Local Government Bill [HL]

My Lords, this is our second attempt at a Second Reading debate on this short, single-issue Local Government Bill. The first was put on hold by the intervention of the noble Lord, Lord Howarth—I understand that he is unable to be in his place today—and the noble Baroness, Lady Hollis. Despite a ruling from the Public Bill Office that the Bill was not prima facie hybrid, and using the fact that they had obtained two opposing legal opinions on the matter, they persuaded the House that there was a case for the Bill to be deemed hybrid. As a result of the success of that Motion, the Bill was referred to the Examiners for adjudication. This has taken place. I understand that the hearing was very short; no one from the Opposition attended to speak. After a very short deliberation by the Examiners, it was found that the Bill was, as expected, not hybrid. In effect, the Examiners put an end to a somewhat dubious delaying tactic. By their decision, they also vindicated the original decision of the Public Bill Office. That is important, as it is a strong convention that the House accepts the expertise of the Public Bill Office in these matters. The purpose of the Bill is to give effect to the statement in the coalition agreement that: ""We will stop the restructuring of councils in Norfolk, Suffolk and Devon"." Noble Lords may be aware that the previous Secretary of State decided, after much debate, to implement unitary councils in Norwich and Exeter. His decision was taken late in the Parliament and made despite the fact that those authorities did not fulfil the five criteria for becoming unitary. The Secretary of State cited "compelling reasons" why those authorities should be an exception to the rules. The decision was also made against the background of considerable controversy, since there was a general lack of evidence for the "compelling reasons" and a lack of public support. Concerns were raised by noble Lords during debate on the orders about the cost and the lack of support, while questions were asked about the manner in which the decision of the Secretary of State was taken. A Motion of Regret tabled by the noble and learned Baroness, Lady Butler-Sloss, underscoring these concerns, was passed overwhelmingly. On 24 March, Parliament approved the orders that established unitary councils in Exeter and Norwich. Since then, an appeal against the orders has been made to the High Court, which has recently declared that the then Secretary of State’s decision on the proposals for a unitary Exeter and a unitary Norwich was unlawful and that the Norwich and Exeter structural change orders should be quashed. We expect the court next week—provisionally on 5 July—to decide the precise details of the quashing of the orders, in particular whether the quashing will also end the deferral of elections for one-third of city councillors in Exeter and Norwich from May 2010 to May 2011. Lastly in this saga, the previous Government took no decision on the proposals to create unitaries in Suffolk, instead proposing a county constitutional convention. This was a pie-in-the-sky invention of the previous Secretary of State, which was meant to bring together the principal authorities in Suffolk and their MPs to reach a consensus on a possible unitary solution within that county. The convention has never met and the proposals, therefore, have not been pursued. The Bill will put an end to any possibility of this matter being taken further. That brings me to the reasons why we are introducing this legislation. In short, our case for doing so is one of non-compliance with the five criteria and, more generally, lack of any evidence of value for money. The arguments in favour of the restructuring in Devon and Norfolk were, in truth, never made out and should never have been pursued. The surprising thing, given the problems identified, is that they were pursued. It is also of considerable significance that the department’s accounting officer had such concerns about the value for money of the unitary proposals for Exeter and Norwich that he requested that he should receive a written instruction from the then Secretary of State to implement them. Having noted the accounting officer’s concerns, the then Secretary of State still gave a direction to implement these unaffordable unitary proposals. He also made a statutory decision to take no action on the Boundary Committee proposals for unitary authorities in Devon and Norfolk, thereby putting an end to those proposals. This Bill does more than just put a stop to the structural change orders for Exeter and Norwich. It will put an end to all uncompleted plans for unitary restructuring including Suffolk, thereby giving these councils certainty on their future and a clear position for them to regroup and work with others to structure their services. They will also not have to bear the significant costs of reorganisation, which it has been estimated would have cost their taxpayers in the region of £40 million. I shall now briefly discuss what the Bill does. Clause 1 revokes the orders creating unitary structures in Exeter and Norwich. It will also prevent the Secretary of State from making an order to implement a unitary proposal that he received before the coming into force of the Bill and so will put a stop to the implementation of any Suffolk unitary proposals that remain on the table. Clause 2 makes consequential electoral provisions in relation to the deferral of elections of one-third of councillors in Exeter and Norwich city councils. It may be that after the court hearing next week, when the precise details of what is quashed will be decided, this clause will no longer be needed. If that is the case, consideration will be given to removing it from the Bill by amendment in Committee. Clause 3 provides for the short title and the commencement of the Bill. In the gracious Speech, it was emphasised that this parliamentary Session will focus on freedom, fairness and responsibility. This Bill is the embodiment of that message, as it brings freedom from an imposed restructuring; restores fairness by redirecting the councils’ focus to serving communities and the people who elect them; encapsulates financial responsibility by putting a stop to wasteful public spending on restructuring; and opens up opportunities for the councils to seek efficiencies without the distraction of reorganisation. It will prevent the wasting of public money on unnecessary reorganisations. I recognise that it was forecast that reorganisation might have led to savings, in the case of Exeter and Norwich, of some £6.5 million per year, and possibly larger savings from some of the proposals in Suffolk, but there were clear financial risks to those estimates. The previous Government were determined to impose restructuring, whether viable or not, which was expensive and destructive and would not have served well the cities and communities of Exeter, Norwich or Suffolk. It would have created uncertainty and controversy and, through the acceptance of a flawed case for reorganisation, the authorities’ attention would have been taken away from the needs of rapidly changing service provision. I recognise that both city councils will be disappointed by this move. Exeter and Norwich are dynamic cities. However, a controversial restructuring of services is not the way to achieve efficient delivery. There are excellent examples of councils of all sizes coming together to benefit from joint working, such as the sharing of chief executives, back-office pooling and co-procurement. Councils are free now to decide on sensible co-operation in the interests of their citizens, without restructuring. I believe that this approach will be made even more beneficial under the Government’s plans, which were announced in the Queen’s Speech on 25 May, to devolve more power to local authorities and fully focus on the power of localism. I am confident that the council leaders of these authorities will want to commit to sensible co-operation and effective collaborative partnership with all the councils in their county areas. I make it clear that my department will help in any way that it can, while recognising that decisions should be made by local councils at a local level and that the age of centralisation is over. In conclusion, this Bill puts a stop to all these uncompleted plans. It saves the taxpayer £40 million in restructuring costs. It releases the councils to focus on the services for their communities and the local people who have elected them. Above all, I stress that, with this legislation, Exeter and Norwich will be able to continue to be the powerhouses for their counties. They will be able to continue to be cities whose historical status can be, and always is, truly recognised. They will be able to continue their work without distraction and be impressive economic forces for their cities and the wider counties. I commend the Bill to the House and I beg to move.