Cheshire (Structural Changes) Order 2008
Baroness Andrews (Parliamentary Under-Secretary, Department for Communities and Local Government; Labour)
My Lords, today we are debating the order that brings into effect two unitary authorities for Cheshire. I am well aware that this decision has raised considerable passion in this House and that is reflected on the Order Paper. We all have an interest in the future governance of Cheshire and, with this in mind and with the indulgence of the House, I hope that I can explain why we have already addressed many of the concerns raised by noble Lords in their amendments to the Motion. It has been a difficult decision, but nevertheless it is a decision which we believe provides the right governance for the people of Cheshire moving forward.
I will deal with this comprehensively, because it is important for the House to know how we have gone through this process and why we have reached the decisions that we have. I will therefore set out the general approach that we have adopted to unitary restructuring and the precise approach that we have taken in assessing this proposal and judging that it meets the criteria. I will also deal with the issues raised in the report by the Merits Committee. I emphasise before I do so that the JCSI, which has a key role in scrutinising legal instruments, has given the order a clean bill of health. I know that many noble Lords have emotional and political ties with Cheshire. Their concerns mirror the fact that we are also very well aware that, with every reorganisation, there comes a degree of local and sometimes historic disagreement, which can be a very unhappy experience for many people.
While the Government set out the case for unitary authorities in the original White Paper, pointing to the confusion and weakness that is inherent in two-tier working when services and responsibilities are split, the choice of the way forward has been entirely a matter for the local authorities themselves. That is precisely what has made this restructuring process different from previous processes. What we have done is to simply invite those principal councils in England that wished to do so to put their own proposals for new unitary structures or enhanced two-tier working to overcome those challenges. Indeed, the option to put forward an enhanced two-tier solution for Cheshire was one of the options open to the councils. In the event, that did not prove achievable. The search for a unitary solution, as noble Lords will know better than I, goes back many years, with many councils believing for some time that a unitary solution was the only way forward. All seven principal councils had an opportunity to come forward with a joint bid for a unitary structure that they could all endorse. Likewise, in the event, this did not prove possible.
In the end, this is a unique situation reflecting the complexity of local government relations in Cheshire, and the geography and political make-up determined that we received three different proposals from the councils in Cheshire. In our judgment, only two of those met the criteria that we set out in our invitation—the proposal for a single unitary put forward by the county council and the proposal made originally made by Chester City Council and then subsequently endorsed and joined by the borough councils of Ellesmere Port and Neston, Macclesfield and Vale Royal for a two-unitary Cheshire.
It is important that I explain the criteria that these two proposals needed to meet and how we made our choice between them. The criteria set out in the invitation were devised to reflect the aim of restructuring, which was to put in place local governance which would best enable an area to achieve economic, social and environmental success. Therefore we set out three criteria which specified what restructuring should deliver. These criteria therefore focused on strategic leadership, genuine opportunities for neighbourhood flexibility and empowerment, and the delivery of value for money and efficiency of public services. That was a judgment about the future—about likely outcomes if the proposal were to be implemented.
However, when assessing a proposal for unitary local government, it is important to consider not only what the proposal would achieve once implemented, but what the change to the new structure would involve. Briefly, would it be worth the candle? Would it have sufficient support locally for the new unitary structure to be a success in delivering quality local services and in enhancing opportunity and prosperity? Therefore, our invitation also set out two criteria that if the change were to be made, it must be a change that would not set up new councils that were designed to fail; and that has meant, first, that those advocating change should show that it was affordable, and secondly that it would have the support of people who would ensure pragmatically that their partnership and commitment would ensure better services, better strategies for the entire community. That is precisely why we chose the form of words that there should be a,
"broad cross section of partners and stakeholders".
As with the other criteria, the judgments were prospective. In the case of Cheshire, we received two diametrically opposing proposals—one for two unitary authorities, which this draft order seeks to implement, and another for a single unitary authority. We made clear in our consultation paper published on
I understand that some noble Lords disagree with our judgment and we have tried wherever possible to listen to, respect and respond to those concerns, but the fact is that opinion remains divided, just as it does on the ground in Cheshire, on the relative merits of the two proposals. I understand the sincere feeling among some noble Lords and the case for delay that we will hear this evening can be argued either because some noble Lords feel that delay would be a better outcome or that they still hold to a preference for a single-unitary option. Both positions are honourable but neither will serve the interests of local authorities now being formed in Cheshire—and neither is open to us today.
