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Local Government and Public Involvement in Health Bill

My Lords, I echo the opening statement of the noble Baroness about how nice it is to be back dealing with the local government Bill. I welcome everyone back, refreshed, sharpened and focused, to the Report stage. Some large issues have been raised in the opening statements on this group of amendments. It is probably worth responding first to the noble Lord, Lord Dixon-Smith, who concluded his argument by referring to the matter raised by the noble Baroness, Lady Scott, about why we are doing this. I can absolutely assure the noble Lord that no one is more conscious than the Government are of how much effort goes into restructuring and that the object is and must be about better services. That is exactly where we started from and exactly why we started with a process that is different from the previous process in 1992. The process was driven by an invitation to local authorities to consider moving towards unitary status. I do not know enough about the French system but I do not think that the French have duplication of functions or confusions over which authority collects waste and which deals with it, or whether there are any two separate mandates held for a single area, which is what we have with the two-tier system. In some areas the system has been made to work well, but we have always known that it has been flawed, because it builds in conflict and duplication of functions. We started from the presumption that if there were an opportunity to move towards that new system, local authorities would give us their arguments on whether they wanted to, against the criteria that we set very clearly: better leadership, better neighbourhood engagement, better services and all the things that we know make a crucial difference to improving local areas. We looked for a broad range of support on that. We wanted to open, by invitation rather than imposition, a path to better services; we wanted to do it in a way that enabled local government not to embrace change for change’s sake, but to take advantage of what it thought was an opportunity to set out a new way forward. Twenty-six local authorities came forward; 16 were invited to go forward for further consultation and we have ended up with the Secretary of State agreeing to nine proposals. The process has been open and transparent. The debate has been conducted in every conceivable form of public arena, and that takes time. The noble Baroness says that there is outrage at the speed. She will hear me say again during this debate that the reason why we did what we were asked to do in this way—the invitation was sent out under the common-law powers of the Secretary of State—was that we were urged by everybody not to have a protracted process, but to make progress. We therefore did it in a way that we thought would be democratic, legal and effective, because it was consulted on. I appreciate what the noble Baroness, Lady Scott, said about local government being where it is. Indeed, it is where it is with our nine proposals. I obviously cannot say much about the judicial review, but we expect a result shortly. I should also say that it is not entirely unpredictable that councils that are disappointed or aggrieved have sought to make legal complaint. In 1992, in the previous reorganisation, there were no fewer than 30 judicial reviews from councils that felt that their interests had been overlooked or ignored on whatever grounds. Change generates disturbance and difficulties. That is where we are. I hope that that takes us into the narrower debate on the powers of direction. The purpose is very clear, as the noble Baroness said. The amendments would remove the Secretary of State’s power to direct any principal authority to make a proposal under Clause 2, by way of inserting the word ““relevant””, so that the Secretary of State may only invite a relevant principal council rather than exercising the power of direction. Briefly and I hope for the last time, I shall run through the key provisions that will enable this to happen. It is a devolutionary structure, as I have explained. The provisions in Part 1 of the Bill replace the structural and boundary change provisions in the Local Government Act 1992. Clauses 1 to 7 make provision about the invitation process for effecting structural change; Clauses 8 to 10 provide for boundary changes, which are wholly separate from the current round of restructuring; and Clauses 11 to 30 provide for the implementation of both forms of change and the necessary supplementary provision. They enable the Government to invite—or, until 25 January 2008, as clearly stated in Clause 3, direct—proposals from local authorities for structural change. Consider the change from the 1992 Act, when the Electoral Commission was asked to direct the Boundary Committee to consider whether there should be a move to unitary structures and to make recommendations. We are a million miles from that. Yes, it is indeed a process of invitation. The logic is followed by what I will say—which I think will meet the concerns of the noble Viscount, Lord Eccles—about the circumstances under which we would hypothetically have to seek a direction. Noble Lords are no doubt asking why, if this is so devolutionary, we need a power to direct at all. That is the crucial question. The answer is that the limited power of direction in the Bill is necessary to ensure that we are able to bring the present round of restructuring to an orderly conclusion. The idea that we are somehow going to extend this or rush through a power of direction rather than an invitation in the next few months, as the noble Baroness suggested, is rather a fantasy. We were aware of concerns about the original power. We worked with the LGA to limit the scope so that it cannot be used beyond 25 January 2008. It might help the House if I give a short example of a hypothetical situation where it might be necessary to use the power. I am not saying that it is necessary at all; I hope that noble Lords will understand, when I come to the end of this description, why it would not be necessary. In July, we said that we were minded to implement the unitary proposal for Bedford borough on the basis that there was a satisfactory unitary proposal for the rest of the area. We announced that we would be inviting Bedfordshire County Council, Mid Bedfordshire District Council and the South Bedfordshire District Council to put forward a unitary proposal for the remaining area of Bedfordshire, excluding Bedford borough. I should emphasise that we intend to invite these councils to make a proposal. However, if the Secretary of State were to feel that she would be unlikely to receive a proposal in response to this invitation, she may decide to direct a proposal from the local authorities concerned. We are on record as saying—and I can again give the commitment—that this is a very limited power, which would be used only where it is necessary to deal with a residual area in order to make sense of a unitary proposal that is currently proceeding towards implementation. It does not force any particular new structure on an area—quite the contrary. It requires the councils in an area to decide the new structure that they want. I admit that it leads to the area having to move towards unitary status, but it is interesting that in the responses that we have had to these proposals the principle of unitary status has not been challenged. People want unitary status, where they have come forward. However, we have been clear that we will use this power only where it is necessary to round off a unitary proposal that we have already received and accepted. In other words, we would require councils to make a move to unitary structures only where it is necessary for other councils to be able to implement the unitary proposal that they have chosen to put forward. It is surely better to give a council the opportunity to do that rather than going straight to advice from the Boundary Committee. In the case of Bedfordshire, would it be right that Bedford borough could not adopt the unitary structure that makes good sense for the people of Bedford simply because the other councils in Bedfordshire were unwilling to consider a unitary future? However, that is a pessimistic scenario; from the evidence that we have in the case of Bedfordshire, we firmly expect all the councils concerned to respond, perhaps with some enthusiasm, to the invitation that we propose to issue shortly. I reiterate that this is a limited power for specific circumstances. It follows from, and is independent of, the invitation. I hope that noble Lords will feel reassured that the limits on the way in which it might be used do not open the door to anything more.