useful step beyond the current arrangement—provided for by Conservative legislation, I might add—whereby the costs of the district and county council services and how they are paid for in aggregate are shown separately on the single local tax bill. I hate that just as much as my noble friend Lord Boyd-Carpenter.

My noble friends on the Front Bench will know by this time in the debate—if they did not know it already—that both these parts of the Bill are likely to prove controversial. To me, the least controversial part of the Bill—the review of the structure of local government—is also by far the most interesting. My party burned its fingers rather badly as a result of the 1972 Act.

Lord Stoddart of Swindon

That is an understatement!

Lord Skelmersdale

All right, my Lords, I am renowned for understatement, I have been using it all through this speech. It has been suggested to me more than once that it was that single piece of legislation, which conjured up Avon and Cleveland and destroyed Rutland, among a great many other things, that lost the government of the day the 1974 election. Of course, it is not as simple as that. No one reason is detectable, but it was undoubtedly a major factor in the areas I have mentioned as well as in Scotland, Yorkshire and Wales.

The reason for that mammoth change was a belief current in those days that we had to have authorities with a big enough population to support the various functions run by both county and district councils. The intervening years have shown that it ain't necessarily so, except in one particular respect which I shall reach in a minute.

First, I should say that I believe that the Government have been peculiarly coy about the functions of local government. They seem to believe that anything carried out by district or county at the moment could equally well be done by a unitary authority. I agree, it could be. But the Government must appreciate the corollary to that statement: those functions can be done equally badly by a unitary authority, and I mean any authority of any political persuasion or of none.

Although I do not believe in the credo issued by the Association of County Councils that one must decide on the functions before one decides the level of government that carries them out, I believe that by adopting the posture that if there are to be any changes in functions, they will be introduced as and when the departments in charge of them decide that it is necessary, the Government have missed a major opportunity. No one in his right mind can be happy with the way social services, often estimable in their own way, are run. Well publicised and unfortunate events in Cleveland, the Orkneys and, more recently, Lambeth, have shown that the management of the social services leaves something to be desired to say the least.

I have not had the opportunity publicly to thank my noble friend on the Front Bench for a Written Answer that she provided as long ago as February. She has probably forgotten about it. The Written Answer showed among other things that if personal social services were paid for by central government, community charge bills would be reduced by 33 per cent., provided all authorities spent at their standard spending assessment. That is a tempting enough reason indeed for centrally funding social services, but there is another much more compelling reason.

Conventional wisdom has it that this function depends most heavily on having adequate housing. That would lead a man from Mars to believe that both functions are performed by the same level of local authority. But no, that is much too simple. Not only is one the responsibility of the county and the other of the district, but the care of social services is even split between two central government departments: the DoE for the finance and the Department of Health for the regulations.

Housing, too, is becoming less and less the direct prerogative of the districts in parallel with the Government's desire for local authorities to become enablers rather than providers. There is a further reason, for me the most compelling of all, namely, that people in the care of social services, because they need community care or for other reasons, make much more use of the health services than the rest of us. All those factors, and many more that I have no time to discuss, lead me to believe that the responsibility for the social services should be given to the health authorities. If my noble friend needs a model, I suggest she leads a team over to Northern Ireland where the two go hand in glove handsomely.

A few moments ago I referred to the oddball in the Local Government Act 1972. To my mind that was the sharp end of the planning system where the final say was transferred from county to district level. I am sure that it was that one decision which led to the gigantic escalation of planning appeals and resulted in one former Secretary of State—he is not too popular in certain quarters just now—coining the acronym "NIMBY" or "not in my backyard". He tried and failed to halt an inexorable rise in appeals; they have been increasing by some 30 per cent. a year in recent years. The situation has become so bad that another acronym is now doing the rounds. Some noble Lords may have heard of "BANANA" which stands for "build absolutely nothing anywhere near anyone". I therefore make one appeal to the local boundary commission and to the Secretary of State—whoever he or she may be—when considering whether to support, with or without alteration, the commission's findings in any area. Such areas should not be made too small. If they are too small, this country will again fall into the trap of having councillors decide a planning case when they are too local to the case in question.

I hope I have an ally here in the right reverend Prelate the Bishop of Guildford. Whether this plea is heard remains to be seen, but, assuredly, planning will change as a result of this Bill. As the noble Lord, Lord McIntosh, asked, what price county structure plans, for example, when there is no county?

I have allowed myself to become sidetracked on to two of my hobby horses. That is, of course, a bad thing. However, I now wish to make a request that I believe my noble friend on the Front Bench will he able to agree to in the future stages of this Bill. We all remember the enormous costs that surrounded the implementation of the 1972 Act. There were new and expensive town halls and council headquarters, to say nothing of old teams of officers kept in being long after they were necessary. Such matters can and should be controlled under the terms of this Bill by the reports of the Audit Commission. However, according to Clause 16, that will only be done if the Local Government Commission requires it. That situation must be wrong. I shall develop that point in Committee. For now suffice it to say that the Local Government Commission should always hold the same views as those of the Audit Commission, not only when the latter makes a specific request.

That said, I congratulate the Government on what is in part —the part that most affects some unhappy people in this country—a populist measure. A bit of populist policy now and again is good for any party. However, if it clearly makes a volte-face in too many areas, the policy will not do a party any good in the long run. The Opposition may have achieved miracles in the opinion polls by doing just that, but I believe that, like Julius Caesar, my right honourable friend the Prime Minister will be able to say next Spring, "Veni, vidi, vici".

6.4 p.m.

Lord Dean of Beswick

My Lords, like some previous speakers, I shall commence my remarks by referring to Part II of the Bill. I was interested to hear the contribution of the noble Lord, Lord Beloff, to this debate, having been personally involved on two occasions in local government reorganisation. There is some misunderstanding as regards local government being the product of political parties. It is no such thing. No one expressed that point more clearly than the noble Lord, Lord Sefton of Garston, in a debate in your Lordships' House a few months ago. The noble Lord was the former leader of Merseyside County Council.

Local government sprang from the desire of members of the public to have a stake in what was happening in their area. On the previous two occasions that local government was reorganised under this Government, members of the public were not consulted. Local authorities were consulted, but that is not the same as conducting a grass roots survey. In the past I was the Leader of Manchester City Council. That council declared for the status quo, as it was a large unitary authority. However, that argument does not necessarily satisfy members of the public. The reorganisation in greater Manchester was a complete mess. Greater Manchester consisted of 10 authorities ranging from one containing nearly half a million people to one containing only 150,000. Anyone with any sense can see that it is difficult to combine such authorities in a unitary authority.

Reorganisation was referred to by the noble Lord, Lord Skelmersdale. In the main I believe other local authorities resented the imposition of metropolitan counties. Eventually, however, the metropolitan counties appeared to be doing a worthwhile job. They were accepted as they fulfilled a strategic role. They were often able to avoid confrontations when differences arose and promote planning, transport and industrial development. Prior to that situation the largest authority in a metropolitan district could literally call the tune.

After about a decade of that kind of organisation, the government of the day—it was a Conservative Government—decided they had had enough. They decided to adopt another system and destroyed the metropolitan counties overnight. The biggest scandal of that era was the fact that the Government abolished the Greater London Council. It is my belief—I stated this at the time—that the Government abolished the GLC because they hated the political views of the person who led that body. I do not believe that most people feel there is any other explanation for the Government's action.

The noble Lord, Lord McIntosh, has said that the sooner we re-establish a central elected authority to look after the affairs of London the better things will be. The Government are simply paying lip service to democracy at local level. They destroyed the metropolitan counties and appointed chairmen of residuary bodies. They did not give power back to the people in the areas concerned. Every single one of those chairmen was a member of the Conservative Party. They were all able men and they drew a hefty salary. I believe one of those men is still in place. I make no aspersions about the honesty of those men, but those appointments were not examples of democracy.

I listened with interest to some of the comments of the noble Earl, Lord Lytton. I agree with him that on occasions some not very nice things happen in local government. However, I think the noble Earl went a little too far in his remarks as he did not bother to explain that the overwhelming number of candidates who stand for office in local government, whether they are Labour, Conservative or Independent, do so because they wish to serve the community. I know of thousands of councillors who have made considerable personal sacrifices, both financially and in terms of promotion, in order to serve the community. That must be put on record as a caveat to what was said to the noble Earl.

The noble Earl inferred too that local authorities are able to manipulate land deals to make a lot of money. But there are converse cases. When I was chairman of housing in Manchester, I recall that in order to accommodate a quarter of a million people outside Manchester we bought a large tract of land to the east, towards Sheffield. It was known as Hattersley. The deal was struck. However, once it was known that Manchester was to use the land for housing, the owner, who had struck the deal knowing that fact, appealed, stating that a planning change had taken place. The cost to Manchester of that land for housing doubled overnight before one foundation stone was put down.

Members of your Lordships' House will know that over the past few years I have raised some of the issues relating to the centre of Manchester. It is not the local authority that is called into question. The residuary body has been wound up. However, no one completely understands the machinations of what occurred because the residuary body and others were answerable only to the Secretary of State. They published a balance sheet that was placed in the Printed Paper Office and Vote Office in another place. I queried how a large section in the centre of Manchester appeared to be lying dormant. I discovered that a group, including the chairman of the residuary body and two members on it—although Manchester wanted that prime site in the city centre adjoining a huge development area—had signed the land away to a company called Merlin, an Australian company. As I understand it, that company did not put any money on the table and has done nothing with the land since. The Central Manchester Development Agency has put a CPO on it. The matter has gone to court. I believe that the court has given Merlin three months to do something or the CPO will be granted. If one wants jiggery-pokery on a large scale, that is the way to do it.

However, I wish to put on record that the overwhelming number of councillors of all parties that I have met would have nothing to do with some of the practices to which the noble Earl referred. A particular case involving a former member of my party is being dealt with under the law. If he is found in the wrong I hope he will be dealt with as severely as possible. I say no more.

I refer now to the first part of the Bill. I do not wish to go over the ground which was thoroughly trawled over by my noble friend Lord McIntosh. I agree with what he said. The Labour Party supports openness. We want investigation. However, will the costs of the investigation be more than met by the savings?

I am glad that the Government have decided to accept the Audit Commission as an adjudicator. However, we have had a number of debates in your Lordships' House—I have taken part in many, as have other noble Lords from all sides of the House—which have drawn attention to reports by the Audit Commission on the appalling state of the housing stock in this country, stating what ought to be done, and on the appalling state of school buildings and the way in which they have deteriorated. However, the Government took no notice of them. They use the Audit Commission only when it suits them.

I am a great admirer of the Audit Commission. On at least one occasion I have written thanking it for the statistics that it has given me, but that does not mean that they are infallible. I hope that while considering the Bill we shall be able to insert the proviso that if a local authority disagrees with what the Audit Commission states about it, it has the right to meet the Audit Commission to ensure that it has used the right statistics before they are published. We all know what happens when someone goes public, whether it is a politician, a television star or a company. Some of the mud that is thrown sticks, even if the person or organisation is completely clean.

A Statement was made in another place today. I make no complaint that it was not made in this House because I understand that it was offered and refused. I believe that there was a misunderstanding because the Statement was made in another place by the Financial Secretary, Mr. Maude. However, he spoke of the issues about which we are talking today. The White Paper was called Competing for Quality. Many issues are thrown open without any indication of when the Government hope events will occur. On the sixth page it states: We also intend to bring forward proposals to introduce competition into the important field of housing management—in ways which will enable tenants to participate". No one can cavil at that if that is what the people wish and they have been balloted accordingly. But earlier this year the Prime Minister and Mr. Heseltine, on 19th March 1991, said the same thing. However, there is no mention of any such provision in the Bill. Will the Minister give a copper-bottomed undertaking that such provisions relating to the housing section will not be introduced in the Bill at a late stage?

In a recent Bill an important amendment was moved at the eleventh hour by a Back-Bencher in another place. I have sat in another place, together with my friends and colleagues on this side. The oldest trick in the world is for a government of any colour when a Bill is almost finished suddenly to introduce a dramatic change when the timetables are set and no one can argue. Therefore, while I look forward to legislation on the housing charter, will the Minister in her reply give a copper-bottomed undertaking that no such provision will be introduced in the Bill at the eleventh hour and that if such provisions are introduced later it will be in a separate Bill?

When my noble friend opened the debate from this side of the House he said that it is not the longest Bill that we have ever had but it is complex. No one knows some of the ramifications. It is shooting in the dark. I have tried to generalise my thoughts on the Bill. Much of it is welcome.

There is the farming out of some of the professional services. Local authorities have already tried putting them out to tender. They have found their own professional staff such as architects and surveyors at the lowest tender. We have to make sure that what we do is right and that we are not spending money needlessly, because the local authorities do not have the money to spend. If there are proposals concerning housing, I hope that we will be careful. Let us not forget that if increased costs are not justified by the savings, the only people who will pay for them are council house tenants because of this Government's legislation and the ring fencing. However, having said that, I support my friend and colleague on the Front Bench in his opening remarks and look forward to being able to discuss the Bill at length in this House.

6.20 p.m.

