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Norwich and Norfolk (Structural Changes) Order 2010

My Lords, today we are considering the draft order which brings into effect proposals for a unitary council for the city of Norwich. With it, we will consider the draft order bringing into effect a unitary council for the city of Exeter. I recognise that there is a great deal of strong feeling on all sides of the House on the decisions we have taken in Devon and Norfolk. At the outset, I want to say that we recognise that these are controversial decisions. They are not matters that we have treated lightly. However, we believe that these decisions have been taken in the best interests of the people of Devon and Norfolk. It may help the House, particularly in light of the amendments that have been put down by the noble Lord, Lord Tope, and the noble and learned Baroness, Lady Butler-Sloss, if I use my opening comments to say something about the decision-making process which has led to our proposing these orders, not least to dispel some of the myths surrounding these decisions. Before I turn to any consideration of process, it is important to recall the substance of the issues before us this afternoon. In short, the choice before your Lordships’ House is whether the cities of Exeter and Norwich should have new unitary councils—whether the people of those cities should have the unitary authorities which their democratically accountable councils have proposed, and for which there is genuine local appetite. In the case of Exeter, the unitary proposal has cross-party support across the council. In Norwich, the proposal is supported by Liberal Democrats, Labour Party members and Green Party members. The benefits of unitary city councils are widely recognised and have been proven over time. Such councils reinforce the city’s distinctive identity and sense of place. They recognise that cities are the driver for wider economic growth and provide the clear, simple leadership needed. They also enable local services to be targeted and tailored to the particular challenges and issues that cities face. Moreover, unitary city councils will restore these cities to the position that existed before the 1974 reforms took away the system of local self-government which they had enjoyed for centuries. It is a myth to suggest, as some are, that these unitary proposals are ripping the heart out of the traditional county. I turn now to the issues of process—and these, I accept, are not unimportant. I will first sketch out something of the history, which shows just how long these processes have been in train, and just how carefully and fully the options and choices have been considered by my honourable and right honourable friends over the years. The story originates back in 2006 when the Government issued an invitation to councils in England. Exeter and Norwich councils both put forward proposals for unitary local government. In February 2008, the Secretary of State sought the advice of the independent Boundary Committee, asking for alternative proposals covering Exeter and Devon and Norwich and Norfolk. She considered that the original ones did not meet the criteria in the invitation. The Boundary Committee undertook its own consultation, generating 20,000 responses, and submitted its advice in December 2009. Once the Government received the Boundary Committee’s advice, we allowed a further six-week period for representations, receiving more than 2,800, including meetings with many of the affected councils. It would be fair to say that the stakeholders and public in these areas have been consulted more than adequately on these proposals; that the process is anything but rushed; and that a resolution to these issues is now what all concerned crave. Central to our decisions on the proposals was an assessment against the five criteria of affordability; whether there is a broad cross-section of support; strategic leadership; neighbourhood empowerment; and value-for-money services. Our assessment was that, contrary to the Boundary Committee’s views, the alternative proposals for single county unitaries in Devon and Norfolk did not meet all the criteria, in particular the "broad cross-section of support" criterion. It was clear that not one of the existing principal councils in the areas supported the idea of a unitary county council. Having considered the original proposals for Exeter and Norwich afresh against the criteria, our assessment was the same as that of the Secretary of State in December 2007. To a limited extent, the proposals still do not meet all the criteria. In the case of Exeter, we judged that it did not meet the affordability criterion to a limited degree. The payback period would be a little longer than five years—the city council told us perhaps six. But without doubt, savings would exceed costs over a few years. In the case of Norwich, we judged that it too did not meet the affordability criterion to a limited degree. The payback period would similarly be a little longer. We also judged that the value for money on services criterion was not met. Having made this assessment, we considered the merits of each proposal, giving careful consideration to the circumstances in which there were, ""compelling reasons to depart from the presumption that proposals that meet the criteria are implemented, and those that do not are not implemented"." It has been suggested—not least by the Merits Committee—that this wider consideration of the merits of each proposal was somehow a new or novel procedure. I can categorically tell noble Lords that it is not. In December 2007, the then Secretary of State approached her statutory decisions in the same way. She recognised that it was in principle open to her to conclude that the criteria were not met, but that there was none the less a good reason to implement the proposal, or conversely that the criteria were met but that the proposal should not be implemented. In the event she decided that, having regard to all the circumstances then prevailing, it was appropriate to implement proposals that met the criteria, and not to implement proposals that did not meet the criteria. In contrast, we concluded—when looking at the merits of the proposals in the round and considering today’s economic circumstances—that there were compelling reasons why these unitary proposals, despite not meeting all five criteria, should none the less be implemented. This was not least because when the Total Place approach is factored into consideration, the outcomes for services in Norwich generally would be as good, if not better, than the outcomes envisaged by the "value for money services" criterion. For both Norwich and Exeter, we judge that the risks of a slightly longer payback period are outweighed by the benefits for the local economy. The Total Place approach is transforming the possibilities for local public service delivery. Total Place takes a "whole area" approach to delivering public services in a geographical location, looking at how to deliver better services at less cost, through effective collaboration between local organisations, led by local authorities. In the case of Exeter and Devon, and Norwich and Norfolk, it means that there can be the best of both worlds. There will be one local government leader able to provide strong strategic leadership for the city; and the more rural remaining two-tier area stands to have a stronger voice through a more focused county council, working closely with the rural districts. Together, in a partnership of equals, the city and county councils can work with other service providers to shape and jointly deliver high-quality services across the whole area, with the economies that brings, but which also meet the diverse needs of urban and rural communities. I am sure noble Lords here today will recognise that Exeter and Norwich are the engines of economic activity and potential in their sub-regions. Their pull already draws in investors, businesses, employers and wealth. There are