Bedfordshire (Structural Changes) Order 2008

rose to move, That the Grand Committee do report to the House that it has considered the Bedfordshire (Structural Changes) Order 2008. The noble Baroness said: We are debating the order which brings into effect the two unitary authorities for Bedfordshire.  This is the last of the orders implementing restructuring proposals from this round that will be brought to this House for the immediate future. I feel that this is something of a solemn moment after the heat and burden of the day. I am sure that Members of the Committee are as sorry as I am to see the end of the passage of this order. The reason why this order is the last of those that have been presented to this House is because the process in Bedfordshire has been more complex than that in the other areas. I do not want to reiterate much of what I have said on the previous orders, because we have been over it quite a few times. I also lack any cavalry behind me, but I am sure that they will be along in a moment. However, I need to outline the process because in Bedfordshire the situation was different. Members of the Committee will know that the process began in October 2006 with the local government White Paper, and we indicated that there was dissatisfaction with the confusion and weakness in two-tier working. Knowing Bedfordshire as I have come to know it in the past few years, I have to say that local governance in Bedfordshire could be viewed as an example of this confusion. It has not been a happy situation. It suffers from over-governance with four principal councils providing services to a population of just over 400,000 people. So we gave an invitation to councils to come forward with proposals for unitary local government or with proposals for enhanced two-tier working to overcome the challenges. As I said, on each occasion, the choice whether to come forward was absolutely up to them. It has been more complex in Bedfordshire, which is why this is the last order and why the timetable is challenging—I take that point. The complexity has arisen because in response to the invitation we received not only competing proposals but a proposal which met the criteria, but which was in our judgment unviable without a satisfactory unitary solution for the rest of the county. The chronology is slightly complex, so I will explain. In January 2007, in the first stage of the process in Bedfordshire, we received three separate proposals for unitary structures in response to the original invitation. There was a proposal from the county council for a unitary county; a proposal from Bedford Borough Council for a unitary Bedford; and a joint proposal from Mid and South Bedfordshire District Councils for a new Central Bedfordshire unitary for the rest of the county. We assessed the proposals and judged that the Central Bedfordshire proposal did not meet the five criteria set out in the invitation; therefore, unlike the county and borough’s proposals, it did not proceed to stakeholder consultation. Noble Lords will remember the five criteria—they are a bit like the five tests—that we set out in the original invitation, which those two proposals were judged to meet. One was the strength of strategic leadership; another was the degree to which local communities and neighbourhoods would be involved in decision-making in future; the third was the value for money in improving public services—in other words the long-term outcomes that we seek. They also involved judgments about whether the proposals were financially affordable; and whether there was a range of support sufficient to make us believe that if the proposals went ahead, they would be a success. In the case of Bedfordshire, we came to the judgement that both the county council’s and the borough council’s proposals met each of these five criteria. However, the Bedford Borough proposal was the one that we judged would deliver to a greater extent the long-term outcomes that we were seeking. We made the means by which we would choose between the two competing proposals that each met the criteria clear in the consultation paper published on 6 June 2007. In July, we announced that we were ““minded to”” implement Bedford Borough’s proposal. We made that announcement in the full knowledge that if the proposal were to be implemented, the rest of Bedfordshire would be unviable as a two-tier local government area. That was not, as may have been suggested, a perverse decision. Our view was that the county council’s proposal would not deliver the long-term outcomes that we seek to the same extent. We wanted the best outcomes for the people of Bedfordshire and therefore decided, despite the fact that there was no viable alternative for the rest of Bedfordshire, to announce that we were minded to implement Bedford’s proposal. We also announced at the same time our intention to issue a further invitation to all the remaining councils in Bedfordshire to put forward unitary proposals for the rest of the county. That was on 19 November. We could not have issued that earlier for two reasons. First, in the light of several challenges brought by councils against the Secretary of State in relation to the ““minded to”” decisions and the first pre-statutory invitation, it was appropriate to wait for the Local Government and Public Involvement in Health Act 2007 to receive Royal Assent before issuing an invitation, so that we could make that invitation on the basis of the provisions in the Act. Secondly, in the routine that we followed, we identified certain risks to Bedford Borough’s financial case. We