I shall go through the criteria. Noble Lords here may say that this proposal is neither affordable nor sensible, and the amendment to be moved by my noble friend Lord Grantchester reflects those concerns. We do not share those perspectives because, for a proposal to meet the affordability criterion, the transitional costs must be expected to be more than offset by the savings that the proposal is estimated to generate and this is expected to be achieved within five years. I shall explain how we arrived at the judgment, which we did not come to alone.
The financial cases for each proposal were subjected to rigorous scrutiny by independent financial experts—ex-local authority chief finance officers—employed by the department through CIPFA and IPF. In the case of Cheshire, as part of our careful examination of the affordability criterion, we identified certain risks to the financial case put forward for the two-unitary bid and requested in August that the proposers of that bid submit further financial information on the viability of their business case. Our financial advisers independently analysed the business case in light of this further information. They undertook their own modelling, making their own assessments, and they concluded that it was right to categorise the proposal as high-risk, but within the safe context that the proposal met the affordability criterion.
The advisers concluded that the levels of savings envisaged in the proposals were not unreasonable and that the business case, even after significant additional risk provisions, still produced ongoing savings of some £16 million a year, which are at the high end of the sort of savings that we have seen in the unitary proposals that have been successful so far. We considered this risk-adjusted figure and a risk-adjusted estimation of the transition costs very carefully, and they are the figures on which we based our decision. They differ from the original bids because they are lower, but they support the conclusion that the proposal is affordable; transition costs are repaid within 3.7 years—well within the five years that we set out as part of the criterion.
Let me conclude on this point by answering a particular criticism that has been levelled at the Government in this House and the other place that we have not released publicly the assessment of our independent financial experts. We decided not to release this report—not just in relation to Cheshire but in relation to all the areas where similar requests have been made—because we consider that it falls under the exemptions in Section 35(1)(a) of the Freedom of Information Act 2000, which relates to the formulation or development of government policy, and Section 35(1)(b) relating to ministerial communications. We consider that the public interest weighs against its disclosure, in particular because of the need to preserve the thinking space around Ministers when reaching decisions, to maintain the convention of the collective responsibility of Ministers.
I turn to the issue of support, which is very important and is the subject of the amendments to be moved by noble Lord, Lord Wade, and by my noble friend Lord Harrison. Let me be clear about what the definition of,
"broad cross section of support",
actually means, as set out in the original invitation. It is, essentially, about whether the new unitary authority genuinely meets its objectives and will work for local people. Again—and this is different from any reorganisation that has taken place in the past—we were conscious of the strain and stress in any change. We knew that the proposals would have to be tested against whether they would work, because they had the support of those, including partners outside local government itself, like the health or police services who would have to make them work.
That is not the same as popular support and that is deliberately the case. We did not make this a test of public opinion; that is, whether we had a majority of public support. We did not base support on whether there was a majority of stakeholders, a majority of local citizens or a majority of some other group of interested persons who supported or approved the unitary proposal. In our original invitation we explicitly recognised that any proposal might not carry consensus from or within all sectors, and that is why we said that no single council or body, or group of councils or bodies, could have a veto. We left it to the local authorities to solicit opinion locally in the way they thought effective in order to demonstrate how the proposal would stand up against the support criteria. The responses we have received to the stakeholder consultation as a result reflect divided opinion, divided politics and divided loyalties.
The two-unitary proposal was originally made by Chester City Council, and subsequently endorsed and joined by the borough councils of Ellesmere Port and Neston, Macclesfield and Vale Royal. Predictably, there was strong opposition from the county council on the basis of its unitary proposal, and from the remaining two districts, the borough councils of Crewe and Nantwich and Congleton. I can tell the House that Congleton's claim for judicial review was dismissed by the High Court on all grounds in September. Today, we have learned that the appeal has been dismissed unanimously by the Court of Appeal, which has also refused leave to appeal. We welcome this judgment. We urge Congleton, before it seeks to take its claim further, to think very carefully about what course of action is now truly in the interests of their council taxpayers and local communities.
As I said, local polls conducted by the affected councils had varying but predictable results. A poll commissioned by the proposing districts showed a preference for the two-unitary proposal over the single-unitary proposal—23 per cent compared with 16 per cent—whereas a telephone survey conducted by the county council demonstrated 46 per cent of support for a single unitary compared with 22 per cent for the two-unitary proposal. Hostile district councils—for example, Crewe and Nantwich Borough Council—conducted specific polls where the results were also predictably hostile. However, polls were only one of the factors that we took into account in assessing the range and depth of support for a proposal.
Stakeholder support was also predictably variable, with opinion being divided. Although there was a consensus from the majority of respondents in support of unitary local government in principle, 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, this has not been about a search for a majority. The two-unitary proposal has support from four out of the six district councils and some public sector stakeholders, such as East Cheshire NHS Trust and West Cheshire PCT, and some business and third-sector support, as well as some support from town and parish councils. On that basis we felt, and continue to feel, entitled to conclude that the proposal has sufficient support for it to be able to work.
