Local Government etc. (Scotland) Bill

HL Deb 09 June 1994 vol 555 cc1324-99

3.38 p.m.

The Minister of State, Scottish Office (Lord Fraser of Carmyllie)

My Lords, I beg to move that this Bill be now read a second time.

The Local Government etc. (Scotland) Bill which we are considering this afternoon is, as your Lordships will recognise, a long, detailed and often complex measure.

It has been the subject of intense and prolonged discussion and scrutiny in another place. Discussions at Committee stage there extended to almost 180 hours —a record, as I understand it, for Scottish legislation at least in recent memory. Certainly it represented over 50 hours' more consideration than was given to the previous reform legislation, which became the Local Government (Scotland) Act 1973, which some noble Lords will remember well.

The Bill has emerged from those marathon sessions both changed and improved. The Government have listened to the arguments that have been presented and responded to them in a whole range of areas.

But before the House becomes too immersed in the details of the Bill, it would, I think, be helpful if I were to touch briefly on the background to it and on the principles which lie behind its provisions.

In terms of historical background, many of your Lordships will recall that our current structure of local government was established in 1975. It was based upon the profound and influential work of the Royal Commission chaired by the late Lord Wheatley. It replaced a structure of no fewer than 430 authorities, dating back to 1929, which Lord Wheatley himself described as, a patchwork quilt dotted liberally but unevenly with beads", a graphic description of the mixture of counties, cities, large burghs, small burghs and districts which then made up local government.

Even as the Wheatley Commission carried out its work, however, the advantages which a single-tier structure of local government could offer were being recognised and although, on balance, Lord Wheatley recommended a two-tier structure, he did so with the advice that the structure would need to continue to evolve. 'The structure of local government cannot afford to remain static", he said, and noted further that, the social and economic changes that have made the present structure so thoroughly obsolete have not halted. On the contrary they show every sign of moving onwards with increased momentum". Prescient words indeed from a report published almost 25 years ago.

That was advice which was picked up by the Committee of Inquiry into Local Government in Scotland headed by the then right honourable Anthony Stodart, (now, of course, my noble friend Lord Stodart of Leaston), which was established in 1979 to examine the division of functions between the two tiers. In his report, which was presented in January 1981, my noble friend concluded that, we must take note … of the substantial body of opinion —not least among some local authorities—which maintains the belief that only the creation of all or at least most purpose authorities throughout the country will produce a wholly satisfactory system of local government". So the debate about the most effective structure of local government is long-standing and has deep roots. The key arguments have consistently been about efficient and effective service delivery and about local democratic accountability. It has consistently been recognised that any structure is inevitably going to represent a compromise between those sometimes conflicting priorities.

Lord Wheatley carried out his work at a time when the priority was perceived to be to have authorities of a sufficient scale to provide the full range of what have since come to be termed "strategic services"—that is, education, social work, strategic planning, roads and the like—and that they should provide them at their own hand.

Lord Wheatley's model for Scotland envisaged just seven authorities across the whole country to carry out these services. Lord Wheatley was, of course, obliged to recognise the deficit that such a model left in terms of local accountability. He recognised also that not all services were appropriate for delivery by such large units. It was those considerations which drove him to recommend a two-tier structure of regions and districts. It is interesting, of course, to note that Lord Wheatley's seven-authority structure proved in the event to be too much for Parliament to swallow. Even with the establishment of district councils, there was a recognition in this House as much as anywhere that a structure of seven regional authorities across the whole of Scotland represented a swing of the pendulum too far from what true local government ought to be about. The loss of local identity would have been too great.

By the time the legislation finally left this House, therefore, in the autumn of 1973, the giant east coast region, which would have stretched from the English Border to Kinross, had been broken down into no fewer than three regions (Borders, Lothian and Fife) and we had a structure of nine regions, of very varying sizes, three islands and 53 district councils which also varied enormously in size.

Over the years, of course, that structure has generally operated very well. There is little dispute that the quality of service has improved and that there has been increased professionalism in the delivery of services. But the old arguments have not gone away. Indeed, as the world in which local government operates has changed, so the focus of those arguments has become more intense.

The greatest change has occurred in the old perception of local authorities as the direct providers of all or most services. Since the time of Lord Wheatley's Commission, this perception has been steadily eroded and authorities across the country now routinely look at a range of service provision options, whether that be purchase from the private sector, from a public service provider or possibly from another local authority.

Indeed, such has been the shift of view that in the Labour Party policy document which was published in February 1990, entitled The Future of Local Government in Scotland, the following was said: Labour see much additional development taking place through partnership or contractual arrangements with other agencies. Local authorities should be able to develop their enabling role, frequently acting as the commissioning agency rather than the direct provider of services". The balance of arguments that led to our present structure has, therefore, changed. People have been asking increasingly whether the two-tier structure to which the arguments drove us some 20 years ago now acts as a constraint upon local government in Scotland.

Those questions are being asked across the political spectrum. It is not for nothing that the introduction of single-tier local government in Scotland is a manifesto commitment of all the major parties in Scotland, whether or not in the context of the establishment of a Scottish Assembly. I am bound to say that I have never understood the direct relevance of the existence of a Scottish Assembly to local government reform unless there is a hidden agenda, as some suspect, and the existing powers and responsibilities that are presently vested in local authorities, such as those relating to education or the police, are not to be further devolved, but centralised in Edinburgh.

Faced with the change of view, the Government were, in effect, obliged to act. Local government spends £7 billion in Scotland each year. It employs nearly 300,000 people and it touches the lives of all of us in some way or another, whether through the provision of schools, social work services, roads, planning, housing or whatever.

It is imperative, therefore, that local authorities should not be constrained by their administrative structures from fulfilling their true potential. The Government, therefore, embarked upon a very extensive process of public consultation.

Behind this Bill lie no fewer than six consultation papers which have evoked responses, often detailed and thought-provoking, from many thousands of people and organisations in Scotland. The message that has come out from this is that there is room for improvement in the present structure and that changes need to be made if we are not once again, as happened 20 years ago, to allow the modern world to bypass our existing structures on local government.

The Bill now before this House has been drafted against that background. What it aims to do, by creating 32 new single-tier authorities across the country, is to make local government more democratically account-able and therefore more powerful.

In Part I of the Bill, provision is made to abolish the two-tier structure which, by its nature, introduces confusion into the process of accountability and which therefore weakens the sense of identity between communities and their local councils. That structure is replaced with a structure which has been specifically created to respond to local wishes and local identity; but a structure equally that will allow the present standards of service delivery to be maintained and improved. Provision is also made in this part of the Bill for transitional arrangements, particularly for local author-ity staff and for property.

Our proposals envisage that the great bulk of existing local government services will remain with the new authorities. In two specific areas though we have had to make specific arrangements for the continued delivery of services following reorganisation; namely, in relation to the provision of water and sewerage services and of the services provided by the children's reporter service. Provision in respect of each of these areas is made in Parts II and HI of the Bill.

Taking first water and sewerage, a feature of the history of these services has been the increasing scale of their operations. Currently we have 12 water and sewerage authorities together with the Central Scotland Water Development Board. At the end of the war there were 210 water authorities in Scotland and as recently as 1973 no fewer than 234 separate sewerage authorities.

The pressure for larger units of operation continues. It reflects the ever-increasing sophistication of the technology used and the parallel need to maximise economies of scale and so minimise the cost to the user of the services. Technological sophistication never comes cheap. The process is still far from complete. Over the next 10 to 15 years some £5 billion of investment is likely to be needed in the water and sewerage services in Scotland. Roughly half of this is needed to maintain and renew existing infrastructure and provide services for new customers. The rest represents an upgrading of facilities to comply with the various EC directives affecting water and sewerage.

Water and sewerage are and increasingly will be substantial businesses in their own right. They employ over 6,000 people in Scotland and have an annual turnover of more than £450 million. Each day about 2.3 million cubic metres of potable water are supplied from 603 treatment plants through some 45,000 kilometres of mains; and some 27,000 kilometres of sewers and 900 sewage treatment works deal with the ensuing waste water. Operations of that type need to be ran on a large scale and to be subject to all the financial and organisational disciplines that characterise the best private sector practice.

In England and Wales the challenge of the water and sewerage services was met by placing the services in the private sector. Successful as that has been this side of the Border, it is a solution which after extensive public consultation we have firmly rejected as inappropriate for Scotland.

We propose instead to set up three public water authorities, not as a second best or a halfway house, but as a reasoned, practical and durable structure for the delivery of those services in Scotland. They will be public bodies. They will be of a size to capture economies of scale and they will be managed to maximise efficiency, secure co-operation with the private sector and provide value for money to customers.

In relation to children's reporters, we consulted carefully about how the present excellent service could best be maintained. We listened to concerns that some of the smaller authorities might be unable to maintain current standards. We are therefore proposing to establish a national body to administer children's reporter services. That will avoid problems in smaller council areas but equally—I stress this—we are determined to retain the local points of contact that are so essential to work in this field.

Part IV of the Bill makes provision in relation to a number of important local authority functions. I do not propose today to detain your Lordships with the details of those other than to point out and acknowledge that they cover a number of important areas, including education, valuation and rating, the powers of local authorities to promote economic development and the changes to area tourist boards that we propose in order to promote tourism.

A debate such as this on a Bill as extensive as this one allows only the briefest outline of the detailed proposals in the Bill. I have no doubt that in Committee and thereafter we can look at a large number of them in detail and subject them to the scrutiny that they properly deserve. What I hope I have done in a debate in which, I am encouraged to see, there is considerable participation from all sides of the House is to describe something of the context of the proposed reforms because I believe it to be critical that there should be a clear appreciation of that context as we take further our consideration of the proposals in the Bill.

The Government believe firmly that the structure of local government in Scotland can be improved and that, if it is improved, the beneficiaries will be local government itself and those who make use of and, importantly, those who pay for its services. The proposals contained in the Bill have been shaped by a long and detailed consultation process and by lengthy and considered debate in another place. I have no doubt that your Lordships will wish to submit the Bill to further detailed scrutiny, and rightly so.

This is an important Bill. It is one which will profoundly affect local government in Scotland. We believe firmly that its effect will be to make local authorities more democratic, more accountable and more closely identified with the communities they serve. That can only be good for local government and for our democratic structures generally. I therefore commend the Bill to the House.

Lord Stallard

My Lords, before the noble and learned Lord sits down, perhaps I may remind him of what the Secretary of State for Scotland, Ian Lang, MP, said during the debate on the White Paper: By abolishing the two-tier structure and by lifting the baleful socialist shadow which stretches across the central belt of Scotland and far beyond to the outlying areas, we shall enable those areas to break free and assert their own varied political allegiances".—[Official Report, Commons, 14/7/93; col. 1000] Does not that sentence contain the real reason for this expensive and controversial measure?

Lord Fraser of Carmyllie

My Lords, no. If the noble Lord had been listening to me, he would have appreciated what I said: every major political party in Scotland is committed to the principle of the introduction of single-tier authorities. I hope that the noble Lord will reflect carefully upon what I said. While the Wheatley proposals have, in large measure, as I acknowledge, worked well, times have moved on. The idea that every local authority should be a direct provider of all the services for which it has responsibility has changed. As I underlined in one quotation, the Labour Party itself recognises that that change has taken place. Against that background, I trust that we shall be able to enjoy a constructive debate on how best to improve the proposals for Scotland that have been set out as we take the Bill through its later stages.

Moved, That the Bill be now read a second time. —(Lord Fraser of Carmyllie.)

3.59 p.m.

Lord Carmichael of Kelvingrove

My Lords, I thank the Minister for his detailed introduction of the Bill which is, as he said, long and comprehensive. There is one small point that should perhaps be made at the outset. To be discussing a Bill such as this on the day when the European elections are being held seems to be a bit silly. Parliament should have been adjourned for today. That would not have affected our massive win in Scotland but it would have been better to have been with the rest of our colleagues up there.

The Bill which dismembers local government in Scotland is basically a bad Bill. When discussing it with Members on all sides of the House—I mean on all sides of the House —I have found little enthusiasm for it. The decision to replace the present two-tier local government system of regions and districts with an ostensible single tier is basically boundary driven. It has little to do with the efficient and economic delivery of local government services and much to do with the creation of Tory "safe havens", as was referred to by my noble friend Lord Stallard in his intervention. The safe haven to which we refer in particular is the "Stewartary", as it has become known. It is the small part of southern Glasgow known as Eastwood. In Scottish political terminology, it is almost the equivalent of Westminster council.

It is all so different from the previous reorganisation of local government in Scotland, which was preceded by an independent commission. That was the Wheatley Commission, around which there was a great deal of consensus. I do not remember whether the noble and learned Lord was a member of the commission. I certainly was and it was fascinating. The basis of it should have endured longer but the Government appear to believe that its time has come.

Of course, there were inevitable disputes over the precise details of the boundaries in 1974. But the independence of the Wheatley Commission, the extensive consultation which took place and the fact that it was widely recognised and accepted that the reform was wholly to do with what was best for local government in Scotland—not party political or ideal preoccupations—helped to ensure a smooth transition of the proposals. The commission sat for a long time because it was a very important Bill.

We have argued that single-tier local government in Scotland should not happen without a Scottish Parliament. It would be for that Parliament to establish an independent commission which would examine the best future for Scottish local government. A single-tier system, if indeed that was the conclusion of the commission, based on a Scottish Parliament, would then be part of an enhanced democracy with increased accountability.

The noble and learned Lord continually referred to the fact that all parties in Scotland are in favour of a single tier. We agree that that might be right. But Scotland is varied in population and geographic outline. One of the problems in Scotland has always been that on the east coast there are three major centres—Edinburgh, Aberdeen and Dundee—but on the west coast there is only one major centre, Glasgow. To a great extent that determines the way in which we handle local authorities. In Scotland, all parties except the Conservative Party have stated that single-tier local authorities with a Scottish assembly would be a possibility, and we would hope for that.

Perhaps we may nail another myth. The establishment of a Scottish Parliament would not result in the diminution of the powers of local government. Rather, that Parliament's powers would be devolved from Westminster, when appropriate, while local government would retain independence both from Westminster and the Scottish Parliament. That is what 75 per cent. of the Scottish people voted for in the 1992 general election. That is in marked contrast to the tawdry, back-of-the-envelope exercise in gerrymandering, which is obviously and inevitably seen in this Bill.

Following three years of consultation, the Wheatley Commission identified four main objectives which local government ought to meet. Those criteria were later accepted by the noble Lord, Lord Stodart, in his 1981 report. We on this side of the House see no reason why they should not remain benchmarks—not immovable but benchmarks —of good local government. According to Lord Wheatley in 1969, the prerequisites of good local government were, first, power. Local government should play a more important role in the running of the country, take on more responsibilities and be less dependent on central government. The second was effectiveness. Local government services should operate at a scale which allows it to function properly, providing high standards of service, good value for money, the flexibility to cope with future changes and the co-ordination of services which affect one another. The third criterion was local democracy. Elected local councils should be genuinely the charge of the local situation and answerable to local people for its handling. The fourth pertained to local involvement. Local people ought to be brought as much possible into the process of reaching decisions.

The case that Wheatley made in 1969 remains valid today. We do not deny that subtle changes may be necessary but the basic principles remain. The onus is on the Government to prove that there is a case for change. That, they have palpably failed to do. It is for this reason successive opinion polls have shown that the people of Scotland do not want this costly and unnecessary piece of legislation.

The Minister will be aware that in March this year a System 3 poll showed that support for the change had dwindled to only 22 per cent. of the Scottish population, with 64 per cent. preferring retention of the present system. The Bill fails on all four Wheatley criteria. Local government powers will be radically weakened by the Bill, which has a centralising thrust running through it. The creation of joint boards—which are not directly elected and, therefore, are less accountable than local authorities—to deal with services such as police and fire, diminishes local democracy. The nationalisation of the reporters' service to children's panels appears to separate them from elected social work and education authorities. That is a connection that Lord Kilbrandon saw as a key safeguard for children. The noble and learned Lord will remember that famed report.

Wheatley developed a system to reduce joint arrangements and make councils more viable. The Bill takes us back to the pre-1973 days of less effective joint arrangements and the unaccountability of councils. The much smaller authorities which this Bill envisages will, of necessity, have to come together in a myriad of joint arrangements to provide specialist services on a cost-effective basis. Services currently provided well by the regional councils—for instance, special education, emergency social work cover and proper protection for the consumer as well as trading standards advice to business—could be seriously under threat. At best, their continued existence depends on those newer authorities coming together in cumbersome and confusing joint committees. An example, which has become almost a laughing stock, is the proposed Clackmannan Council, with a population of only 47,000; it may be single tier in few respects as it would need to resort to joint or contract arrangements for at least 11 local authority functions. Where is the democracy there? Where does the citizen go to complain when 11 local authority functions are only remotely connected to the elected council which was put forward at the previous election?

I stress that the Bill does not propose a single-tier system. From water boards to joint boards for police and fire, the passenger transport authority board in Strathclyde, not to mention a plethora of joint arrangements throughout the country, this Bill proposes a confused and confusing multi-tiered system. But, crucially, only one of these tiers—the successor authorities—will be elected and accountable.

The Minister spoke about water and in the technical sense I find it difficult to disagree totally with some of what he said. But we are not talking about the technical sense. We are talking about the organisation and the control that elected people can have over that.

The Government's proposals to remove water and sewerage services from local authority control are probably the most undemocratic of all the proposals. Councils will be replaced by three unelected quangos. That the Government are continuing with that plan despite the results in Strathclyde Regional Council's water referendum in March of this year, belies their protestations that they are a listening Government. Many smears and half-truths have been bandied about by the Government since the referendum result. They have chosen to ignore the substantial issue that the people of Strathclyde overwhelmingly rejected the proposal. Instead, they thought that they would shoot the messenger—the people who brought them the result.

I remind the Minister that the Strathclyde referendum, run by the Electoral Reform Society, asked a simple question: Do you support the Government's proposal for the future of water and sewerage services? In a turnout of 71.5 per cent., which exceeds the turnout in both the Scottish referendum of 1979 and the European referendum of 1975, 97.2 per cent. of the electors of Strathclyde said that they thought that the Government's proposals were wrong, while only 2.8 per cent., or 33,000 people, agreed with their plans to remove water from local government democratic control. Therefore, 1.2 million voters in Strathclyde voted against the Government's proposals and only 33,000 voted in favour of them. And yet this "listening" Government seem intent upon ignoring their views. The same Government who insist on a right of veto in Europe deny the people of Scotland their light to determine the future of water. I believe that a 97.2 "No" vote is a loud and clear veto with regard to that not very attractive part of this Bill.

Baroness Carnegy of Lour

My Lords, I thank the noble Lord for giving way. Does he believe that the people who voted in the Strathclyde referendum on that question about which he has told the House knew the present system for the delivery of water and the proposed system for the delivery of water? If they did know, how did they know?

Lord Carmichael of Kelvingrove

My Lords, the noble Baroness, who has a great knowledge of the east of Scotland, obviously does not have a great knowledge of the west of Scotland. Believe me, the people of Strathclyde feel in their bones that something is wrong with water services being removed from local government control. It is one of the highest newspaper purchasing areas in Britain. The people there know what is happening and they disapprove very strongly of the Government's proposals.

The veto has been backed by successive opinion polls throughout the length and breadth of Scotland, by the Government's appalling showing in last month's regional elections, and I suspect that when the results come through on Sunday, it will be much the same, or perhaps worse, for the Government's party in the European elections.

The people of Scotland are suspicious of the Government's motivation in insisting on ploughing ahead with a measure that is self-evidently universally unpopular. The provision of water services by local authorities is a service which has developed over the past 150 years. The liberal councils of the mid-19th century were extremely adventurous with regard to such matters and history shows that local government can handle such an apparently complicated service.

The Prime Minister has not ruled out privatisation because only two weeks ago it emerged that a senior government adviser, Peter Levene, who will be familiar to many noble Lords opposite, had a meeting with the Scottish Secretary, Ian Lang, to discuss the future of water in Scotland. Privatisation of water may be publicly off the agenda for the Scottish Office, but the Scottish people are suspicious that it is still very much in the orbit of Treasury thinking because it could be quite a fillip for an inefficient Treasury.

I turn now to the effects on other services. It is not only the future of water which is threatened by this legislation. Many other services, which are provided efficiently and economically by the existing regional councils, are jeopardised by the proposals contained in the Bill.

Education is an obvious example of that. Leaving aside, for the moment, whether the new authorities should have a statutory requirement for directors and committees of education and social work—and we shall deal with that in Committee—question marks hang over the future of important parts of our education system which we believe can be provided only by larger authorities.

Special needs education for children could be extremely adversely affected by the Bill. Thus far, the Government have failed to guarantee the maintenance of the current provision of special educational needs and psychological services. Those specialist services are maintained presently, partly because of the strategic capability of the regional councils and the corresponding economies of scale which they can achieve. A very high level of co-operation and a significant financial commitment from the successor authorities would be required to maintain anything approaching, far less equalling, that provision.

I take an example within the Strathclyde region with regard to education. The future of the centres of excellence in dance, music and art are in doubt. Presently, gifted children from throughout the region attend the music school at Douglas Academy in Bearsden and the dance school in Knightswood. Even if the new Glasgow authority felt able to continue funding such schools, would children from other authorities have access to them? Parents are extremely worried about such matters.

Those are only two examples of the ways in which our education service could be damaged by this legislation. Undoubtedly, we shall return in Committee to other anxieties from school transport to non-statutory services such as community education and the extremely important pre-five services.