therefore requested extra information, and it was sensible to wait until that had been thoroughly assessed by the independent financial experts. In fact, they confirmed that the risks were neither material nor significant. We gave councils four weeks to respond to that because we wanted to minimise the period of uncertainty, which has always been a consideration. We also made clear in July that we were going to issue a further invitation for the remainder of Bedfordshire, so councils had an extensive opportunity to get together to do the preparatory work. We hoped that all the remaining councils in Bedfordshire would co-operate to submit a joint proposal, but that did not prove possible. Instead, we received a new and much improved proposal from Mid and South Bedfordshire district councils for a unitary for the rest of Bedfordshire to be called Central Bedfordshire. So, as we were required to do by the 2007 Act, we began a further consultation in December, in which we asked stakeholders to specifically comment on the extent to which the central Bedfordshire proposal, together with Bedford Borough’s proposal—the two-unitary solution for Bedfordshire—were likely to meet the outcomes specified by the five criteria set out in the invitation. We also requested that respondents consider whether the two-unitary option on the table or the single-unitary proposal made earlier by the county council would better achieve the long-term outcomes specified by the criteria. There were two options to consider. We allowed eight weeks for consultation, which was justified because of the preparatory work, the long and protracted process and the fact that there had been an earlier consultation on the proposals from Bedford Borough and the county council. We felt that an eight-week consultation period would allow us to press on towards implementation on 1 April 2009 and thus avoid another year of uncertainty and potential disruption. The two critical issues were support and affordability. I know that we have gone over this ground quite a lot in Committee and in the House. The definition of ““broad cross-section of support”” is whether a new unitary authority would genuinely meet its objectives and work for local people because it had the support of critical partners outside local government, including health or police services, which would have to make it work. That is not the same as popular support; it was not a test of public opinion. We left it to the local authorities to solicit opinion locally in the way that they thought effective. We received evidence reflecting divided opinion, divided politics and divided loyalties. It is clear from that that the two-unitary solution commands support from three of the four principal councils in Bedfordshire, but there was strong opposition from the county council. Those divided loyalties were reflected in local polls, and a poll conducted by the county council showed that 46 per cent of those polled preferred the single-unitary proposal. Bedford Borough, however, submitted a petition with over 30,000 signatures in support of its proposal. The county council submitted a petition with 30,000 signatures as part of its ““save our services”” campaign. It was very evenly divided, as was stakeholder opinion. While there was a consensus from the majority of respondents in support of a unitary local government solution, in whatever form, for Bedfordshire, it is fair to say that a majority of representations received from public sector stakeholders expressed a preference for the county’s single-unitary proposal. However, as I said before, it is not and never has been about majority opinion. The two-unitary solution has support from some public sector stakeholders, the business community, education and housing, as well as some third sector support and support from some town and parish councils. We thought that was sufficient support to ensure that it would work. In terms of affordability, as we followed for the other unitaries, the transitional costs must be expected to be more than offset by the savings that the proposal is estimated to generate within a period of less than five years. We used an independent assessment; we did not come to the judgments alone. The financial cases were subjected to rigorous and independent scrutiny by ex-local authority chief finance officers employed by the department through CIPFA and IPF. They went over all the figures for both the Bedford Borough and Central Bedfordshire proposals in the light of the further information that we requested. They undertook their own modelling and made their own assessment of the risks, and concluded that the two-unitary solution was a medium risk, but that it met the affordability criterion with a payback period of less than five years. They concluded that the levels of savings envisaged were about £18 million a year, which is the high end of the sort of savings that we have seen from other unitaries. In short, the proposals met the affordability criteria and will deliver savings that can be reinvested in local services or in reducing council tax. As I said earlier, a decision on which proposal to implement where there are alternative proposals is not about support or affordability; it is about which one delivers to the greater extent the long-term outcomes that we are seeking. After considering all the relevant information, the Secretary of State concluded that the two-unitary solution would deliver those long-term outcomes to the greater extent, particularly as a two-unitary Bedfordshire would be better focused on the different needs of urban Bedford