We believe that support will be bolstered by that fact that the new unitary authorities propose to put in place new local area arrangements which build on established and successful practice in the Chester area. Those will ensure, with the new duty to involve under last year's local government Act, that local people are represented locally, that they have local influence and that they will be connected in new ways to the new local authority. That is a very important part of what makes these new unitaries "new".
Our judgment also turned on how closely the new authorities would match the existing economic footprint within Cheshire and therefore whether they or the alternative single unitary would be better able to take advantage of new opportunities and build on the economic realities. Again, we accept that there are differing views about this. The county council commissioned an independent report by the Centre for Sustainable Urban and Regional Futures, which sought to challenge the notion that east and west Cheshire are component parts of the neighbouring Manchester and Liverpool city regions. The proposing district councils, on the other hand, claimed that the findings in the report lacked hard evidence and that in any event the data in the report could be interpreted as supporting the east-west split. They used travel-to-work journey data to argue that the east and west were self-contained economic units.
We carefully considered all the information submitted to us, and the views represented a range of different positions. We have read the report very carefully and are persuaded that the data in the SURF report was equivocal and that the travel-to-work journey data support the argument that the east and west are self-contained economic units. Furthermore, we believe that the reality now, and in the future, is that the economic drivers of Liverpool and Manchester—and, to a lesser extent, Deeside—will continue to dominate the region and offer greater advantages in the future. As it better matches this economic reality, the two-unitary option offers the possibility of a more focused approach to economic development to take advantage of that. We believe that the single unitary system would not offer those sorts of advantages.
We are also convinced that these new authorities, through effective place-shaping, will be able to channel economic prosperity and influence outcomes throughout their communities, including those to the south that would perhaps consider themselves marginalised from this economic reality. We are convinced that the new neighbourhood and area committee arrangements will genuinely connect people with their local neighbourhood and new councils.
I turn to the issue of deliverability and shall reflect on the Merits Committee report. The committee said that it understood the Government's wish to achieve an early resolution of uncertainties but suggested that,
"this be weighed carefully against allowing more time to prepare for the establishment of the new authorities".
We have weighed and considered that carefully. We accept that implementation will be challenging. This is a complex undertaking and there are risks. However, we are confident. We have strong leadership, proper planning and the right level of input and co-operation from all the existing local authorities and stakeholders to ensure that these risks do not materialise.
Strong evidence was presented to the Merits Committee that local government in Cheshire will provide, and is providing with increasing energy and commitment, the necessary leadership. The debate in another place provided further evidence of that. As I said, compelling evidence was presented to the Merits Committee that new councils in Cheshire are co-operating positively and practically to begin the delivery and transition process. Much of the preparatory work is already well advanced.
The Government are supporting and monitoring delivery through our regional office. My officials meet regularly with the joint implementation teams that are already up and running on the ground. The relevant government office works closely with the implementation teams pulling in service-specific expertise across the services, providing support where necessary, and helping to build the capacity of the officers where appropriate.
There is also a requirement in the order for implementation plans to be drawn up, against which we will monitor progress. A recent implementation update report provided to my officials has also highlighted the desire of major partners to be fully engaged. This was picked up by the Member for Macclesfield in the debate in the other place last week, who said:
"In all the arrangements, all seven local authorities and their partners are actively and positively involved with major partners, signalling their desire to be more fully engaged. Good progress is being made".—[Hansard, Commons, 26/2/08; col. 1055.]
I do not for a moment deny that this is a challenging situation. However, there are precedents with successful restructurings having taken place on a similar timescale in Humberside and Avon in 1995-96. We are confident that new flagship councils delivering strategic leadership, effective neighbourhood empowerment, value for money and equity in public services can be delivered in Cheshire on
Perhaps I may spell out to the House the genuine risks of delay. If we delay, we risk creating a further period of uncertainty—for a year or perhaps more—for the people of Cheshire. What would that achieve? On top of that, the thousands of employees of the current councils will be in a state of limbo and uncertainty for another year. If we delay, we will derail the process which is now seriously under way of local government officers working together for the good of the people of Cheshire. We will jeopardise the progress that has been made. Again, I refer the House to the words of Members of Parliament for Cheshire in the debate in the other place. They know their constituencies and know what is happening on the ground. The Member for Weaver Vale said:
"Now is not the time to emphasise our divisions; we should be saying, 'This is what we'll do, and what is in the best interests of everybody whom we represent.' We should take that agenda forward in a positive way".—[Hansard, Commons, 26/2/08; col. 1057.]