Among the services at risk within the field of social work are the future of the out-of-hours emergency social work schemes run by regions such as Strathclyde and Lothian. Those schemes offer particular help to the elderly and young people.

Community care planning arrangements, which are extremely successful at present, are also at risk. Presently, there is one council, Strathclyde Regional Council, which deals with four health boards within Strathclyde. The Bill would mean 12 new authorities dealing with those four health boards and a host of voluntary and other organisations. It is a recipe for chaos and confusion, affecting the most vulnerable members of our society who rely on effective provision of social work services.

The specialist services developed by the regions over the past 20 years are given scant attention in this Bill. Another example in my own area is the Blindcraft factory in Glasgow, which I know very well and visit often. It is the largest sheltered workshop in Europe, employing 134 blind and disabled people and 87 support staff, with an annual turnover approaching £4 million. Strathclyde region provides a subsidy to the workshop of £1.8 million each year, and is the single largest purchaser of Blindcraft merchandise. It is difficult to see how Blindcraft can survive without the present regional structure.

Again, within Strathclyde, the future of the purpose-built Regional Chemist's lab, one of the most advanced scientific laboratories in Scotland, is at risk. It is estimated that it would cost the 12 successor authorities £10 million merely to maintain the current service, which costs Strathclyde region £4 million.

Voters today are electing their representatives for the European Parliament, but the links that have been built up between Scotland and the rest of Europe via our regional councils are endangered by this legislation. Strathclyde region employs a full-time Brussels liaison officer, a post that is unlikely to be continued by the 12 new authorities. I can give your Lordships the details of the effectiveness of that direct representation from Strathclyde but perhaps that should be left to our discussions in Committee.

During our debate on the Local Government Commission in England, many noble Lords commented on the fact that Europe is increasingly becoming a Europe of the regions. Indeed, many of our European counterparts are moving towards larger, strategic authorities, just as we, by this Bill, are dismantling them. Abolishing the regional councils in Scotland, without any independent assessment, further reduces our capability to access the benefits that come from membership of the European Community.

Strategic planning, recognised as an essential aspect of good local government by Wheatley and others before him, will be lost in the proposed reorganisation. For development, transport, the future of the green belt and the general overall wellbeing of the city and its interdependent hinterland, there is a crucial need for a clear strategic overview. That is particularly true for Glasgow and the Clyde valley, but is also true for Scotland's other city regions. The Bill does not even acknowledge the important role that regional councils play in strategic planning. There are many fears that much will be lost without the regional councils or a statutory joint board arrangement in the new set-up.

I should like to say a few words about costs because we shall certainly be going into that matter in great detail when we reach Committee stage. First, I hope that we have shown that the proposed reorganisation will be damaging; it is certainly unwanted. I believe that we can show that it will be very expensive.

The Government's latest estimates of the costs of reorganisation, based on the Touche Ross report, is that the transitional costs of reorganisation will be no more than £190 million, with ongoing savings of up to £52 million per year. It is difficult to assess the veracity of such claims as despite repeated requests, the Government refuse to publish the assumptions upon which the Touche Ross calculations are made. In that respect, it would be interesting if the noble Baroness who asked a question about the Strathclyde water survey were also to ask the Government how they manage to reach conclusions without letting any of us know the criteria which they gave to Touche Ross. The noble Baroness may receive an answer more readily from the Minister than I am likely to do. I look forward to hearing the response.

However, several independent reports, commissioned by various local authorities throughout Scotland, estimate that the costs will be much higher than those envisioned by the Government, CoSLA, CIPFA, PEIDA and many councils all agree that the transitional costs will be between £375 and £720 million. In Strathclyde alone, the transitional costs are estimated at £208 million, while the ongoing costs for the 12 new authorities represent an additional £37 million each year.

The Government's estimates of ongoing savings are questionable because the bulk of council expenditure in Scotland (between 70 per cent. and 75 per cent.) is spent on services currently provided by the regional councils. The break up of the five regions—Grampian, Tayside, Lothian, Central and Strathclyde into 25 new "single tier" councils will mean significant losses in economies of scale and, I imagine, higher costs. It is not compensated for by the merging of some districts and regions into single-tier authorities in other parts of the country.

I believe that to be an outrageous waste of public money, especially bearing in mind the argument put forward by the Government that they will actually economise and that they will break even after five years. We should be given much more information about such, proposals. It is outrageous to use public money unless we have a very clear idea as to what the outcome will be. Those costs will, inevitably, be borne by individual council tax payers. The alternative is a reduction in the quality of services—services crucial to the wellbeing of the nation, such as schools, community care, consumer protection, transport and homes for the elderly.

We find it difficult to believe that the Bill will pass through all its stages as quickly as the Government hope. However, if the Government persist and the Bill becomes an Act, the time-scale for change laid down in the legislation is simply not feasible. If the Bill does not receive Royal Assent before the autumn, that leaves only six months before the shadow authorities come into existence, and a further year before the new system is: planned to be up and running. If services are to be protected under the reorganisation, I do not believe that that will be possible.

The reorganisation, especially in the case of those regions which are being broken up into smaller units, is a far more complex process than that of 1974. The problems in information technology systems, to name but one very important example, are simply not resolvable in the time-scale provided. Robert Peggie, the chair of the Staff Commission, has voiced his concerns about a smooth transition on such a time-scale, as have many independent and experienced local government officials.

A rushed reorganisation is not in the interests of services to the public, or of the 300,000 staff who provide them. I implore the Government to think again. We are willing to work very closely with the Government on genuine improvements in local government. Indeed, I am sure that those concerned in local government could give us many hints on how we could improve it. However, I shall put that ideology to one side. We must examine the profound damage that the Bill could inflict on public services and at least re-examine the timetable for reorganisation. The present system has been working effectively for 20 years. I simply cannot understand why there is such a rush to tear it down.

We on this side of the House will bring many concerns to the attention of this Chamber during the Committee stage of the Bill. We believe that it is an ill-considered and ill-thought out piece of legislation. It is not, ultimately, about boundaries and it is certainly not about accountability or democracy: it is about the sad breakup of local authority government in Scotland.

4.27 p.m.

Lord Thomson of Monifieth

My Lords, I thank the Minister for the very useful, historical survey of local government reform in Scotland with which he began his speech. The noble and learned Lord mentioned the 180 hours of debate which took place on the Bill in another place. Judging by the flow of representations that we are all receiving on detailed aspects of the Bill, it would seem that in Scotland there is no doubt at all about the usefulness of the House of Lords as a revising Chamber. When the usual channels come to consider the timetable for dealing with such important matters, I hope that ample time will be given for their consideration.

In today's Second Reading debate I shall concentrate on the wider constitutional issues which I believe the Bill raises. I am bound to say that my immediate reaction to the Bill is a feeling about the audacity of the Government in presenting it to Parliament; indeed, some might be inclined to refer to the "effrontery" of the Government in so doing. Of course, no one knows what the voters in Scotland will say in today's European Elections. However, one has to bear in mind the fact that in the last local elections, as recently as 5th May, the Conservative Party commanded only 13.5 per cent. of the vote. Moreover, in last week's System 3 poll conducted by the Glasgow Herald, I believe that the Conservative share of public opinion support went down to 10 per cent. That is a very frail basis of legitimacy for a government to set out on a radical reshaping of democratic local government.

My approach to local government reform is no doubt reflected in my own modest experience in the field. It is now 45 years since I contested a general municipal election in Glasgow when all the boundaries had been redrawn. Due to some terrible error on the part of the boundary commissioners and some aberration on the part of the voters, I was soundly defeated on that occasion. Later in my political life, as Member of Parliament for Dundee, I had the unlikely ministerial responsibility for launching the Redcliffe-Maud report on local government reform in England. Prime Ministers move in mysterious ways their wonders to perform. I can only confess that after a fascinating time wrestling with these issues and with the various conflicting views from the local authority associations in England, I return to the relative simplicities of negotiating British entry into the European Community with a certain sense of relief. I have retained, I think, a certain scepticism from then on about rigid grand designs in local government organisation.

In measuring any proposals one must look at what has tended to happen when governments set their foot on the road of local government reform. It is almost immediately, and by definition, disruptive. It is always immensely expensive and always more expensive than forecast. I venture to prophesy that this will be as true in this case as on previous occasions. It creates great uncertainties for local government employees, a good many of whom in the case of this Bill will, I think, face redundancy.

This means that major local government reform should be undertaken only when certain conditions are fulfilled. First of all, the existing system should patently be shown to be failing to serve its citizens. Although the noble and learned Lord, Lord Fraser of Carmyllie, made a case about the changes that have taken place in the external environment in which local authorities have to operate—and we all agree on that—it does not seem to me to be the kind of overwhelming case in which patently the present system has broken down. I am afraid I may be at that stage in life where my feeling is, "If it ain't broke don't mend it". I think the evidence on which the Minister based that part of his case is still pretty thin. But, apart from that, the pattern to replace it —given the political sensitivities of local government, and given the fact that it is the very grass-roots of representative democracy in our society—should come from the recommendation of some independent body and should not be done on the say-so of the executive in St. Andrew's House. This, of course, is what happened with the Wheatley Commission, as the noble Lord, Lord Carmichael of Kelvingrove, said.

In England they have been a measure luckier than we have in Scotland in terms of the Government's approach to this matter. Although the dogma with which the Government have been approaching English local government reform is about the same as that shown by Scottish Ministers, in England they are at least doing it through an independent Local Government Commission. The Minister concerned tried to put that Local Government Commission in a straitjacket as to what it should recommend, despite its independence, and I am happy to say the courts slapped the Government down firmly on that. We have not been so fortunate in Scotland.

But, above all, a new system, particularly a radically new system of local government, must command a reasonable degree of consensus from the electorate and from the local leaders of the community in Scotland. This Bill fulfils none of those conditions. Although they start—the noble and learned Lord, Lord Fraser of Carmyllie, has made the most of this—with consider-able support for the concept of unitary government in appropriate conditions, the Government have thrown away this advantage in the way they have approached the matter. As I have said, far from being the product of an independent inquiry with a concern to establish the public interest as a whole, this measure has behind it really a rather mean-minded party political motive.

Some useful boundary improvements have been made in the committee in another place but this element of gerrymandering still remains. The areas I know best —Monifieth and Invergowrie—are both being removed from Dundee, although the people who live in those agreeable suburbs will continue to enjoy the services paid for by the taxpayers of Dundee, where most of them find their employment. In Dundee, across the whole of the political spectrum, from the Labour Lord Provost to the Chamber of Commerce, it is felt that this is wrong in the interests of the attractiveness of the areas to inward investment. It is only among Scottish Office Ministers that consideration of rather narrow party political advantage appears to prevail.

But, more generally, the Bill's changes are profoundly undemocratic. Indeed, they are in one sense anti-democratic with the Bill's new crop of government-appointed quangos. Finally, as I have already said, the Government's authority for reshaping Scottish local government is flawed by the dramatic shrinkage in their popular support within Scotland. Of course the Government and the Secretary of State have a duty to carry on the day-to-day administration of Scotland, as part of the United Kingdom, to the best of their ability. But I say seriously to your Lordships that that duty of administration—whatever the present current political situation of the Government in Scotland—does not demand that they undertake major constitutional change for which they have no credible mandate and which is clearly contrary to the declared wishes of a majority of the Scottish people.

By doing so they put a considerable strain on the very union of the United Kingdom which they themselves profess as one of their main aims that they wish to sustain. They cannot bring themselves to see that the only real and the only democratic framework within which unitary authorities could be set up and could operate would be that of a Scottish assembly within the United Kingdom. That is clearly the main consensus in Scotland as it exists today. It would be for that Scottish assembly—as the noble Lord, Lord Carmichael, said —to decide what was the appropriate pattern and shape of local democracy in Scotland as part of that major constitutional change.

If the Government could not bring themselves to accept that fact, it would really have been better to have left local government reform alone until a government came into power committed to a Scottish assembly and ready to bring about the kind of changes that are implied in the proposals that the Government are now carrying through Parliament. The Government will in fact replace the present two-tier local government system with another form of two-tier local government. One tier will have, I think, around 1,200 elected local councillors, some of them in small and unviable councils. Then there will be a second much larger tier, with the major work of local government being done by either cumbersome joint boards or outright quangos like the three super-quangos that are to be responsible for Scotland's water. This is not the abolition of the two-tier system of local government in Scotland: it is the replacement of one type of two-tier local government arrangement with an inferior and much less democratic one. That is the charge that we would make against the government in introducing this Bill.

4.38 p.m.

Lady Saltoun of Abernethy

My Lords, after the speeches of the noble Lord, Lord Carmichael of Kelvingrove, and the noble Lord, Lord Thomson of Monifieth, I think that the noble and learned Lord, Lord Fraser of Carmyllie, will be relieved, and delighted I hope, to hear that in the main I welcome this Bill and think we have waited far too long for it. I have always believed that the creation of two-tier authorities was a mistake and is wasteful, besides leading to nothing but confusion, certainly so far as concerns the man in the street.

Many of us are looking forward to having only one set of officials to deal with instead of two. I think that the Government have got the number and the areas of the new authorities broadly right, whatever various opinion polls may say. You can get any answer you want in an opinion poll if you ask the right question. I believe that people have a. habit of saying what they think the pollster wants to hear simply to get him off the doorstep. I am afraid I have no faith at all in opinion polls.

Having said that, I put on my hat as a convenor of the Scottish All-Party Parliamentary Group for Children. I have a few concerns about social services for children. Only three clauses in the Bill relate to education and one to social work. One might conclude that the Bill was simply about who ran councils and had no significant implications for the range and quality of services for children and adults with special needs. There are grave concerns that services will suffer, both in the longer term and particularly in the transitional period during and following reorganisation, unless the Bill contains appropriate protection for those very vulnerable groups. Many children and adults with special needs require highly specialised services.

The Government have acknowledged that a significant number of the new councils will be too small to offer the full range of services that is currently available and is needed. They say that smaller councils will have the power to buy in services from larger ones. We are worried about the willingness of larger councils to sell the services or, in some cases, the ability of the smaller councils to pay for them, with a consequent decline in the standard of services, as happened before the last local government reorganisation.

A related problem is that some people will find themselves in a different council area from the services they currently use, such as training centres and respite services. Reassurances have been given that children who attend special schools will be able to continue to do so beyond 1996, but no such guarantee exists for other specialised education services or any of the social work services. The problem may perhaps be solved by strengthening the duty of councils to provide a full range of services locally and to co-operate with each other; by making some funding dependent on the councils continuing to provide existing key services; by giving the Secretary of State the reserve powers to prevent the closure of vital services; and perhaps by giving rights to people to continue to use the services on which they currently rely, at least for a transitional period.

The system of community care planning operated by social work departments is only two years old and will be liable to suffer major upheaval. It is doubtful whether some of the authorities will be big enough to produce strategic plans for their areas. If they have to rely on other councils to provide services it is vital that they consult at an early stage. I should tike to see a requirement for councils to consult other authorities which may be affected when a plan is being prepared. Child care plans will be even more vital as a way through the turmoil of reorganisation.

Another concern is whether the standards of inspection of residential care by councils will be compromised. Social work departments have inspection units that monitor both local authority homes and independent registered homes. It is possible that in a small council those services may not be truly independent, especially where there are no alternative facilities locally. Will they have the skills to inspect specialised facilities, such as small homes for profoundly disabled people? Perhaps the Government could undertake to issue more detailed guidance to the new councils on inspection standards and monitor their performance.

The massive transfer of responsibilities and services makes it likely that there will be a number of dissatisfied parents and children, especially in the first couple of years. In social work there is at least a complaints procedure, although it is not clear how it will work if councils choose not to have a social work committee. In education the only recourse is to appeals procedures which are intimidating for parents and expensive for local authorities and the Secretary of State. The Government have required local authorities to come up with a scheme for decentralisation. Would they not also consider requiring them to develop an accessible and flexible complaints procedure?

Many of the more important services are not provided by councils themselves but by voluntary organisations. Even a short break in funding whilst the new councils settle in may force those organisations to close. The Scottish Council for Voluntary Organisations is worried about transitional protection for funding in the voluntary sector. That is vital to ensure that services are not lost. Even a break of one year can be a disaster in the life of a child. When services go they often do not reappear.

I recall the very detailed instructions which in the past the Government have sometimes given in primary legislation regarding comparatively trivial matters, such as the licensing of taxis and window cleaners. I remember that some years ago your Lordships spent hours and hours in this Chamber talking about window cleaners. I hope that the Government will think very seriously about these matters. Some of us will table amendments at Committee stage to meet these concerns. I very much hope that the Government will consider producing amendments of their own. If they do it will save a great deal of time; we shall merely accept them and move on to the next business. In the main, I welcome the Bill and wish it an easy passage.

4.45 p.m.

Lord Stodart of Leaston

My Lords, the usual enthusiasm with which I greet proposals advocated by my noble and learned friend is in this case slightly qualified by two matters. First, it is only 19 years since the last major legislation was introduced. That compares unfavourably with the half century which spanned the period 1929 to 1975. My second slight uncertainty concerns the Government's basic intentions. Lord Wheatley's intentions were perfectly straightforward. My noble and learned friend, in a speech which enabled me to tear up one page of mine (for which I am grateful), gave the figures.

Lord Wheatley found that there was an enormous number of local authorities of all sizes, many of which were far too small for the responsibilities of the day. He laid great emphasis on a subject which has been mentioned hardly at all but to which I shall return— viability. Lord Wheatley reduced the number from 440 to 44. That was then amended, after enthusiastic commendations from both Houses, in the early 1970s. In numerous speeches from both Front Benches it was said that we were well set for well into the 21st century and it was a wonderful scheme. Parliament slightly increased the number of authorities to nine regions, 53 districts and three islands.

The main reason now being put forward for change is confusion which must be got rid of. At this stage I feel that if sackcloth and ashes were obtainable I ought to clothe myself in them, particularly having listened to the noble Lady, Lady Saltoun, and her views on the two tiers. What I would describe as the functions committee, set up by my noble friend Lord Younger of Prestwick in 1980, after the first five years of the new system, was designed to try to say who was responsible for doing what.

The report of the all-party committee was received with extreme generosity. My noble friend Lord Mackay of Ardbrecknish, in his House of Commons days, said that the proposal would help regions and districts to carry out their functions and ratepayers to understand who was responsible for what. However, 10 years later my noble and learned friend Lord Fraser of Carmyllie, with the robustness which we always look for, when repeating a Statement on 8th July 1993, at column 1513 of the Official Report, stated: [The new Bill] will remove the confusion which undoubtedly exists over which council is responsible for which function". There is confusion—yes, my Lords. I have a septic tank which the local authority kindly cleans out free of charge once a year. Some few years ago I was told that it needed cleaning out. I rang up the environmental health department in Haddington and a very nice gentleman said, "Lord Stodart, you of all people ought to know that drainage is regional, not district".

There is confusion. Yet I am not quite convinced —perhaps my noble and learned friend will be able to convince me—that the confusion is as rampant as is claimed. I say with hope that people's understanding of the many functions is getting better. But I shall not emphasise the point; I might hear my noble friend say, "He would say that, wouldn't he".

The call for unitary authorities is not new. The Wheatley Commission heard the call; my committee heard it from each of the cities and from the districts of Falkirk, Moray and Argyll. Following the recommendations of the functions report, speakers from all sides were ready to give the allocated, suggested functions a fair wind. But nearly everyone wondered whether two tiers could work effectively. That was 12 years ago. Undoubtedly my right honourable friend the Secretary of State has decided that those misgivings are now justified. So the Scottish Office has produced a plan for 28 authorities—25 plus the three islands authorities. There has been prolonged debate in another place. The ultimate proposal is for 32 authorities —29 plus the three islands authorities.

Noble Lords may wonder why I am a little uncertain about the basic objectives. Let me refer to viability. Lord Wheatley wrote two pages with 10 paragraphs on the subject. My noble friend Lord Younger, in appointing me to the functions committee, said firmly that the viability of the existing authorities must be maintained. Perhaps I may quote Lord Wheatley's definition of viability. It is interesting. It is: The need for each authority to be capable of sustaining, both administratively and financially, the responsibilities laid upon it". There has been an almost total lack of reference to viability in connection with the new proposals. That is extremely interesting.

Indeed, I again come back to an answer given by my noble and learned friend Lord Fraser in the Official Report of 8th July 1993 at column 1517. He stated: It would be impossible for [Caithness and Sutherland] to run a viable local authority with the full range of services". Of course he is entirely right; and it sounds from what he said then as though the new authorities are expected to run a full range of services and to be viable. That is how I interpret what he said about Caithness and Sutherland.

It is interesting that the Stodart Committee found that Moray, with a population of 82,000, had both the population and the resources to be viable and is now to be a unitary authority. But Argyll is to be unitary, too, and the findings of the Stodart Committee on that aspect are extremely interesting. Representatives from Argyll gave evidence to the committee. They said that Strathclyde had been extremely generous to them, but Glasgow was a long way away, there was the Rest and be Thankful area between them, and they would very much like to go forward on their own.

It is most revealing to read the single paragraph on Argyll from the Stodart Report. I quote from paragraph 34. In oral evidence the council told us that it would welcome the creation of an all-purpose authority provided that the same level of services could be maintained without any substantial additional demands being made on the ratepayers. In reply to an inquiry as to what it had in mind, we were told that an increase of 2p. or 3p. in the pound on the rate levels in 1979–80 might be acceptable. But when those representatives were told that it would take 20p., they decided that that was not on. The population of Argyll has admittedly increased by 2,000. But it could not conceivably provide that full range of services then. How can it possibly do so now? The answer is that it cannot, and nor indeed can Clackmannan—although I am bound to say that the Central Region, which we thought was an ideal authority, well populated and compact in size, certainly could.