numerous examples of how these cities have been successful in attracting businesses—for example, the Met Office or EDF Customer Services relocating to Exeter, or the fact that Norwich ranks as a top 10 UK retail centre and one of the top 10 cities in the UK for employment in knowledge-intensive businesses. I recognise that much of this activity happens outside the cities’ boundaries, but most businesses do not choose to locate in a surrounding district council area just because it happens to be a particular district council—for example, locating in the district of Broadland in Norfolk or East Devon in Devon—they choose that location because they want to locate in and around the cities of Exeter or Norwich. The strategic leadership that unitary councils for these cities will deliver means these cities’ "brands" can grow, and the gain to Exeter or Norwich will also be Devon’s or Norfolk’s because these benefits do not recognise administrative boundaries; they will spill over into the wider sub-region. That is why I can say without hesitation that we are convinced that the best outcome for the people of Devon and Norfolk is a structure which would see an urban-focused unitary council for the cities together with a two-tier local government for the rural surround. I should like to turn briefly to the report that has been published on these orders by the Merits Committee, which raised a number of points which I hope I have already addressed, but there are a few further issues that I think are worth responding to here. The committee questions the extent to which interested parties should have been given the chance to comment on and evaluate the "compelling reasons" which informed our decisions to implement unitary councils for Exeter and Norwich. Representations were received from both affected councils and others, particularly orally at meetings, and covered a wide range of matters. We received representations arguing that the proposals should not be implemented, not because they did not meet the criteria but because, for example, the present form of governance was better than a unitary structure, or that even if unitary structures had merit, the change was not worth the candle. We also received representations arguing that unitary proposals which did not meet the criteria should none the less be implemented because the benefits they would bring would outweigh the downside of their not meeting the criteria. So clearly, those making these representations to us felt able to set out what for them were compelling reasons over and above the criteria why a proposal should or should not be implemented. The Committee also questioned the extent to which these unitary proposals, which rely on collaborative working, are now feasible. We are quite clear that there are real benefits to the residents of Exeter and Norwich arising from unitary status, as well as real advantages to all the residents of Devon and Norfolk from their councils working together with the new unitary councils, as well as for Torbay and Plymouth in Devon, to deliver real improvements for all. The Government’s expectation and hope is that the elected representatives will recognise these opportunities, put aside their differences and work together in the best interests of their residents. I want also to respond to the points raised in the Joint Committee on Statutory Instrument’s report on the orders themselves and explain a little about how they work. The JCSI’s most serious concern is that it believes that, ""there is a doubt as to whether the orders, if they are approved and made, would be lawfully made"." The reason for this doubt, in the JCSI’s view, is that if the High Court found for the claimants in the judicial review proceedings currently being brought by Devon and Norfolk county councils against these decisions, this might mean that the orders, after they had been made, would be rendered unlawful. The inference of the JCSI’s reasoning seems to be that we should await the outcome of the court proceedings before completing parliamentary consideration of the orders. We do not accept these concerns. This confuses parliamentary accountability with issues of legality and might mean that Parliament could not decide on an issue until court proceedings had been resolved. We do not accept that the legislative process and business of government should be halted simply because judicial proceedings have been commenced, nor do we accept that it would be right for this House to base a decision on its assessment and judgment of the outcome of court proceedings. That would not seem to be consistent with the concept of a separation of powers between the legislature and the judiciary. I am sure that if noble Lords were to consider the full implications of the JCSI’s position, they would share the Government’s concerns. The JCSI also drew attention to the orders on the grounds of the unexpected use of powers, drafting that requires elucidation, and failure to accord with proper legislative practice. Officials in my department are confident that they have followed the proper drafting practice and that the instruments achieve their objectives. We have prepared these orders following consultation with the councils concerned so that the arrangements we are setting up are those which local people believe are best for them. The orders provide that from 1 April 2011, Exeter and Norwich will become the sole principal councils for the cities, having both district and county functions. This will be a wholly new start. There will be a refreshed senior management team and, once elections are held in 2011, potentially new members. The orders provide for the establishment of an implementation executive to lead preparations for both new councils. These executives will be led by the leaders of the current city councils, with membership drawn not only from the city councils but also from those county councillors who represent areas in the cities. The orders also place a duty on all councils to co-operate during the transition. My final point picks up on the JCSI’s concern that the provisions seeking to cancel the thirds elections due in both Norwich and Exeter in 2010 are an, ""unexpected use of the powers"," in the Local Government and Public Involvement in Health Act 2007. We gave all the affected councils in Norfolk and Devon the opportunity to comment on the proposed transitional arrangements for creating new unitary councils. That included the option of holding elections to any new unitary council in either 2010 or 2011. Since all the local authorities in Devon and Norfolk expressed the clear and reasoned view that any elections should take place in 2011, the orders seek to do that. Consequently, the orders provide for the cancellation of elections for one-third of the members in Exeter and Norwich due to be held in 2010. In truth, the effect is that those elections are postponed to 2011. That is necessary to maintain the integrity of the local democratic process as, if elections in 2010 were to go ahead, there would be questions about their purpose since those elected would serve only a year’s term. Noble Lords will note that the provisions cancelling elections are similar to those made in previous structural change orders, which hindsight has shown to have worked effectively. I want to say something briefly about the direction that the Secretary of State gave to the department’s accounting officer on 10 February. It is a myth that in some way the Secretary of State and officials are at loggerheads—nothing could be further from the truth. The process of seeking a direction is a standard part of the administrative processes of government. It was proper for the Permanent Secretary, as accounting officer for the department, to draw attention to the fact that Ministers had not chosen the option which appeared to deliver the best value for money. However, it was equally proper for the Secretary of State to set out Ministers’ reasons for their decisions, and to direct officials to implement those decisions.