and the predominantly rural middle and south of the county. The JCSI has drawn this order to the attention of the House because of what it considers an unusual use of the powers in the Local Government and Public Involvement in Health Act 2007 in the provisions cancelling district council elections in 2008. As we have said before in relation to the other restructuring orders, we do not agree that the use of this power is novel or unusual. There are strong legal arguments in support of the position that there is a power under the 2007 Act to make such provision and we note in this latest report that, significantly, the JCSI has not expressed any doubts about the vires. So we are now in agreement on that point. In our view there is a powerful policy case for cancelling the district council elections. We explained in our memorandums that, were they to go ahead, their purpose would be open to question since those elected on this occasion would not have the key functions—for example, setting budgets and council taxes for the next year—that they would normally be expected to undertake as councillors. Therefore, all sorts of questions would be raised about whether candidates would be prepared to stand. The elections would be very confusing. We argue that they would be positively damaging as people would think that they were normal elections when that was not the case. The electorate would be invited to vote for people whose powers and term of office would be unusually limited. It could be argued that it would be wasteful of resources to hold elections for members who would have a term of office for less than 11 months, and would not have the power to take the decisions that councillors would normally be expected to take. It is for that reason—the practicality of needing to cancel the elections—that we have laid this order before the House so soon after we announced our decision and why we have pressed for its early consideration by the House. The Merits Committee invited the Government, in the light of Bedfordshire County Council’s judicial review challenge currently before the High Court, to, "““explain more fully what action they would take if the High Court’s ruling meant that the Order could not go ahead””." I am happy to do that now. The county council’s challenge is to the Secretary of State’s decision of 25 July 2007 that she was ““minded to”” implement the proposal made by Bedford Borough Council. Significantly, the decision taken under the Act which this order seeks to implement is not subject to challenge. We consider that it is unlikely therefore that the order would be quashed and in our view there is no purpose served by speculating about an outcome which is unlikely to materialise. Even if the court were to conclude that the decision of 25 July 2007 was in some respect flawed, that decision has been superseded by our decisions taken since the Act has come into force, and this raises serious doubt about whether it would be appropriate for the court to grant any relief to the county council. This reasoning reflects the Court of Appeal’s conclusion in the related Shrewsbury and Congleton case that decisions or actions made in advance of the orders coming into force under the Act were no more than preparatory steps; the only issue which ultimately mattered was the legal effect of the decisions taken under the 2007 Act. On that basis we feel that it is essential to continue with this process and push on towards the 1 April 2009 implementation, which is what everybody in Bedford wants. We know that that implementation will be challenging but we believe there is now an evident and growing willingness and an urgency to make the decision which has been taken work. In Bedfordshire officials and elected members alike are beginning to come together in a determination to work through what is best now for the people of Bedfordshire as swiftly and as clearly as possible. The mayor of Bedford and the leaders of Mid and South Bedfordshire district councils have written to me confirming this outcome. In his letter, the mayor says: "““I want to assure you that there is huge commitment, enthusiasm and capability from both Members and officers to achieve the timetable proposed in the Order. We believe the strategy of sooner rather than later is absolutely the correct one to have taken and will achieve the minimum disruption to service users at the minimum cost to local and national taxpayers.””" The leaders from the district councils set out in an extensive letter the preparations that they have already made for the Central Bedfordshire council. They ask me to stress, "““the work already done and the enthusiasm we have already generated in the process, so that the House of Lords is clear about what is happening on the ground””." They go on to say: "““There is huge enthusiasm in our area to respond to the timetable proposed in the Order, which we believe is achievable, and we would respectfully ask you to urge the House of Lords to approve the Order.””" The people who need to deliver these changes are fully and actively committed to making them work, and are working hard to ensure that they make the most of the benefits. They obviously now need and seek the approval of Parliament. I sincerely hope that Members of the Committee will now assist this process and support the order. I beg to move. Moved, That the Grand Committee do report to the House that it has considered the Bedfordshire (Structural Changes) Order 2008. 14th Report from the Joint Committee on Statutory Instruments, 15th Report from the Merits Committee.—(Baroness Andrews.)