I wish to say a few words on water. I find it difficult to understand why there is a need for more expertise in the provision of water. I look back to the days of the old East Lothian County Council, with its water board; in the 1920s it provided water for every agricultural cottage in the county. Then, admittedly, along came the cement works demanding an enormous amount of water and, together with the Lothian Region, the water board was faced with the Cockenzie power station, followed by Torness. That body was entirely under the control of the local authority; no one was officially appointed from outside by the Secretary of State. Why do we have to change? All I ask now is: have we got it right this time? My word, I hope so.

5 p.m.

Lord Taylor of Gryfe

My Lords, first, I wish to thank the Minister for his clear exposition and reasonable explanation of the Bill. At the same time, perhaps I may apologise to him for not being present at the conclusion of the debate, but I promise that I shall attend all the Committee stages of the Bill. That may not be a promise which he would welcome.

I suspect, however, that today we are not discussing the details and that we have already received from various sides adequate material in justification of the case for the separate authorities which are interested. I have been impressed by the quality of the material that has been given to us. One of the Highland groups appeared before us yesterday and gave an excellent exposition of its views, as did the Central region. Today I received a piece of paper from north east Fife, where I reside, giving its view. All that will be fed into the discussions when we come to talk about the size and responsibilities of the separate regions in the Bill.

Today we are discussing the general question of whether the Bill passes certain tests. Will things be more efficient? The Minister has been good enough to acknowledge that since the application of the Wheatley principles and the reorganisation of local government in Scotland, a greater professionalism has been introduced. Frankly, from talking to people who are interested in Scotland and in local government reorganisation, I can detect no great grounds well of pressure for change in the way that the Bill asks us to endorse it. So I doubt whether it will be more efficient.

We all said at the time Strathclyde was created that it was a monstrous great area which would never work. I had sympathy with the apprehensions expressed at the time. But look at the record: Strathclyde has managed its affairs with extreme efficiency and a deep sense of responsibility, not only to the City of Glasgow and the urban areas but also to the wider areas for which it has responsibility outside the cities.

I live in north east Fife and from my own experience of local government I cannot speak too highly of the services that I receive from that local authority in all aspects of its activities. I cannot subscribe to the view that the changes involved will necessarily introduce greater efficiency in management and the delivery of services. Will it be more responsive to local needs? Again, I am not sure that that is proved; it is speculation. Will it be an extension of the democratic principles of local responsibility? I entered local government a long time ago, under the guidance of the father of my noble friend Lord Carmichael in Glasgow City Council. We had a delightful period there in which there was equal Conservative and Labour representation and the 12 members of the Independent Labour Party, of which I was one, held the balance of power. So we exercised a great deal of responsibility at that time. However, the local authority on which we then served had responsibility for education, housing, health and the hospitals in the area. What a transformation there has been in local authority responsibilities since that time! Many of them have been transferred to non-elected quangos, appointed by a Secretary of State whose party cannot achieve 20 per cent. of the votes in Scotland. Quangos have now taken over many aspects of local authority control.

Perhaps I may quote from a document sent to me by CoSLA the other day in connection with the Bill: The Bill makes provision on almost 100 occasions for the Secretary of State to issue regulations, directions or guidance to local authorities, enabling him to influence or control many aspects of the delivery of services which until now may have remained the responsibility of locally elected councillors". One cannot pretend that the Bill has any justification in terms of an extension of local authority responsibility and democratic control because of the continued erosion of local authority responsibility and the kind of thing to which CoSLA draws our attention in that quotation.

The noble Lord, Lord Thomson of Monifieth, rightly said that there is something wrong. If we are serious about improving local government, we should remember that about 85 per cent. of the people of Scotland have supported different parties —be it Scots Nats, Labour or whatever—which have demanded a Scottish parliament. That is a fact of life. Sensible politicians who are anxious to respond to the wishes of the people should take that into account. If they do so, they cannot possibly proceed with a reorganisation of local government. I have never been wild about a Scottish parliament. I remain to be convinced of the many aspects that are claimed as the advantages of a Scottish parliament. However, the people in Scotland demand it and we cannot resist it indefinitely, as the noble Lord, Lord Thomson, said. We will endanger the unity of the United Kingdom if we continue to resist that kind of pressure. It would be quite irresponsible of the Government to ignore the possibility of a Scottish parliament because obviously, if we had such a parliament, there would have to be some adjustments in responsibilities between new local authorities and a Scottish parliament.

The Bill has no justification in terms of priorities for good government in Scotland. She is not in her place but just 10 days ago the noble Lady, Lady Saltoun, myself and several other Members of the House met the Minister. We pleaded with him to introduce into this House a children's Bill for Scotland. Wales has a children's Bill and there is one in England. It is required to protect children in many ways. The Minister was extremely sympathetic—he has done a great deal of work in the preparation of such a Bill—but he said that he regretted there was no parliamentary time for a Bill of that description.

Lord Fraser of Carmyllie

My Lords, perhaps the noble Lord will allow me to intervene. That is not an accurate reflection of what I said. I certainly indicated that we are in the process of preparing a Bill. I know that he is well versed in the parliamentary convention that if the Government intend to introduce programmed Bills, that is not indicated in advance of the Queen's Speech. That is all that I indicated to the noble Lord. But he is absolutely right; I am clearly interested in securing such a Bill if at all possible.

Lord Taylor of Gryfe

I am sorry, my Lords. I do not wish to misrepresent the Minister. I also regret that the noble Lady, Lady Saltoun, who was at the meeting, is not present. But the noble and learned Lord indicated that the great difficulty about securing a children's Bill was the lack of parliamentary time. We are now going to spend not only today but six or seven days looking at this Bill which has no democratic justification, at a time when the social needs of Scotland are great and priorities do not justify it.

The cost of the Bill has already been mentioned. Is it a wise expenditure of the limited budget available to the Government to introduce this kind of Bill? I do not believe so. We cannot reject the Bill, but I hope that in the course of the Committee stage we shall improve it and try to make it more consistent with the needs of the people of Scotland. I shall certainly play my full part in helping the Minister to improve the Bill. For example, the Secretary of State for Scotland said in the other place in connection with some of the boundaries, that there is an opportunity in this House for making changes. I hope that the House will take advantage of that opportunity.

5.12 p.m.

Viscount Thurso

My Lords, perhaps I may begin by bringing your Lordships back to a point first raised by the noble Lady, Lady Saltoun, earlier in the debate. I should like to draw your Lordships' attention to concerns about the impact on Scotland's voluntary organisations of the Government's proposals to reorganise the structure of local government in Scotland.

Their concerns stem from the effects that they fear reorganisation will have on the services in social care and many other fields which voluntary organisations provide at both local and national level. Each year Scottish voluntary organisations receive £90 million of funding from local councils as a result of 5,000 positive funding decisions. About 90 per cent. of that money is in the form of discretionary annual grants. Those grants will be extremely vulnerable during reorganisation.

The timetable for planning the 1996–97 budgets will be very tight. The "shadow councils" which will take over power in 1996 will not be elected until April 1995. They will have only six or seven months in which to draw up their 1996–97 budgets, at a time when they will be determining their internal structures and making key appointments. In addition, there is a large gap between the Scottish Office estimate of the costs of reorganisation and other people's estimates. If the new councils themselves have to absorb a significant share of the costs, they will be under severe pressure to cut their discretionary funding of voluntary organisations.

Many voluntary bodies will also face the need to restructure their own organisations to match the new structure of local councils. That will impose one-off costs at the very least —for example, for redundancy in the case of any local councils of voluntary service which need to amalgamate—and recurring costs in the case of national organisations needing to expand the number of staff liaising with social work authorities. The Scottish Office acknowledged the issue without committing itself to any action, but the voluntary organisations continue their efforts to quantify those costs.

During the passage of the Bill in another place attempts were made to introduce an amendment to establish a central "last resort" funding facility for voluntary organisations. Those attempts failed. The Scottish Council for Voluntary Organisations believes that the case for amending the Bill to meet at least some of the voluntary sector's funding concerns remains strong. It has been suggested that the addition of a new clause putting the new councils under an obligation to ring-fence the level of funding of voluntary organisations during the transitional years 1996–97 and 1997–98 would be simpler to administer than a central funding facility. That would leave the councils free to determine which voluntary organisations should receive support while guaranteeing that overall levels of funding remain stable. I therefore hope that the Minister, when he comes to reply to the debate, will hold out some hope that those concerns will be addressed during the passage of the Bill through your Lordships' House.

The principal point which I hope to make in the debate is the extreme unwieldiness of the proposed pan-Highland single tier local authority put forward in the Bill and the desirability—nay, the need—to halve that area in size, certainly if we are to deliver to the voters of the Highlands of Scotland local government which is truly local.

What do we mean by local government? Surely, first of all, it must mean the administration of a community in which the people have a strong sense of common identity; a community where people share like advantages and like disadvantages of geography, climate and distance from world centres or national government centres; a community of which the people have a shared sense of history, both recent and ancient history. It must also mean—and provide for—a community with a shared commercial and business interest and a shared appreciation of industrial and development problems. It is also desirable that such a community should enjoy a shared cultural, artistic and sporting history and a shared concept of what it wants its environment, architecture, towns and villages to look like. Especially though local government must make it easy for people in the community to take part in its functions, to stand for election and, if elected, to find it easy to attend meetings while still remaining rooted in and firmly part of the community which they are elected to serve.

I was a serving Thurso town councillor and Caithness county councillor at the time of the last local government reorganisation when a two-tier system of local administration was chosen and the monstrous and expensive Highland Region was created. I pleaded against it at the time, both in your Lordships' House and in the Caithness Council Chamber in Wick; but, alas, my pleas fell on deaf ears. People's ears were stopped and their eyes blinded by the promises of economy of scale held out by the supporters of the Wheatley Report.

Unfortunately, there were no economies of scale, just a huge increase in costs. I fear that we shall see another huge increase in costs as a result of the Government's proposals that are now before your Lordships. Not only will there be a massive bill for transitional costs but —because in view of the vast size of the proposed single authority there will have to be considerable devolution to local areas within the single council area—there will be hidden costs not yet decided, quantified or revealed. We know that, from what took place after the Wheatley local government reorganisation.

The Association of Highland District Councils has examined those points in particular and produced well-informed and vouched-for figures which show real annual savings of £2 million over the status quo, with transitional costs £600,000 lower than for a single council if two single-tier councils are chosen to replace the present set-up rather than one pan-Highland authority as proposed in the Bill.

But let us examine the two alternatives in the light of my analysis of what is needed from a local government structure. Would the people in a single Highland local government area have a strong sense of common identity? The answer is, no, no more so than already exists between Sutherland and Perthshire or Shetland and Aberdeen or, for that matter, between Yorkshire and Lancashire. Even the people of Inverness do not truly understand the needs and wishes of the people of Caithness. There are too many complaints of lack of understanding on the part of the existing Highland Region.

The latest example is the imposition of a traffic warden and parking charges on the motorists of Wick and Thurso—an unnecessary expense and an unneces-sary inconvenience simply because Highland Region has decided it is needed in Inverness and therefore all burghs must have it. An expensive new and complicated system of traffic lights outside our new Presto supermarket was chosen when a single roundabout would have done the job perfectly and kept the traffic flowing at a fraction of the cost.

Nor can all the Highland districts be said to share the same industrial and development problems. For instance, the majority of the fishing industry in the Highlands is located in the northern half, which is home to a very significant part of the whole British sea-fish industry. There is little or no fishing industry from Inverness southwards.

The noble and learned Lord, Lord Fraser of Carmyllie, says that the Bill is meant to make local government more accountable. Let us look at that in the light of the huge size of Highland Region (a local authority area which is larger than Wales and nearly as large as Belgium) which is a desperate dilution of democratic accountability. Before Wheatley, a voter took part in choosing one twenty-fifth of the local council strength. After Wheatley his voting power was diluted to the point where his vote chose only one fifty-first of the region's membership but he could still choose a district councillor for his ward.

Under the proposals contained in this Bill it will become about one sixtieth of the council and he will lose his district representative. On the other hand, two single-tier councils will restore to the voter some of his lost democratic power by increasing his ability to affect the composition of his council to one fortieth of the council's strength. In addition, the proponents of the two Highland council set-up also suggest some interesting and imaginative ideas for devolving functions within the north Highland area which will further enhance democratic accountability without any further cost to the voter.

Two councils instead of the one monster proposed in the Bill would still provide two large enough and effective local authorities able to deliver the full range of services effectively and fully capable of taking a strategic overview and co-operating where necessary with their neighbours over such matters as, for example, trading standards. They would still be larger than the nine other new authorities proposed by the Bill and financially able to tackle major projects and well able to work in partnership with other local bodies such as LECs.

Highland Region is too large, as I have already said, for proper local government. It is 116 miles from my home to the council headquarters in Inverness and a further 103 miles to its southern boundary. It is little surprise therefore to learn that it is hard to persuade people to give their services, especially if they are busy, involved people or leaders in the business community. It comes as no surprise also to learn that 89 per cent. of the general public support a two council solution, as do 69 per cent. of business leaders.

At the moment power is centralised in Inverness and the needs of the outlying areas are ignored or brushed aside. Naturally Inverness people and their representatives are anxious to keep it that way. They know what is buttering their bread and that is why there was a division of opinion among my honourable friends when the Bill was debated in another place. However, in that debate the Secretary of State for Scotland conceded that, the debates in another place are a matter for their Lordships … They may well be interested in pursuing the issue further". Indeed we are interested and I can assure your Lordships that my colleagues on these Benches are united against the pan-Highland council proposed in the Bill and solidly behind the proposal for two single-tier councils as outlined by the Association of Highland District Councils. Therefore I hope that, together with my colleagues on these Benches and with support form fair-minded Members from all sides of your Lordships' House, we shall be able to move amendments to this Bill at later stages which, by providing for two single tier local authorities for the Highlands, will give those of us who live there greater representation, a wider choice of candidates, a more obvious sense of community and more effective use of our money.

Regionalisation took away from the streets of Thurso its historic flagstone pavements, to replace them with pre-cast concrete cobbles. I hope that this time round your Lordships will make it possible for a more sensitive and less bureaucratic administration to be seen to be doing their work closer to the people whom they are supposed to serve. They may not re-flag our pavements but I am sure that they would bring back our pride in our local heritage and deal more sensitively with local concern than has been the case since Highland Region was set up.

5.26 p.m.

Lord Gray of Contin

My Lords, I am happy to follow the noble Viscount, Lord Thurso, and I sympathise with his first point which I am sure the Minister will answer in due course. I take this opportunity to congratulate him on the work he does on behalf of the Boys Brigades. He does a very fine job. Sadly, we part company there.

The Local Government etc. (Scotland) Bill has already had a long and thorough period of examination in another place. Whatever views there may be about the proposals, the Government cannot be accused of rushing the measures through or of limiting the debate by means of the guillotine; nor can they be accused of being inflexible since a number of significant amendments have already been accepted. Nevertheless, some aspects of the Bill will no doubt receive further scrutiny in your Lordships' House where a mixture of personal experience of local government matters and objective observation will enable us to give it the sort of constructive consideration for which this House is renowned.

I welcome the Bill in general terms and particularly I applaud the decision to create one pan-Highland council to absorb the responsibilities presently carried out by the Highland Regional Council and eight district councils. It is on that specific issue that I shall address most of my remarks.

First, let me make some general comments. There is never an ideal time for reorganisation of local government. Having said that, it would have been neglectful of the Government to ignore the almost continuous calls, going back very nearly to the last reorganisation, for unitary or all-purpose authorities. Also, it is broadly accepted that such authorities have much to offer in avoiding duplication and, in the longer term, in being more economic and providing improved services more efficiently. The Bill seeks to achieve those objectives.

Probably the most controversial aspect of creating new authorities lies in defining their boundaries. I can sympathise with those who have made representations to me who do not wish to be included with high spending existing councils or within areas where political activists appear to be hostile. There is certainly a decided disinclination among many Conservatives in, for example, Cumbernauld and Kilsyth to be linked with Monklands—I am bound to say that I have sympathy with them—while in the East there is a determination within the "Kingdom of Fife" to retain its identity.

I was Scottish Whip in another place in the early 1970s when the last reorganisation Bill passed through that House. I remember all too well the vigorous campaign to retain the "Kingdom of Fife" mastermind-ed by the unholy alliance of the Conservative MP for East Fife, Sir John Gilmour, and the Labour MP for West Fife, the redoubtable Willie Hamilton. They proved to be an unstoppable duo. On this occasion I note that the Government are proceeding along lines which would have been acceptable to those stalwarts.

At the end of the day, however, I suspect that most people are not so concerned about where the decisions are taken as they are about the quality of those decisions and whether or not councils provide good value, good services and reasonable council taxes. Of course, activists get very steamed up about the details of location and day-to-day administration, but the man in the street—or, should I say, the person in the street—is much more interested in the end result. Low turnout levels at local government elections for just about as many years as I can remember support that view.

The question of water in Scotland is always sensitive. Generally speaking, water is not something which Scots see as being suitable for privatisation, and I for one felt greatly relieved when I saw that the Bill did not go down that route. The creation of three water and sewerage authorities is a better way forward and I am glad that they are to have substantial borrowing powers through the National Loans Fund. The wording in the Bill describing that function goes on to say "and other sources", which I presume refers to other private sector sources. I would ask the Minister whether such freedom also allows the authorities to engage in joint ventures with the private sector.

In the case of the Highlands, with some 160 water supply systems in existence, many of them private, local authorities have amassed a wealth of experience in administering public water supplies. I trust that when the Secretary of State comes to make appointments to the various boards he will keep in mind this asset and not ignore the benefits of appointing at least some people with local knowledge.

I turn to the proposals for a single Highland authority. Over the past 30 years there have been enormous changes in the Highlands, none more so than since the last reform of local government. Considerable investment in infrastructure, the most obvious of which concerns the A.9 both south and north of Inverness, has led to a change in commuting patterns hardly imaginable some years ago. The bridging of the three firths at Kessock, Cromarty and Dornoch has improved vastly the ease of access to Inverness and the south. Oil and oil-related industries acted as the catalyst for much of the improvement in infrastructure but that could not have been achieved in the timescale without massive support from central government. Whatever criticisms may be levelled at this Government, neglect of the Highlands should certainly not be among them.

Despite much progress in many parts of the Highlands, the area remains unique not only in Scotland but in the United Kingdom and even in Europe. It has distinctive features which set it apart from all other areas —the quality of life it offers, the magnificent environment it enjoys, its crofting, fishing, agriculture and sporting heritage, spreading from the North Sea to the Atlantic; and these all combine to attract a thriving tourist industry. Add to that a sparse population, unevenly spread, and the challenges to local government are not difficult to imagine. I believe that in order to provide the whole plethora of services required in an area of such size and diversity, nothing short of a. pan-Highland authority is acceptable.

The need for a strong council tax base is obvious. In order to obtain that base, boundaries must be drawn widely. With its largely self-contained economy and cultural identity, already reflected in Highland-wide policies and organisations such as Highlands and Islands Enterprise and the Crofters' Commission, and including Objective One status within Europe, the necessity to retain the integrity of the inner Moray Firth in which lies the power house of the area is even more essential.

The division of the Highlands into two councils, as some would wish, would create wholly artificial administrative boundaries and deny people throughout the region a say in the future of planning and development in an area whose facilities are widely and frequently used by people from throughout the north. There is no natural north or south Highland identity. In the west, Skye and Lochalsh district council, which supports one Highland council, points out that it does not fit comfortably into either north or south. It sees as the best way forward for a rural district council such as exists there the devolution which can come from one pan-Highland authority.

Those who advocate two councils make much of size. I do not accept that argument at all. Modern technology, transport and improved infrastructure make that argument very thin indeed. They claim that the proposed Highland council would be larger than Wales —and of course that is correct. Wales covers approximately 20,000 square kilometres and the Highland council area would cover approximately 25,000 square kilometres. They fail to point out, however, that the population of Wales is nearly 2.9 million people while the population of the Highland council area is 209,000. So it is hardly surprising that Wales would have many more councils dealing with vastly different problems in circumstances so different as to make comparison virtually pointless.

The Association of District Councils, which now promotes the two-council case, has been most inconsistent in its preferences and even now does not speak for all its members, both Skye and Lochalsh and Nairn district councils favouring one council. Originally, the association opposed two councils and campaigned for all-purpose authorities based on existing district council boundaries. That proposal was always doomed to failure and eventually it was dropped in favour of a proposal for three or four unitary authorities. But at no time during the extensive period of consultation with the Scottish Office did the Association of District Councils recommend the creation of two councils, even although that had been one of the Government's options.

The present Highland Regional Council already has experience of delivering 85 per cent. by value of all local government services and of doing that in a very devolved manner. It has recently produced a consultation document on decentralisation which can be used as a basis for further decentralisation when the new council is created. Furthermore, the retention of the Highland region as one unit involves minimal functional change; and that is vitally important.

The splitting of the Highland area would be a sad mistake. It would dilute the strong voice which one authority can command. It would create petty jealousies and cause unnecessary duplication in administration. It would necessitate joint working arrangements for a whole host of important services.