Baroness Faithfull

My Lords, before starting my speech, perhaps I may support my noble friend Lord Boyd-Carpenter and the noble Baroness, Lady Hamwee, in gently chiding the noble Lord, Lord McIntosh, who said that the Labour Party was the party of local government. We are all parties of local government. We all support local government. I served for five years as an officer in the London County Council and for 18 years as a chief officer and therefore—

Lord McIntosh of Haringey

My Lords, I welcome the noble Baroness's words. I wish that she had more influence than she does over her Front Bench.

Baroness Faithfull

My Lords, that remains to be seen. It is not always recognised that a great deal can be done in the background.

As has been said, the Bill falls into two parts. The first part relates to two themes. The first is the publication by local authorities of information on which the public can judge performance. That being so, there must surely be a mechanism known to the public through which they can put forward their thoughts and wishes and complain of poor performance, particularly in cases affecting individuals or groups of individuals. There is not time to relate such instances. The majority of councils listen to matters of individual and public concern, but some do not.

On the second theme—the extension to local authority professional and technical services of compulsory competitive tendering—it is to be hoped that that will provide the best and most economic services. However, I support the noble Baroness, Lady Hamwee. I do not think that all services should be put out to tender. We should put out to tender only those services where the best can be provided at the least cost. I support the noble Baroness when she said that that applies particularly to the law.

The second part of the Bill relates to the establishment of a commission to review the structure of local government. Here again, I find myself in complete agreement with my noble friends Lord Boyd-Carpenter and Lord Beloff. Before we consider the question of structure, three matters should be resolved. First, such a commission should define the purpose and role of local government; for instance, which services are to be supplied by local government. That point was well made by my noble friend Lord Beloff. Is it the purpose of local government to be an enabling organisation or to provide services; or is it to be a mixture of the two?

In that connection I refer particularly to social services in this country. We have splendid voluntary services and some private services, but they do not cover the whole country and they cannot carry out the necessary court and legal duties. If local social services are to deliver a service, the departments must be adequately staffed and the staff properly trained. In that respect, I commend to the House two papers written by Coopers and Lybrand which were recently published by the Association of County Councils.

Secondly, the commission should define clearly the relationship between central and local government and their respective roles. Local government is weakened and democracy and responsibility are diminished if, against the wishes of the people of any one authority, a government can overrule and dictate to the local authority. Local authorities can do what government cannot do; namely, promote the active participation of individuals and local committees on a day-to-day basis.

Thirdly—here again I support my noble friend Lord Beloff —I turn to the confusion regarding the relationship between central government and county councils in the administration of the main grant; the consequent and equally confusing relationship between county councils and district councils; and the inevitable confusion between local authorities and grants to voluntary organisations. The lack of proper planning and the disarray is fully documented in the research carried out by Coopers and Lybrand under the leadership of Mr. Guy Hollis. The research was funded by the Rowntree Trust, which does not support research save in exceptional circumstances.

In a nutshell, local authorities start to prepare their estimates in September and October. Because the county council does not know from the Treasury what its main grant is to be, the county council cannot in turn finalise financial arrangements for the districts, each of which has a different population. That in turn causes confusion for the voluntary organisations. That confused and uncertain state has lasted for years. Those of us who have been chief officers have been greatly inconvenienced. The process has wasted a great deal of time and been very inefficient. Perhaps I may say to my noble friend the Minister: The time has come', the Walrus said the time has come for something to be done.

The situation should be considered before the structure is formulated.

Fourthly, will the commission consider the extent to which particular structural options will facilitate good relationships between local authorities and European institutions? We have heard little about what we are going to do about Europe. I hope that that matter will also be considered before the structure is established.

Having considered those four points, we come to the structure of local government in England. I listened to a paper given by the editor of The Times, Mr. Simon Jenkins, in which he recommended that a wise structure should be founded on what is required and wanted by local areas. He said that every effort should be made to understand what the people of any one area want. Some areas may want a county council which has the strength, competence, achievements and potential to be a key part of any new local government structure, whether organised on a county or two-tier basis. History, tradition, certainty and continuity must be considered. Other people may want county councils as unitary authorities with a close relationship with parishes. Various noble Lords have mentioned the role of parishes. I agree with my noble friend that they do not change. It is important for the commission to consider the best structure to attract high calibre, trained staff for local government.

Will my noble friend the Minister spell out the reason why there is to be no independent scrutiny of proposals for Wales, as there is to be in England? Surely the same process of independent investigation applies in Wales as well as in England. Possible changes should be examined together and introduced simultaneously.

It is to be hoped that this time round we shall get a local government structure which is acceptable to the people of this country. I congratulate Her Majesty's Government, and in particular the Secretary of State, for bringing this Bill before Parliament. I also congratulate my noble friend Lady Blatch for presenting it so well from the Front Bench to your Lordships' House.

6.30 p.m.

The Viscount of Oxfuird

My Lords, I should like to add my voice to those of other noble Lords in praise of those of all political persuasions who give a great deal of time to their local areas of government for little reward. Such selflessness often carries minimal recognition. One cannot but support any proposal that adds the stature of correct reward to such positions.

I have no authority to speak on local government and particularly its structure. However, for many years I have been involved in the field of competitive tendering: competitive tendering in overseas projects, particularly within the disciplines laid down by organisations such as the World Bank. The word "compulsory" seems to cause difficulty. Surely the word "compulsory" when applied in this instance effectively underlines the terms of democracy. This is public money. It is the taxation of our fellow citizens. It is public money in a World Bank tender. All tenders are effectively compulsory by virtue of the existence of the tender itself.

There is no doubt that the tendering process ensures that competition is evident from the beginning of the initial stages of any contract. One of the most important side effects of competitive tendering today is the highlighting of quality and its cost. The term "cost of quality" is used very frequently and is, I am certain, well known to the consultants on this Bill— the PA Consulting Group—who, I understand, were originally responsible to the Department of Trade and Industry for the introduction of total quality management. The words "cost of quality" are almost built into our dictionaries.

At the end of the day the cost of quality boils down to getting everything right first time. Therefore the tendering process must be structured to reflect the philosophy of prevention and not that of detection. A policy that allows inspection or detection to take the greater share of the quality costs will often create an unquestioning acceptance of failure. The costs of failure and subsequent detection are very much greater than the initial cost of quality. It is therefore essential that any tender should reflect that philosophy in its structure. One of the areas of greatest attention must be the structure of any tender for public bidding.

Much has and will be said about the control of the tendering process by councils to ensure that DSO and commercial bids are adjudicated within the same framework and conditions. However, there may be those who seek greater protection for local government tenders in terms of bidding and performance. Is it possible to emulate the principles of international tendering by the use of bid bonds and performance bonds? They could be set at levels which would ensure that the authority was protected. The use of the bid bond ensures that the tenderer is properly qualified to submit his tender in the first place; the use of the performance bond ensures that he can carry out that tender, that he is financially able and that he has the equipment, the experience and the expertise.

It has been said that the route to success hinges on excelling at what one does best. Surely the submission of tenders must come within that field. It is what one does best that entitles one to tender in the first place. I believe that all Members of your Lordships' House recognise the sense in compulsory tendering. It is not political. It is simply practical and professional.

6.35 p.m.

The Lord Bishop of Exeter

My Lords, my education in local government began when I was a curate in a county borough with a population of 100,000. My vicar insisted that I be the correspondent to the managers of the primary school. Whenever there was a problem all I had to do was ring up the Deputy Director of Education and I was given an appointment within a few days. So I got on my bicycle and went to see him. My education continued when, in the Fenland, I discovered a village which was a true community but which was divided by a dried-up canal which ran straight through the middle. One side of the canal was administered by one county and the other side by another.

We have come a long way in 30 years. Nevertheless there is a general feeling that some further change is needed. However, when we try to address that change we come upon a sense of unease as to whether there is enough clarity about the role of local government to make it possible to discern the appropriate structures. I have sensed that unease within this House and elsewhere.

Therefore it would seem to me essential that the Local Government Commission, if it comes into existence, should be given guidelines, guidelines to which the Minister herself referred. It is essential that the commission is enabled to develop a culture of great flexibility. I was glad to hear that a Minister used the word "flexibility". However, it seems to me that a culture of flexibility is essential and the commission should have space to develop that culture so that the concept of the unitary authority would be applied most sensitively.

The area of ecclesiastical authority which falls to me covers one large county—the two are exactly coterminous. It must have within it an almost unique feature; namely, it contains a city of a quarter of a million inhabitants which is neither the county town, in the old terminology, nor the see city. A quarter of the county council is made up of members from that city. They have to travel 40 miles to attend the county council meetings. Yet, within the same area there is the city whose name I bear, which is typical of a number of such cities in England, cities which combine a vigorous contemporary life with existence as historic places. I suggest that there is an importance to these historic cities which is greater than may meet the eye. Many people come to them and during their visits they are strengthened because these cities speak to them of our national roots. To be aware of our national roots is, in a generation which tends to be rootless, something that it is very precious to preserve.

Therefore it would appear that any Local Government Commission will need the wisdom of Solomon. The recommendations it will need to make to the Secretary of State may well be—indeed we pray they will be—sound and we pray also that the decisions made by the Secretary of State will be sound. But they will not be successful unless they are truly accepted in the localities. Some of the difficulties which have been with us ever since the last round of reorganisation have meant that changes were not accepted in the localities and they have formed an ongoing cause of grumbles.

Therefore I would suggest, if I may, that, in addition to giving the commission space to develop, the guidelines should promote a culture of flexibility in the content of its recommendations and should define the process of its consultations. It would be important to ensure that the commission does not simply consult with one group, then with another and then with another, all in separate compartments, before making a recommendation. We should try to ensure that the competing interests—and there are competing interests—in any one area are brought together under the aegis of the commission so that they face each other and talk through their differences of view. Such a process should prepare the ground for a greater degree of acceptance when the ultimate decision is made and promulgated.

6.43 p.m.

Lord Wade of Chorlton

My Lords, first may I follow the remarks made by my noble friends Lord Boyd-Carpenter and Lady Faithfull and draw to the attention of the noble Lord, Lord McIntosh, who might have enjoyed taking as much credit as possible for the Labour Party, to the fact that most of the great decisions in relation to our cities were along the lines—in fact, most of our great cities were run on the lines—that many noble Lords have suggested they ought to be run today. They were run with much more efficiency and with good management. The councils considered the interests of the local people, and of them alone. They did not become involved with issues which did not concern them but looked after the growth of their local people. All that was done by Tory administrations before the Labour Party was even thought of. I draw attention to that, and to the fact that the heyday of local government was probably in the last century, when so much was achieved by it. All our present benefits have come from the great decisions that were made then.

Lord McIntosh of Haringey

My Lords, I acknowledge the truth of what the noble Lord says about the 19th century. I take it that he is going to lavish equal praise on the 1963 London Government Act and the 1972 Local Government Act.

Lord Wade of Chorlton

My Lords, I was not planning to refer to either of those Acts. I will leave them to those who know more about them.

I support this Bill and believe it is right and proper that the Government have brought it forward at this stage, when great changes arc taking place in how society sees itself, in the requirements of local people, and when there is a need to have a closer relationship between all those aspects so that we might even go back to some of the ideals we had in the last century, even before the 1963 Act.

I particularly support the proposals for tighter audit and financial control, specifically to ensure good management and the efficient use of people's money. I should like to mention one or two points arising from the proposals on competitive tendering and enabling, and on the Local Government Commission. I very much support the enabling proposals; both those which the Government have already brought in and those which will come forward under this Bill. I see great benefit from them in that they will bring local government closer to the people and will assist it to understand more effectively what is wanted and to adapt more quickly to the needs of the local community.

However, there is a development arising from that which the Government may not have entirely realised. This brings me to the point mentioned by my noble friend Lord Beloff. As you get closer to what the people want they will, in fact, more and more resent central government making decisions for them. I suggest that the Government may not have thought through the position in that where they define "enabling" as a way to have more efficient buying and provision of services there will be a corollary; that is, local people will want to make sure that what they want is what they get. Also, they might want something different from what others may want.

I very much support this legislation because it pushes forward in the direction in which society is going anyway, but what will happen is that society will be very different in different parts of the country. We shall see some cities wishing to go in one direction and other cities in another. That is right and proper. I should like those people who wish to see their locality develop in a certain way—by providing more jobs and more development in a certain area and so on—to have that. But, of course, there may be people in another area who do not want such developments but wish to retain a quiet rural life. They should have that if that is what they want

There is the overall issue mentioned by my noble friend Lady Cumberlege, and others, which I strongly support. That is the concept of the strategic implications. I do not believe those strategic implications can be dealt with by joint committees: that will only be a recipe for further disaster. I believe that as these matters unfold it will be important for government to ensure that if they go to unitary authorities—in some places they might, and in others not—the sizes of the authorities are of such a nature that they can take proper strategic decisions which are right for the development of the economy as a whole.

On the other hand, I feel that we must take more and more notice of what local people want in this regard, but there has to be a proper balance in relation to size. So far as we are concerned in Cheshire that has worked well. Here I must admit that we have been fortunate in having two good local authorities at both county and city level, with a good relationship between them, and they have made good strategic decisions which have been made in the interests of the whole area. However, I feel that it would be a great mistake to have so small a size of unitary authority that it is not possible to draw in economic benefits, to attract inward investment and to take an important role in what is going to be a European concept, where people invest and where business grows.