I have received a letter from the leaders of Macclesfield and Vale Royal borough councils—the two councils that will be leading implementation in east and west Cheshire until the elections. In the letter, they say that they are,
"keen to get on with the task of implementation of the two new unitary authorities in Cheshire and to keep up the momentum which we are already achieving through engagement with officers and elected members of all existing councils in Cheshire. We would ask that you stress that to the House of Lords in the debate which you will be leading for the Government tomorrow".
I have done that.
If we delay, we break faith with the fact that, despite the genuine difficulties and unhappiness, there is now a growing willingness to make the decision work. Officials and elected members alike have come together in a determination to work through what is now best for Cheshire as swiftly and as clearly as possible. It is to the enormous credit of those professional officers and councillors alike who did not want this choice to be made that they are now determined to make it work. They need, and seek, the approval of Parliament.
That approval has been forthcoming. The order has been considered in detail in another place, and the debate was constructive, despite some sharply argued disagreements. That reflects the progress that has been made and the shared desire in Cheshire to make unitary restructuring work. I sincerely hope that your Lordships will assist this process now and support the order without delay or division. I beg to move.
Lord Wade of Chorlton (Conservative)
rose to move, as an amendment to the Motion, at end to insert "but this House calls on Her Majesty's Government not to proceed with the draft order until the residents of Cheshire have been fully and properly consulted and have been able to express a view on the division of their county."
Lord Wade of Chorlton (Conservative)
My Lords, I am most grateful to the noble Baroness for the rather lengthy explanation that she gave us of how the Government came to this decision. I listened to it with great care. I thought that, if she had come to a different conclusion, she would have said something very similar.
I have lived in Cheshire all my life. My family has lived and farmed in Cheshire for a couple of hundred years at least and I was a county councillor in Cheshire in 1973 when we went through a reorganisation. My family business is in Chester and I have many interests in businesses and organisations—charitable and social—throughout the county. I know it extremely well. I decided to bring forward this amendment and to question the Government's decision because of the weight of influence that has been brought to bear on me from various parties who are very dissatisfied with the decision made by the Government.
I do not agree that the evidence received indicated a strong view in Cheshire for the two unitary authority solution. Throughout Cheshire, the view is entirely the opposite. There is no strong feeling against the idea of unitary authorities—I personally approve of unitary authorities because they are more efficient, more competent and can more sensibly deliver a range of services to the citizens—but I strongly believe that any change should have the one purpose of producing a better arrangement for the delivery of services to the citizens, to the ratepayers, to the businesses, to those who use all the services of a county council, to the elderly, to those who need social benefits, to education and to schools. Those should be of the best possible order and be delivered by an organisation that is as efficient and as well run as an organisation can be.
The Minister made no comment of any criticism—I do not think that anyone can—of the existing structure within Cheshire County Council, which has run the county extremely efficiently and already delivers some 80 per cent of the services now received by the citizens of Cheshire, covering the whole range of activities for which the council is now responsible.
I am sure that the Minister will agree with me that, over the period of this Government and previous Governments, the responsibilities of councils have increased enormously. I have no problem with that. Local delivery of services is no bad thing. At the same time, however, one must imagine that the greater emphasis on local delivery of services will increase rather than decrease; indeed, history indicates that that will happen. Therefore, for the future we need an organisation that is best fit to deliver those extra services; we need an organisation that attracts the most able leaders in the county, an organisation that attracts the most efficient and capable officers in the county and one that unifies all the activities of the county rather than destroys them.
The noble Baroness referred to those matters that she wishes to create. I am more concerned about what will be destroyed. An organisation to which all the people in Cheshire look as their central body will be destroyed and split into two. One interesting thing that has happened in those areas on the periphery of Cheshire that have been sloughed off into other areas or into their own unitary authorities is that they still think of themselves as Cheshire; they want to be part of Cheshire. It is a long-term, historic county, to which those in it have a great deal of loyalty.
I do not disagree with the noble Baroness when she makes the point that certain groups and certain authorities want to maintain their independence and want to be the new leaders. "They would, wouldn't they?", as has been said in the past. That is their role, but that does not mean that that is the best solution. The best solution is one that overrides the local issues, rivalries and prejudices and looks at what is the best long-term decision—I emphasise long-term decision. At the end of her remarks, the noble Baroness said that, if we do not agree this soon, there will be further delay, which will cause disruption. Frankly, I am not worried about a little delay now, provided that we come to the best decision for the people of Cheshire in the future.