I do not often find myself in full agreement with Sir Russell Johnston, the Liberal Democrat Member of Parliament for Inverness, Nairn & Lochaber. But as a Member for a Highland seat for 30 years and as a former member of the Wheatley Commission on local government, his view on local government in the Highlands is worthy of note. On 17th May of this year, in another place, he made a very interesting contribution in which he outlined in considerable detail the advantages of a pan-Highland authority. He was very critical of government action over the years—I do not want to misquote him or give the wrong impression —so far as concerns local government, but speaking about the Highlands he did not mince his words.

In conclusion (and I paraphrase) he said, "However, in the case of the Highland region the Government are right and staying with one council for the Highlands makes sense". I am not certain that those are his exact words.

Lord Burton

My Lords, has the noble Lord asked Sir Russell whether he can quote him? It is not the procedure of this House to discuss what a Member of another place has said without consulting him.

Lord Gray of Contin

My Lords, I have not asked Sir Russell because I have not quoted him verbatim. I said before I made my quotation that I paraphrased. I am sure that the noble Lord will accept that. On this unique occasion I can therefore say that I agree wholeheartedly with the Liberal Democrat Member for Inverness. In the days which lie ahead we shall have ample opportunity to debate those matters further and I look forward to participating.

5.42 p.m.

Lord Palmer

My Lords, I feel a bit of a fraud speaking in this Second Reading debate because I am the only non-Scot taking part and as such I shall be as brief as possible. I am afraid I feel that this Bill is fundamentally flawed; admittedly slightly less so after the mammoth time spent in Committee in another place. But to me it stinks of political corruption. It stinks of giving far too much power to the Secretary of State of whatever party he may belong to. It stinks of expense and it stinks of unemployment and the added expense that that unemployment will create.

Local government in Scotland works. Why on earth do we want to change it? The people of Scotland are baffled and perplexed. I must ask the Minister why the people of Scotland are once again being used as guinea pigs. I know that political memories can be short but surely the fiasco of the poll tax was not in the dark and distant past. I remember asking my first supplementary question on 14th March 1991. I asked the then Leader of the House why Her Majesty's Government had introduced the poll tax into England and Wales having seen what a disaster it was in Scotland. The noble Lord the Leader of the House replied that the Government did not consider the poll tax a disaster in Scotland and yet the very next week the Government announced its abolition.

This Bill to me is reminiscent of the poll tax. The idea in theory is fine but, like the poll tax, it simply has not been properly thought through. If the people of Scotland are to be used as guinea pigs, then we can only hope and pray that the Government carefully study the results and learn from their mistakes.

Are the Government not aware that 86 per cent. of the electorate failed to vote for them in the May election? I find it incredible to think that the Conservative Party does not have one single seat from Scotland in the European Parliament and I doubt very much whether today is going to change that situation.

I cannot understand why the Government refuse to allow the new local authorities to have statutory directors of education and social work. Both, I believe, as other noble Lords have said, will suffer greatly and I believe that it is wrong that they should suffer. I am thankful that the idiotic and illogical idea of amputating Berwickshire from the Borders has been shelved and Mr. Kirkwood in another place must take much credit for that.

By keeping Berwickshire in the Borders the flood of Conservative Party resignations seems to have dwindled to a trickle and Her Majesty's Government are no doubt grateful for that. The idea of linking Cumbernauld and Kilsyth with North Lanarkshire is almost as illogical and I would urge the Minister to look again at that proposal. Local feelings are important because we are, after all, talking about local government.

The Government claim to have consulted the people of Scotland. They have, but what they have not done is they have not listened and I fear that in failing to listen they have insulted the people of Scotland just one time too many.

I will close with a quotation from the 7th May edition of a national newspaper: 'The carving up of Scotland's local councils is one of the most disgraceful pieces of one party political arrogance in modern times". For democracy as a whole and Scotland in particular I beg the Government to think again about this Bill. If they really want a surge of support north of the Border, then the whole Bill ought to be pushed aside in favour of more urgent problems facing Scotland.

5.46 p.m.

Lord Hughes

My Lords, I am not certain that I am delighted to be following the noble Lord, Lord Palmer, in the very outright speech which he has just made because I feel by comparison that I am going to sound almost moderate. But I agree entirely with what he said and I wish that I had thought of using exactly that sort of language myself. Much of what I would have said has been made unnecessary because of the way in which my noble friend Lord Carmichael of Kelvingrove spoke from these Benches. He covered very much of the Bill in a way with which I can associate myself entirely. I have one little exception to that which I shall come to in due course.

I am in favour of all-purpose authorities, particularly if they can be proved to be suitable in size, capable of carrying even the minimum of administrative costs and operating within reasonable boundaries. Having said that, however, I cannot say that I find that this Bill produces, with a few exceptions, all-purpose authorities. The advantage of an all-purpose authority is obvious to local people. When they have a problem, instead of having to search out one councillor, at present they have to find possibly one or the other—that is to say, one local and the other perhaps quite a bit remote. That difficulty is removed by an all-purpose authority.

But why do I say that the Bill does not produce in its entirety all-purpose authorities? Perhaps I may give examples. Fife has been mentioned by the noble Lord, Lord Gray of Contin, as suitable. Fife is to be an all-purpose authority and fulfils all the conditions which I have mentioned. It will be viable; it does not have people travelling enormous distances and even with a limited amount of devolution within it, the services can be brought quite close to where people live.

I do not understand how the Government have approached this problem because, having accepted that Fife is such a suitable all-purpose authority, they then cast: forth to find Central Region—very similar in size to Fife—with the same kind of organisation. Fife is one region and three district councils become one authority. Central Region, which is one region with three district authorities, becomes three unitary authorities. I say "unitary" because they are not three all-purpose authorities. Why the difference?

This is where the views of the noble Lord, Lord Palmer, about the underlying political motives come clearly into the picture. Fife had a Labour regional authority. There was also a Labour authority in Dunfermline and in Kirkcaldy. There was a Liberal Democrat authority in North East Fife. The Government looked at that situation and said, "Good God, given that we are going to have an area in which there will be no Conservative authority at all, let's have one Labour authority rather than two Labour authorities and one Liberal Democrat authority". I think that it was the Liberal Democrat authority that stuck most in the Government's throat.

The position is different on the other side of the Forth. There are two Labour authorities, Falkirk and Clackmannan, and a Tory authority in Stirling. The latter exercised authority in Stirling on the casting vote of the Provost. If the elections take place in April, which is what the Bill seeks, I venture to suggest that Stirling, even on its own, will not produce an authority in which a Tory Provost will exercise a casting vote.

The Government's original proposals for Central Region envisaged two authorities. One authority was to be Stirling and Clackmannan; the other was to be Falkirk. However, Mr. Forsyth then came on the scene and said, "There is no way in which I am having Clackmannan joined with Stirling because that would condemn us to a Labour authority for the foreseeable future".

So, the Government had second thoughts. What did they do then? They left Stirling on its own and joined Clackmannan with Falkirk. The noble Earl, Lord Mar and Kellie, who is to speak later, carried out an interesting experiment demonstrating the stupidity of that proposal. He rowed across the Forth to show that that was one way in which the people of Clackmannan could take their problems to Falkirk if they did not want to take the roundabout road of going by Kincardine.

Obviously, the noble Earl made his point because the Government then made their third choice, saying, "Very well, we can't offend Mr. Forsyth to the extent of joining Clackmannan with Stirling and we obviously cannot join Clackmannan to Falkirk, so we'll set up a third authority". So, we now have the Central Region, which is an obvious candidate for being an all-purpose authority, like Fife, which will have a new constituency of 48,000 people. There is no way in which Clackmannan can be an all-purpose authority.

I turn now to the position of the Highlands. I attended a meeting with the Association of Highland District Councils at which I had my eyes opened—not to the size of the area because one need only look at the various plans that the Government produced to see how enormous the area is; what impressed me was when we were told that if there was one authority, that would mean recourse to a very expensive system of decentralisation. It appeared that the Government were hoping that no council would have more than 60 to 65 councillors. That would mean an extensive system of decentralisation in the Highlands, where three, four or five people would be exercising all or many of the functions of the Highland Regional Council. That does not seem like democracy in practice.

What effect has all this had on the people of Scotland? We have recently had local council elections. I live in Tayside and am pretty conversant with the situation there. For the first three terms of the regional council, there was a Conservative majority. In 1986, the Conservatives fell from that majority position to have only 14 seats out of a total council of 46. In 1990, the Conservative vote remained 14 seats. Now, the issue of water having intervened and caused concern to the people of Scotland, there are only four Conservative councillors in Tayside region.

Perthshire is still regarded as feudal, yet there is not a single Conservative councillor in Perthshire today. Angus is pretty nearly feudal. There is one Conservative member in Angus, in Kirriemuir. Surprisingly enough, the other three are in Dundee. That does not augur well for the results of the elections in Scotland in April next year.

I hesitate to use the word "gerrymandering", but given what has happened in Central Region and, if one crosses to an area in which another Minister is involved, in Eastwood, it certainly looks as if there has been gerrymandering.

Before I leave the question of the organisation of the councils, I should like to point out one matter of personal interest. The Minister knows that I shall refer to this. Clause 4 is exceedingly interesting. Subsection (7) states: The convenor of each of the councils of the cities of Aberdeen, Dundee, Edinburgh and Glasgow shall, with effect from 1st April 1996, be known by the title of 'Lord Provost', and the convenor of each other council shall be known by such title as that council may decide". The county of Fife has for a century, if not for several centuries, been known as the "Kingdom of Fife". Her Majesty might be rather offended if the Fife County Council decided to call its convenor "the King of Fife". However, that would be permissible under the clause. But I know that the people of Fife are much too canny to get themselves into that one.

Let us consider what happened after the last reorganisation. Outside the cities, the majority of civic heads took the title of Provost or Convenor. I think that that is probably what will happen again. I draw the Minister's attention to the wording of Section 3(6) of the previous reorganisation Act of 1973: 'The title of 'Lord Provost' shall attach to the chairman of each of the district councils of the cities of Aberdeen, Dundee, Edinburgh and Glasgow, the chairman of each other district council shall be known by such title as the district council, with the consent of the Secretary of State, may decide". That meant that there was no plethora of Lord Provosts. Perhaps the Provost of Stirling would now like to be called the "Lord Provost of Stirling". Perhaps the Provost of Falkirk would like to be called the "Lord Provost of Falkirk". Perhaps the Provost of Eastwood would like to be called the "Lord Provost of Eastwood". As a former Lord Provost of Dundee, I am quite certain that all the existing Lord Provosts would not like the title to be devalued to quite that extent. I am certain that the Minister does not want it either. So I hope that he will introduce a suitable amendment to that clause, because if he does not I will.

I turn briefly to the issue of water. The noble Baroness, Lady Carnegy, queried the value of the result of the Strathclyde referendum on water. She said that it depended on the way in which the question was asked. I noticed that 300 Tories in Eastwood, the constituency of the Under-Secretary of State, wrote to him saying that they felt insulted that both he and the Prime Minister should have suggested that they were incapable of understanding the question which was put to them. They understood it very well. They did not want water to depart from the control of the local authorities.

I did some investigation about what happened in Dundee. In 1859, the then town council decided that its sources of providing water for the city would not last for very much longer. It purchased the estate of Lintrathen. From that time until now, Lintrathen has remained the major source of supply for the city of Dundee. If the Bill takes effect, we shall have three quangos, one of which will take over responsibility from Perth to the Isles. It will be a quango of seven to 11 placemen of the Secretary of State for Scotland. There is no guarantee that even one of them will be a member of an elected authority. To think that 145 years of satisfactory service to the people of Tayside as a result of the foresight of those men of 1859 is to be swept away to be replaced by that quango. There will be an election in less than 145 weeks. I venture to suggest that that election will make certain that, if those quangos come into existence, they will not last for many weeks after the general election.

I want to finish with something I read. The Financial Times produced a Scotland article on 18th March. the article states:

Mr. Lang told the Financial Times that difficulties in popularity in Scotland related to the United Kingdom's political situation and that the Tories no longer faced 'hostility of the deep-rooted and very focused kind that we experienced in the last election'". That was only six weeks before the local authority elections which saw the Tories' control of councils in Scotland decimated. I have described the extent to which that happened in Tayside. I do not believe that the Secretary of State has shown himself to be very much in touch with the realities in life in Scotland. It may well be that the provisions relating to water, which run to 45 pages in the Bill, will prove to be the Secretary of State's suicide note of perhaps record proportions.

6.4 p.m.

Baroness Carnegy of Lour

My Lords, at the outset of the debate, my noble and learned friend Lord Fraser reminded us that all the main political parties in Scotland included in their election manifestos the creation of single-tier authorities. There is no question but that there are strengths in the present two-tier system. There were strong strengths when it was set up. I took part in setting it up when it was first created. As has been said, Lord Wheatley's Commission thought long and hard about it. For those who work in it, I believe that it is still logical and comprehensible. But times are moving on. I have to say that, and I am sorry that the noble Lord, Lord Palmer, is not in his place, because I am not sure whether he realises the extent to which things in local government are changing. Times are moving on.

The function of local authorities is changing. I say to my noble friend Lord Stodart, that there are great weaknesses in that people still do not appreciate, and find it hard to understand, who represents whom on which council and what council does what. People who are close to local government understand it well now, but the mass of people do not. I do not believe that accountability is helped by that. That is still a problem. I do not believe that the present system will be mourned greatly by the people of Scotland.

We have been having a great party political knockabout, but we should not do that when we are talking about local government. The question is whether we are improving the system; whether we want single-tier authorities; and how to get good ones. I hope that we will be constructive about that because we all want single-tier authorities. We have said so. Presumably we still think so.

The Bill proposes a system which will in many ways be very different. It is the result, not of a flash in the pan, a thought by the Government, or by the people in St. Andrew's House, but of prolonged and extensive consultation. We know that in your Lordships' House, and we must remember it. There were originally two general consultation papers, separate papers about different aspects of the Bill: the publication of an analysis of the responses and then the White Paper. There has been a great deal of consultation. Many people have responded. Yes, the responses have been conflicting. They have by no means been unanimous. A reconciliation between them has had to be made. That is what the Bill contains.

The Bill takes account, as it must, of the changing role of local councils. My noble friend Lord Stodart made an interesting speech from his great experience about the need for viability in councils. The kind of council which is now viable, and what we mean by viable, has changed, because its functions are changing. So what is now needed is different.

I think that it was the noble Lord, Lord Carmichael, who reminded us that there was a Labour Party paper on this subject, about the need for the contracting-out of services, and so on, by local councils, and how that would affect local government. Social work, community care, leisure, recreation and the like, are now not run hands-on by local government. The services will be specified. They will be allotted to people to carry them out for the council and the performance will be monitored. The function of education will change greatly as the decisions are made, not in the centre by the committees of the council, but in the schools. The function of the authority in relation to education will change enormously. It will be crucial. It will be extremely interesting to do, but it will need a different council, a different committee structure. That is all coming about, and changing councils must follow.

The Bill allows councils much greater flexibility of internal management. Many of the ideas for that derive from an excellent submission made by the chief executives in Scotland who understand the whole picture. The plans for education committees worry directors of education of course. They are right to be worried. We shall have to examine that when we come to it. The same goes for social work. We shall need to see whether or not the flexibility is too great. I have thought for a long time that that kind of arrangement is the right one to get a really good education authority and social work authority going.

Because the system must also take account of all the things about which we have been talking—the contrasting geographical and sociological areas of Scotland—the single-tier councils proposed not only van,' enormously in size, but they will have to have great flexibility about the way they operate; how they combine; how they decentralise; whether they decentralise a lot or a little.

In the longer run, I say to noble Lords opposite, should anyone find a workable way towards a Scottish assembly or parliament—one which solves the West Lothian question and is funded by a system which will not threaten the unity of the United Kingdom within a few years—then this proposed system of local government will sit much more easily with a Scottish assembly or parliament than does the existing one. I do not believe that the existing one could sit with it. So, if one believes in that, we are moving in the right direction. That is something we should not forget.

As to the arrangements for the water authorities, they seem to me to be workable, except that I should like to look carefully at the protection of the consumer when we come to that part of the Bill. We want to be sure that the council which will see to that protection is strong enough and adequate. That arrangement for water relieves the public sector borrowing requirement of a large amount of investment. It provides the opportunity to bring it in from the private sector. It does what the noble Lord, Lord Carmichael, said rather earthily; it is a good fill-up for an inefficient Treasury. I do not know whether or not the Treasury is inefficient. I do not get that impression, but it is a good way to ensure that the taxpayer does not have to pay for everything.

There are a number of aspects—I shall be brief, because I think our speeches are becoming too long— which will need careful examination by the Committee.

As regards Schedule 1, we must look at some of the anxieties that councils are expressing about boundaries and the number of councils. We have heard about the problems of the Highland areas. The fact that the Highlands do not agree about the way in which they should go forward is not unfamiliar. We know that some people in Fife believe that there might be two councils rather than one. I do not know how much backing there is for that suggestion but I believe that my noble friend Lord Dundee will say a word or two about it.

We must look carefully at the various areas in which councils will need to co-operate, in particular where smaller councils will need to get together with one another or with larger councils. We must ensure, for example, that there is a proper process for consultation on structure plans. This may be too ad hoc, and if it is it may not work. I shall be interested to hear the Government's thinking on that.

We shall need to look at cross-boundary arrangements for schools in order to make sure that, as time goes on, choice is still possible, even if the school chosen is in a council area other than that in which a family lives. The noble Lord, Lord Thomson of Monifieth, mentioned Monifieth, which I know well, where there is an example of such an anxiety.

The Bill no longer continues the old statutory requirement that every council must have a director of education and a statutory education committee. That arrangement is rooted in old history. It dates from 1915 when people used to elect education authorities for that purpose alone. Then the education authorities were brought into local government, so a certain amount of autonomy for education committees was brought in under certain statutory requirement provisions. I have long believed that the time has come to end that. The Bill does that, but we shall need to look at the matter.

The reporters for the children's panel are anxious about their relationship with local authorities, education committees and social work committees. We will need to look at that matter to see whether the flexibility of arrangements is so great that an adequate relationship may not be possible.

Concern has been expressed about voluntary organisations, and I shall not repeat that. Several speakers have made the point well. I see that the noble and learned Lord, Lord Cameron of Lochbroom, is in his place and he may be intending to speak about that. I know that he has a deep involvement in it.

s There is also the anxiety of the Scottish Community Education Council. I declare an interest as an honorary fellow and former chairman of that body. It wonders whether the requirement for consultation that councils must carry out before drawing up their decentralisation schemes is wide enough. That appears in Clause 23(4). I hope to table an amendment in order to explore whether that arrangement is all right.

We must also look at the anxieties of the Scottish Library Association about school libraries and the way in which they will be affected by the reorganisation. The noble Lord, Lord Palmer, commented on the matter. I am not sure that he said that we shall want to look at it because, with respect, I think that his speech was not particularly constructive. But we shall want to look at all the areas in the Bill where the Secretary of State can make an order or where he has the power to decide. I hope that in doing so we shall read carefully what was said about the deregulation Bill by the noble and learned Lord, Lord Simon of Glaisdale. That is one big, what he called, Henry VIII affair. But the noble and learned Lord said that if in that case one does not use secondary legislation, one will not have primary legislation. We must look to see whether everything that is being done by primary legislation will not prevent the flexibility that is needed in the system. We can have a flexible system or no system at all if we do not give the Secretary of State a certain number of powers. We know that in Scotland; we do not have such an antipathy in respect of that as do many south of the Border.

The noble Lord, Lord Carmichael, told us that the timetable is tight. I know that the Convention of Scottish Local Authorities is worried about that. However, I am bound to say that I should have a little more sympathy with that body if it had not decided that it would not co-operate with the Scottish Office in making plans to implement the Bill. It asked its members not to co-operate with one another or with the Government in respect of implementation. That has held things up and it will have to help to make up time. I hope that we shall be able to keep to the timetable, and perhaps adjustments made in other areas will help. I do not think that it should cry wolf on that too much.

This is indeed a large Bill. Of its 276 pages I am encouraged to note that 117 are devoted to minor and consequential amendments to other legislation and to the repeal of existing legislation. I hope that those pages will not be too controversial. I support the general thrust of the Bill. I hope that noble Lords on all sides of the House will support the thrust because the Bill tries to do something that everybody agrees is necessary. We must go into the detail of the Bill with great care, but I certainly support its broad thrust.

6.20 p.m.

The Earl of Perth

My Lords, I welcome this Bill for one single basic reason—that it restores single tier government in place of two tier government. I am sure that it means that many local people will know to whom they can turn on whatever issue it may be. They can complain to their local representative and they will know who that is. The noble Baroness, Lady Carnegy, made that point extremely well.

My plea is that this should be the last reform of local government for a long time. It is a mistake to change it every 20 years. The noble Lord, Lord Stodart, made that point. It is in danger of becoming a political football, although many of your Lordships do not behave in that way. I am not altogether happy about the speech of the noble Lord, Lord Carmichael, in that respect. On the other hand, I recall well how, 25 years ago, the noble Lord, Lord Hughes, put up a valiant battle to prevent Strathclyde becoming one single area. He wanted it to be four areas for the very good reason that it was thought that it would be much less cumbersome and more effective. That was not necessarily in total agreement with Labour thinking at the time but he showed that he was independent and wanted to get things right.

I found it extraordinary that in the end the government refused resolutely to allow the change into four areas, although in relation to one area they would have benefited from that. I shall not go on about that for too long. The noble Lord, Lord Hughes, made a very important point about titles. The only city which suffered as a result of the last reform was the city of Perth. While it may be that no others should become kings, queens or anything else, I make a plea that the city of Perth should have restored to it as a title the Lord Provost, when one remembers its background and that it was once the joint capital of Scotland. I hope that that plea will be listened to.