I should like also to draw attention to the fact that, in the concept of enabling, our traditional boundaries at all levels are breaking down so that where it might be right, proper and economic to offer one service over a relatively small area, another service might have to be considered over a much wider area. We can no longer work on the concept of traditional geographical boundaries, city sizes or county boundaries for all our range of services. It may well be that there has to be sufficient flexibility in the system to allow us to maximize the range of services by looking beyond existing boundaries. We might have to look at our boundaries in relation to the specific item we are offering, rather than looking at a whole range of items.

I feel strongly about several aspects of the Local Government Commission. Already too much power is concentrated at the centre and as a result many dangers will arise. No matter what is said, we must be aware that any change will be costly and disruptive to the services and I trust that the commission will look closely at that.

There must be no pressure for uniformity. That will be unacceptable to the people and will cause further problems in future. The two-tier system works well in many shires. There is a great deal of loyalty in some of our traditional shires which have a sense of history and we must consider retaining that as much as possible.

Communities vary in their needs, atmosphere and performance. Any change must provide for different views to be heard, for diversification and for full and democratic representation. In particular, there is a need for the commission to consider the aspects of the rural economy. It must not think only in terms of what takes place in towns and cities. Rural areas are becoming increasingly important places for people to live, work and create wealth for the nation. There is a wide diversity of views about how they should develop environmentally and economically; and that should be looked at closely by the commission. I believe that the views of people who work in the rural economy will be important.

The noble Lord, Lord McIntosh, mentioned two issues which caused me to make a note. He asked about decision making in respect of the Council for the Protection of Rural England. What is more important in deciding what happens in a local environment? Is it a national unelected body which has a deep interest and a great deal of expertise in a specific issue, or is it a democratic decision taken by people who live in the area? Whose view will predominate? In my view, great confusion exists about that and about recent decisions taken by the Secretary of State. There has been a diversity of views about his decisions taken after looking at matters nation ally and about what local people want. At some stage the Government must lay down the issues that can be decided locally and those that can be decided nationally. At present a great deal of confusion exists.

The noble Lord, Lord McIntosh, and the right reverend Prelate the Bishop of Exeter referred to historic cities. I live in the historic city of Chester. Its residents feel strongly that their problems are neither understood nor accepted by people who do not live in such a city. Many people consider a historic city to be a place to visit, wander round and look at buildings that were erected many centuries ago. Other people actually live, work and try to make a living there.

There are differing views about how historic cities should develop. Enormous pressure exists because our cities have not been allowed to grow as have similar cities in, say, France and to change and alter their traditional buildings. Many old, traditional buildings in Chester have been destroyed because planning laws prevented the city from growing outwards. I should have preferred to see the city grow on the outside while retaining its ancient and beautiful buildings on the inside That is the view of most residents of such cities; those of York, Cambridge, Carlisle and so forth. However, many national planning rules have prevented such development. If we are to have the proposed changes who will make such decisions?

I welcome the Bill. However, I hope that the Government will consider my views about some of the dangers that may flow from it and find solutions at an early stage. I am sure that will be the case as the Bill passes through your Lordships' House.

6.55 p.m.

Lord Swinfen

My Lords, I was delighted to read in the Bill that the Government are to introduce the proposals contained in the Citizen's Charter. Several thoroughly unfair anomalies exist round the country. I wish to talk in particular about those in the city of Sheffield, but I understand that they exist in other areas.

We expect that our community charge payment will fund certain amenities. Indeed, it is used to fund amenities in the areas around us. Under the right-to-buy legislation people living in local authority houses may buy their properties. In Sheffield, and in other cities, the local authorities insist that a clause be inserted providing that the purchasers who became the freeholders must pay a service charge for the amenities for which they had previously paid under their community charge, or rates as was then the case. They also have to pay the community charge. I understand that in Sheffield the matter has been in dispute for some 10 years. The authority is about to insist that the charges hitherto uncollected will be paid by the purchasers. I suspect that Sheffield is getting into difficulty.

In addition, a number of housing estates in Sheffield were built with a central heating system supplying all the houses in those developments. In some instances people who bought under the right-to-buy legislation wished to be disconnected from the system. I am advised that the charges for disconnection are horrendous. That matter should be investigated under the Citizen's Charter. I am incensed on behalf of the people who bought their properties because many local authority tenants are in arrears with their rent but no effort is being made to chase them up.

I wish to speak also about care in the community. Any review of local government structure should take into account the impact of change on voluntary organisations. Many organisations have established relationships with particular councils and have been involved in planning innovative services. There is a danger that the early stages of the community care system will be disrupted by reorganisation. Adoption of the community care plans are scheduled for April next year. The transfer of social security funds is scheduled for 1993. Plans were drawn up after consultation with the voluntary sector and a great deal of time and effort has been spent on their implementation. Reorganisation must protect local services provided by the voluntary sector. I hope that the voluntary sector will be consulted about the best way in which any reorganisation should take place.

7 p.m.

The Earl of Carnarvon

My Lords, first, I apologise to the Minister for not being present in the House during her presentation of the Bill. As she may know, I was with the Secretary of State and all the local authorities from the East Thames corridor deciding what to do about that part of the South East.

In the debate on 27th February, I urged that changes in the system should only be made after proposals had been thoroughly tested by a most searching inquiry. Therefore, I welcome the creation of the Local Government Commission which is the subject of Clause 13. That is an extremely positive response to the fears which I and others expressed; namely, that there was a real danger of instant solutions and immediate proposals for a new structural system of local government. The Government are to be congratulated on drafting that clause and Clause 14. The new commission will have power to recommend structural changes by the replacement of the two principal tiers of local government with a single tier, having regard to the need to reflect the identities and interests of local communities as well as the need to secure effective and convenient—an important word —local government.

That seems to me a sound and pragmatic approach. The commission will have the necessary freedom to make, or, indeed, not to make recommendations for structural change in any area depending on its view of the part of England which is being reviewed. In other words, solutions should be devised to fit the need of each area.

I draw your Lordships' attention to Clause 13(6) which empowers the Secretary of State to give directions as to the exercise by the Local Government Commission of any of its functions. That power is extremely wide and may perhaps be used to limit the discretion of the commission by directing it to find particular solutions which meet the wishes of the Secretary of State and thus, in an important sense, stultify its role. It would have been helpful if the guidelines against which the commission is to work had been published in time for this debate. I hope that when replying to the debate the noble Baroness will set our minds at rest by explaining the guidelines so that we may be assured that they are objective and equitable. A consultation paper on the guidelines would be welcome.

There will be a great interest in the areas of the country where the commission will start its work. A consensus for change is not seen uniformly across the country. One imagines that it will be in areas where certain strains have emerged that the commission will wish to begin its work; for example, the artificial counties created in the 1974 reorganisation which have found it difficult to establish an identity commanding widespread acceptance. Equally, there are areas such as the Isle of Wight where the case for a unitary authority appeals and has already been commended by the present boundary commission. Early change there may be advantageous.

As your Lordships well know, I do not like the idea of change for change's sake. I am pleased to say that I am supported by NALGO in that respect. I was also pleased to hear the right reverend Prelate the Bishop of Guildford commending traditional and historic counties where there seems to be no overwhelming desire for change among the general public.

In many counties, including Hampshire, which is my county, some district councils aspire to unitary status. I was flattered by the noble Lord, Lord Boyd-Carpenter, drawing attention to the fact that for some time I was chairman of the largest spending authority outside Strathclyde. I obviously did not do my work very well because he did not seem to understand the duties as regards monetary involvement of the county and the district councils. I spent many days and hours in Winchester and in front of television cameras explaining to the public of Hampshire what they were paying for in their rates and which part of the rates were county rates and which part district rates. Apparently that did not get home to the noble Lord, Lord Boyd-Carpenter, which saddens me.

We need to have regard to what the public says. That important point was made by the noble Lord, Lord Stoddart of Swindon in an extremely good speech. We must listen to the smaller authorities, the parish councils, the business groups, the CBI and both sides of industry. Many functions, such as transportation and structure planning, mineral policies and refuse disposal, cannot be undertaken by local authorities which are as small as some of the present districts. Change in those areas would have to be cogently argued before it could command acceptance. I believe those were the views of the noble Lord, Lord Skelmersdale.

Some people have suggested that arrangements in the form of joint committees between unitary authorities can be established to overcome any apparent defects of small unitary authorities. To combine in that way is complete nonsense. I believe that I am supported in my view by the noble Baroness, Lady Hamwee. The public is confused. It cannot understand whose is the responsibility for a particular task. Accountabilities are confused between the joint committee and its constituent authorities. I hope that within the guidelines for the commission's work serious reservations can be expressed about joint arrangements. The commission should be invited to suggest them only as a last resort when all other options for achieving a satisfactory solution have failed.

I hope that substantial use will be made of the Audit Commission's advice. I draw special attention to Clause 16 which provides that the Audit Commission "may" be consulted as to the cost and effectiveness of any proposed structural changes. Perhaps the clause does not go far enough. The Audit Commission should be consulted automatically on all proposals for change because additional costs will undoubtedly flow from any reorganisation. To proceed without those costs being quantified is not, in my opinion, very sensible.

I raise one last issue which again I hope the noble Baroness may be prepared to touch upon in her reply. Besides her own, other great departments of state have a vital interest in any restructuring of local government. I have in mind the Departments of Transport and of Health and the Home Office. Indeed, most functions carried out by local government are not the responsibility of the Minister's department. May the House be informed as to the views of those departments about the proposed review process so that at a later date this House may judge whether the guidelines against which the commission will work take heed of those views? I believe that to be an important point.

Lord Boyd-Carpenter

My Lords, before the noble Earl sits down, does he appreciate that even the most beautifully drafted and framed explanation of the situation, such as he gave, does not touch on the reality of the position in which one set of councillors decide on expenditure and another set take responsibility for levying the taxpayers or ratepayers? It is not the absence of an explanation but the division of responsibilities which is the problem.

The Earl of Carnarvon

My Lords, no doubt the noble Baroness will answer that when replying to the debate.

7.9 p.m.

Lord Norrie

My Lords, my anxieties in regard to the Bill relate to environmental matters. In a nutshell they involve improving the environmental standards of local services, the operation of the Local Government Commission, land use planning, and the implications of the Bill for national parks in England.

First, let me deal with environmental standards. In Clause 1 of the Bill I would like to see environmental performance, alongside cost and efficiency, as a further criterion for measuring the overall standard of performance of local authorities. For instance, I should not like to see cost-cutting measures leading to a decline in the environmental quality of services.

A further concern I have with Part I on environmental grounds relates to the extension of compulsory competitive tendering to professional services. In particular, I am worried about the possible future use of private consultants for certain land use planning purposes. It is important not to overlook the value of the constructive and often creative relationship between local authority planning staff and local councillors. Local authority planning staff are often more familiar with their locality and local interests. They are better suited to drawing up local planning policies than outside consultants, who pose the problem of conflicting interests where those same consultants also work for private sector developers. In this context I should like to ensure that the importance of the environmental standards of local authority services and responsibilities, including continued support for local environmental groups, are taken into account.

My second main concern relates to the way in which the Local Government Commission is to operate. I believe that the Local Government Commission should be able to recommend, on the basis of detailed investigation, the most appropriate structure for local government in any specific area. In many areas that may be the status quo. I therefore wholeheartedly welcome the provision in Clause 13 which allows for the commission to recommend no change to local government structure. However, I should like to be reassured that the commission will, in formulating its recommendations, take into account the ability of local authorities to perform environmental functions effectively. That would be consistent with the Government's recent first year report following the 1990 environment White Paper. It said that the reform of local government structure should result in local authorities being, better able to reflect community interests and to rise to the environmental challenge". It went on to say that the Local Government Commission would consider the need for effective environmental protection in developing proposals for reform. I look forward to hearing how that will be achieved as the Bill progresses.

I am concerned also that the review process should be open to public scrutiny and influence. I am not satisfied that Clause 15 provides for sufficient publicity or opportunities for effective consultation over the commission's work. Furthermore, I am disturbed by Clause 17, which suggests my right honourable friend the Secretary of State for the Environment will be able to implement the recommendations of the commission, with or without changes, by making an order without an opportunity for local views to be heard or taken into account. That is a deficiency which should be remedied.

I now come to my third concern. One of the most crucial environmental functions performed by local authorities is land use planning. That involves balancing the demand for new development with the need to protect the countryside and the wider environment. I scarcely need to tell noble Lords that one of the unique features of the planning system is that valuable but different functions are performed at both the county and district level of local government. Both the noble Lord, Lord McIntosh, and my noble friend Lord Skelmersdale said that county councils are responsible for county structure plans which set out strategic priorities in non-metropolitan areas. They also play an invaluable role in regional planning guidance, which the Government have encouraged.

Within the context of structure plan policies, district councils prepare local plans setting out detailed development policies. Decisions on planning applications are largely the responsibility of district councils. The Planning and Compensation Bill, enacted in July this year, was widely welcomed as restoring faith in this two-tier system of planning which had suffered from some years of uncertainty. I very much regret that the prospect of local government reform has renewed uncertainty just as the planning system was settling down again.

