Local Government Act 1988 (Competition) (Defined Activities) (Scotland) Amendment Order 1997 (Hansard, 23 July 1997)

§ The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel)
rose to move, That the draft order laid before the House on 7th July be approved [7th Report from the Joint Committee].
The noble Lord said: My Lords, today's debate, provisionally timed as a five-minute wonder, concerns the Local Government Act 1988 (Competition)(Defined Activities)(Scotland) Amendment Order 1997 which amends a small part of the timetable by which authorities must have complied with the compulsory competitive tendering legislation.
Compulsory competitive tendering regulations are renowned for their complexity. This order is no exception and is about an unusually technical part of one of the most complex areas of secondary legislation around. It would be fair to say that "arcane" would not do it justice.
CCT introduced a split between functional work—work carried out by authorities in pursuit of their own functions—and so-called works contracts—work authorities carry out for other public bodies such as other councils. This order concerns only works contracts for the new services. These are white collar support services, housing management, vehicle management and security services.
Under CCT, an authority can only enter into a works contract with another public body if it has won the work following a complicated and tightly prescribed tendering process involving at least three other parties. I would not dispute that competition here may bring benefits, but the current timetable of October 1997 is not sensible.
There are two main reasons why this change to the timetable needs to be made. The first reason is a legacy of reorganisation. We all know that Scottish local authorities are still bedding down from a disruptive piece of local government reorganisation. Some account must be taken of the adverse impact reorganisation has had on the internal workings of local authorities.
The other reason is of course linked. It just does not make sense to require authorities to compete for these contracts while we are developing an alternative system of best value covering all local authority services, which is a much more comprehensive and thorough approach. This order tidies up the CCT timetable and means that authorities will not have to comply with the CCT legislation surrounding works contracts until April 2000. I beg to move.

§ Lord Fraser of Carmyllie
My Lords, perhaps I may intervene briefly in this matter. As the noble Lord pointed out, the regulations in this field are very complex. I noticed with interest that the Joint Committee of both Houses appointed to scrutinise such 1482 statutory instruments indicated that there was nothing to which it was thought necessary to draw the special attention of the House.
But there is one matter upon which I shall be grateful for the Minister's clarification. I understand his reasoning that, because of reorganisation, a greater period might be allowed for the local authorities to bed down before this measure is required of them. I also understand the arrangements that the Secretary of State for Scotland has put in place following the announcement by him on, I believe, 27th May, that he was suspending compulsory competitive tendering for a further year in Scotland while this best value approach was being examined.
However, what slightly baffles me is that I understand that the timetable for reporting back by CoSLA and others and consideration by the Secretary of State himself of the new arrangements is to be completed before the end of this year. If the existing date is October 1997, I can see why the Secretary of State wishes to defer it. However, if that is the sort of timetable to which the Scottish Office is working, I am less convinced as to why the date needs to be put back, as this order will provide, from October 1997 to the year 2000. That seems to me to allow for an excessive period. I shall be grateful if the noble Lord can give me some explanation for this almost three-year delay in some cases. Otherwise, I say to the noble Lord that we are bound to harbour the suspicion that the real purpose of this statutory instrument is not to give local government or the Scottish Office a little more time to get new arrangements in place, but to lose the ball in the long grass by indicating now that nothing needs to be done by the year 2000. I hope that the Minister can satisfy me that my suspicions are wholly ill-founded, but I have just a glimmer of suspicion that I may be rather closer to the truth than he would like to acknowledge.

§ Lord Mackie of Benshie
My Lords, as I understand it, the Minister said that there were two objectives. He said that one was to give local authorities further time to settle down. I also understood him to say that a comprehensive review of the situation was taking place and that that would give more time to produce results. By that does the Minister mean that he is reviewing the whole question of competitive tendering or that he simply wants to revise the procedures and that competitive tendering will continue in order to keep costs down?
The noble Baroness, when speaking about the previous legislation on the Order Paper, spoke of efficiency audits. It appears to me that they are necessary in all circumstances of local government. Perhaps the Minister can comment on whether that is part of the comprehensive look at this very serious problem of local government. It will be nice of him to say so, not that I am suspicious of this Motion, like the noble Lord, Lord Fraser of Carmyllie, but I would simply like to hear the Government's views on this very 1483 important point of efficiency in contracting and whether the system of competition is properly worked out, fair and competent.

§ Baroness Carnegy of Lour
My Lords, perhaps I may follow my noble neighbour who lives in the same area as me. He will know, as I do, that competitive tendering has proved enormously successful in the Tayside area, not just in helping local authorities to become more efficient, but in restoring the private sector in many areas which has been reduced almost to nothing in the City of Dundee because of the preponderance of services being carried out in the public sector.
I heard the Minister say that competitive tendering can bring great benefits. He knows that very well with his experience of the matter. I understand that it might be quite difficult to put white collar services out to tender in the early years of a local authority, but in the case of vehicle maintenance I do not understand why that should be so. There are garages for the maintenance of vehicles all over Scotland which are longing for work of that kind. They will not get any work until the year 2000. That seems to me to be quite wrong. I wonder why that is included in the order. Perhaps the Minister can tell us why.

§ Lord Sewel
My Lords, those who offer me help and advice on occasions like this are enormously prescient because they suggest that I should start by saying, "We have had a very interesting debate" and, in a way, we have.
As regards the year 2000, it is absolutely true that the report on which the best value approach is based identifies a three-stage implementation plan. The first stage is autumn 1997 when councils will provide details of how they have conducted the current CCT bidding round and assessment of the extent to which they comply with the essential elements of best value. A plan showing how and when they will be able to achieve compliance will be very important in order to move forward.
But there are further periods of self-assessment at stages in 1998 and 1999. So it is really being done to get authorities into the process, to make sure that they are familiar with it and doing the job properly and taking a little time to make sure that things are done correctly. It is better to have them done correctly by taking a little time rather than to rush things and to find that they do not work smoothly. The year 2000 aligns these particular services with the white collar functional work as well, so that the works contracts and the functional works are now running on the same timetable. I hope that the noble Lord will see the reasoning behind our explanation.
The noble Lord, Lord Mackie of Benshie, drew particular attention to the need for efficiency. Local authorities in Scotland have a statutory requirement to ensure that they have procedures and processes in place to deliver economy, efficiency and effectiveness. In Scotland, this is subject to audit by the Accounts Commission. Therefore, robust procedures are already in place to ensure that councils deliver on that score.
1484 The noble Baroness, Lady Carnegy, mentioned vehicles. Perhaps I should point out that this is a new service. It is a vehicle management service; not a vehicle maintenance service, so it is a much more professional, white-collar task which fits in with this group.
On the basis of the explanations that I have given, I hope that the House will be able to approve the order.