Lord Hughes

My Lords, perhaps I may say to the noble Earl that the situation has changed. At that time I supported the retention of the title of Lord Provost for Perth, but it was then the city of Perth. It is not the city of Perth which is created by this Bill; it is the restoration of the county of Perth and Kinross, and it is quite inappropriate for a county to have a Lord Provost.

The Earl of Perth

My Lords, we shall have to return to that matter and discuss it in detail.

I wish to turn now to the main reason that I am speaking in the debate; that is, as a Catholic Peer. I wish to thank the Government. The Catholic Education Commission of Scotland and the Catholic hierarchy acknowledge with gratitude the tabling and acceptance of government amendments in another place. They concerned not only Catholic but, indeed, other denominational schools. The effect of the acceptance of those amendments is to ensure that the existing school catchment areas are retained. Moreover, there is welcome clarification of the statutory duty on local authorities to continue to provide free school transport. That is written on to the face of the Bill. I hope that we shall cover such details in Committee and at other stages of the Bill.

The only other point which occurs to me is that we must look dispassionately at this matter. We must try to improve certain parts of the Bill. There are other educational problems which will be extremely difficult to solve because of the smallness of some of the authorities. I hope that we can look at those issues in Committee. We must ensure that in certain respects there is collaboration between the larger and smaller authorities. There is a great deal of work for us to do.

6.25 p.m.

The Earl of Glasgow

My Lords, like many other noble Lords on this side of the House, I am uneasy, even sceptical, about this local government reorganisation Bill. I am uneasy because I am not convinced that in practice it will be any more efficient, labour-saving or comprehensive than the two-tier system which we have in Scotland at present.

I am sceptical because I doubt some, at least, of the Government's real motives behind introducing it in this form. The curious new boundaries which have been drawn round some of the proposed new councils lead many of us—I would say most of us—in Scotland to suspect at least an element of gerrymandering in an attempt to increase the Government's chances of retaining at least some Conservative councils in Scotland in the future.

Also, by abolishing most of the larger regional councils and passing down their responsibilities in some cases to existing district councils, it is likely, in practice, to result in more power ending up in the hands of the Secretary of State.

My noble friend Lord Thomson of Monifieth has already pointed out—but it cannot be over-emphasised —that the most indefensible element of local government reorganisation is that the new boundary changes have been decided by the Scottish Office and not by an independent commission, as they were in England. Why cannot they be decided by an independent body in Scotland as well? It seems that Scotland is still treated as a colony and nothing could be better devised to increase support for the SNP. Even if the Government were not engaged in gerrymandering, they would always be accused of doing so; and quite rightly so.

I am not opposed in principle to single-tier government. It sounds sensible. It would almost certainly make sense in those parts of Scotland that are large in area but small in population. It would certainly make sense in conjunction with a Scottish assembly. But without a Scottish assembly and with a too-powerful Secretary of State, there are areas —and they are the highly populated urban areas—where single-tier government is unlikely to be adequate to deal with the larger issues such as overall strategic planning and an integrated transport system.

Nowhere is that more apparent than in the area now covered by Strathclyde Regional Council. If the Bill passes into law unamended, Strathclyde council's existing power will be passed down to 12 (and some new) local authorities. Surely it is sensible, not to say essential, that one elected authority should continue to remain responsible for the overall strategic planning of the whole Clydeside conurbation.

When Strathclyde region was first formed, it was widely criticised as being too large and impersonal. It covered nearly half the population of Scotland. However, over the years many of its critics have had to acknowledge that its very largeness has enabled it to play a vital role and it has been able to achieve things which smaller councils could not by themselves achieve. For example, it can provide a fully integrated transport system for the whole area. In fact, it has created the most effective and widely used fully comprehensive rail, bus and Underground network in Britain, which is the envy of all other large cities.

It has also been very successful in implementing its policy of urban regeneration throughout the conurba-tion. For example, it has discouraged building on greenfield sites when brownfield sites were available. Perhaps I should explain that brownfield sites are sites on which industry or housing had previously existed. Developers tend to prefer greenfield sites if they can acquire them. The council offering greenfield sites is thus more likely to attract the business. However, by the late 1980s, Strathclyde was authorising the building of nearly 8,000 homes per year and over 70 per cent. of those were on brownfield sites. That has contributed very largely to the successful renewal and urban regeneration of the Glasgow-Clydeside conurbation. It is largely through Strathclyde's strategic planning that Glasgow's image has changed from being one of Britain's depressed urban areas into Europe's City of Culture. Glasgow City Council could not have achieved that on its own.

In 1991, Strathclyde regional council received a European planning award—the first and, so far, the only award of its type—because of its success in regional planning and especially in urban regeneration. In fact, I am told that at this very moment the Dutch Government, who were so impressed, are considering a form of two-tier local government on the present Scottish lines in order to deal with their own strategic planning problems in Holland.

In the Bill as it now stands, the principle of a larger single authority controlling strategic planning over an area that includes a number of smaller local authorities is to be dumped. The new smaller authorities are to form themselves into joint committees for that purpose. Those joint committees will be made up of the representatives from the new authorities who will inevitably have conflicts of interest as each is, quite rightly, rooting for his own district. The Bill says that when such conflicts arise—and the Government readily acknowledge that they will—the Secretary of State will step in to sort them out. Therefore, in practice, controversial decisions on strategic planning will revert back to the Secretary of State.

Do the Government really want that to happen? There is always the nagging suspicion that they are ever striving to wrestle more power from local government, especially if local government will almost certainly be controlled by non-Conservative councils. However, I hope that that does not prove to be the case in respect of Strathclyde. I hope that the Government can be persuaded to retain those elements of the two-tier system that have proved to be successful and that they will agree to incorporate them in the Bill.

The Government propose to establish a Strathclyde passenger transport authority because they recognise that an integrated transport system within the Strathclyde area made sense and was successful. However, it will be empowered to deal only with public transport, whatever that means in these days of blanket privatisation. I believe that it should also be made responsible, as it is now, for the region's total transport policy which includes road building; or indeed the non-building of roads as the case may be.

It is most important that an elected authority should be retained for the whole Clydeside conurbation area, responsible not only for dealing with an integrated transport policy but also for continuing Strathclyde council's work in overall strategic planning. It need not necessarily cover as large an area as that covered by Strathclyde at present, but it must certainly cover those towns and rural areas which are largely or partially affected by the greater Glasgow conurbation. In their overall desire to impose single-tier local government in Scotland, I hope that the Government will take individual proven successes of the two-tier system into account and not throw healthy babies out with the bath water.

6.32 p.m.

Lord Cochrane of Cults

My Lords, the Bill is very much to be welcomed. I speak today with an unusual degree of trepidation because, until the noble Lord, Lord Thomson of Monifieth, entered the debate, the whole of the party opposite consisted of my relations and my noble kinsmen. I hope that they will not be too hard on me subsequently. As I said, the Bill is to be welcomed. It has very wide aspirations. It is interesting to note that its Long Title considerably exceeds in length various Acts passed during the last century and more recently.

The Wheatley Commission unfortunately got it wrong in many respects. We have heard much about high aspirations—for example, big was better—and the value of strategic planning. There has been a great clash of claymores and targes in various parts of the House as to which bit was right and which was wrong. All I shall say is that there has been absurd duplication.

Perhaps I may recount to your Lordships a story from my own experience. A meeting with a regional council representative and a district council representative at my house very nearly ended with my factor and I having to separate the two contestants. The situation nearly went beyond words. That shows how such things can go wrong. I dare say that it was untypical and rare, but there it is: it happened.

One concern is the remoteness of the regions. Moreover, I am afraid to say that they are not always very well run. For example, in Fife a large amount of money was unfortunately wasted in the support—no doubt well intentioned, but, in the end, ineffective—of the miners' strike. There has also been considerable trouble in the social work department which had to be investigated at truly amazing expense. However, I have said enough about that aspect of the matter.

Local government is about people and politicians; and, with politicians, it is about power. As has already been said, the size of a district varies enormously. In fact, according to my arithmetic, it can vary by a factor of some seven times from Clackmannan to the largest landward district, which would be Fife, with some 320,000 to 330,000 people. We are told by all those who would be expected to say it that the expense of the changeover will be truly enormous. One of the MPs in Fife has quoted a list of figures. However, at the end of the day, it was rather difficult to know where to put the commas among the noughts.

On the other hand—and although it is quite a different question—I see from reading my notes that roughly 30 per cent. of all councillors in Scotland will be made redundant, yet they only expect the total employment of council staff, which currently stands at about 300,000—or four-and-a-half or five times the size of the Royal Navy—to diminish by, at best, 2,200; that is 1 per cent. or less. That does not really seem to be very sensible. It has always been my opinion that any manager who could not dispense with 5 per cent. of his costs within 12 months probably ought to be looking for another job.

One of the important considerations in local government is the job of the councillor. They are like Banquo's ghost: we all know that they are about, but we cannot see them. They have hardly been mentioned in the debate. The quality of councillors is absolutely crucial to the success of local government. If the job is too demanding, you cannot get people who are employed other than in very large companies or in the public service to do it because, quite simply, they cannot afford the time away from their main source of earning. If councillors try to do too much—as in one case where the chief officers were not allowed to open the mail— everything goes downhill rapidly, because chief officers and their departmental heads will not put up with such a situation. It should never happen. We must ensure that councillors do not get too close to the working face. It is their job to set the policy and it is the task of the officials to carry it out. We must ensure that that happens. If we do so, then the welcome and valuable proposals in the Bill will succeed, as they rightly deserve to do.

I turn now to transport. My noble kinsman Lord Glasgow referred to the success of the PTA in that city. Yesterday I drew the attention of my noble friend the Minister to a possible gap in the Bill. There appears, prima facie, to be no easy route in the Bill to establish such an authority for the Lothians. I have to say that the Lothian region, despite its many other defects, has done a good job on transport.

Much has been made of the necessity for joint boards or of the folly of having them and anything else that could be heaped upon their heads. Joint boards have always existed and they will certainly continue to be necessary. Everyone in business knows that you have to work with other people. If you do not do so, you will get nowhere. However, it is vitally important that members of joint boards should not consider their own narrow interests, but the wider interests of those people whose affairs they have been entrusted to administer. To that end, the choice of chairman for the joint boards is obviously extremely important.

Further, I believe that the choice of the clerk to the joint board is just as important. We all remember the days of the county clerk who quailed councillors. Let us have clerks to joint boards who will quail the members.s Then perhaps one will see things going forward properly. To that end I think it would be wise if the clerks to the joint boards were not drawn from either or any of the constituent authorities. That I am sure would broaden the point of view of the board and greatly enhance the quality of its work.

I will take issue momentarily with the noble Lord, Lord Gray of Contin, on the subject of Fife because I live there. The Gilmour-Hamilton axis defeated the Government's proposals for Fife to be divided between the Lothian region and the Tayside region. Everyone in Fife felt that this was a fearfully bad idea. It ended up that Fife became the only region made from a single county. It is perhaps interesting to think that had we been divided, we would now probably be offered two districts, which is right.

I support this Bill. We have heard much gloom, despair and all that, but these comments of despair are of those who find all change too difficult. We all know that change is not always for the better but in this case I am quite confident that it is and will be.

6.41 p.m.

Lord Cameron of Lochbroom

My Lords, I rise to make two specific points about this Bill. For the first I put on my hat as president of the Scottish Council for Voluntary Organisations—an umbrella body for voluntary bodies in Scotland which seeks to promote their interests and to improve their effectiveness. I would like at this stage to express my thanks to the noble Lady, Lady Saltoun, to the noble Baroness, Lady Carnegy, and to the noble Viscount, Lord Thurso, for what they have already said about voluntary organisations.

These bodies play a remarkable part in the civic life of Scotland. They have an active volunteer support from some one out of every four members of the adult population. They provide 20,000 full-time jobs. They have between them a turnover which is estimated to be at least £1.5 billion a year. With the encouragement of central and local government they play a critical part in the delivery of many forms of community-based services. I can instance health, education, drug abuse, family violence, and the field extends to the arts and to sport. They are concerned as a third force in the efficient service delivery of which the noble and learned Lord the Minister spoke at the outset.

Allied to funding from central Government, local government funding and assistance in other forms given by local authorities, in the forms of staff secondment, training, the provision of equipment and so on, have been extremely important in the fostering of the partnership between local government and the voluntary sector which government so rightly have sought in providing the widest possible range of high level services to communities. The existence of established contacts between local authorities and voluntary bodies is an important element in the fact—to which the noble Viscount, Lord Thurso, made reference—of the annual negotiation of grant funding which makes up something like 90 per cent. of a total sum—to which he also made reference —of some £90 million a year which is received in grants from local authorities, after 5,000 decisions have been taken.

I do not intend to cover the ground which the noble Viscount amply covered in making the point—as he did, and which I would reinforce—about the concerns which the voluntary bodies have presently about the tight timetable for planning of the 1996–97 and 1997–98 budgets, and the necessary fears that arise from the uncertain costs of reorganisation, and the apprehension that it will be the grants to the voluntary bodies that may bear the brunt, if that be the case, of the new bodies meeting their side of the costs of reorganisation. Of course with that must go the concerns which arise from the possible disruption of those contacts which are already well established between voluntary bodies and local authorities. I am certain that these matters lire susceptible of cure and I would certainly endorse entirely what the noble Viscount has said as to a way forward which he suggested—and has been suggested by the Scottish Council—in the form of an obligation written into statute which will ring-fence the level of funding for those two transitional years so that it should not drop below a stated level commensurate with current levels of provision. Stability is all important and in so far as this third force is an important element in services to the community, I would hope that the Minister will bear very much in mind what has been said by the noble Viscount on the matter of such an improvement to the Bill.

I hope I may doff that hat and wear another one, speaking personally as a member of the Scottish Records Advisory Council. I express my welcome and support for the purposeful thrust of Clauses 52 and 53 in the Bill and the allied Clause 118 which deal with the preservation and management of records held by local authorities and their use. But I have an anxiety which relates to the provision for disposal of records which are not considered to be worthy of preservation which is contained in subsection (2) of Clause 52. I would observe that perhaps "disposal" is a euphemism and more probably means destruction, although the matter is by no means clear because I observe that the word "disposal" appears in the side note to Clause 53 and would appear there to have a completely different meaning. Perhaps this again may be an element where statute provides money for the lawyers in due course.

However that may be, the point I wish to make is that the power of disposal in subsection (2) of Clause 52 is untrammelled by any reference to consultation or to the obtaining of professional advice. That is in contrast to what is provided, perfectly properly, in other parts of the clause in relation to the making of arrangements by local authorities for the preservation and management of records. It requires that before these are put into effect there shall be consultation with the Keeper of the Records of Scotland. I observe that that consultation will of course take place before the arrangements are put into effect. On the other hand, what is involved in subsection (2) is something which takes place after the arrangements are put into effect, and there may be, I suggest, a lacuna here which might be best filled by some provision for consultation, or the obtaining of professional advice, before a local authority disposes of records which may be worthy of preservation. If it acts on its own opinion—which without professional advice may be wrong—that could result in the loss of valuable records. Apart from that I would simply say that I shall be interested to see how these matters are dealt with in due course in your Lordships' House.

6.49 p.m.

Lord Gray

My Lords, I welcome the Bill and support its objectives. I trust that my noble friends on the Front Bench will not take offence when I admit that my support owes more to personal views on the proper shape and nature of local government—which this time happily coincide with theirs—and personal experience of the present format rather than any conviction that the Government have necessarily produced a perfect package in every respect. If I remind the House that I live and work in Argyll it will immediately register with noble Lords that escape from the clutches of Strathclyde is for me the icing on this particular political cake.

On 15th December 1973 this House voted in favour of an amendment by the noble Lord, Lord Hughes (whom I see in his place), which would have split up Strathclyde. Sadly, another place did not agree. The years since have been an unpleasant experience for Argyll, out of which has grown a cynical dissatisfaction with local government institutions. Strathclyde brought us in Argyll an unsuitable and unwelcome politicisation of local democracy more suited to the city. It brought frustration at its remoteness and, at times, despair over its antics, of which the infamous water referendum was a prime example. The noble Lord, Lord Carmichael of Kelvingrove, was characteristically honest enough to admit that the vote was emotional because, as I think he put it, they felt it in their bones. Fair enough. But we certainly felt it in our pockets. Was the cost of the referendum not in excess of £600,000? Perhaps the noble Lord, Lord Ewing of Kirkford, will be able to tell us the figure when he winds up for the Opposition. Had the vote been objective and not fuelled by a great deal of misrepresentation and misinformation, and perhaps had voters been aware of the findings of the Friends of the Earth (Scotland) report as to the failure of Strathclyde and other regions to meet their sewerage responsibilities and Strathclyde's underspending on its treatment works programme and bad pollution record, how might the result have turned out? In the face of mounting and costly problems the Government have had to act, and I applaud them for doing so.

To imply that everything that Strathclyde has done is bad is unfair, but the balance of advantage has lain elsewhere than in rural Argyll. We have still had to pay. Similarly, it would be unfair to deny the excellence of some officials. Although I hesitate to say so, equally it would be wrong to deny that bureaucratic dominance had led to arrogance in others in their dealings with ratepayers. For instance, there has been a continuing impression of failure to establish adequate systems to handle a very large area, to collect and handle data and to share it inter-departmentally and generally. I suggest that it is the very size, complexity and infinite differences between areas of the region that have advanced bureaucracy at the expense of democracy and, certainly where I live, fuelled an increasing distrust in local authority institutions.

The Government's proposals to return overall control to a single authority in Argyll are a most welcome recognition that local government should be just that: local, single-tier and truly responsive to democratic control, affording greater access to councillors to whom people look to control local government. I fear that Strathclyde's poor relationship with the people of Argyll has spilt over to affect that 'twixt the district council and its electorate. Let us hope that a new start will repair the damage that has been done. The present format has done harm that the new authority will have an uphill task to undo, but with the support that it deserves to receive from central government, and which I hope it will earn from its electorate, the Government's reform must surely benefit the county. So much for the generality of criticism for the past and my hopes for the future.

Before I sit down, I make two detailed points: one concerns roads and the other tourism. First, roads in rural Argyll are in an appalling state. No one can recollect anything like the shambles of the present and recent past. The region can boast some fine road building. However, it is all very well to improve highways into an area, but within the area driving is a nightmare and frequently dangerous. It is bad enough for visitors and tourists, but it is local folk who suffer most directly and indirectly. Quite frankly, we have had enough of it.

I am particularly concerned about north Argyll and Lorn where some roads are neglected to a pitch of unpreparedness that is unbelievable. Others have been patched and had patches put upon patches, only for potholes to appear in the middle of each and every patch. A few months ago I had to go to a local hospital to which patients are taken by ambulance. I was unable to drive there without my wheels dipping into at least three potholes. I made the drive in daylight and illegally wove the best course that I could, but the potholes I could not avoid. That is symptomatic of what we have had to put up with of late.

In view of this situation, I ask my noble and learned friend who is to reply whether the Government as a matter of urgency will initiate an independent survey and report on the conditions to which I have referred so that special funds can be allocated to the new authority, or perhaps in advance of it taking office so that it is not saddled with an unsupportable burden when it becomes fully responsible. I read that one of our newly elected regional councillors has stated that he will bring the new chairman of the roads committee up to Argyll to see the position for himself. I hope that he does so. I hope—it is perhaps a forlorn hope—that action may result.

The second detailed matter to which I wish to refer is tourism. Great alarm has been occasioned throughout Argyll among all those concerned with or involved in tourism by a Scottish Office announcement of an intention to merge the West Highlands and Islands of Argyll Tourist Board with the Cowal and Bute and the board covering Stirling, Loch Lomond and The Trossachs. It may be reasonable to argue for a reduction in the number of local boards, but to merge Argyll and the islands, when one considers the special nature of that area, with the central belt is certainly not reasonable.

I have been criticising Strathclyde regional authority. In fairness I shall now state that I and others are not satisfied with the recent current performance of our local tourist board. That is a matter for us to sort out ourselves; it is an issue that can be put right. However, with the present state of the board, if our area were to merge into an organisation which takes in such diverse areas, I cannot imagine how on earth we shall ever obtain a sensible and reasonable programme of promotion and look after tourists' interests in the future. I urge the Government most strongly to think again.

A plank in CoSLA's argument for the status quo is this: do nothing now because of what may or may not happen to Scottish local government at some future date. That argument has found echoes in the Chamber today. Delay is always the last resort of the vested interest and the worst excuse for not doing what patently needs to be done. I congratulate Her Majesty's Government on bringing forward the reforms.

7.3 p.m.

Lord Macaulay of Bragar

My Lords, having listened to the noble Lord, Lord Gray, I have some difficulty in understanding how holes in the road can be cured by a Bill. Presumably holes in the roads existed in Argyll for a long time before the Wheatley Commission even came into existence and we had local authorities in their present form. I cannot understand the justification for suggesting that the new system of government proposed by the Bill will make any difference to the holes in the roads in Argyll. I am rather puzzled. Perhaps the noble Lord can clarify the matter.

Lord Gray

My Lords, perhaps I may be permitted to answer the noble Lord. If he had been able to hear more clearly what I said, I pointed out that the situation has arisen since we have had Strathclyde regional authority in charge. No one can remember such a situation previously. I merely expressed the hope that in future matters might improve. I suggested that the Government might like to take emergency action in order not to saddle the incoming authority with an unreasonable burden. Paving the highways with this Bill, thick as it is, is not the answer.

