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Local Government

I was astonished at the way in which the Minister introduced this order. Whichever way we look at it, the Department said in 2007 that it was going to look for reorganisation. It is important to understand what it was asking. It said of the bids for unitary status:"““It is wholly at the discretion of a Council whether or not it responds to this invitation. The Government accepts that it is only in some areas that Local Government restructuring is widely seen as the way forward. It will be from Councils in such areas that proposals are made.””" The Department then went on to make it clear that it would take note of local views and expect to consult a vast cross-section of the people involved, and that it would certainly take account of those working in education and social services and in any other areas that would be directly affected by the order. When it became clear, to people's astonishment, that the council was actually suggesting a proposal that was not supported by the majority of Cheshire ratepayers, there was an enormous attempt to discover exactly what the council had meant in its letter which stated that it was ““minded”” to put forward this suggestion, and that it would be based on the criteria that had been discussed. The reality is that it was not based on anything of the sort. We must be quite clear that, in the discussion on the figures that were put forward for the authorities, there has been a constant shifting of the goalposts, and not just by the Department. A bid based on Chester has constantly changed. The savings have changed, the administration costs have changed and it is very clear that the information given to the Government was not strong enough to support their view—otherwise, they would have been quite prepared to support the request made under the Freedom of Information Act for a copy of the assessment and would not have needed to refuse it. If the report vindicates the decision further to change the financial envelope, why does the Department wish to conceal it? There must be a reason. We should make it quite clear that when the decision to opt for a unitary basis for the whole of the county of Cheshire was made, it was not done for something as simple as the status quo. A great deal of work went into making it clear that we were prepared to consider a county region, that we were aware of the economic and political costs and that we were very clear about Cheshire's ability to attract direct investment flows from all around it. We are all aware of Cheshire's close connections with Liverpool, Manchester, the Potteries and north Wales, which make it unique in its operation. What is now clear, however, is that no matter whether we look at the independent review of Local Government Futures, the assessments done on behalf of the county or the subsequent assessments by the Department itself, the impact of this reorganisation will be absolutely disastrous. The county will be divided into two, both unitaries will be faced with direct economic problems and they will both lose money. Under the current needs methodology, the report concluded that west Cheshire unitary would be entitled to £82.7 million of formula grant and east Cheshire £54.1 million; but the proposed two-unitary model, when uplifted to the present settlement figures, allocates only £76.4 million to the west and £60.4 million to the east. The local agreement deprives the west of £6.3 million of formula grant a year—2.5 per cent. of council tax—and the funding is effectively permanently lost in the form of a financial subsidy to the east because in three years' time, the national grant distribution formula will be applied to the two unitaries using their locally agreed allocation. It is totally unrealistic to assume that one authority will agree to provide a substantial financial subsidy to the other. In fact, it may prove to be unlawful and in breach of the authority's fiduciary duties to council tax payers. Although we looked closely into the economics, it is not just a matter of the amounts of money involved. Almost without exception, the education services wrote to Ministers making it very clear that, whether it be the teams built up to deal with special education or social services, they would all face very real difficulties with the reorganisation that was being pushed through over their heads. What happened? The Minister in the other place, Lord Adonis, wrote to them, saying effectively, ““Oh well, we are very concerned about what you say, but don't worry, after you have reapplied for your own jobs you will have to work together””. Well, that is brilliant, is it not? First, we will divide you up; then force you to go through an entire reorganisation; then we say, what is really important for the county is that you work together. Some people may not find that insulting; I find it absolutely bizarre. We want to know exactly how the Government intend to make up the shortfall in finances. We want to know exactly how they imagine that a carefully planned authority, which has just been given an excellent rating—a better rating than it had before—can be expected to tear itself in two and produce a level of change that will meet the needs of my constituents in any way. In reaching her decision, the Secretary of State took the view that a single unitary authority would not reflect the"““economic reality that many consultees perceive splits Cheshire between East and West””," although she was not able to produce the number of consultees or any evidence about them. The existence of the opposite view, however, was very plain—even on the No. 10 Downing street website, which today bore nearly 2,000 signatures defending Cheshire's status as a unitary whole. Cheshire is a powerful economy in its own right. It is independent of the surrounding city regions of Liverpool and Manchester, and it requires a strong and coherent strategic approach to development. There is a fundamental misinterpretation of the economic evidence suggesting a split economy in Cheshire, and the decision on the basis of east-west economic flows reveals a simplistic and partial understanding of the economy. On Monday the Minister published the results of his Department's stakeholder consultation, which had resulted in 906 responses. There were 27 responses from local government, 64 from town and parish councils, 67 from the public sector, 35 from the business sector and 35 from the voluntary and community sector, as well as 680 public responses. There were 200 further responses which the Department decided to discount. The Department's report describes overwhelming support for keeping Cheshire together. The county council's proposal was supported by a quarter of town and parish councils, with only a very small number supporting the alternative. Public sector respondents and all the schools were in favour of single unitary status, as were the majority of voluntary and community organisations, and the business community made it very clear that it did not want the change. I find it extraordinary that although it is clear that only the single-unitary proposal is capable of meeting the ““broad cross-section of support”” criterion, that fact is to be ignored and we are to be pushed into a ““two unitaries”” arrangement. The Department has been highly selective in its approach to evidence of stakeholder and public support, which suggests that Ministers were aware that many unitary proposals were unlikely to receive public endorsement. The Secretary of State was entirely wrong not to consult the public directly, especially as the invitation to submit proposals in October 2006 stated explicitly that the Department would undertake consultation before making decisions. The practical difficulties are such that problems are already being posed to library services for the elderly, to special educational needs teams, to the way in which we plan the development of education for the future, and to children's care services.