The Minister talked about the economic future of the county and how it might be more satisfactory if the county were divided into two units that had their economic allegiance in different areas. I completely refute that scenario. Cheshire is an important economy on its own. Some 70 per cent of the economic employees in the county work in the county; they do not move elsewhere. Some of the finest companies in the UK are in Cheshire. I do not have to tell the House that it is one of the most productive rural counties in the country. It produces great leadership at all levels and has made an enormous contribution to the economy of the north-west. It is extremely important that it maintains a powerful voice in the north-west. By splitting it, we will not add to that opportunity. I do not accept the Minister's suggestion that the two divisions owe allegiance to other peripheral areas—the two major cities of Liverpool and Manchester—and I do not accept that that will happen in the future. The two major cities of Merseyside and Manchester have their own economies; they are thriving and effective areas, but so is Cheshire.
The noble Baroness is working against what the majority of people in Cheshire want. Her proposal is not wanted by the business community of Cheshire; it is strongly resisted by the rural community in Cheshire and by its very active food production industry; and it does not have the support of all the citizens of Cheshire. I believe that, if we are to go forward as the Government propose, creating a new structure well into the future with the inevitable disruption that will occur, that will not be the best solution. I appreciate her point that sub-committees have been established and are working towards that end—again, "They would, wouldn't they?", as that is their role. I have no doubt that they will try their best to make whatever they have work.
Neither have we found out what the financial implications are. The Minister made the point that it is not right for her to give certain information, but if people are to make the right decisions they need to understand the financial implications of these changes. History tells us that, every time we make decisions on the financial costs of local government change, those costs always end up at least twice as much as anyone ever anticipated. I am as certain as I can be that that will happen in this case. The implication of all the little things that the Minister has not mentioned or does not appear to have taken into consideration is that they will cause considerable problems. There are issues that are now dealt with by the county on a centralised basis, which everyone will find extremely difficult to divide into an east and a west.
I return to my original proposal that there must be a much better understanding of the financial implications, which must be transparent and open to everyone. On that basis the people of Cheshire can be asked for their views. Surely if we are to make changes of this kind they need to be of such a quality and such a level that all those affected by them are behind them and can support them. So far, that has not happened.
The noble Baroness makes the point that this is a difficult decision. Well, these are difficult decisions, because she is inundated with all kinds of pressure from all kinds of sources. But leadership must make those decisions away from the pressures, looking at the long-term picture of what is in the best interests of the county of Cheshire and its people. We should look again at the real requirements of our county. I beg to move.
Moved, as an amendment to the Motion, at end to insert "but this House calls on Her Majesty's Government not to proceed with the draft order until the residents of Cheshire have been fully and properly consulted and have been able to express a view on the division of their county."—(Lord Wade of Chorlton.)
Lord Harrison (Labour)
My Lords, let me introduce you to the ancient, proud and historic location of the county of Cheshire and let me introduce you to the strange world of Alice in Wonderland, the creation of one of Cheshire's finest sons, Lewis Carroll. For tonight the Government plan to take us into Alice's Wonderland, to wipe the smile off the face of the Cheshire cat and to create two artificial entities of west and east Cheshire: two entities that have no friends, no heart, no history and no bottom, solidity or definition; two entities entirely devoid of that which gives communities and individuals character, place, definition and support. Tonight we forge two entities entirely bereft of location, location, location.
I speak to my own amendment and support that of the noble Lord, Lord Wade, to try to avoid the break-up of this ancient, historic county of Cheshire, itself designated four star and still rising in its ability to respond to the people of Cheshire. Cheshire boasts of its chief executives in speaking of the quality of the people who have served this ancient county, even just over the past 30 years: Sir John Boynton was asked to help the Government out on the Rhodesia/Zimbabwe issue; Robin Wendt went on to work on care provision nationally; Colin Cheeseman is now a member of the Parkinson's Disease Society; Sir Michael Pitt recently reported on behalf of government on flooding; and Jeremy Taylor. That is the quality that the noble Lord, Lord Wade, was referring to—the kind of quality that will be lost if Cheshire is lost.
I strongly support the principle of unitary authorities. In a new incarnation, Cheshire can rise again as a single unitary. It has the capacity to absorb the 15 per cent of services currently given by the six district councils, because it supplies 80 to 85 per cent of existing work. It is ideally placed to oversee the transition, one of the follies of which is that there is no succeeding authority in existence to allow the collapsing of seven authorities into two. Of course, Cheshire can retain and, in its new incarnation, extend its reputation and its name as a county of bottom and worth—a Rolls-Royce of a county, with a big engine, running smoothly, proudly and effectively at its heart, and a real place.