Lord Macaulay of Bragar

My Lords, I am grateful to the noble Lord for his explanation. I have no doubt that those responsible for the roads in Strathclyde will take note of the noble Lord's observations and will take steps to correct the situation.

It is a most interesting debate. The noble and learned Lord, Lord Fraser of Carmyllie, stated, if I heard him correctly—it is always difficult to hear in the Chamber —that the quality of service had improved since the Wheatley Commission and the current local authorities were brought into being. If that is the starting point for the Government, what improvements will be created by the new system proposed in the Bill? I shall be interested to hear what the noble and learned Lord says on that. How can one improve on an improving situation within the local authority? I have no doubt that my noble friend Lord Ewing of Kirkford in due course will refer to water in Scotland. It will be a major issue during the Committee stage of the Bill; I shall not say much on the issue at this stage.

Perhaps the message has not got through to the Government, and never will, that no one wants the Bill. The noble Lord, Lord Gray of Contin, may want the Bill for a variety of reasons. By introducing the Bill, the Government are fragmenting society in Scotland. Everyone is looking to his own little comer saying, "I like this; I like that. I don't like this; I don't like that", whereas until now we had a firm structure of local government in Scotland which served Scotland well. The Bill is completely unnecessary.

I am reminded of a Country and Western song called, "I'm nobody's child". Perhaps someone will tell me who is the father and who is the mother of the Bill. I shall then know that it is somebody's child. Those on this side of your Lordships' House consider that the Bill is nobody's child.

Lord Graham of Edmonton

My Lords, it was conceived somewhere.

Lord Macaulay of Bragar

My Lords, as my noble friend reminds me, the Bill was conceived and born somewhere.

We are always ready to welcome change. Improvement is always welcome. However, we do not need the Bill to improve local government in Scotland. There is no demand for it. In the Queen's Speech—it was some time ago now—we were told about consultation in Scotland. Consultation in Scotland was a farce. This Government tell us that many people responded. If one goes to any area in Scotland and asks, "What do you think of local government in Scotland?", people are not jumping up and down on the tables saying, "I think it's a bloody disgrace"—if noble Lords will excuse my phraseology. 1 have met no one since the Wheatley proposals, apart perhaps from someone with a housing problem or those affected by holes in the road, who says, "The local authority is to blame; it should be fixing the problem". No one talks about restructuring in Scotland apart from the politicians. Restructuring is their child.

It will be a sad day in Scotland, as those of us who live in Scotland know, when people in Scotland do not criticise politicians, do not nag the local authority and do not find something to complain about. No doubt the same applies in England and Wales. However, the reality of life is that local government in Scotland was going along quite well. For some reason as yet unexplained—the Government have had plenty of opportunity to explain it—they are now using a political bulldozer which will destroy the fabric of local government created by hard work, diligence and dedication on the part of councillors and their officers throughout Scotland. I state that with a great deal of sincerity. If one meets the local authority officers and councillors, one knows that they are dedicated to making life in Scotland better for the people whom they serve. How this Bill will serve the people of Scotland 1 do not know.

I should like to know how the Government will respond to a speech by Professor Patrick Minford. I refer to an article by Alan Forbes in the Scotsman on 6th June 1994: One of the Chancellor's 'seven wise men' called local government reorganisation a disaster yesterday. Professor Patrick Minford, an economic adviser to the Government and an ardent Thatcherite"— I do not know what that means; I would not like to give him that description, but that is what the reporter said— made the most outspoken attack yet on proposed council reforms. Describing the Government's plans as being less intellectually defensible than the poll tax, he expressed the hope that time would run out before they could be introduced. Professor Minford was guest speaker at a lunch in Glasgow … He had previously expressed concern about the break-up of strategic planning authorities which played a key role in attracting inward investment, but yesterday his views seemed to exceed even Strathclyde's expectations. Professor Minford, the professor of applied economics at Liverpool University, told a large audience, consisting mostly of business people from the west of Scotland, that Strathclyde"— which we all know is the political target of the Government— the biggest local authority in Europe, did have an important role to play in Scotland. He said that in European terms it was not too large, particularly as the area it covered had to compete with other big European regions for business. The Government's proposal, he added, could leave Strathclyde in the same situation as Merseyside, without one authority in charge of strategic planning over a wide area. Instead rival local authorities across the region would compete rather than co-operate in the quest for investment and business would be lost as a result". That is a general point. The next point is most important: to support that, he said that 100,000 jobs had been created in Strathclyde between 1986 and 1988, but virtually none in Merseyside". I wish to know from the Government how they respond to the professor's criticisms of what they are doing at the moment.

We know that the break-up of local government could be disastrous for Scotland. I asked a long time ago in your Lordships' House for figures from the Government as to what this will cost. In another place the Secretary of State said: "Well, it might be £30 million, £35 million, give or take £5 million here or there". One may be pursuing beggars in the streets, but £5 million does not matter to the Government. The core of the disestablishment—if we can call it that—of local government in Scotland is a breakdown of the authorities we have at the moment.

We then come to the question of redundancies. We have asked time and time again whether the Government have made any studies as to the cost of redundancies in local authorities. The Government say that it is up to each local authority to decide who goes. I can tell your Lordships' House—because this was not mentioned to me on a confidential basis —that to get rid of one officer in a particular part of the local authority will cost £¼ million. Officers in the age bracket of 55 to 65 may have given 20 to 30 years' service to a local authority and they will be coming up to retirement. They will say to the local authority: "Right, I soldier no more. I don't want to know about this new authority". What will happen then? The figure given by CoSLA is £720 million and the Government have produced no figures to contradict that. The Touche Ross Report has now been rubbished and no one pays any attention to it. That is just not right. It probably went on the wrong facts.

In the various aspects of social work, education and the rest we are working in the dark. The Government give us no guidelines. I wish to know, for example, about concessionary fares. You can go from Edinburgh to Dunbar on the bus for 30p. if you are old enough. When the new structure comes in, will you still be able to do that for 30p? Then there are the blind and the disabled. What about the arts? Who will provide the money for the arts in Scotland once the new system comes in? The transitional costs are, however, what cause me the most anxiety, and the redundancies.

One other matter which I wish to raise shortly is reporters to the children's panel and the reporting system in Scotland. The Western Isles raised an issue: they fear that they will lose the reporter to the children's panel because the system will be centralised in Inverness. I have no doubt that the noble Lord, Lord Gray of Contin, will be interested also. I should like to know whether the Government will give an undertaking that the Western Isles will have a reporter to the children's panel, irrespective of the structure with the director being in the Scottish Office. There are so many negative factors in the Bill. It contributes nothing to the well-being of Scotland.

In conclusion, there is also the matter of the directors of education and directors of social work. As I understand it, in England and Wales there is a statutory obligation to have a director of education and a director of social work. We in Scotland will be deprived of them. As I understand it, education will be a sub-culture of the leisure industry. To put education and leisure together seems to me completely nonsensical. It is up to each local authority to decide whether it has a director of education and a director of social work and the qualifications they should have. I raised the issue a long time ago. Would the Minister like to have his appendix taken out by a plumber? That is the way we are heading: "You don't need qualifications to be a director of education or a director of social work. You just speak to Jimmy Smith on the street and say, 'You are the director of education. We will pay you £60,000 a year. Thank you'". No doubt he too will say "Thank you".

I should like to know from the Government what plans they have in relation to directors of education and directors of social work. Will the Government give the people of Scotland an undertaking that there will be a statutory obligation on local authorities to have a director of education and a director of social work?

It boils down to this. There is no loss of face in doing a U-turn. The Government have done so many U-turns that another one does not matter. From this side of your Lordships' House we say to the Government: "Take the Bill away and bury it and come back when you have thought the whole thing through".

7.17 p.m.

The Earl of Balfour

My Lords, I am fascinated to follow the noble Lord, Lord Macaulay, after his comments. My experience in rural areas has been very different. I welcome the Bill because the past 19 years have proved to me beyond any doubt that city councillors do not understand the requirements of rural areas and probably rural councillors do not understand urban problems.

When the Local Government (Scotland) Act 1973 was introduced, the then Conservative Government really did create two Popes in Scotland—the Secretary of State and the chairman of Strathclyde—because more than half the population of Scotland was in the one region. The city councillors of Glasgow, by sheer numbers, would always be able to override the rural councillors of Strathclyde.

May I, as a citizen of East Lothian, say that as far as local government is concerned, I wish to get as far away from Edinburgh as possible and I am certain that rural areas more than 10 miles from any city have suffered. No new schools have been built in rural areas over the last 20 years, even when the local authority owned the land. I am sure that the rural areas of Grampian would be better without Aberdeen and Tayside would be better without Dundee. As for the roads mentioned by my noble friend Lord Gray, in the rural areas the roads are in a dreadful state. I am sorry that in the Bill's passage through another place East Lothian and Berwickshire did not combine because the industries and economies are identical. Hills do not divide an area but rivers separate. However, that did not have the backing of the majority.

In the present two-tier region and district system of local government there are substantial amounts of duplication of functions. For example, animal diseases, health and welfare are regional functions; but slaughterhouses are district functions; consumer protection and trading standards are regional functions; but markets, food hygiene, standards and labelling are district functions. Those are but a few items. Having all those functions under the management of the environmental health department of a single authority, as proposed in the Bill, should make for efficiency and economy.

There are also joint arrangements, where both the region and the district manage social welfare, building control and industrial and economic development. That also has led to duplication. I am delighted to see the reintroduction of the old word "convenor" because at least that word cannot be altered in the way that the word "chairman" has been turned into the ridiculous word "chairperson". Equally, I hope that any of the new local government areas which wish to call themselves counties can do so under the new Section 23 of the 1973 Act {described in Schedule 13 of the Bill on page 192). I never liked the words "region" or "district".

I can at least say that the present multi-system of local government in Scotland was one of the two main factors which saved us from having a devolved Parliament—like that which was such a disaster between 1603 and 1707. At present we have elections for the European Parliament, the Parliament at Westminster and regional, district and community councils. With a devolved Parliament, we should have become the most over-governed country in Europe. The other factor was that there was no indication as to how the devolved Parliament was to be financed.

What on earth has happened to British water and sewerage? Throughout the whole of my life I have had complete confidence in drinking water from any tap in any house, hotel or restaurant anywhere in the United Kingdom. Other than perhaps putting some paper on the sides of a lavatory seat, I have felt safe to use any public convenience. But in Europe it was a different story. I was advised in France, Italy and Spain to buy bottled water to drink. As for some of the public conveniences in Europe, I sometimes felt that it would have been better to go and dig my own hole.

Now I am told that in Scotland alone we are required to spend £5 billion to bring our water and sewerage up to European standards. The population of Scotland is only 5 million. Is there a misunderstanding of "wholesome water"? Within Scots law the words "wholesome water" have two meanings: first, "conducive to good health"; secondly, wholesome water is no more than "water which is not contaminated nor dangerous to health".

Let us not forget that the majority of the shares in the water bottling plants of Europe are owned by the national government of the country and therefore that that government has a vested interest in them. What is the point of European countries agreeing to European legislation and then having their governments do nothing to enforce that legislation? Let me give but two examples. Europe agreed to milk quotas 10 years ago. Italy, where milk is almost undrinkable, has steadily increased its milk production and is only now, in 1994, considering bringing in Europe's quota agreement. France, out of its own exchequer funds has subsidised its pig production, which is directly against CAP rules and detrimental to British food production. Britain, as a law abiding country, obeys the European rules and regulations to the letter, which results in our food production being priced right out of the market.

A little dirt never did any of us any harm. People of my age have developed an immunity to most bacteria. If food is off, we will smell it. But if our grandchildren are brought up on sterilised food and water, they will have no resistance. Let me give a true example. Despite being told of the position of a private water supply pipe on my estate which went to a dozen houses, the Electricity Board put a new high tension pole right through it. It did not even bother to pull the end of the pipe out of the ground. That resulted in the supply being polluted and it failed a test two weeks later. Nobody was ill. But in 30 years from now, with the present strict hygiene rules, those households would probably go down like ninepins.

At present there is a concessionary grant of 75 per cent. towards the cost of replacing lead water pipes and lead water tanks in houses. Unfortunately, that is not well known and some local authorities are not keen to make such a grant. I must say that East Lothian district council is very good. There is also a 75 per cent. grant for installing septic tanks for sewerage in rural areas. But I am concerned that under Clause 123 the Rural Water Supplies and Sewerage Act of 1944 is repealed.

7.29 p.m.

The Earl of Minto

My Lords, the first time I rose to speak in your Lordships' House was not so long after the last reorganisation of local government in Scotland. At that time I spoke as an elected member of the Borders Regional Council, which was one of nine regional councils in mainland Scotland. I spoke of our experiences to that date of the new two-tier system. It was possible even then to identify areas from which government had not withdrawn as had been intended within the Act of 1973. Yet it was sufficiently early to remain hopeful that local government would be allowed to fulfil its proper role.

It is fair to say that at that time all those involved in regional government were committed to the provision of services within the new structure. We saw the future as a worthwhile challenge and I believe that, had we been allowed to meet that challenge unimpeded, we would have met with success. The commitment of many to that same objective throughout the past 20 years has been absolute. Therefore I personally deeply regret that the constant interference and movement of the targets has not allowed the original purpose of the Local Government (Scotland) Act 1973 to be fulfilled.

However, that is now in the past. Today we are invited to look again at a new future. I remain a member of the Borders Regional Council, of which I have been Convenor for over four years. It is therefore against that background of the past and of the present that I should like to comment upon the content of the Bill before the House in four specific areas. First, I should like to declare a specific position: the Borders Regional Council has for many years believed that it should be a single tier authority. We believe that, as we provide 85 per cent. of the services in financial terms, it is absurd within our region to expect those we represent to shoulder the additional burden of financing four separate district councils—with all the costs that that implies—so that the remaining 15 per cent. of the cost of the services can be provided by them. For that reason I support the intention of the Bill to provide a single tier Borders council.

That having been said, when in October 1992 I first read the consultative document Shaping the New Councils, I assumed that the principles of local government as defined within it would form the substance of any forthcoming Bill. I assumed —I believe that I had good reason to make the assumption since that is what was clearly stated—that the reorganisation would aim to establish authorities large enough to carry out most local authority functions. To me Strathclyde could not and cannot be seen by the public as a local government authority. In saying that, I in no way detract from the very considerable achievements at political and administrative level of Strathclyde. Conversely, I assumed that the Borders, Dumfries and Galloway, the Highlands, Central Region and Fife would retain their separate identities. Each clearly fitted the principles as defined. And yet during the progress of the Bill in another place Central Region has been divided into three councils and the excellence of Highland Region and Fife has been challenged, as indeed that was challenged here this afternoon.

Following 1975, the people of Scotland learnt one thing above all else: that given an adequate numerical and financial base through the conjunction of the old counties, the new regions could bring to all areas a quality and a diversity of services previously undreamed of. The key to this lay, and lies, in that same numerical and financial base to which I referred. I must say that it fills me with dismay that the Government promote a situation in one area which will necessarily lead to the formation of joint authorities or joint boards for the majority of services. Joint boards are hugely expensive; they lead to untold frictions and run contrary to the democratic provision of services. For that reason during the Committee stage I trust that this House may right some wrongs. The acceptance of a number of non-viable authorities for the delivery of major strategic services is not an advance; it is a step backwards.

For my second point I turn to a vein that runs throughout the Bill, about which in Scotland there is a proper concern. As your Lordships are well aware, the people of Scotland have always expected from their leaders an explanation of the direction in which they are to be led. In the terms of the Bill, it would be reasonable for those I represent to expect me to be able to give them that assurance. That I am not able to do for the simple reason that within the Bill the Secretary of State for Scotland takes unto himself powers to regulate, guide or consent within no fewer than 97 areas. That is far too many. The noble Baroness, Lady Carnegy of Lour, made mention that there had to be some flexibility. I accept that. But for 97 areas to take regulations, guidance and consents is really too many. Surely it must be reasonable for this House to expect as much as the people of Scotland, and surely at the start of a new era within local government, authorities should not be expected to operate within a framework of undefined secondary legislation. It is not good for the future of government, whether central or local, and it bodes ill for the future.

Thirdly, I turn to the timetable as defined within the Bill. I do not believe that I would be justifiably challenged if I were to claim that the Bill amounts to a massive change which will require time for retrenchment. That being the case, I ask Her Majesty's Government to think very seriously of the implications of extending compulsory competitive tendering within the proposed timescale. With the best will in the world, the contents of the Bill will be hard to implement by April 1996. That is an important statement of fact. The council of which I am Convenor has that will and I believe that it will achieve that objective. But I do not believe that it will be able to implement the changes required and at the same time undertake the requirements of extended CCT. When I say that "we" cannot do that, I ask the Government (who know me) to consider the likelihood of the success of other councils. I say to the noble and learned Lord the Minister that if the Government want the Bill, when enacted, delivered properly, it is absolutely vital that the extension of CCT is delayed for at least a year beyond 1997.

My fourth and final point is very close to my heart. It concerns the present and future of our employees within local government in Scotland. All of us who are or have been employers know the importance of the relationship between us as employers and those we employ. Your Lordships will agree, I think, that that relationship should be no less important in one area of employment than in another. I do not need to remind the House that local government is a national public service. In a major reorganisation the employees of this public service are surely entitled to treatment which is both equitable and fair. It is therefore quite unacceptable that the compensation arrangements which it is believed the Government intend to produce will leave it to the discretion of individual authorities as to the extent to which compensation will be awarded in individual cases.

Local government officers move from authority to authority, just as civil servants in Scotland move from one department to another. In my view it would be inconceivable that in any reorganisation of the Civil Service in Scotland different compensation terms might be offered to individual civil servants for no other reason than that they happen to work in different departments at a particular time. Surely, therefore, the same should apply to our local government officers.

The total upheaval which a major reorganisation brings to a service such as local government is enormous. The success of such a massive exercise as is defined within the Bill is largely dependent on local government staff and, in particular, on senior and middle managers. Many of them will be required to work long additional hours under considerable pressure if reorganisation is to be achieved by 1st April 1996. Those who are and will be under the greatest pressure are those who have the greatest uncertainty about their future careers. Some will lose their jobs. Some may never work again. Despite all this, the very highest standards of professionalism will be expected of them. The very least which these people are entitled to expect is that, if they do lose their jobs or suffer a diminution of their present role, the compensation terms set by government will be fair.

In previous reorganisations in Scotland and England, as your Lordships would expect, there was acceptance that equitable terms of compensation were awarded. On this occasion I am not so sure. I feel that the early indicators are that compensation terms will fall well short of previous settlements. Therefore, as an employer I feel it my duty to warn the Government that a lack of fairness in dealing with the staff at this time could jeopardise the whole reorganisation process. Such a miscalculation is fraught with dangers.

The Bill before your Lordships is one demanding massive change. It will affect every man, woman and child in Scotland. I do not believe that this Bill has the support of the majority of those who understand it. For that reason, if it is to succeed the Government must pay heed to those of us who are elected to serve the people and who are prepared, as I am, to act and speak only, out of deep knowledge, in the interests of those for whom we care and for whom we have compassion and understanding.

I have tried to illustrate four areas in which the Bill could be improved. I have tried to warn of the consequences of blind actions. These warnings, while very serious, are given with my very best of intentions and I hope they will be heeded.

7.43 p.m.

The Earl of Dundee

My Lords, during the 1992 general election, as has been said, every political party in Scotland supported single-tier local government for Scotland. Since then, however, and noticeably during the earlier stages of the Bill in another place, we have heard one or two voices of dissent. No doubt this apparent change of heart and mind reflects the healthy and enjoyable pastime of party politics. Nevertheless, there have been a number of criticisms which should be evaluated carefully.

Nor, of course, does it necessarily have to be inconsistent for those who said they wanted single-tier local government in 1992 to deny that they want the same thing two years later; that is, provided that it is a particular interpretation of single-tier local government which they now refute, such as that proposed in the Bill, rather than the principle itself of single-tier local government, to which they have already given a commitment. Indeed, the noble Lords, Lord Carmichael and Lord Thomson of Monifieth, made their position plain by linking approval of single-tier local government to the prior existence of a Scottish devolved parliament.

Conversely, however, as was very ably expressed by my noble friend Lady Carnegy, the functioning of any future Scottish assembly would be all the better for the prior existence of single-tier local government. Yet it has been contended that the formula currently put forward for single-tier local government would be more expensive, less efficient and less representative than what is already in place and that the people of Scotland are not in favour of it.

Regarding comparative costs, however, Scottish Office figures indicate net savings by 1997–98. These estimates are supported by most of the present Scottish councils themselves due to be reformed. Certainly, one important aspect is the cost of reorganisation. This will depend on how effectively the old councils are wound up. The Scottish Office now estimates that cost to be about £190 million. Several of your Lordships have expressed concern that that budget figure needs to be much higher and have inquired how the Scottish Office figure has been arrived at. It is always a great pleasure for any of us in any context when we find that a budget is eventually matched by reality. It could even be the case that this budget will be matched by reality. But if it is not, I should not have thought that it would be widely divergent.

Equally, when one compares the different types of running costs before and after reorganisation, and even before one has looked at comparative cost details at all, there is the obvious presumption of saving money. This comes from the avoidance of double handling and from the removal or mitigation of what Lord Wheatley recognised as the "criss-crossing of responsibilities" contained in a multi-tier structure until that may be replaced by single-tier local government.