During our consideration of Commons amendments in July, I asked my noble friend the Minister to reassure me that whatever the Government decided on the question of local government reform, the provisions of the Bill would remain intact. I was delighted by the response I received. The Minister said, the planning system and the measures in the Bill will remain central in the Government's thinking as they work towards reform of local government". I trust that my noble friend will be able to reassure me tonight that the Bill before us will include safeguards to protect the two-tier planning system so recently confirmed. My fear is that without those safeguards local government reform will be environmentally damaging. The strength of the two-tier planning system is in the separation of longer term strategic issues and the detailed day-to-day local considerations. As the noble Earl, Lord Carnarvon, suggested, retaining an effective strategic planning tier is one of the most pressing considerations for local government reform. I do not believe that small unitary authorities are geared to strategic planning. That could seriously undermine the role of the planning system in balancing the interests of development and conservation.

Perhaps I can illustrate my anxiety regarding the problems which could occur if we move towards smaller unitary authorities with an example from the Tyne and Wear conurbation. The unitary authorities in the old metropolitan area appear to be fighting among themselves to attract economic investment by releasing over 3,700 acres of land from the green belt. The extent of the green belt in Tyne and Wear was approved as recently as 1985 and confirmed in government guidance in 1989. I am sure that many noble Lords will be able to envisage the way similar tensions and conflicts could escalate if planning was left just to districts in rural areas. Such problems are likely to result in even greater pressures on my right honourable friend the Secretary of State for the Environment to intervene to resolve conflicts which would be much better sorted out—as they are now—at the county level. I would not like local government reform to give rise to new problems simply because the planning implications have not been adequately thought through. If there are to be more unitary authorities as a result of the work of the Local Government Commission, I believe only large authorities, capable of performing effective strategic planning will be appropriate. By delegating detailed planning responsibilities to more local area committees, an effective two-tier planning system could be maintained. That would also avoid the problems with joint arrangements to which my noble friend Lady Cumberlege referred.

In order to take account of strategic planning, the Local Government Commission should consult with representative bodies and strategic interests. Clause 13 rightly emphasises the interests and identities of communities. But I believe the commission should be required to consult with all relevant parties.

My fourth and final concern is about national parks. The future of national parks is inextricably linked with the future of local government. Yet the Bill makes no provision for dealing with the parks. Recently the Government made a most welcome announcement in their response to the report of the National Parks Review Panel that each national park should be administered by an independent authority. That is widely considered to be the most significant change that could be introduced to make the parks more effective. I am anxious that the wider implications of the Bill, and indeed proposals for local government reform in Wales, do not inadvertently disrupt the management of the parks before the Government's intentions are fulfilled. I will therefore be suggesting amendments to the Bill to provide for an independent authority for each national park in England and to ensure consistency in the treatment of national parks by the Local Government Commission.

7.19 p.m.

The Earl of Shrewsbury

My Lords, bearing in mind the large number of noble Lords who have put down their names to speak this afternoon, I shall try to be as brief as possible. I live in Staffordshire, where the county council is controlled by the Labour Party. Staffordshire County Council is well run, keeps within its budgets and provides good services. I suggest that it is one of the best performing local authorities in the country. I see smiles on the Benches opposite. This is an excellent example of just what can be achieved by local politicians of different parties when they work together for the general good. I suggest that congratulations are in order to the hard-working members of all parties on that county council.

There is broad agreement between the two main political parties on Staffordshire County Council that this Bill will serve to benefit the people of the county by splitting the City of Stoke-on-Trent away from the remainder of the county. Such a result will provide, far more cost effectively than the present system of district councils within the county, two separate local authorities of a certain size. The economies of scale which this will produce will be very considerable indeed. Of course such arrangements may well suit one county but not another. Therefore the proposed Local Government Commission will have to look very carefully at the issues involved.

My main interest in the Bill is concerned with compulsory competitive tendering. My noble friend Lord Oxfuird spoke eloquently earlier this afternoon about the necessity for and benefits of such a system. In my view, compulsory competitive tendering is a natural progression to the practices which have been employed in recent years, certainly by my county authority. These days very many businesses have taken on board total quality management programmes. They have had to because they have to remain competitive in a highly competitive environment.

Perhaps I may quote the key principles of TQM. Quality is continually satisfying customer requirements; total quality is the achievement of quality at lowest cost; and total quality management is achieving total quality by harnessing everyone's commitment. Financial institutions, manufacturing industry, motorway service area operators all have had to review and improve the quality of their products and their customer service. Why? Because the customer expects and even demands the best of service and quite rightly too. While not totally agreeing that the customer is always right—I am sure that many a salesperson in Woolworth's will say that the customer is quite often an infernal nuisance—customers have to be treated as if they are special, as indeed they are.

In my view local authorities are exactly the same as all businesses in the service sector. They are providers of many services to a very substantial customer base. The local authorities should practice total quality management and the private sector must be given the opportunity to compete with those authorities on a level playing field for the provision of services. Perhaps I may give noble Lords an example of the benefits of competitive tendering that works successfully. About five years ago my dustbins used to be emptied by East Staffordshire District Council. The bin men—I beg your Lordships' pardon; the refuse collection operatives—were surly and unhelpful and the service was thoroughly unreliable. Collection was supposed to occur each week but sometimes we had to wait far up to three weeks for removal of our rubbish. On one occasion I complained to the manager of the waste collection department and I was literally told "Bad luck, mate".

The East Staffordshire District Council has since then changed its policy and now uses a major private firm of repute, Leigh Environmental, whose staff are waste management experts. The result is a regular, efficient service, polite and cheerful bin men and a manager at the end of the telephone who reacts positively and with speed when problems occur, which is very seldom. Who are these wonderful people? They are none other than the old dustbin men from the East Staffordshire District Council, who, it would appear, far prefer to work in the private sector.

Yet CCT for housing repairs, highway maintenance and refuse collection and all the other myriad services, produced only a 25 per cent. penetration of the market by private contractors. The remaining 75 per cent. of the contracts were won by in-house DSOs with bids that reflected new and improved structures of management and manpower with the inherent savings to the councils. So fears in council chambers that the private sector would whisk most business away from under their eyes have proved to be substantially unfounded and services have improved dramatically.

Noble Lords will see that I am an enthusiastic supporter of compulsory competitive tendering. In my view it brings with it heightened quality, better service and a better deal for the taxpayer. In conclusion, I believe that contracts won through the CCT disciplines need to be of sufficient length to allow the necessary learning curve within the new commercial culture—for instance, a minimum of three to five years, with RPI—enhanced payment beyond the first year.

7.25 p.m.

Lord Teviot

My Lords, forgive me for not discussing the merits, demerits or basic logic behind the Bill and allow me to get on with specific points. They are points which I do not believe have been dealt with so far today, which is unusual. My two noble friends have spoken eloquently and I shall not refer to them. If they wish to escape they may do so. I very much enjoyed listening to them.

It is curious that my two main political interests have come together today; namely, transport and archives. At one stage I thought I was going to have to make two speeches in one but fortunately the transport aspect has dealt with me lightly. However, the Bus and Coach Council is concerned that the proposed reorganisation of the structure of local government will produce unitary authorities which may be smaller than the existing county units. Such units of local government would generally not be appropriate for transport co-ordinating functions. It may therefore be necessary to group a number of these smaller units together as presently happens in the metropolitan areas in order to make effective decisions on transport related issues. The council feels that provision for such a grouping should be made within the existing legislative framework.

My other main concern with the effects of the Bill lies within a number of small but important services currently administered by county councils which will suffer damage if unitary authorities smaller than counties become the normal practice. I feel sure that it would not be the Government's intention, by changing the structure of local government, to see services to the community debilitated. I fear that without proper recognition of the problems posed to the small scale services they might be the unwitting victims of change, and the community the worse as a result.

I am thinking of services such as county record offices, consumer and public protection, waste management, archaeology, and specialist guidance on historic buildings. They require small specialist teams and currently operate effectively, providing quality services at the county level. However, they would become less cost-effective if the population and the catchment area served were to become smaller.

I have a particular interest in archive services and record offices and wish to use an example to illustrate my anxieties. I have not approached the other parties aforementioned. The history of the provision of archive services by local authorities stretches back at least half a century and even further. The earliest county record offices were established by pioneering authorities such as Bedfordshire in 1913 and Essex in 1938. The archives they hold, however, date back in some cases over 1,000 years and provide evidence of the history of our local communities over that span.

The Local Government (Records) Act 1962 empowered local authorities to provide comprehensive archive services. The authorities could acquire historical records, make them available to researchers, and publish and exhibit them. County and county borough councils acquired those powers as of right. District councils might apply for them. In fact, since that date only eight shire district councils have been granted archive powers by the Department of the Environment. In other words, outside the metropolitan areas, local government archive services in England are administered almost exclusively by county councils. That suggests very strongly that this small but key service is run most effectively when it serves an area on the scale of an English county.

The county archive services have many achievements to their credit. Properly secure and environmentally controlled storage areas ensure the preservation of irreplaceable archives which form the very heart of our national heritage. They are the records of the lives of institutions, authorities, churches, businesses and individuals across the centuries. But archives are of course still being created today and modern records need to be provided for. New repositories have recently been built in counties including West Sussex, Suffolk, Hampshire and Northamptonshire to ensure that storage conditions meet the British Standard requirements. Such storage provision is expensive and is most economically provided in large units. Thriving publication programmes and added value services such as genealogical research demonstrate the success in marketing and promotion. They also provide, at no cost to the authority, services which today's customer wants. Each year more than 300,000 people visit English and Welsh records offices to pursue student research, leisure interests or legal and administrative inquiries. Countless more derive benefits from the exhibitions, publications and schools activities operated by local record offices.

County record offices have been successful in keeping close to their users through branch offices and active educational programmes while also providing support services from a central team of highly skilled specialists at the heart of every county record office. Those specialist teams cannot be divided into smaller units without threatening their very viability. The years of work spent in cataloguing and indexing collections of enormously rich and important archives to make them accessible to this and future generations would be wasted if the offices were broken up.

Another important factor should be borne in mind. I refer to the continuity of the archives themselves. Since they were established, county record offices have rescued and preserved at the local level much of our nation's history which was previously scattered or threatened with decay or destruction. Many collections reflect the ancient county administrations themselves. They could not be subdivided or broken up without destroying centuries of local history, heritage and roots.

The costs of large-scale change would be great. If archive services in England were devolved to the current district councils, it would mean equipping and staffing 296 new conservation units and employing and housing 296 additional heads of service and their staff, not to mention the satisfactory storage of 296 newly constituted archive collections. Even if the new unitary authorities are based on areas larger than the present districts, it is difficult to see how these cost-intensive services could be duplicated or multiplied without failing the Secretary of State's own criteria for change; namely that, there must be a proper justification for the upheaval and costs which are inevitably involved in reorganisation. Change must be worthwhile and cost-effective". There is, furthermore, recent evidence that some smaller authorities have little understanding of what is needed to ensure the wellbeing of this aspect of their local heritage.

I am aware that the part of the Bill to which I have referred does not cover the Principality of Wales. However, I am delighted to see that the Secretary of State has published a paper The Structure of Local Government in Wales. In its submission to the Secretary of State, Montgomeryshire proposed a budget for an archive service totalling £9,000. Of that, £7,810 was for employee costs—a sum that would barely pay for a typist, let alone a trained archivist or conservator. Such funding cannot possibly provide acceptable levels of service for the users and depositors of archives comparable with those which have become, and rightly so, the accepted norm for nothing less than the preservation of our common past. If that pattern were repeated across the country, we should witness the virtual death by slow neglect of our written heritage.

The Bill does of course provide for the establishment of joint authorities and residuary bodies to carry out certain functions. For small county-wide services which cannot be subdivided effectively, such arrangements perhaps present the best hope. But the experience of the metropolitan areas in the wake of the abolition of the metropolitan counties in 1985 gives a clear warning that this provision does not automatically give sufficient safeguards for services such as archives.

Following the Local Government Act 1985, the most successful archive services in metropolitan areas have been those like West Yorkshire and Tyne and Wear which have continued to operate from a centralised base while providing services to their constituent districts. Elsewhere—in the West Midlands for instance—it has not been possible to build a network covering the whole area; so some boroughs exercise no care of their archival heritage. I was surprised to learn that because in the area of transport West Midlands probably comes top of the league. There is little positive evidence overall to suggest that the difficulties of maintaining a comprehensive service held together only by the voluntary involvement of districts have been balanced by positive advance and achievement.

Noble Lords will be aware that this is possibly the last opportunity the House will have to debate the structure of local government in England, since under the Bill decisions will be made by the Secretary of State, advised by the Local Government Commission. Therefore I must ask my noble friend what safeguards will be provided in the Bill to ensure that future services in England will be satisfactorily funded by the new unitary authorities. Will she please ensure that a small, valuable service such as archives—exercising a role for which any civilised society should make provision —will survive undamaged the effects of the Bill? I shall be more specific. Will my noble friend please state whether archives will be covered by the residuary body provisions in Clause 22 or in another suitable place in the Bill? As it is now almost 30 years since the passing of the Local Government (Records) Act, it is time to reconsider the wider frame of legislation relating to local archive services. Our archive services should enjoy the status of a statutorily required service. At the very least there should be a requirement in the Bill that the new unitary authorities must contribute financially at an adequate level, based on current costs, to joint working arrangements or a residuary body provided to ensure the survival of the investment made by our local communities over half a century in their own much valued past. Anything less would be a squandering of what is undoubtedly a local heritage and, collectively, a national asset.