My amendment to that of the noble Lord, Lord Wade, is designed not only to test the views of the people of Cheshire, but also to debate them in Parliament. I shall clarify the case for a single unitary but also plead for a delay, not as a delaying tactic but to ensure, if it is indeed the desire of this House and the other place to have two unitaries, that they are brought in successfully.
The Minister's siren voice is saying, as we have heard tonight, that delay will postpone elections, that Chester City Council badly needs County Hall now in order to decant its people and that general mayhem will ensue. But the House of Lords is nothing if not the place to flag up dangers to the other House when it perceives them to be real. Indeed, the delay is not of our making. It is imperative, even if you think that the two unitaries are required. It is better to arrive at the best decision than the fastest decision.
The delay is at the door of the Government and the district councils. The Government have hesitated three times in thinking about reorganisation in Cheshire since 2004. Only in July 2007, they dealt with five other unitaries with a clear verdict. However, this time, in looking at Cheshire, they said that what was proposed by the district councils and what was proposed by Cheshire County Council were both viable. They said that the five criteria were clearly passed by Cheshire County Council. Indeed, their problem was with the district councils. So poor and unconvincing were the district councils' financial returns that the Government asked them to go away and redo the figures. They did not ask Cheshire County Council to do so, because it passed with flying colours.
The Government reopened the matter and invited comments and then, abruptly, on
It was not only I who was surprised and it was not only Cheshire that was surprised that this decision was made in the dark days before Christmas. The Treasury was surprised, too. When I came back to your Lordships' House, I opened a letter on
However, the district councils' confusion did not help. The Government made great play of the proposals being from within Cheshire, originally sponsored, of course, by Chester City Council. It was claimed last week in the Commons debate that all six district councils supported the proposals. This is palpably false: Crewe and Nantwich has never supported them; Congleton has never supported them—indeed, we hear of the judicial review that has been requested; and the original sponsor, Chester, no longer supports them, following its change of administration in the town hall. Ellesmere Port and Neston supported them, but tells me that it supported an entirely different proposal, which was to split the county into three unitaries so that it would be Ellesmere Port and Neston plus Chester, although without Vale Royal. It did not see the idea of Vale Royal being part of a unitary, but now it will be part of that unitary. Vale Royal is in turmoil. It supported the proposal on the chair's casting vote, which resulted in the resignation of a senior councillor who was upset. That leaves Macclesfield. Of course, Cheshire County Council has to be added to the six district councils. It has always been sceptical and, despite the hard work done by its officers and members, attempts to get some co-ordination with the district councils have failed.
Large percentages are against the proposal. If we measure by the number of councils, their spending power and population, we have to conclude that a large majority are against. What about the Government's criterion of popular and stakeholder—I prefer the phrase "interested party" to "stakeholder", but I have to use it—support? Crewe and Nantwich financed a countywide IPSOS Mori survey and, within Crewe and Nantwich, a local postal ballot in June 2007, which was approved by IPSOS Mori and scrutinised by external auditors. The countywide telephone survey demonstrated only 23 per cent support for the two unitaries. Some 30,000 postal ballot papers were returned and produced a figure of 5 per cent—one in 20—in favour of the two unitaries. In June 2007, BMG produced a preference survey for Cheshire County Council in which only one in four was in favour of the two unitaries. Since then support has slipped and opposition has mounted.
In last week's Commons debate, Minister Healey talked about the necessity of providing a broad cross-section of support in Cheshire for these proposals to have two unitaries. Let us have a look at the broad cross-section of support. Let me name those who broadly support it. Mr Healey quoted AstraZeneca; Cheshire Building Society; East Cheshire NHS Trust; Western Cheshire Primary Care Trust; West Cheshire College; the Highways Agency; and Age Concern East Cheshire. That is it. Contrast that with the opponents: Cheshire Police Authority; Cheshire Fire Authority, of which I shall speak more; the Probation Service; Cheshire Association of Governing Bodies; Cheshire Association of Secondary Headteachers; Cheshire Association of Special School Headteachers; Cheshire Association of Primary Headteachers; Age Concern Cheshire; Merseyside and Cheshire Ambulance Trust; Central and Eastern Cheshire PCT; Cheshire Association of Local Councils; Cheshire Federation of Women's Institutes; Cheshire Federation of Young Farmers Clubs; Reaseheath College; Age Concern; Cheshire Landscape Trust—I declare an interest; Manchester Airport plc; Cheshire Crimebeat; and the National Trust. I am not sure of the position of the chess club in Chester, but that does not represent a broad cross-section.