Nevertheless, while the latter point might be conceded and cost savings even acknowledged by opponents to the Bill, it could still be objected to by them, as indeed it has been objected to by, among others, the noble Lord, Lord Carmichael, that the suggested structure, which includes 29 new authorities, will lose the economy of scale inherent within the present distribution of nine regions. In theory that argument holds up well. It influenced Lord Wheatley 25 years ago. Indeed, at that time single-tier local government would have given rise to disproportionate costs in a way which need not happen now and for reasons which fortunately no longer apply.

If that is so, why is it so? First, there is the difference between the previous local government role of direct disbursement of services suited to multi-tier local government and its present enabling role, which is better suited to a single-tier system, as my noble and learned friend the Minister pointed out earlier on. Competitive tendering is an obvious example, among several others, of the changed character of local government which now seeks to enable the provision of services rather than to control directly that provision. This is not to overlook that some of the new authorities may well fail to co-operate or combine to perform service functions where logically they should. With that in mind, but only as a last resort, the Secretary of State will have the power to require two or more local authorities to form a joint arrangement if they do not manage to give service in a particular area.

Then we come to the allegation that the new arrangements emanating from the Bill are undemocratic and that hardly anyone in Scotland approves of them. To substantiate a case along those lines a number of points would have to be established; first, that the Bill would make local government more remote from people than it already is; secondly, that there has been a poor attempt only at consultation which did not elicit proper responses which could form the basis of the Bill; and thirdly, that the Government have not managed to accommodate people's views and concerns either during the consultation period or while the Bill has been under discussion in another place.

However, when we look at the facts, none of these allegations is really able to stand up. Starting with the consultation paper two years ago, there has been a thorough canvassing of opinion and a clear message that local solutions are required to meet local needs and to improve accountability. Nor is there evidence that the Government have failed to listen or failed to adapt, whether in response to anxieties about water provision, joint boards and affiliated bodies or to concerns about boundary changes, a number of which have already been accepted in another place. Clearly, there are a great many matters which we shall have to address when we come to the Committee stage here. None of us would wish to go too far into the details of these just now and indeed none of us has. Of course, some general aspects, including the question of boundaries, are closely tied up with the principle of the Bill.

Today I would like to mention briefly the situation in Fife, where I live. So far within the Bill as it is a single-tier authority is proposed to correspond to the area of the present Fife region and thus to give a constituency of 343,000 people. This really would be too large to be properly accountable to its electorate or truly representative of the interests and wishes of different communities within Fife, as my noble friend Lord Cochrane has already pointed out.

Under the two-tier system, as the noble Lord, Lord Hughes, mentioned, Fife has given a very good model. Indeed, Fife region has performed fairly ably. However, when the matter was discussed in another place and in the context of single-tier local government, two aspects were chiefly taken into account: first, the case for keeping the full boundary of Fife given that this boundary had been especially preserved during the local government reorganisation in the 1970s; and, secondly, the arguments for creating within Fife three single-tier authorities, which was the substance of the amendment put down in another place.

Regarding the first point, Ayrshire is now a good illustration of the fact that local government arrangements are a separate issue from preserving historic county boundaries. The 1970s campaign, to which my noble friend Lord Gray of Contin referred, was launched to prevent Fife being split between Lothian and Tayside regions. But that is in no way parallel to the position today.

Regarding the second point, while the proposal to form three authorities had its merits, if implemented it might not have produced, consistent with the aims of this Bill, the balance of scale and accountability which can be achieved by forming two divisions only. That is why there is now solid support for the proposal to create a separate East Fife and a separate West Fife authority. I would ask my noble friend the Minister and all your Lordships for your help in examining this case when we come to it in Committee.

Meanwhile, as we discuss the general arrangements and effects of this Bill at its Second Reading, many of us will be very grateful to have on course a system of local government in Scotland which will, I believe, in spite of the strictures of my noble friend Lord Stodart on the subject of confusion, be much less muddling, fairer and cheaper and, notwithstanding allegations to the contrary, local government which succeeds in respecting the wishes of different areas and communities.

7.57 p.m.

The Earl of Mar and Kellie

My Lords, I am glad of the opportunity to speak today about the proposed reforms of local government in Scotland and to thank the noble Lord, Lord Hughes, for his kind words in anticipation. I have been a local government officer in social work for many years. I am one of those who was caught up twice in the local government reforms of the 1970s, both in England while working in Sheffield and then in the Grampian region. To see Scottish local government apparently up in the air again is superficially depressing and certainly anxiety-provoking for staff, elected members and communities.

The fundamental of these reforms is the improvement of the local government service to the locality. Effective service provision is the goal. A quality service enhancing the sense of community and a feeling of moving forward together, are what is needed. To this day, as has been alluded to before by the noble Lord, Lord Stodart, there is confusion about which council, regional or district, delivers what service despite 20 years to get the message over. While working for the Highland Regional Council in Inverness I noticed that the people generally spoke of the county and the town. The public failed to identify with the two-tier structure of regions and districts. Some regional councils have become remote and bureaucratic. District councils have been better able to identify with their localities.

So what is needed for Scotland? The Scottish people are accustomed to self-determination within distinct and identifiable communities. Governments in Scotland are expected to serve the people. What is required is local government which will respond to the people's desires and aspirations, which will show leadership and move forward to create the type of society that the Scottish people want.

At the local level, councils are currently achieving these objectives to varying degrees and there is a need for fine tuning. I offer this specification for a successful local council. First, it will be clearly identified with by its community. Secondly, it will have a dynamic culture aimed at improving its district and responding positively to local needs. Thirdly, it will be forming partnerships with other government agencies, community organisations and the private sector; and achieving high levels of investment leverage in so doing. Fourthly, council staff will feel personally responsible for the service they administer and deliver. Fifthly, the decision-making processes will be streamlined. Sixthly, there will be a simplified committee structure. Seventh: the staffing organisation will be a flat pyramid, eliminating the possibility of bureaucracy. Eighth: it will be accessible to individuals and groups. Ninth: above all, the community will be proud of its local council and be getting value for money.

I know that it is easy to put down a set of what may appear to be ideals. In fact, I know that that can be done. I cite as evidence the experience of my home area, Clackmannan. It is for special reasons that the "wee county" has fought for its independence. I am particularly happy to praise the Government for the decision to give Clackmannan its own unitary authority. That is exactly what the people of Clackmannan want. The initial proposal to merge (or submerge) Clackmannan with the district of Falkirk provoked 15,000 out of the 47,000 residents to petition the Secretary of State not to proceed with such an extraordinary proposal. Clackmannanshire may have been called "the wee'st county with the langest name". Size is no reflection of the strength of community or the historic ability of the Clackmannanshire people to look after their own affairs.

Since 1822, local government has been based in Alloa. Before 1975, the Clackmannan County Council, along with the town councils of Alloa, Alva, Dollar and Tillicoultry, provided all local services. There were successful joint board activities for policing with Stirlingshire and, more radically, for water supply. Perth County Council and Grangemouth Large Burgh joined forces with Clackmannanshire County Council to build the Loch Turret reservoir. Clackmannanshire thrived while other small counties had to merge—Kinross with Perth, Cromarty with Ross, Nairn with Moray. As regards the Central Regional Council, I have to say that few Clackmannan people have felt able to identify with Central region. That council's priorities always seem to be in other parts of the region, in Stirling or in Falkirk.

Perhaps the most interesting argument about small councils is about economies of scale. Under the typical council with its bureaucratic structure, I agree that a small council would not be viable and would be too expensive. But if the council has eliminated bureau-cracy, minimised staff into the flat pyramid model and streamlined the committee procedures, as Clackmannan District Council already has done, those worries are diminished. Ultimately, it has to be about quality of service.

I should like to turn briefly to the proposals for the Highland region and its eight districts. As the prison social worker at Porterfield Prison in Inverness, I had a unique view of the Highland region. It is a vast geographical area. There are cultural differences in the people: Celts in Lochaber, Norse in Caithness and Gaels in Skye. Above all, there are incredible distances between remote settlements. The proposal for a single unitary authority for the Highlands can hardly be described as "local government"—possibly it is regional government.

I urge the Government to amend their plans and to create two councils for the Highland region. I cannot see how a single council for 200,000 people in such a large area can be responsive to local needs or be easily identified with, especially with uniquely limited representation.

To conclude, effective unitary authorities are vital to Scotland's local communities. Local government is, of course, a relative term. Lying to the north of Scotland is the independent state of the Faroe Islands with a population of 45,000. Set that against any worries about Clackmannan.

8.1 p.m.

Lord Burton

My Lords, I believe the Bill to be fundamentally sound. It must be right to set up unitary authorities. No doubt a number of points require tidying up and, in connection with those, I should like to refer particularly to the remarks of the noble and learned Lord, Lord Cameron, on voluntary bodies. I know that there is considerable concern among such bodies. The noble Lord, Lord Carmichael of Kelvingrove, referred to the time schedule for getting the Bill through Parliament in time for the new authorities to be set up. I believe that that is another problem.

However, there is one major flaw in the Bill. One-third of the land mass of the whole of Scotland has been lumped into one authority with a population of 203,000. It is among the biggest authorities in Scotland in terms of population, as well as being the biggest in terms of land mass. In no way can it be called a "local authority". A land area bigger than Wales would be involved. Can that possibly be right?

Berwickshire and East Lothian have managed to persuade the Government to divide them—quite rightly —but for the whole of the Highlands to have only one authority would be a far more serious problem than if Berwickshire and East Lothian had remained as one. Ayrshire has been allowed to divide. Argyll has been allowed to break away from Strathclyde—once more, quite rightly. But why should Caithness, Sutherland and Ross-shire be left dominated by Inverness?

My noble friend Lord Stodart of Leaston spoke of viability. How right he was. However, there is one blessing. If I am not mistaken, all that is necessary is to change one line in Schedule 1 of the Bill. There may be one or two other minor amendments to be made, but surely the other place cannot complain given that it scarcely discussed the Highland Region.

I have served on local authorities within this one-third of Scotland for over 30 years. I served for many years on Inverness County Council, of which I was chairman of the roads and parliamentary Bills committees. I was chairman of the old Inverness District Council for many years and more recently I spent eight years on the current Inverness District Council. I have thus seen the changes, many of which have not been for the better.

During my time as chairman of the Inverness roads committee, one of the biggest-ever developments in the Highlands took place—not as my noble friend Lord Gray of Contin indicated under Highland Region, but under the old Inverness County Council. That was largely thanks to my noble friend Lord Campbell of Croy who was Secretary of State at the time. We had the advantage that he lived in the North. The A.9 from Perth to Inverness was upgraded to its present standard. Those improvements are now largely out of date, but one wonders what would have happened in the North if they had not been carried out in the early 1970s.

The next items on our shopping list in 1975 when we were reorganised were the A.82 from Inverness to Fort William and the South; the A.96 to Aberdeen; and a bypass round Inverness. Now, after 20 years of Highland Region's jurisdiction what do we have in the way of those three vital pieces of infrastructure? I can tell your Lordships that the answer is very little.

What we have is a huge increase in the population of Inverness to over 60,000. The sewage for that large number of people is still being discharged crude, into the Beauly Firth. I do not think that that speaks well of local control of water and sewerage. I agree with the Government —I may be rather a lone voice in this—that the matter needs a great deal more push than Highland Region is able to give it.

Our rates have rocketed. That is little wonder when Highland Region employs 10,000 people. That is a real growth industry for which those of us who live in the North have to pay very large sums of money every year for very little return.

My noble friend Lord Gray remarked on bureaucracy in Strathclyde. I am afraid that that applies to the Highland Region also. Now the proposal is to build on that bureaucratic mass by giving them more to do. But who is it intended to have as councillors to attempt to administer this vast area, to drive for miles and miles around the Highlands and even to around their own wards? The ward in which I live, just outside Inverness, is 30 miles long with two large glens cutting into it— and that is not the biggest ward in the Highlands by any means. The old Inverness County Council was really too big when some of the outer islands were included. The amount of paperwork through which new councillors will have to wade will be enormous. Now no businessman can afford the time required to do council work properly. I know that my business has suffered over the years from the loss of the time which I should have given to my own work but which I devoted to local government.

Since its inception in 1975, between 42 and 55 per cent. of Highland Region's seats in the Highlands have returned councillors unopposed. Nearly 50 per cent. of councillors are returned unopposed at elections because there is no one else to take their place. I imagine that my local councillor would have been out on his neck long ago if we had a reasonable candidate to stand against him. There just are not the people available to do the work, and now the Bill seeks to exacerbate the situation. Highland Region would be a complete bureaucracy. Many in the Highlands understand this, as when the System 3 opinion survey of 1,000 people from all parts of the region was taken, 83 per cent. were in favour of smaller unitary councils. Are we to have bureaucracy or democracy? Is the voice of the majority, and a big majority at 83 per cent., to be listened to?

There seems to be a prevalent view that if there were two authorities the two centres for those authorities would be Inverness and Dingwall. In fact, the northern authorities have been having discussions in the hope that they will be divided into two and that there will be a major base in Dornoch where there is already a council chamber. Another view which is being floated is that the two authorities would cost twice as much as one. This, of course, makes the Highland Region costings very suspect. For instance, there are currently six educational psychologists in the Highland Region. It was said that the two authorities would need 12, but surely if an authority with six educational psychologists is divided into two authorities, that makes three each. As I have said, the costings do not seem correct.

My noble and learned friend the Minister referred to the pendulum swinging too far and to the loss of local government. Perhaps he can organise a change for the Highland Region in the Bill by dividing it into at least two authorities.

8.10 p.m.

The Earl of Kintore

My Lords, the advantage of speaking last after so many speakers is that there is little left to say, except to assure your Lordships that an excellent speech lies shredded in the wastepaper basket in the Library. I much enjoyed the speeches of the "School of '73" which was involved with Wheatley, and the powerful speech of my noble friend Lord Palmer. I thank the noble and learned Lord for introducing this important Bill, and wonder whether I may address just one clause (Clause 108) which relates to the right of objection to the proposed laying of water mains.

I know that landowners can object to a sheriff if they cannot agree to the laying of a main; but that should never have to happen, provided that there is advance notice and discussion about the line of the pipe. Laying a main is an inconvenient operation for the owner or occupier of land. Mains do not have to be laid in an emergency, so surely a proper legal basis could be introduced, similar to the rules to which other utilities have to adhere. I believe that the Scottish Office feels that there are cogent arguments for not putting the laying of water mains onto a proper legal basis. I wonder whether the Minister would write to me on those arguments, if he does not mention them in his reply this evening.

8.11 p.m.

Lord Ewing of Kirkford

My Lords, we have had a fairly long and interesting debate. It would seem strange for me to complain that I could have listened to another two speeches, but the two speeches that I should have loved to have heard today, and which have not been made, would have been made by the noble Lords, Lord Campbell of Croy, and Lord Younger of Prestwick—the architects and the driving force behind the 1973 Act which has been so savagely dealt with in speech after speech during the course of our debate. It was interesting when, midway through the debate, reference was made to my noble friend Lord Hughes moving the amendment to break Strathclyde down into four sub-regions, which was carried here in your Lordships' House but which was defeated when the Bill returned to another place.

In actual fact, the amendment was first moved in Committee on the 1973 Bill by Bruce Millan who is now the European Commissioner. It was dismissed out of hand. It was just demolished by the noble Lord, Lord Younger, then George Younger, the Under-Secretary of State who was dealing with the Bill.

The noble Earl, Lord Dundee, said that in the 1992 election all the political parties had in their manifestos that they were in favour of single-tier unitary authorities. I shall come to that in a minute. I find it interesting to see how views have changed. It is almost as if we have to forget the 1973 Act, and the confident views that were being expressed at the time that that was the form and shape of local government that was to take us, as the noble Lord, Lord Stodart, said, into the 21st century. There was a degree of certainty about those debates that I found surprising. It was reminiscent of the degree of certainty with which the legislation which introduced the poll tax was brought forward. There was that same degree of certainty when the poll tax was introduced: that that is the new form of local government finance which will outlive time itself — and, lo and behold! where is the poll tax now? It is consigned to where it should always have been—in the rubbish bin—at a cost—we talk about local authorities spending money—to the United Kingdom taxpayer of £400 million in Scotland alone. I do not know what was the figure for the rest of the UK, but the cost to the taxpayer of the Scottish fiasco alone was £400 million.

The reason I introduce my remarks in that way is to caution the Minister about the confidence and certainty with which he has moved the Bill. The Minister, the noble Lord, Lord Gray of Contin, and one or two other noble Lords, have mentioned the fact that in another place the Bill was subject to extensive debate. It may well be my suspicious mind, but if the implication of that remark is, "Well, your Lordships do not really need to give it that much consideration", I have news for the Minister. We are going to examine the Bill line by line. We are going to give it the same detailed consideration as was given to it in another place. We are prepared —I make this offer to the Minister—to stay here as long as is necessary to consider the Bill.

The amendments that we put down as an Official Opposition have to be understood to be tabled against the background that we do not want the Bill in the first place, and our amendments will be designed to improve what is basically a very bad job. It will be difficult, but that will be the purpose of our amendments.

There is one other point that I want to place on the record, because it should not go unsaid. I hope when he replies the Minister will say something about the timetable, because it seems to me that the Government are running up against a very, very serious problem in relation to the timetable for the elections next year. Ian Lang, the Secretary of State, has always said that the Bill would be on the Statute Book before the House went up for its Summer Recess. That is not going to be the case. The Bill will not get Royal Assent until early in November, just before the State Opening of the new Session, and that must have serious implications for the timetable.

The Boundary Commission is not to draw up the new ward boundaries. That is to be done in-house by the Scottish Office. The job has been taken away from the Boundary Commission, and that task is to be set to civil servants in the Scottish Office. But the draft electoral register will be published on 10th October this year, and there is no possibility of that draft register having ward boundaries in it. The register proper, published on 5th February 1995, seems to me also to run the risk of not having ward boundaries in it, and therefore it would be impossible, in my view, to hold elections in 1995 on a register which does not contain ward boundaries. The Minister should make a statement in his wind-up, and if not during the wind-up, certainly in Committee, about what is happening to the timetable of the Bill. It is a serious point. Local government is entitled to know what is going to happen. The sensible thing for the Government to do is to delay the whole thing.

If the Bill is not implemented—I put this on the record —by the time of the next general election, an incoming Labour Government will cancel the whole exercise. The noble Earl, Lord Dundee, mentioned that all parties had in their manifestos that they were in favour of single-tier unitary authorities. That is true; but we did not have in our manifesto—although I speak only for the Labour Party, I am sure that I am right in saying the same of the Liberal Democrats, the Scottish National Party, the Greens and all the other parties that contested the election—that in conjunction with the single-tier unitary authorities we were going to set up a whole plethora of quangos. That was not part of our manifesto. Part of our manifesto was also that the question of local government in Scotland would be considered by an independent commission. That is one of the fatal flaws in the Bill.

The noble Lord, Lord Thomson of Monifieth, mentioned the amount of material that we have been receiving from local authorities and organisations which are interested in the Bill. The reason we are receiving all those representations is that there was no independent commission to which those representations could be made. When the Wheatley Commission started, all such representations were made to that commission. In this case, because there was no independent commission and no confidence in the way in which the consultation process was conducted, these representations are now being made to your Lordships as they were, no doubt, to Members of another place.

Like the noble Earl, Lord Dundee, I shall not go into the detailed points that we intend to debate in Committee. However, I shall mention two issues. The noble Lord, Lord Gray, asked whether I could tell him the cost of the Clyde referendum on the future of the water and sewage industry. It worked out at just less than £600,000, or 37 pence per elector. Perhaps I may complete that picture by pointing out that the noble Lord's area of Argyll and Bute—the Bill proposes to create a council based on Argyll and Bute —was the seventh highest participant in that referendum. Of the 48,000 ballot papers sent to the electors of Argyll and Bute, 35,000 were returned. Not only did they have the seventh highest participation rate, they had the highest "no" rate. I do not suggest that the noble Lord, Lord Gray, is out of touch with the people beside whom he lives but it seems to me that they too fully understood the question that was posed in the referendum.

I must say to the noble Earl that I do not accept that there is overwhelming support for the proposals to split Fife in two. I too live in Fife and I have found no one in my locality who is in favour of what is being proposed basically by North East Fife district council. I give notice that I shall argue vigorously to seek to persuade your Lordships to preserve Fife as a unitary authority.

I am sorry that the noble Lord, Lord Cochrane of Cults, is not in his place. Nevertheless, I wish to place on record the fact that it was unfortunate that he should have referred to the Fife region as he did in connection with the payments that it gave to miners during the miners' strike under Section 12 of the Social Work (Scotland) Act. That money has been repaid. In relation to the inquiry into the social work department, I must say honestly that I do not know a social work department in Scotland that has not had an inquiry into the matter. The very nature of social work leads to inquiries from time to time. The delay was caused not by Fife region but by the Scottish Office and by the length of time that the reporter took to compile his report and to report his findings. That delay had nothing to do with Fife region and it was unfortunate that the noble Lord, Lord Cochrane, should have raised those two issues.

Another feature of our debate has been the way in which, in order to justify a proposition which might come forward in Committee, some of your Lordships have criticised the existing councils. I do not accept that criticism. There is a whole host of good people of all political parties and of none who are serving on the councils that are to be abolished. We ought to record our thanks to all those people who give of their valuable time. All right, we might not agree with some of the things that they do but they are just as sincere as us. I must say to the noble Lord, Lord Burton, that it comes strange from the security and comfort of your Lordships' House that we should talk about turfing out councillors if we can get someone to stand against them. There is no danger of any of us being turfed out and we ought not to raise that spectre.