7.37 p.m.

Lord Feversham

My Lords, I am glad that someone has had the opportunity to raise the issue of archives. The noble Lord, Lord Teviot, has dealt extremely thoroughly with the difficulties of shifting archives from structure to structure. Archives are also an interest of mine but the noble Lord has dealt so well with the subject that I am sure he will forgive me if I do not follow him in talking about archives.

As President of the National Association of Local Councils I obviously have considerable interest in a Bill which seeks to set up a commission to review the structure of local government in non-metropolitan areas and I should like initially to give this Bill a cautious welcome. By way of introduction perhaps I may make a few remarks about the nature of local councils. They are what we used to call parish councils and parish meetings and they exist almost solely in rural areas at present, where they serve a function which has become increasingly valuable constitutionally since the last major restructuring of local government—not least because, prior to that upheaval in 1974, many medium to quite large country towns had their own rural and urban district councils which were self-governing over quite a wide spectrum of activities. Following the 1974 reorganisation, many of those communities have been able to maintain an identity within the constitution, albeit with somewhat reduced powers, through their parish or local town councils.

Local councils are able to carry out their necessarily limited functions efficiently. They allow local people to come to their own decisions without bureaucracy, almost always in a non-party political forum, and in my experience local council discussions are conducted with great good humour and decisions are firmly rooted in sound common sense and real local knowledge. Further, local councils are increasingly becoming the last remaining corner of our constitution where it is possible for ordinary citizens to take an active part in the democratic process of ordering their own lives without having to become, effectively, full-time politicians.

I venture to suggest that if parish councils did not exist we would need to invent something very like them. You cannot prevent people from meeting to discuss their common problems at the most basic local level. It is very much better to contain that human requirement via a safety valve incorporated in the mechanisms of the constitution than it would be, otherwise, to have a proliferation of ad hoc pressure groups springing up all over the country on a whole range of different issues and operating outside the legal framework of government.

I believe that the latter is widely understood by politicians of all parties. Indeed, the concept of the local councils meets with great goodwill in every political quarter. Thus far, my remarks seem to have been received amiably by noble Lords, with indulgent, if slightly somnolent, expressions. Even the noble Baroness, Lady Hollis, has yet to drop upon me like a jaguar out of a tree.

Baroness Hollis of Heigham

Just wait!

Lord Feversham

Nevertheless, my Lords, despite all this amiability over parish councils, there are considerable difficulties with the local council system as it functions at present which have become increasingly apparent since the reorganisation of 1974. It seems right at this time that those difficulties should be advanced and dealt with by the commission that the Bill seeks to establish. I very much hope that when it comes to considering suitable appointments to the commission, adequate consideration will be given to appointing at least one commissioner who has sufficient experience of the workings of local councils and the value of their place in the constitution.

As I understand it, the commission is empowered to abolish almost everything except parish councils—noble Lords will not expect me to quarrel with that fact. However, the point was raised by the noble Lord, Lord McIntosh, and the noble Baroness, Lady Hamwee, that you cannot really have a commission looking into the structure of local government without at least reviewing the functions which are also carried out by the local and parish councils.

I believe that that consideration is particularly important because the value of local councils is not always fully understood by the larger local government bodies or by the civil servants charged with refining these constitutional mechanisms. Noble Lords who enjoy the television programme "Yes, Minister" may share my view that the idea of a few amateurs gathering together to make decisions on their own local issues with very little bureaucratic assistance and on the basis of common sense is a difficult concept for the mandarins of Whitehall to come to terms with, other perhaps than as an intrinsically dangerous concept where the guiding principle should be one of damage limitation. It is not too difficult to imagine that this last suggestion of mine might be met in the department with the opening gambit, "Perish the thought Minister".

Equally, there has been a very uneven pattern of behaviour by the post-1974 rural districts towards the local councils in their area. We have a rather unusual constitutional position that local councils can only really operate at their optimum if the value of their activities is properly recognised by the district authorities. Some districts have always taken the view that parish councils are rather a nuisance. Some districts' view of parish councils is at best grudging, through the adoption of the aforementioned damage limitation attitude, while other districts have come to realise that their own work can be much more effective if they encourage and work with their local councils as much as possible. I am delighted to say that my own parish council of Helmsley in North Yorkshire has an extremely successful working relationship with Ryedale District Council. Indeed, at reorganisation, Ryedale District Council set up an office specifically to liaise with its parish councils. Where that kind of relationship exists, I believe that one finds better local government.

Many of the difficulties surrounding the local council system at present have arisen because the position of such councils in the constitution has not been adequately addressed in past local government legislation, where it is all too easy to regard their role as insignificant. Consequently their position has been steadily eroded, for example, by such things as the poll tax legislation. I shall not go into that aspect of the matter. My purpose today is to ensure that this new look at structure adequately addresses the role of local councils in the future.

The chief problems to be addressed are as follows. The first is the fact that local councils come in all shapes and sizes, some quite large and able to carry out a relatively wide range of functions and some very small and barely able to function at all other than as a local pressure group. Further, not all areas are presently parished. There is the problem that in some areas districts may, if they feel inclined, devolve activities to parishes where they exist but will have to provide those activities directly to areas where parishes do not exist. That can lead to the problem known as double rating. I do not feel that this is the right moment to examine these and other difficulties in any detail. The right forum for that should be the Local Government Commission.

Nevertheless, perhaps I should demonstrate the kind of difficulty which can arise when Bills on local government such as the one that we are debating today are introduced and insufficient consideration is given to the effect on local councils. Perhaps I may draw your Lordships' attention to the provisions of the Citizen's Charter in Part I of the Bill and in particular to the provisions under Clause 2 and Schedule 1 to enable amendments to be made to the compulsory competitive tendering provisions contained within the relevant 1980 and 1988 Acts. The noble Lord, Lord McIntosh of Haringey, dealt with these aspects in what I thought was quite a ferocious manner; but, nevertheless, he did so with his customary accuracy.

As regards local councils, I shall just say this. Any extension of competitive tendering to other areas of local authority activity under the rules as currently applied will make it much harder for delegation of functions from, say, a principal unitary authority to its local councils. The standard concept of delegation is that the main authority agrees to entrust one of its functions to its local councils to be exercised by each of them for its own costing. At present more than £100,000 per year must be offered for tender.

The function must go to the successful tenderer and few local councils will be able to tender because of one or more of the following reasons. First, they do not have the staff and so on to be able to tender. Secondly, they cannot tender across borders, so one local council could not tender for the work of, say, half a dozen such councils. Thirdly, the tender offer cannot be broken down into parish-sized lumps. A general aim to enhance the role of parish councils may be nullified in the service field by pressure for compulsory tendering, even though it can frequently be demonstrated that a very local exercise of a function is the cheapest way of exercising that function in that parish.

In conclusion, I shall reiterate my cautious welcome to the Bill. Provided it produces a forum where the work of parish councils can be adequately examined, I feel that it would lead to determination on the part of national government, of whatever political persuasion, to address the difficulties which exist at present in operating at its optimum this vital level of our local government, which is, after all, closest to the people. If the role of local councils is more effectively enshrined in our constitution, democracy will be well served and a measure of protection against what has been described as "the elective dictatorship" can be provided.

In that respect I feel that I should mention the European Charter for Self-Government. I do so partly because the noble Baroness, Lady Faithfull, wanted someone to mention Europe but more so, if the truth be told, because I wish even at this late stage to demonstrate that my contribution to the debate is of truly international gravity, although on the surface it may have appeared to some noble Lords to be rather more parochial.

The admirable European charter produced by the Council of Europe at Strasbourg is, as your Lordships might imagine, awaiting signature by Great Britain. It asserts: The powers of government should be exercised at the lowest practicable level". In view of the Government's arguments against signing other European documents they should have little problem in putting their name to this one. If that is the case, they should also have little difficulty in ensuring that the terms of reference for their new Local Government Commission will embrace at least an examination to locate the most useful way in which parish councils can be incorporated into any structure which it may recommend.

7.50 p.m.

Baroness Denton of Wakefield

My Lords, as the daughter of a local government supplies officer who lived and breathed the concept of service still inherent in most of today's local government officers, I am delighted to participate in today's debate. I should also acknowledge the splendid start in life I received courtesy of the education department of the West Riding of Yorkshire. But local government cannot be exempt from the tremendous speed of change in which we are all today involved. It must also be subject to the rule that standing still is a backwards movement.

The size and complexity of decisions needed today have led to situations very different from those in the past with regard to local government workings. The demands on people have also necessitated for them a change of priorities, and the setting up of a Local Government Commission to review the structure can only be of value.

Perhaps I may suggest to those who believe that there is no need for such change that today many people do not even know the name of their local councillors; and yet the argument is that local government is nearer to the community. Indeed, in many areas almost 70 per cent. of the population does not turn out to vote. I well remember the words of one Birmingham City Council leader who said that the true result of the local election was that the majority of people did not care who governed them.

If it is true, as the noble Lord, Lord McIntosh, claimed, that his party knows more about local government than anyone else, I can only say that it does rot seem to share that knowledge with the local population. As your Lordships have heard, local responsibility used to be taken seriously. It was a matter of prestige to be a local councillor, and the city fathers and trade unions barons shared the power and influence willingly and easily, to the benefit of the area. Today, there are still areas such as Birmingham where politics have come second to the needs of the city and the team has achieved great growth. In my own Black Country area, while Sir Alfred Owen, the head of Rubery Owen, would be leading the council Conservative group—not in power—many of the employees from his plant were given time off to participate in the work of the Labour group; but for many years now it has not been easy for industry to allow people time off work to participate in local government work; nor has it been easy for management to take time off and to give of its best.

It may also be that many in the private sector do not understand and cannot live with the way that some local government operates at the moment. There would seem to be too much involvement in detail: of the nature of, "How many coathangers for the adult training centre?", instead of, "How should we manage the budget for maximum effect?".

Much local government has become bogged down in the committee system and has attracted an entirely different type of person, with few other demands on his time and perhaps too reliant on the fees. I have come across a case where the need to retain a fee has influenced the decision-making. The mobility that industry and commerce require of their management today means that those people do not have the same opportunity to develop roots in the community and to give their service.

Members of the commission will undoubtedly have much work to do in assessing the balance between cost-effectiveness and areas of a size suitable to be close to the community. It is sometimes difficult to come to terms with the amount of duplication that exists between district council and district council in areas such as housing and highways.

There would seem to have been little change in the role women are playing in the local authorities. There is some evidence that more professional women are becoming involved as councillors, but the 1990 Municipal Yearbook shows that only four authorities out of some 500 have women chief executives, and even today they will be in single figures. Perhaps the noble Lord, Lord McIntosh, who is interested in the proposed chairman of the commission, will transfer that interest to areas nearer home. Of even more concern is the fact that there would seem to be not one senior female legal officer—a crucial role as local government is governed by law and statute; and yet I understand that 70 per cent. of the staff of local authorities are female. There seems to be an opportunity for change in that area.

The Bill, with its setting up of a system of measurement defined by the Audit Commission and levels of performance targets chosen by local government, will be driven by the customers' needs. It is the decade of the informed consumer. The people who want to know more about their health, the food they eat and with which they feed their children and about the opportunities for training will as citizens undoubtedly make greater demands for efficiency on local authority services. The accurate targeting of expectations and measurement of achievement will be much welcomed. It is imperative to measure in order to manage.

Competitive tendering in new areas will provide, again, opportunities for better managed and measured work. With the best will in the world, in-house departments have a protective self-interest instinct. I once inherited a garage team where the profit came from warranty work generated by its getting things wrong in the first place. There can be surely nothing like the holding of the overall check control to ensure that what is specified is what one receives at the right price and at the right time. Of course it inevitably puts great stress on the writing of a clear but accurate specification. I have seen arguments that advertising costs will increase; so, I add, will the choice for the local authority.

I am sure that in our youth we were all introduced to the small girl with the curl who, When she was good

She was very, very good,

But when she was bad

She was horrid". Local government is a little like her and, for the benefit of those living in horrid areas, needs reassessment. I welcome the Bill. I thank my noble friend the Minister for giving it such a splendid introduction.

7.58 p.m.

Viscount Falmouth

My Lords, I too congratulate my noble friend the Minister on introducing the Bill so splendidly. As many noble Lords have said, it is an important Bill of great constitutional impact. Unlike many of your Lordships who have so distinguished yourselves in local government, I can speak only from the viewpoint of a Lord Lieutenant of my county with no particular axe to grind beyond that of trying to do his best for the county to which he belongs. I may make a few points of interest along the way.

One of the chief arts of government is to know when to control from the center—I use the word "art" because it is not a science—and when to decentralise. Anyone who runs a business knows that. Local government was the first system of government, through which our countrymen gradually learned that art before the country became a united kingdom under the Crown in Parliament.