Minister Healey also invoked the parish councils. He said that six out of 20 parishes were in favour of the two unitaries. The truth of the matter is, as the DCLG's paper demonstrated, that of the 53 parishes that replied, 48 were against. The failure to publish the DCLG responses has provoked more concern about the responses of the people of Cheshire to these proposals. We know that there were 906 responses, but the Government have published or allowed us to see only 233. Even the 233 responses from people and institutions in Cheshire show that only 5 per cent—one in 20—are for the proposed two unitaries.
Your Lordships' esteemed Merits Committee has pronounced on this. It sought only to pronounce on the response. There has already been talk about that this evening. When your Lordships comment on something, the most moderate of language is used. This is a compendium of those who are against the proposals and it is a source book for those who wish to see why that is the case. This is the conclusion of our Merits Committee:
"We recognise that creating two new authorities to run some of the most complex services, such as child protection and adult care, must pose particular challenges. We understand the Government's wish to achieve an early resolution of the uncertainties caused by re-organisation, but suggest that this should be weighed carefully against allowing more preparation time for the new authorities to be established, bearing in mind the complexities that have been identified".
Other noble Lords will speak to that, but children's and adult's services are complex issues, with which the members and officers of district councils are unfamiliar. The Minister said tonight that the Merits Committee gave some sort of green light, but I think it is far from that and as deep an amber and as near to red as could be found.
I shall amplify two areas of particular concern that have already been labelled as those that oppose the two-unitaries solution. One is the fire authority. The chief fire officer has been in contact with me because he is worried that the concerns about running a proper fire service in Cheshire have not been recognised by the Government. The fire authority writes that,
"the Fire Authority will be heavily impacted by the changes to the council structures in Cheshire, both from a partnership perspective, and constitutionally ... Although earlier Government guidance suggested that arrangements for reconstituting the Fire Authority would be dealt with separately, we feel that it is both inconsiderate and naive of the Government for the Order to be issued without explicitly recognising the impact on organisations which draw their Members from affected Authorities, such as ourselves and the police authority.
Moreover, the inability to spell out what impact the transitional arrangements will have on the Fire Authority and at what point changes will be made to our constitutional arrangements, is likely to damage the objective of establishing strong arrangements for empowering local communities".
What are the criteria that have been put forward by the Government? Like the new and existing councils, the fire authority will have to ensure continuity of services, despite potential changes to over half the existing membership.
Let me now turn to the schools sector. I very much regret that despite many requests Ed Balls, the Secretary of State for Children, Schools and Families, has not met those of us from Cheshire who would have liked to have put him right about these issues. I quote from a letter of
"These concerns, are, we believe, causing some schools to lose their focus on raising standards and divert their energies to combating perceived threats. A few of our schools are even considering what we consider precipitate and perhaps inappropriate courses of action to combat those perceived threats. It would therefore be most helpful if the DCSF, as the only currently existing body"—
because there is no succeeding body—
"with ongoing responsibility and authority could provide the reassurances that we seek. But the government must understand that if the finances of the two unitary councils are weak from the outset—and they will be—then the new authorities will inevitably struggle to provide the same services as at present".
Finally, it states:
"The organisational uncertainty, policy hiatus and central education leadership team changes precipitated by LGR, not to mention an exceptionally challenging timetable for implementation are, however, jeopardising educational standards".
We are here to listen and we are here to act on that advice.
We heard from the Minister and from Minister Healey that everything is going hunky-dory in the preparation committees, the implementation committees. That, too, is wrong. The leader of Crewe and Nantwich Council states to me:
"Faced with a fait accompli and with the three authorities"—
those proposed in east Cheshire—
"being responsible public bodies, there is an inevitability about wanting to make the best of a dog's dinner. However, he"—
"is utterly wrong that good progress is being made. There is not even get an agreed implementation plan. He is right that the process is challenging. In all other areas, county councils are absorbing districts and there is a continuity of authority approach. In Cheshire there is no continuing authority and the county council functions need to be disaggregated. There is no precedent for this and yet there is an expectation of working to the same timescales as other new unitary councils. The timescale will be achieved, but not in a smooth fashion and not without great cost, upheaval and distress".
Interestingly, in her opening address, my noble friend said that there are examples from the past—Berkshire, for instance, in 1974. But when Berkshire was split, it went down to the five existing district councils. Therefore, they had a fair start. Mention of Avon and Humberside is astonishing. They were unloved from the beginning and when there was the opportunity to get rid of them, people were pleased to do so.
We are talking about the county of Cheshire, which has been here for a thousand years. Cheshire County Council is a Rolls-Royce county. It has men and women with huge experience of public service. When it is asked to do something, it attempts to do it. I hear from the county council that officers and councillors are coming in from the district councils who know not what they are taking on, in terms of the sizable services, the implications for children and adult services, or anything else.