I shall not deal in detail with the points that we shall raise in Committee. This is an unwanted legislation and it is being forced on an unwilling population in Scotland by an unpopular government. I shall not overstate the case by saying that there is no support for the Bill. However, there is little support for it for the simple reason that the consultation process was so restricted, and no independent commission was established as there was in England.

The noble Lord, Lord Cochrane of Cults, returned to his seat about two seconds after I criticised him. If when he reads my comments in Hansard tomorrow he wishes to raise the matters with me, I shall willingly discuss them with him.

Lord Cochrane of Cults

My Lords, I am grateful to the noble Lord, Lord Ewing. I was unavoidably detained and in no circumstances will I complain about whatever he was kind enough to say about me.

Lord Ewing of Kirkford

My Lords, the noble Lord is generous to a fault. As I said, there is little support for these proposals and the Government must know that. They have received plenty of correspondence from people and plenty of submissions from chambers of commerce. It has been received not only from political parties and people in local government but from chambers of commerce, as the noble Lord, Lord Thomson of Monifieth, mentioned about Tayside. The Small Business Federation has complained about the cost that will be imposed on small businesses as a result of this reorganisation. If anyone believes that the 37 pence per elector in Argyll and Bute was costly— indeed, that was the cheapest referendum ever carried out in any part of Europe—they must wait to see the cost per elector of this reorganisation. They will wish that its implementation was 37 pence per elector. There is no support, and the Minister should recognise that and seriously consider withdrawing the Bill.

There is also the question of the water industry. My noble friend Lord Hughes said that I would refer to the matter in my speech and I am pleased to do so. The quangos that are to be appointed and set up are Scotland's Police and Magistrates' Courts Act issue. Your Lordships will recall that Act, which was passed through your Lordships' House recently. The great issue was that the Home Secretary was taking to himself powers to appoint the police boards, and not only to appoint the boards but their chairmen. Your Lordships' House imposed on Her Majesty's Government a provision which stated that these boards must be made up of a majority of local authority representatives and that not the Home Secretary but the board should appoint its chairmen.

When we discussed the water industry quangos that are to be established, part of my argument will be that all of the members of the quangos, not just the majority, should come from the local authorities in the area which are covered by the three major quangos. As indicated by my noble friend Lord Hughes in his comments about the situation during the past 150 years, there is no need to bring in so-called "outside" experts. Local authorities have had their own experts for many years and they are just as capable of running the water industry as some mystical outside expert or consultant who the Government are thinking of appointing.

I am against the establishment of the quangos. In Scotland, water has always been a local authority function as distinct from the position in England where the water boards were not part of the local authority set up. The reason for that was that the vast area of the English Midlands took its water not from England but from Wales. That was dealt with by the establishment of the water authorities. I admit that it was easy for the Government to privatise water in England. They would love to do it in Scotland but the reason they are finding it so difficult is the history of the water and sewage industry. It has always been a local authority function. The proposals on water and sewage will provide the centre-piece of one of our debates in Committee.

I conclude where the Minister began. He began by saying that there had been widespread consultation. There is one clause in the Bill—it is Clause 149—on which there was no consultation whatever. Clause 149 makes provision to abolish rates on sporting estates. That is not to take effect from 1st April, 1996, when these councils come into being; but it is to take effect from 1st April next year. Yesterday the chairman of the Ratings and Valuation Appeal Tribunal, in conjunction with his 10 colleagues, heavily criticised the Secretary of State, Ian Lang, because the first that the rating and valuation people knew about that proposal was when they read it in the press. That body was considering three appeals against rateable values on sporting estates not knowing that the Secretary of State was going to introduce a clause in the Local Government (Scotland) Bill which would abolish rates.

No account whatever was taken of the roads leading to the estates or the fact that the children of the workers who work on them use the education system. No account was taken of the massive sums for which those estates change hands. Without any consultation, the Secretary of State introduced into the Bill Clause 149 to abolish rates. The Minister cannot deny that. There was no consultation. If that is one clause on which there was no consultation, I have absolutely no doubt that there are many others. We shall tease that out in Committee; but in the meantime, I look forward to hearing the Minister's reply with particular reference to the timetable problems on which I concentrated in the early part of my remarks.

Lord Gray

My Lords, before the noble Lord sits down, I should like to ask him this. Will he accept that I merely suggested that the £600,000 had been wasted because the answer to the referendum was predictable? As the noble Lord, Lord Carmichael, pointed out, it was an emotional vote. I was merely saying that had the people had proper information on what was the situation, an objective vote might have gone the other way.

Lord Ewing of Kirkford

My Lords, I do not accept that the £600,000 was wasted, nor do I accept that the outcome of the referendum was predictable. It is worth noting that in the run-up to the referendum government Ministers, by using the Scottish Office Press Office, were expressing strong criticisms and trying to persuade the people taking part in the referendum to vote the opposite way.

When I was a Scottish Office Minister, we had four or five press officers. There are now 32 press officers working in the Scottish Press Office. That is about four press officers for every Tory MP in Scotland. They could not get their message across. Still the people of Strathclyde said no. That is a failing on the Government's part.

8.34 p.m.

Lord Fraser of Carmyllie

My Lords, I am grateful that at this hour this long and extended debate is coming to an end. I begin by saying that I am grateful to those of my noble friends and others who extended a substantial welcome to the change, which we had included in our manifesto and which other political parties had included in their manifestos, that we should move to single tier authorities.

I am grateful also to those who have indicated that while they may not be wildly enthusiastic about the proposals in the Bill, nevertheless, they are prepared to debate this matter and come forward with constructive proposals. I look forward to those detailed debates.

First, I deal with the issue of boundaries in particular areas, which has taken up some of the time in the debate. The noble Lord, Lord Carmichael, may be one of the last people to be accorded the freedom of Strathclyde in recognition of his mastery of the brief on behalf of Strathclyde. However, I doubt whether he will be quite such a welcome visitor in Clackmannan, the home of the noble Earl, Lord Mar and Kellie, for his view about the viability of that small authority.

The noble Earl, Lord Glasgow, suggested that the approach to the areas of Scotland has been flawed by the fact that there has been no independent commission. I make two points about that. Indeed there is an independent commission on this side of the Border, but I should have thought that anyone who had followed its activities would not have thought, for example in Derbyshire, that it had simply reached the conclusion which satisfied the local people. Similarly, although what was proposed by the Wheatley Commission was part of a Royal Commission and its assessment of the situation, as I was at pains to point out, when that Bill came before this House and another place there was no agreement to accept the Royal Commission's recommendations in relation to areas. There was strenuous debate and substantial change was achieved.

It is a matter of some interest that while running through the contributions this evening a number of views have been expressed that we should keep to larger authorities rather than reduce downwards in size, in another place there were only three Divisions in Committee and on each occasion, the attempt was to make the area smaller.

I was grateful to my noble friend Lord Stodart for reminding me—and I was intrigued to be reminded— that Falkirk District Council made representations to him that it should be a single-tier authority. I shall look forward to reviewing the papers to see whether a distinguished ex-Member of Parliament for Falkirk supported that representation back in the 1980s, if he recalls that at all.

From the debate it seems to me that there are two areas which have attracted some interest. The first is that of the Highlands. We have heard the arguments outlined briefly in favour of two authorities for the Highlands. Nevertheless, it has brought together some strange bedfellows when my noble friend Lord Gray of Contin prays in aid Sir Russell Johnston as offering wide experience of the Highlands with regard to what is a desirable solution.

However, I appreciate from the contributions of my noble friend Lord Burton, the noble Viscount, Lord Thurso, and others that there is a difference of view in that regard. I anticipate that we shall return to that matter. I should like to hear some answers to the point made by my noble friend Lord Gray as to what is the separate identity between the north and south Highlands. It might be slightly curious if the centres of those two authorities were to be located at Dingwall and Inverness. That would still leave the noble Viscount, Lord Thurso, with a considerable distance to travel from his home in the centre of the northern Highlands to Dingwall.

My noble friend Lord Dundee put forward the proposal that Fife should be divided in two. Again, we shall listen to what he has to say about that although I understand also the argument advanced by the Opposition Front Bench in favour of the retention of Fife as a whole.

There have been proposals for major alterations but there are difficulties with regard to small areas. The noble Lord, Lord Thomson of Monifieth, may recollect that his own party conducted a referendum in Monifieth to determine whether or not it should be retained within Dundee. The people answered overwhelmingly that they wished to be part of Angus. The noble Lord's party seemed to go rather silent with regard to that particular alteration after it discovered that news. Doubtless we shall return to some of those areas at a later stage.

I shall be surprised if the noble Lord, Lord Ewing of Kirkford, advances, for example, a proposal to return to a central region as a single authority against the clear views of one of his honourable friends, Mr. O'Neill.

Lord Ewing of Kirkford

My Lords, I am grateful to the Minister for giving way. I make my position clear. I am prepared to argue a central region case. I do not take my cue from Members of another place. I prefer to argue a central region case. That case has never been argued.

Lord Fraser of Carmyllie

My Lords, I look forward to hearing that with keen anticipation.

The noble Lord, Lord Carmichael, said that he would nail the myth that a Scottish parliament would take away powers from local government. Without going into the matter in any detail, I invite him to look at the proceedings of the Committee stage in another place where Mr. John Home Robertson had something to say about the taking of powers from local authorities to an assembly. It may not surprise the noble Lord that sometimes he has wayward views but what is more interesting is that, as I understand what was said in Hansard, the honourable Member was in large measure supported by the Shadow Secretary of State for Scotland.

One of the other main themes with which we were concerned was that of cost and viability. My noble friend Lord Stodart said that the only argument on which we foundered was that there was some confusion about the responsibilities in local government. With respect, I hope that my noble friend will look to see what I had to say. As my noble friend Lady Carnegy of Lour appreciated, things have moved on in local government. What is considered to be viable is now rather different because local authorities in Scotland have realised that they do not have to be the direct providers in all cases.

If the noble Lord, Lord Ewing, wants me to pay a compliment to existing local authorities, I can say that, yes, there are regional authorities which in the discharge of their new responsibilities of care in the community have very clearly begun to understand how they can secure very good services for those within their areas without necessarily being the direct providers themselves. That is the kind of change that has taken place. I believe it to be most important.

After considering whether the proposals were viable, we then moved on to consider whether the costs would, nevertheless, be excessive. I am bound to say that I have received a number of representations, although clearly not as many as other noble Lords in the Chamber. For example, both the City of Dundee and Angus District Council have indicated to me in the clearest possible terms that, if such changes are to be introduced, they will be able to provide at least the same services at at least the same costs and possibly more economically than is the position at present. The issue of transitional costs and savings does indeed depend on the spending patterns and management structures that are established by the new authorities. One of the complaints is that we should not be too prescriptive in what is established within the new local authorities. We accept that fact. But, if that is the case, if an over-elaborate management structure is adopted by a new authority, clearly it would be more expensive than we might consider to be desirable.

Before I answer a number of detailed questions as best I can within a reasonable time—and I apologise if I do not answer all the detailed points—I must say that I shall do my best after the conclusion of the debate to analyse the Hansard report and, if there are any detailed points that remain unanswered, I shall seek to write to those noble Lords who raised them.

I shall deal first with water. My noble friend Lord Balfour complained about too much reliance on bottled water. As my noble friend returns to the Front Bench and sits next to me, I wonder whether in Forfar the absence of the consumption of Strathmore water would meet with much approval. The noble Lord, Lord Hughes, used a nice example—that of the Lintrathan reservoir. He is quite right to applaud previous generations which established that water.

That is not the problem regarding water in Scotland. It is not the difficulty of establishing reservoirs. As the noble Lord knows, the greater problem in that part of Scotland is that we have until recently had beaches which have been far too polluted for far too long. Considerable cost will be involved in returning the beaches to the quality that we want and ensuring that the quality of the water is properly maintained. As I have already indicated, there is some £5 billion of expenditure there. I am grateful to my noble friends Lady Carnegy of Lour and Lord Gray for their appreciation that one of the changes that the Bill will allow is far greater access in far better circumstances to private capital, to borrowing and to what are described as "BOO" schemes (build, own and operate), to ensure that we get the water supply and the sewerage services that Scotland needs.

I shall not rake over the referendum in Strathclyde which has been mentioned. However, I should simply like to record that, while it is correct that the figures which are given are accurate, at the same time, I am also aware that even if the people of Strathclyde understood what was proposed in the Bill it appears that the Labour Party did not. I say that because, simultaneous with the issue of the referendum papers, the Labour Party circulated a pamphlet saying "No privatisation".

A number of your Lordships may have read Mr. Brian Meek in the Glasgow Herald from time to time. He recently make a good point. In his long time in local government he well recollected furious debates and battles over the convenorships of a variety of committees, but never in his time had he recalled there being any bitter or fierce debate over who might take on the convenorship of the water and sewerage services. I am bound to say that I believe there is a degree of artificial controversy over that aspect of the matter. However, if the noble Lord on the Front Bench opposite indicates that he wishes to return to the matter in detail, we look forward to taking part in those debates.

I should now like to deal with certain specific points that were raised. First, the noble Lord, Lord Carmichael, and the noble Lady, Lady Saltoun, mentioned special educational needs. I recognise that there is a widely held concern that children and adults with such needs should not be disadvantaged by the reorganisation. I share that concern and sympathise with them. After the reform no children with special educational needs or their parents will notice any difference. Children will continue to attend the same school, be it a mainstream school or a special one, and transport to the school will continue as before. The new education authorities will continue to have the same duties and obligations towards their special needs as did the former authorities.

Comment was also made about the difficulty that some new authorities might have in providing services to children with special educational needs because of their smaller size. I have some difficulty in that respect. For example, no one has sought to explain how the Shetlands or the smallest existing mainland authority, the Borders region, have not been able to make satisfactory provision for their children, although they have populations which are either similar or much smaller than some of the proposed authorities. Indeed, I recently visited the Shetlands where those responsible indicated to me that they now hoped to be able to take steps to return some of the children with special educational needs from Aberdeen to the islands.

A small example raised by the noble Lord, Lord Carmichael, was that of the future of the Regional Chemist's Laboratory in Strathclyde. That is an interesting and informative example, because there are just four laboratories across the whole of Scotland. They provide services to all 65 councils. They indicate to me an excellent example of how co-operation between authorities can and does work. I do not see why such co-operation should not continue. The noble Lord will appreciate that, reluctant though the Secretary of State may be, he will ensure that provision will be made, if it is necessary, to bring into place joint boards.

My noble friend Lord Cochrane referred to the position of public transport in Lothian. The Government looked very carefully at the justification for joint arrangements in public transport throughout Scotland. After considering those needs, we arrived at the clear conclusion that only in the Glasgow conurbation, which the noble Earl, Lord Glasgow, mentioned, were the travel requirements sufficiently complex to necessitate the continuance of special joint arrangements. Elsewhere, again on the same theme, we are confident that new authorities inheriting those responsibilities will be able to discharge their functions fully and effectively. We shall encourage co-operation in that field.

My noble friend Lady Carnegy raised the issue of structure plans. Joint working is already a well-established practice in many areas of local authority work. There is no reason to believe that, as regards structure planning, that will not be introduced and will not be effective. But, again I make the point that, if necessary, a joint board could be established. After all, Scotland already has sophisticated structure plans in place.

I turn now to a detailed matter which was raised by several speakers, notably the noble and learned Lord, Lord Cameron of Lochbroom, the noble Lady, Lady Saltoun, my noble friend Lady Carnegy and the noble Viscount, Lord Thurso. I refer to the funding of voluntary organisations. I should like to place on record the fact that we value very highly the work of voluntary organisations and we wish to ensure a smooth handover to the new authorities. For that reason, we shall issue guidance to the new authorities on the key role of voluntary organisations and on the importance of avoiding disruption.

On funding, provision has been made for existing liabilities, obligations and contracts entered into by the existing authorities to be transferred to the new authorities. In addition, we will direct existing authorities to inform shadow authorities of all funding which is given to voluntary organisations by means of grants etc. This direction will ensure that the shadow authorities are aware of the full extent of the funding of voluntary organisations, including annual discretionary grants being paid to voluntary organisations in their area. I should also say that we are actively exploring also the feasibility of a mechanism to protect the value of annual discretionary grants to the voluntary sector during the transition. There are already discussions between the Scottish Office and SCVO and they will continue.

The noble and learned Lord, Lord Cameron of Lochbroom, also raised the issue of consultation before records were disposed of. That is a matter on which the chairman of the advisory council on which he sits has already written to the Scottish Office. While we do not want to introduce an elaborate mechanism we hope that the keeper, when offering advice on the management of records, will also offer advice on what records ought to be retained and what might be disposed of.

The noble Earl, Lord Minto, asked me about the implementation of our proposals on compulsory competitive tendering. We have recognised that CCT, and in particular the extension of CCT to corporate areas around the time of reorganisation, would carry with it the risk of diverting resources away from the establishment of the new authorities. We therefore announced exemptions from existing CCT and a delay in the implementation of CCT extension. We are determined, however, that local taxpayers should enjoy the improvements in efficiency and effectiveness in the provision of local services brought about by CCT from the earliest practical date. Exemptions for upwards of two to three years cannot be described in our view as unreasonably short.

The noble Earl also asked me about compensation arrangements for redundant local government staff. I would say to him that this very issue is being looked at at the moment by the local government staff advisory committee which has been appointed by the Secretary of State. I have no doubt that it will pay close attention to what the noble Earl had to say on this matter.

I shall deal briefly with another few matters. The noble Lord, Lord Gray, indicated his criticism of the proposal to have an area tourist board which extended from beyond Argyll into parts of Central region. While everyone was agreed that the number of such boards should be reduced, there were a number of criticisms of the areas that were chosen. The STB listened carefully to the proposals and we took account of them when the proposals were submitted to us. I hope the new area tourist boards will prove to be a resounding success and will build on the good work done by the existing boards.

I believe the noble Lord, Lord Macaulay of Bragar, was one of the few people to make reference to the issue of the children's reporter system. We believe that a vast majority of those who are reporters in Scotland welcome the proposal to have a national system for reporters. That is not to destroy the link with children's panels which will remain locally based and part of local government. It is clearly understood how desirable the local connection is. But we trust that this arrangement will make it much easier for those who are in the field as reporters to be able to obtain the best of advice, sometimes with regard to difficult cases. Those who have any familiarity with this matter will realise that from time to time single reporters remote from Glasgow or Edinburgh have to take difficult decisions in relation to such issues as the sexual abuse of children. We believe that such a system will bring about an improvement. As regards the particular case of the Western Isles we would wish to ensure that there was indeed a reporter based there to respond to local needs.

Lord Macaulay of Bragar

My Lords, I am sorry to interrupt the Minister but could I take that as an undertaking on the part of the Government that there will be a children's reporter in the Western Isles for all time?

Lord Fraser of Carmyllie

No, my Lords. What I am saying is that once we have the principal reporter established, he will begin with the existing staff. Of course he will look at the staffing across Scotland. After all, half of Scotland is within the remit of one reporter at the present time in Strathclyde. Of course the principal reporter will have to pay close attention to the needs of communities. The way in which the island communities are separate from the rest of the country will clearly have to be borne in mind. The noble Lord also asked some questions about combining departments of education and leisure. He was less than flattering about such an arrangement. I believe there is an individual in the Orkney Islands who already combines those functions who might not be too flattered by the observations that the noble Lord has made.

We then discussed some important issues as regards whether or not other individuals beyond the four great cities of Scotland might be entitled to have at their head a Lord Provost. I think this is far too tricky an area for me to enter into and I certainly want to get through Perth from time to time unscathed. I shall nevertheless be interested to participate in any debate on that matter. As the noble Earl, Lord Balfour, said, if any local authority wishes to change its name, the Bill allows for a mechanism for that to be done. Noble Lords may wish to change the names of some of the authorities we have suggested. While I am prepared to debate anything, I would counsel that we leave that aside. It would seem much more sensible to take forward the idea that is contained within the schedule that the new authority should select for itself the best name for it.

Finally, I shall deal with the matter that the noble Lord, Lord Ewing of Kirkford, asked me to address. It has been claimed, not only during the course of this debate but elsewhere, that our timetable for reorganisation has so slipped that the vesting day of 1st April 1996 will have to change. I say as categorically as I can that we do not accept this and believe it to be wrong. Your Lordships may wish to note that the Local Government (Scotland) Act 1973 was passed on 25th October 1973 and the new authorities came into being on 16th May 1975. This gave existing local authorities just over 20 months to prepare for the reorganisation. Even if the Local Government etc. (Scotland) Bill were not to complete its parliamentary stages until October of this year, a similar preparatory period would be available. I appreciate what the noble Lord said about his desire to scrutinise this Bill carefully. As long as we do that in a positive and constructive fashion, we will not be attempting to hasten matters along. But clearly we would not wish unduly to waste the time of this House over any matter. I appreciate that that would never enter the noble Lord's mind.

Although I understand the point that the noble Lord made about boundaries, I would say to him that initial boundaries will be determined by the Secretary of State as under the 1973 Act. However, the Government made it clear that the new district wards being prepared by the Boundary Commission will be followed, wherever possible, and, if that has not proved to be possible, the Boundary Commission will review boundaries after the first elections.

I am conscious that there are a number of issues that I have been unable to address. As I have indicated, I shall attempt to write to noble Lords if I have excluded anything, but I hope that with this Second Reading debate concluded we can now move on to a proper and detailed consideration of the various parts of the Bill as it stands. I commend it to the House.

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