The Bill puts great uncertainties into the minds of all local councillors, local government officials and the local population. If prolonged, uncertainty is bad for morale. I hope that such uncertainties will not continue overlong. However, with the new Local Government Commission, they are bound to last for a considerable time.

The counties must be anxious about the role of single-tier authorities mentioned in Clause 14. How big will they be? Will they be our present counties with more power concentrated at the centre? Will they be in the shape of the present district councils? These are genuine questions, bringing with them fears that our local government, of all complexions, will just act as agents for the centre with little discretion as to what they do.

My own county is Cornwall, with a population of about 450,000. The county council has five districts, ranging from 60,000 to 80,000 souls, most nearer the higher figure. Undoubtedly we are a homogeneous county and one that is proud of itself, and the county council is looked on as the standard-bearer of our affairs. The districts are the packhorses carrying much of the burden of day-to-day affairs such as local planning, public health and housing—matters which touch us all deeply. Is it really necessary to change the structure in this part of the world so fundamentally as may be suggested?

I have said before in your Lordships' House how important the county structure is in the minds of all who live in these islands. That is especially true in the rural areas. Perhaps the further from London and Westminster we go, the more we feel this. The county is the identity to which we all relate, the focus of the minds of those who live there, who were born there and who retire there and even of those who commute from there to the big cities. I feel this very strongly indeed when having to perform the various duties one has to carry out as Lord Lieutenant.

I am sure that those who live in this or that county will feel that they "belong", as we do in our county. We belong, using the old Anglo-Saxon word with all its associations, perhaps through work for the voluntary bodies that we know of—the county's St. John Ambulance association, the Red Cross, the scouts and guides, the local county museum with all its records (in our case a royal county museum) the friends of the hospitals, the local air ambulance, the county young farmers' federation, the county's sports associations and the agricultural associations. The local county associations are legion. Through their labours also, the statutory bodies of the county—the county council, the district council and the parish council—all have their roots in the county. The idea of the county gives virtue and satisfaction to their devoted efforts rather than the idea of compulsion and control.

The county is a stable unit in the minds of our fellow countrymen. We must be careful to protect this idea. I trust that the new Local Government Commission, with all its tremendous powers, will make the fullest possible use of the necessary and vital consultations under Clause 15 of the Bill. Perhaps the commission will take full note of what is said in your Lordships' House both during this debate and during the passage of the Bill. One hopes that the provisions will be in no way weakened through amendment during the stages of the Bill.

As to the idea that district councils might become single-tier councils, perhaps I may say this. All change is expensive; witness the costs arising from the Local Government Act 1972. We may have more buildings. How many more chief officers would one have, if the old county were divided into new single-tier districts? Under Clause 21 on joint authorities there might have to be several joint boards between single-tier districts. It would be inevitable that those who serve and staff these would look to the interests of their own districts, which would frustrate the purpose of the boards. Such is human nature.

Surely it is much better to work through a larger organisation such as the county which we now have—a known way, large enough to embrace the purposes of a joint board, such as the goal of strategic planning—rather than that a new joint board should have to be created.

How would these boards be accountable to the electorate or the public? When dealing with the size of local authorities, surely the new Local Government Bill will have to take into account the impact on Europe. For example, in anticipation of the tunnel, Kent is part of the Trans-Manche Euro region. I believe that this is the first officially recognised European region to include an English county. I understand that a man of Kent or perhaps a Kentish man is the president of this region. How important geography is to our affairs! Coming events cast their shadows before them. Local authorities such as counties are sufficiently large and well known abroad to hold their own in the cockpit of Europe with far more potential for influence than unknown districts, even if they are to be single tiered.

I am glad that under Clause 26(3) the Secretary of State has included the safeguarding words: power to make different provision for different cases, including different provision for different localities and for different bodies". That is a veritable cascade of differences. I am sure that the Local Government Commission will be the first to recognise that our country is a world of differences. I trust that it will remember the great virtues of the counties and the links which bind them internally, forged through the ages, comprising some of the oldest institutions in the world and also the present smaller second-tier authorities which exist in their confines, separate in their duties but nevertheless complementary and endeavouring to fulfil the wishes of their countrymen.

I am sure that the Local Government Commission will be wise to the dangers of over-centralisation. Even the most efficient central government, run by clever men, can easily fall into the trap of losing touch with the wishes, needs and prejudices of ordinary men and women. I am sure that the commission will remember that local government gives to every man and woman a share in government and a say in the local affairs that concern him and his neighbour. In many cases in rural districts the two-tier system is a workable compromise towards that end.

8.8 p.m.

Viscount Mills

My Lords, I hope that my speech will be welcomed at least as being the last from the Back Benches. I shall confine myself to that part of the Bill which deals with compulsory competitive tendering, or CCT. I am well aware that in certain quarters, including parts of your Lordships' House, the measures relating to CCT in the Bill are controversial. Indeed, recent press reports suggest that many county and district councils, as well as professional bodies, would prefer competitive tendering to be extended voluntarily. Surely though—here I am in full agreement with my noble friends Lord Oxfuird and Lord Shrewsbury—the interests of those for whom services are being provided should be of paramount importance. It is the taxpayers who contribute to local authority finances and they have a right to expect the most efficient use of their funds. Local authorities should be responsible for providing the best available services and they should be accountable for them.

Competitive tendering for certain local government manual services has now been with us for over a decade; indeed since the passing of the Local Government, Planning and Land Act 1980. We perhaps should not lose sight of why compulsory competitive tendering was introduced at that time. It was as a response to considerable public criticism of the performance and efficiency of some local government in-house workforces. Competition was thought to be the necessary spur to promote greater efficiency and better value for money.

Government commissioned research from the Institute of Local Government Studies at Birmingham University has shown CCT to have provided significant benefits in terms of reducing the annual cost of the work carried out. Standards of service have not suffered and in some cases were found to have improved. However, not all the benefits of CCT can be measured directly. Changes have also been brought about in local authority thinking. The tendering process has resulted, often for the first time, in local authorities having to specify exactly what is required from the services they provide. In addition, they have had to monitor these services and quality of service has become a major issue. Regrettably, it seems that not all local authorities have risen to the challenge. Some have responded unenthusiastically towards the competitive tendering process which has resulted in charges of anti-competitive behaviour.

If competition produces better and more efficiently delivered services, then such behaviour is unacceptable. Neither is it acceptable if external contractors are presented from competing on equal terms with direct service organisations. This Bill contains enabling provisions which could be used to give effect to proposals in the Government consultation document Competing for Quality. These proposals provide a clearer framework for competition.

There is a need to specify the cost items which local authorities can or cannot take into account in tender evaluation. There should be a client/contractor split when the work is carried out in-house. Outside contractors need to be allowed an adequate and specified time to submit their tender as well as a minimum mobilisation period to give time to recruit staff and set up the necessary infrastructure to carry out the work.

Overall, I believe that these measures, if introduced, will provide a clearer, fairer and more effective framework for implementing CCT as it exists now. However, the Bill before us goes further by proposing the extension of compulsory competition to a range of local authority professional and technical services. Competitive tendering for these services is not a new concept. Some, more innovative councils have already taken this initiative voluntarily.

I would be surprised if anyone disputed that the need for good management, quality of service and value for money is just as applicable to professional and technical services as to manual services. The question is whether in the case of the former, CCT should be used to achieve these aims. If that is the case, will all professional services be put out to tender? Can the quality of these services be assured? Do suitable external contractors exist? The Government consultation paper explores these issues in some detail.

It is recognised that at least some aspects of corporate services may not be subject to CCT. However, most direct professional and technical services to the public, being largely self-contained, are suitable for inclusion in the CCT process. Indeed, some services may be better carried out by external contractors. Perhaps one example is the management of local authority theatres and arts facilities. The consultation paper states: The planning, staging and promotion of theatrical, musical, cinematic and other performing arts events are activities which call for a combination of cultural expertise and entrepreneurial commitment. These are not qualities which local authorities have traditionally been required to demonstrate. However, a number of local authorities has done so with great distinction in recent years. It is important that the Government have recognised that they must fully address the issue of maintaining or indeed improving existing standards of quality for professional services. In order to do this, it is proposed that in certain cases tenders would have to cross a preset quality threshold before price was even considered.

I also support the proposed phased introduction of CCT to these services. Clearly, it will be a more complex task to develop and implement the competitive tendering process for professional services than for manual ones. I am sure that the extension of compulsory competitive tendering to the whole range of local government services will take time and will not be without its problems. However, it marks a continuing evolution in the role of a local authority from being solely the provider of services to becoming an enabling body as well. I believe that this is a necessary policy to achieve the full potential of the available resources.

As I have outlined, the Government's consultation paper has comprehensively considered compulsory competitive tendering. However, there is one important subject that does not appear to have received attention, that is the environment. Where appropriate, the competitive tendering process should have built into it a requirement to safeguard the environment. Environmental costs need to be minimised just as much as monetary costs. I believe there is widespread public support for such measures.

The Long Title of the Bill emphasises the desirability of securing economy, efficiency and effectiveness—the three "E"s—in the manner in which local authorities carry out certain activities. To these three "E"s I suggest adding a fourth—the environment. Like my noble friend Lord Norrie, I hope that the need to protect and enhance the environment when carrying out local government planning or work will receive further attention when this Bill is discussed in Committee.

8.17 p.m.

Baroness Hollis of Heigham

My Lords, the opening sentence of the Explanatory and Financial Memorandum states that the Bill, makes local authorities more accountable by giving effect to proposals in the Citizen's Charter". I suggest the sentence is incomplete. To whom will local authorities be accountable? That is the question which has formed a common thread through the most interesting speeches we have heard this evening. In so far as the Bill seeks to make local authorities more accountable to their local electorate and local taxpayers, it will have our full support. But in so far as it seeks to make local authorities accountable to the Secretary of State—I fear that is the intention—we shall seek to modify it.

The Bill proposes that the Audit Commission will set performance standards and publish league tables. However, I am sure the noble Baroness, Lady Denton of Wakefield, will accept that those are slippery things. I remember the time when the Audit Commission in its family profiles quite properly fingered the cost of open space maintenance in Norwich compared with York. However, much of the open space in York consists of moors or strays maintained by sheep. The open spaces in Norwich are intensively used and intensively manicured public parks maintained by men. As the Audit Commission has said, such tables do not tell their readers anything about value for money: economy and efficiency are not the same things as cheapness". We on this side welcomed the Minister's comments earlier this afternoon, as I am sure everyone did, when she said that the Audit Commissions's performance tables would embody local standards. That is a helpful comment, but I suggest that problems will remain.

Let us take, for example, refuse collection. One might think that is a fairly straightforward example as regards performance standards. The Audit Commission may judge cost by household and may judge quality by collections missed or complaints. However, it says nothing about the frequency of a service or the mix of dustbins, plastic sacks and wheelie bins. Neither will we be told whether it offers kerbside or backdoor collections, services for the disabled, the collection of garden waste, of large objects or of dangerous goods such as syringes. We shall not be informed either about environmental sensitivity as regards recycling. It is precisely those criteria that have gone into the customer contracts of Labour authorities to which my noble friend Lord McIntosh referred. Customer contracts reflect not only national criteria but local priorities, standards and needs. Local citizens help to set those standards and monitor them. That is surely proper accountability.

With reference to performance standards and league tables, refuse collection is a fairly simple service. It is easy to count and to cost, and everyone receives the same. But how does the Minister believe that league tables can be applied to personal services or rationed services such as sheltered housing? Is more of it good or bad? Perhaps the Minister will tell us. Is a high cost warden service bad because it is expensive or good because it is keeping the highly dependent elderly in the community? What about regulatory functions? When the planning department adjudicates on the conflicts between residents and motorists, how does one judge the quality of that?

On this side of the House we do not object to performance standards but we want them to be meaningful and to reveal more than they conceal. To that extent we shall move amendments to reflect local circumstances and local standards as well as national criteria. In return perhaps the Minister will tell us how the customers are to be consulted about the performance tables embedded in the Audit Commission's criteria.

I turn now to compulsory competitive tendering, the second tool by which the Government propose to increase accountability. Experience of some Members on this side of the House differs from that expressed by the noble Viscounts, Lord Oxfuird, and Lord Mills, and the noble Earl, Lord Shrewsbury. Where tenders have been won outside it has frequently been at the cost of the very standards that they have been designed to enhance. For example, one street cleaning company in London bought its contract by cutting staff, cutting wages by 20 per cent. and cutting training and benefits. The high staff turnover—1,000 young men going through 80 jobs in three years—meant poor work and endless public complaints. Similarly with regard to school cleaning and meal services contracts have had to be called in. In leisure management over the past few weeks two of the largest firms have collapsed. Local authorities have had to pick up the pieces. Cheap is very often costly.

What about savings, my Lords? CIPFA estimates that the savings following CCT have been about 5 to 7 per cent. However, CIPFA also states that the cost of setting up that tender was 6 to 11 per cent. No, my Lords. The additional regulations and applications for CCT are not concerned with standards or savings. I suggest that they relate to government dismay that local authorities have won 80 per cent. of the tenders in-house. Did they win those tenders because local authorities acted unfairly? Government would like to think so. But that is hardly the case. Of the 2,800 or so contracts since 1988 only 31 have been called in by the Secretary of State for anti-competitive behaviour. As the noble Baroness, Lady Carnegy of Lour, said, none of those was in Scotland.

In other words, as local authorities are winning contracts under the rules, government propose to change the rules to make it harder for them to win. Government frankly admit that some of the new provisions—for example, on central administration, vehicles and depots—will increase council tax costs, and that is at a time of council tax capping. But no matter. That is "bygone expenditure" according to the White Paper, as though it is less real, less relevant and has net occurred. Nothing could be clearer from that than that CCT is concerned not with competition but with privatisation. I am convinced that the Government will keep changing the rules until the private, sector wins the bulk of the work.

More alarming still—it is a concern shared by the noble Lord, Lord Norrie—the Bill gives the Secretary of State power to extend compulsory competitive tendering to professional and core services such as law and finance, as he sees fit. Perhaps I may touch on two of those services, computing and housing. I accept that those are part of the second stage.

In the White Paper the Government propose that 80 per cent. of computer services should go out to CCT. However, computing is not about machines but the knowledge that members and officers need as a management tool. Yet any tender specification for computing must presume full knowledge of the need for future knowledge. That is absurd. Noble Lords have only to consider the policy changes thrown at the poll tax by the Secretary of State in the past year, all of which require IT facility, to appreciate the inflexibility, the costs and extensive delays that would come from retendering for computer resources every time the Secretary of State changed his mind.

On housing—in my view disgracefully—we do not even have a White Paper to guide us. In the absence of such a White Paper I ask the Minister two questions. My noble friend Lord Dean referred to the first point. Following the 1985 Housing Act, does the Minister agree that tenants should be consulted before housing management is put out to CCT, as was indicated in the Statement earlier today? Secondly, does she agree that any privatised housing management will want commercial control over rent levels, arrears and evictions, the response time for repairs, and even lettings, to determine acceptable risks? If a privatised management does not have that control, how can it be commercial? If it does, is it not an invasion of political judgment and strategic policy?

I emphasise to noble Lords that on this side we are not opposed to competitive tendering. We object to compulsory competitive tendering. We object more strongly to the compulsory competitive tendering of those professional services where information, confidentiality and the support structure of members and officers may be at stake. No private organisation would send such sensitive services out to competition. Why should local government do so when it will make them more bureaucratic, more cumbersome and less effective'? Above all, we object in the strongest possible measure to agreeing to a Bill to extend CCT to unspecified services. We object to passing a Bill through this House before the responses to the consultation paper, which would have been fed into our debate and into the Bill, will even have been received. It should be clear by now that it is a Bill to increase the accountability of local government not to local citizens but to one citizen only—the Secretary of State.

I come now to local government reform. In 1974 a two-tier structure was introduced which local government said at the time would not work and could not last, as the noble Lord, Lord Boyd-Carpenter, acknowledged. It has warped service delivery. Some functions were made concurrent and overlapping. Others were handled by agencies. Wiltshire was responsible for cutting the first few feet of verge under highway powers; Thamesdown undertook the remaining seven or eight feet under amenity powers. Norfolk was responsible for street cleansing; the city of Norwich spent up to 10 times as much topping up that service to acceptable city standards. No one knows who does what, at what cost and to what standards—certainly not the local taxpayer.

Following 1974, other functions which interconnect were split between tiers—highways from planning, and social services from housing. That concern is shared by the noble Baroness, Lady Faithful]. As a result those most in need of help—for example, the elderly, the handicapped, the vulnerable and the disadvantaged—are the people least able to cope with the very splintered structures that government set up to help them. They retire defeated.

Why then was such a damaging structure introduced? As the noble Lord, Lord Skelmersdale, said, in the late 1960s it was assumed that big was beautiful, that there were economies of scale. Secondly, it was assumed that the growth of private cars had obliterated differences between town and country. Both assumptions presumed in favour of the larger tier, the county council, and both were wrong. On the economies of scale arguments, in all the research on local government I have found no evidence that bigger organisations are cheaper or better. Value for money depends not on size but on scrutiny, competence, commitment and accountability. As the Audit Commission has itself said, those virtues and values are found equally in small and large local authorities.

Indeed, in shire counties stretching 50 miles by 70 miles the reverse is true. There are real diseconomies of scale. I am sorry that the noble Baroness, Lady Cumberlege, did not accept that. Up to 60 per cent. of senior officer time, as one social worker calculated for me, was spent overcoming the diseconomies of distance, co-ordinating, liaising and travelling. So councillors closed schools that they had never visited, amended traffic schemes on roads whose names they did not know and adjusted the tariffs of car parks they never used, and they called it local government. In Europe, where the basic size is only 30,000, such units would not even be regarded as local government.

In practice, most counties set up district offices to administer education and social services to local communities, with their boundaries frequently coterminous with those of district councils, effectively conceding the argument that county councils were, with the possible exception of Cornwall, too large for personal services and too small for almost anything else, especially strategic planning. As a result, we have ended up with district tier administration but not district tier accountability or district tier democracy.

The second problem of structure has come about because the counties have understandably tried to impose uniform standards across large counties. As a result, proud, historic county boroughs, with 600 years of self-government behind them, have, as the right reverend Prelate the Bishop of Exeter noted, found their services savagely cut. However—and this point is too often neglected—rural communities have suffered equally. They have been treated as dilute urban areas and offered thinned out versions of urban services to which those who most need and use those services, the car-less-women, children and the elderly—have least access, instead of rural areas being allowed to develop services, perhaps peripatetic, appropriate to their needs.

Town and country are different, and let us delight in that fact. As I am sure your Lordships will agree, city problems centre around the difficulty of congestion. In rural communities the reverse is true; there is poor access to services. As the noble Lord, Lord Wade, said, they need different styles of local government and local government is about local difference. In the reorganisation of 1974 such local distinctiveness was lost and with it the capacity of local government to be accountable and responsive to local needs.

Today's enabling authority defines local needs and ensures that they are met. Here I am probably at one with the Minister in believing that it does not necessarily have to do that itself but it must ensure that it is done, and in a plurality of ways. Consequently, the size of the enabling authority is of far less significance. What matters is that it reflects its local community and should be close to the people.

Structures matter—for local government is more than the sum of its services, as many of your Lordships have said this evening. It is the voice of a community networked around its sense of place. Structures define boundaries, communities and self-government. That is why the Government are right to focus on structure, because, as the noble Lord, Lord Beloff, said, that recognises the fact that communities come first. That does not mean that we shall not seek to help the Minister by strengthening the independence and integrity of the Local Government Commission. I am sure that the Minister would expect nothing less.

Finally, we are entering a Europe of regions. In the next decade we shall need regional government, not, I emphasise, as a super local government but as a tier of government that brings power and functions down from Whitehall across from quangos and that brings one or two functions, such as strategic planning, up from the counties. With most purpose authorities, based largely on district councils, in place, with regional government, with a proper constitutional settlement at Westminster, we shall have enabling authorities at every tier of government that empower our citizens. As Nye Bevan said many years ago, the purpose of power is to give it away—to citizens—and we on this side will seek to amend the Bill to achieve precisely that.

8.34 p.m.

Baroness Blatch

My Lords, this has been an excellent debate. I do not underestimate that fact. I am impressed by the all-party support for many parts of the Bill, but I must say at the outset that there is no way that I can do justice to the debate. I shall go at the customary gallop, of which I have been accused so many times, in order to address as many of the points as possible.

I must start with the constitutional point raised by the noble Lord, Lord McIntosh, at the beginning of the debate when he suggested that he wished to exclude certain clauses in the Bill from consideration by the Committee of the Whole House to which the Bill will be committed. I am not sure how the noble Lord intends to pursue that approach procedurally, but he will no doubt make his intentions clear through the usual channels. We shall have the opportunity to discuss the matter at a later date. I must point out to the noble Lord that we would not have brought the Bill before the House if we had not intended all of it to be considered by the House in the normal way. I intend to leave the matter there for this evening.

Lord McIntosh of Haringey

My Lords, I am grateful to the Minister for giving way. It may be helpful if I intervene on the procedural side of the matter rather than on the substance. I have taken advice on the matter. The best approach would probably be if I were to move an amendment to the marshalling instruction which will come before the House before the Committee stage and which will set out the order in which the clauses and schedules are to be taken. I understand that, according to the formal procedure of the House, as soon as Second Reading has been moved and agreed this evening, the Bill will automatically be committed to a Committee of the Whole House. It will therefore be proper to deal with the matter at the marshalling stage.

Baroness Blatch

My Lords, I hope that I shall be forgiven for leaving the matter there for the moment.

The noble Lord, Lord McIntosh, and a number of other noble Lords raised a point about the difficulty of establishing performance standards and about the emphasis on costs. He decided that it would be difficult, as did the noble Baroness, Lady Hollis. Although I do not want to underestimate the 80 measures to which the noble Lord referred, the Audit Commission will not start from scratch. For those services to which compulsory competitive tendering applies, standards have already been defined. That was necessary in order for tenders to be let and contracts to be awarded. Admittedly, those standards will not be on a consistent basis, but the standards and definitions will be there. Moreover, the Audit Commission has been running the quality exchange since early 1990, so it already has a fair idea of the range of quality of performance and it will be able to build on that. We can expect it to develop its expertise rapidly so that services, which at present appear difficult, will soon become amenable to the techniques that the commission will develop.

I regret that the noble Lord, Lord McIntosh, appears not to have heard what I said about standards of performance when he said that cost would be the be-all and end-all of comparisons. I said: The new information about standards and costs would be published in a common format so that the public would be able to make clear comparisons between one authority and another for a given standard [of service]". I also stated, and again reiterate, that it is important to emphasise that it will be for local authorities to determine the specific standards of service.

The noble Lord went on to say that there was no evidence of the effects of CCT legislation. Again, we have published a report setting out the findings of the first year's research into CCT, which found that there were not only cost savings, but distinct and marked improvements in the performance of local authorities' own direct labour services.

The noble Lord went on to say why so little use was made of sanction powers, a point reiterated by the noble Baroness, Lady Hollis. We have given to local authorities directions, under Section 14 of the Local Government Act 1988 in relation to anti-competitive behaviour, our views which have underlain those direct ions and which are well known throughout local government. Many other authorities have been guided by them and have handled CCT properly. Perhaps I may point out to the noble Baroness that the warning that we may take action has often brought about improvements in the delivery of services.

Lord Dean of Beswick

My Lords—

Baroness Watch

My Lords, there will be another debase in the future and I want to do justice to this debase. I hope that the noble Lord will forgive me. We shall have ample opportunity to address detail as the Bill proceeds through the House.

The noble Lord, Lord McIntosh, went on to say that this would not apply to the National Health Service. Again, this is another area in which the noble Lord, Lord McIntosh, failed to hear what was said very clearly not only when I addressed the gracious Speech but also when I spoke this afternoon. I referred to that explanation by saying that the NHS of course is subject to these measures but primary legislation is not needed in order to achieve this.

Lord McIntosh of Haringey

My Lords, I hope that the Minister will forgive me for interrupting her, but she is misrepresenting what I said. I complained not about the Bill not covering the NHS but the fact that the local patients' charters which are provided for for the NHS are not available for local authorities and their citizens.

Baroness Blatch

I said that it does not require primary legislation. They will be subject to the same measures. The noble Baroness, Lady Hamwee, asked how we will judge people and how we will criticise them for spending more on services. It is true that some authorities will spend more on services. It is also true that some will choose a higher standard of services. This Bill allows for that. It allows for that to be published in such a way that local authorities can make judgments about the costs and the standard of the services.

The noble Baroness also went on to say that charges may be higher for legal services. From my own experience in local government, I can say that often the size of the legal departments in local authorities militates against cost-effective services. Very often when a particular service is bought in it may in itself be more expensive but it is not supported by a whole legal services department. The prolific use of legal advice and indeed architectural advice or professional advice in local authorities is very often greater than is necessary, simply because it is there. Cost is not the factor. I spelt out very clearly that quality must be considered alongside cost.

As for the omission of London, I want to reiterate that we are not the party to bring back another bureaucratic layer for London. We shall not be reorganising London. It is important and I shall keep emphasising that the distinction between government for London and a voice for London always needs to be made.

The right reverend Prelate the Bishop of Guildford made an excellent speech. I have certainly noted much of it and take it very seriously. He was concerned about separating the setting of standards from the provider and used the analogy of the teacher. It is important to say that a good teacher nevertheless works within a framework. Very often standards are set either by the local authority or indeed by the framework of the national curriculum. The important thing is that the implementation of those standards should be carried out to the best of anybody's, including a teacher's, ability.

The noble Baroness, Lady Hamwee, drew an analogy with local government not being allowed to bid for work in the royal parks. I should like to say very strongly that it is not the job of local authorities to become businesses fishing for work outside their own sphere of responsibilities.

The noble Baroness raised a number of points: indicators should not be crude; client satisfaction is an essential component of service; high spending may not be wrong; information must be valid; and whether the members of the Audit Commission are the best people to advise on quality. The Government accept that indicators should not be crude. That is why the Audit Commission has been given the task of developing yardsticks for performance and has not been constrained by a timetable. The commission may use its own judgment, which has proved sound in the past. The Government argue that customer satisfaction is an essential component of service. That point is made clear in the Citizen's Charter. Our proposals in Clauses 1 to 4 will help local government electors to express their satisfaction through the ballot box. The legislative proposals are absolutely neutral on standards. They will enable yardsticks of service to be developed over a range of standards. The proposals are also aimed at measuring value for money at any level of service.

Other points raised by the noble Baroness were: information must be valid and whether the Audit Commission is best placed to advise on quality. The Audit Commission and the auditors are charged with ensuring that comparisons are on a common basis. It is implicit that the common basis should be valid. The noble Baroness asked whether the Audit Commission is best placed to advise on quality. The answer is definitely yes. It has already demonstrated its interest and its record so far is very good.

The right reverend Prelate mentioned that there is more to local government than efficient delivery of services and that there is a need for long-term considerations. He was correct on both counts. However, I ask whether we should entrust the longer term care of our local heritage and long-term standards to local authorities which are in fact wasting money. The achievement of better value for money will release funds and indeed energy. It will lead to the raising of standards so it will be possible to improve the quality of life for local people.

The right reverend Prelate went on to express concern about the enabling of authorities and the quality of life. Again, this is a wide-ranging issue. But I can assure your Lordships that our experience of CCT and its impact on local government has been that many authorities have at last been required to consider for the first time the way in which they organise the provision of local services and the standards achieved.

The noble Lord, Lord Stoddart of Swindon, referred to the relationship between national and local government. He had a rather idyllic view of the past. I joined local government when the Labour Party was in power. I must say that Peter Shore, without notice, overnight reduced very substantially local authority spending. I think the noble Lord was suggesting that this is the only government that ever had a view about macro-economics. My noble friend Lord Boyd-Carpenter made the point. When local authorities are spending £50 billion, there is no national government anywhere which could ignore the impact of that spending on macro-economics, even though the party on the Opposition Benches that aspires to be in office says that local authority spending would be entirely unleashed.

The noble Lord, Lord Stoddart, was also concerned about CCT procedures and whether they are subject to negative resolution. These powers are precedented. Section 8 of the Local Government Act 1988 gives the Secretary of State the power to make regulations governing a range of aspects of local authorities' CCT exercises. These regulations are also subject to the negative resolution. Our experience of CCT under the 1988 Act has been that local authority CCT practice varies widely. The Secretary of State would use the Clause 9 powers to give consistency and clarity.

The noble Lord, Lord Dean of Beswick, asked whether the cost of the investigation would be covered by savings. That is to misunderstand the provisions on performance indicators. Those provisions are not primarily concerned with the costs and savings. Rather they are concerned with securing value for money, whatever the level of service, and informing the public. If poor value for money is revealed it will be for the public to decide whether better value for money should be reflected in better services or in savings.

The noble Lord, Lord Dean, was also concerned about whether local authorities would be consulted before the Audit Commission publishes information which may be wrong. The answer is very definitely yes. I refer him to Clause 7(5).

My noble friend Lady Carnegy of Lour was concerned in a very thoughtful and constructive speech about the slow start of the CCT provisions of the 1988 Act as it applied to Scotland. She made a plea to increase the pace. She also pointed to the benefit to local people and indeed the encouragement that it would be for the increasing number of new companies. I have noted all my noble friend's points and we shall certainly take on board her plea for pace. She also pointed out the beneficial effect of the way in which CCT has sharpened up the local authorities' own performance.

My noble friend Lord Skelmersdale suggested some very radical ideas which he said must be fed into the reforms. I have no doubt that we shall have a lively debate when it comes to some of those individual ideas being incorporated into amendments. He also suggested that I should lead a team across to Northern Ireland. In fact I did just that. The team consisted of only me. I went across to Northern Ireland a week ago. They are looking across with some envy at the setting up of a Local Government Commission in England and they will be watching this Bill with great interest.

Many noble Lords remarked upon the importance of strategic planning matters and indeed the status of structure plans. We are watching the cost of any reforms and any changes. Of course we shall consult with the Audit Commission but one of the requirements for the Local Government Commission is that it must have regard to the cost effectiveness of the changes.

The noble Lord, Lord Stoddart, asked whether the CCT quality threshold applied to existing services. Our consultation paper raises the possibility of a quality threshold only in relation to professional services to which we propose to extend CCT. We consider that the existing procedures under Part I of the Local Government Act 1988 have proved perfectly adequate to safeguard the necessary standard of service where it already exists. However, I explained in my opening speech that professional services are more complex and will receive greater thought as a result.

The noble Lord, Lord McIntosh, and the noble Baroness, Lady Hamwee, asked: why not publish the PA report on extending CCT? We have made it clear since we announced the appointment of PA in May this year that their report would inform our consideration of options for CCT. We said then that we did not intend to publish the report and we see no reason to change our minds now. What noble Lords should be concerned with is what proposals we have made on the basis of having that information.

The noble Lord, Lord Dean of Beswick, wanted an assurance that the Bill will not be amended to introduce CCT for housing management. We intend to publish proposals shortly on extending CCT into the field of housing management. After my visit to Hackney, that cannot come a minute too soon. On housing management, while not wishing to pre-empt those proposals, we would not expect to have to amend the Bill to give effect to them. However, I should point out that the Secretary of State already has wide powers to extend CCT to additional services under the Local Government Act, and of course any addition would have to come before your Lordships.

I say to my noble friend Lord Mills that I have taken on board what he said about environmental considerations as it applies to CCT.

My noble friend Lord Oxfuird was concerned about the compulsory aspect of CCT and said that compulsion did not require that services must go out to contract. He believed that there had to be a requirement under the Act to market test specific services. Of course I have said how that has led to improvements both in-house and in work forces in respect to contracting arrangements.

The noble Lord, Lord McIntosh, the noble Baroness, Lady Hamwee, and my noble friends Lady Faithfull and Lord Teviot were all concerned about why there was no local government commission for Wales. Again, reviewing local government structure area by area in England is a much larger task than in Wales. In Wales it is both feasible and desirable to look at the structure of local government as a whole. My right honourable friend the Secretary of State for Wales will be examining the case for unitary authorities in that country with great care. It is only in England that the size of the task makes the establishment of a commission necessary.

The noble Lord, Lord McIntosh, my noble friend Lord Nome and others welcomed the bipartisan approach to the local government commission and local consensus, together with the need for stability. The Government will ensure a balanced membership for the commission, covering those with local government experience and those with other experience too. The Government will shortly issue their proposed guidance. Most people have mentioned the word "guidelines" but "guidance" puts a much stronger requirement upon the commission. It will have to have regard to the guidance. I have already covered the point on London.

The noble Lord, Lord McIntosh, the noble Baroness, Lady Hamwee, and the noble Lord, Lord Feversham, were all concerned about the roles of parishes in local government. They referred to the important role of local parish and town councils, and I could not agree with them more. The Government are well aware of the role that is played by the local parishes. This issue certainly merits consideration in its own right, and we will continue to look at options for adapting the parish role.

The noble Lord, Lord McIntosh, and my noble friend Lord Nome were concerned about national parks and their status. Following the submission of the national parks review, we have already announced our intention to establish independent authorities for all the national parks. We expect planning arrangements in the national parks and the broads to remain much as proposed in the planning Act.

The noble Baroness, Lady Hamwee, said that consultation was not for real—a great air of cynicism. I can assure your Lordships that this a genuine consultation exercise and we shall consider very carefully the responses we receive from all parts of local government and also, as the noble Baroness asked, other responses, including those from professional institutions, private industry and the community itself. The noble Baroness was also concerned about arrangements for strategic planning, which cannot be divorced from other functions. We absolutely agree with that point. The noble Baroness went on to say that everyone should have a chance to be involved in the review, and not only those who live in the area. Again, I reassure the noble Baroness that the debate will not be limited to local residents. Anyone at all will be able to make representations to the commission covering strategic as well as local interests, and we see no need for specific provision for local inquiries.

The right reverend Prelate said it was important to build on the strength of feeling for traditional counties. The Government are well aware of the strength of feeling about traditional counties and we shall want the new commission to take full account of such feelings. The Bill, for instance, will enable unpopular counties to be abolished and replaced by traditional ones.

My noble friend Lady Cumberlege not only appealed for a spanking pace but also made a spanking speech. I take her point about the pace of the reorganisation and also the point that she made about uncertainty on the part of local authorities. Indeed, my noble friends Lady Cumberlege, Lord Swinfen, Lord Teviot, Lord Norrie and Lord Falmouth, all named a number of services, mainly strategical: community care, transportation, environmental, land use planning and so on. I say to all of them that it is absolutely essential for the Local Government Commission to ensure that those services are properly delivered by any recommendations they make to this House; and of course both Houses will have an opportunity to make a judgment about that.

I have noted the concerns of my noble friend Lord Teviot about specialist services such as waste management, consumer protection, archaeology and especially archives, and what might happen to them if unitary authorities are smaller than counties. I can assure him that we do not underestimate the value and expertise of these services which have been built up. The Local Government Commission will look at the provision and continuity of all services when it considers the structure of local government, area by area.

The noble Earl, Lord Carnarvon, said that other government departments should play a role in the process of review and guidance. Other government departments have had a very real input into the guidelines, and he will be able to check that for himself in due course. Again, the noble Earl was concerned that the Secretary of State should not make a decision on the recommendations without there being a chance for people to put their views to him. There will be a six-week period during which people will be able to put their views forward to him.

My noble friend Lady Cumberlege was concerned that local health authority and local authority boundaries should be coterminous. I am absolutely certain she will be feeding that into the Local Government Commission. Indeed I know that a very large number of people both in health authorities and in local authorities will be making that very point.

My noble friend Lord Swinfen was concerned about what was happening in Sheffield concerning housing. He was kind enough to write to me with details, and I can promise him that his concerns will be properly investigated.

The noble Lord, Lord Stoddart of Swindon, asked whether the national review would be followed by a single vesting day. Again we think it is important to tackle the country area by area in order to find the best local solutions and to move quickly where a case for change is established. We hope that the first new authorities will be set up in 1994 but we accept that others may take rather longer. My noble friends Lord Beloff and Lady Faithful! pointed out the need to know which functions local government will have before we can review structure. Each function of local authority will be properly considered by the commission and the appropriate tier of government will be determined by the commission. On the basis of that they will make their recommendations.

The point has been made, and I note it with great seriousness, that the role of local government and central government and the grant and financing systems need to be taken very seriously by the commission when making its recommendations. If my noble friend Lord Beloff will forgive me, I shall leave his education point to the debate which I know will take place later this week.

My noble friend Lady Faithful] was concerned about the work of the Local Government Commission and that it should take account of the European dimension. That point of course was also mentioned by several other speakers. This country is developing a role in Europe and it is an important dimension to the formulation of government policies generally; but the history and circumstances of each country are unique to that country and we should not assume that there is necessarily any read-across between countries with quite different traditions.

Your Lordships are already aware that the Government have no plans for regional government in this country, unlike several of our European neighbours. Furthermore, we have no intention of signing the charter; we do not believe that it is necessary to sign international conventions in order to run efficient and effective local government.

The right reverend Prelate the Bishop of Exeter referred to my neck of the woods—Fenland. I was interested to hear his comments about local authorities being both sides of the canal. No doubt that matter will feature largely in representations to the Local Government Commission. I assure him that there must be an objective search for an efficient unit of local authority by the local government. The guidance will be a tool in that regard.

The right reverend Prelate also referred to historic cities, as did my noble friend Lord Wade. Representatives of the cities of Exeter and Chester will be party to a meeting due to take place in my department before the Committee stage of the Bill.

My noble friend Lord Wade expressed anxiety about whose voice will be heard in representations to the CPRE. The Local Government Commission will hear comments from all interested parties. It will then be for it to weigh up all the information and evidence and to make recommendations to the Government.

The noble Earl, Lord Carnarvon, asked which areas would be the first to be reviewed. A programme will be produced and as soon as it is available I shall make it known to the House. The noble Earl also expressed anxiety that the Local Government Commission should be required to seek the Audit Commission's advice. Indeed, it will take that advice rather more than is presumed.

My noble friend Lord Norrie asked about, environmental performance and the impact of the Local Government, Planning and Land Act. It is intended to keep that Act intact as the new reforms come on stream.

The noble Lord, Lord Feversham, asked whether the Government will sign the European charter. I have already stated firmly that we shall not do so.

The noble Lord was also worried about whether CCT would prevent work being organised at the level of parish councils. The answer to his question is no, it will not, so long as the packaging of work does not mean that the private contractors are unable to compete. There is no reason why contract specifications cannot reflect the needs of parishes.

My noble friend Lady Denton of Wakefield gave a timely reminder of women in higher grade posts. That specifically is a course for local authorities, but her point has not gone unnoticed. I shall report her comments about the gender of the commission members to my right honourable friend the Secretary of State. My noble friend articulated in a most persuasive way the need for modern management and for it to work in favour of better service to customers.

The addressing of performance standards of local authorities, the extension of CCT and the fundamental review of the structure of local government will provide for a more efficient, effective and economic delivery of local government services which at the heart will put the interests of local people first. I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.