Lord Tordoff (Liberal Democrat)
My Lords, I hope that the noble Lord will forgive me if I draw his attention to the Companion. Paragraph 4.44 states:
"In debates where there are no formal time limits, members opening or winding up, from either side, are expected to keep within 20 minutes. Other speakers are expected to keep within 15 minutes".
I fear that the noble Lord has now been speaking for 23 minutes and a number of us who are in support of him will find ourselves less so than when he started.
Lord Harrison (Labour)
My Lords, I apologise, but in mitigation, I hope that the point that I made right at the beginning will be understood: that we have simply not had the opportunity to put our point of view. Despite other Members of this House having applied repeatedly to the Chancellor, the Secretary of State for Education and others, we have not been entertained or given a chance to speak up. I apologise to others and I will try to bring my report to a close, but I hope that the House will understand that there is that strong feeling.
Let me just mention some other areas. If we are to conclude as we are, we will have difficulties with education and children's services. We will have to disaggregate current functions such as highways, libraries, waste, trading standards and tourism. There is even the problem at Tatton Park that is, increasing bureaucracy and costs.
Let me conclude with some mention of strategic leadership. When I was concerned with Cheshire County Council in the north-west, it was imperative that Cheshire County Council spoke with one voice. Otherwise, we in the north-west lost the gravitational power of Liverpool, of Manchester and of Lancashire. As the noble Lord, Lord Wade of Chorlton, mentioned the report from Salford University, which routs the proposition that somehow Cheshire in the west and Cheshire in the east gravitate towards Liverpool and Manchester, whereas in fact they have a unique, strong and thriving economy within themselves, I will not repeat that.
In conclusion, in my amendment I have sought to add to the amendment moved by the noble Lord, Lord Wade of Chorlton, that it ought to be discussed here as well as taking the views of the people of Cheshire. I am prepared to withdraw my amendment, and I remind my noble friend that this is not a fatal amendment, but it is an amendment from the heart of the people of Cheshire, who do not want their county disaggregated, but who want more time than the 20 minutes accorded tonight to say, "Think again", even if it is only to think again about how we produce two unitary authorities. That opportunity should be taken; it should be taken tonight. I beg to move.
The Bishop of Chester (Bishop)
My Lords, when the Victorian county boundaries were settled, those responsible tried to follow natural boundaries as far as possible. In the case of Cheshire, that was the River Tame, the River Mersey, the Derbyshire hills and the Welsh border in particular. The church followed that, so the Diocese of Chester, when it was formed in its modern size, followed the Victorian county of Cheshire.
In 1974, there was radical change, with about a third of the diocese, in population terms, moving into the new metropolitan counties of Merseyside and Greater Manchester. Subsequently, there was the formation of Holton and Warrington unitary authorities, spanning either side of the Mersey. So modern Cheshire is about half what it was until 1974. The past 30 years have seen further evolution in the former areas of Cheshire, with the demise of the metropolitan county structure and the emergence of the unitary authorities of the Wirral, Tameside, Stockport and Trafford, which impinge in various ways on the old county.
My diocese now comprises the current county of Cheshire plus the various areas which have been affected by that series of reorganisations. My ministry has been across all those areas for the past 11 years and I have learnt to love, respect and serve them equally. One conclusion that I have drawn is that, when it comes to local government, it must be local and relate to local realities, beliefs, practices, traditions and aspirations. People do not want a sense of local government being imposed against the will of local people, being imposed roughshod.
On the details of the proposal before us, although all the changes of the past 30 years or so have been happening to the north, the current county of Cheshire, with its county council and six district councils, has generally worked well. I endorse all that the two noble Lords who have just spoken have said about that. The county council in particular can claim a great deal of credit for its consistently excellent performance, which has been acknowledged by successive performance reviews. I imply no criticism of the district councils, with their more limited and local remits, but there has been overwhelming appreciation for the work of local government in Cheshire.
In the performance assessments that have been made, the education service has always been a special beacon of excellence. I can testify to that from my direct experience of visiting very many schools—infant, junior and secondary—as well as the quite exceptional special schools that are such a credit to Cheshire. Current school provision across the county is generally good. I know this from comments of my clergy who move around the diocese with children. I very rarely have any problem with children not settling into new schools. In other parts of the country, a different tale is often told. I was therefore not surprised to see that those who are responsible locally for schools, as we have heard, have made particular and unanimous representations against the current proposals. As we all know, education is a very sensitive subject today in society, and indeed in politics, and rightly so. The unanimity of opposition from those responsible for educational provision to the proposals should be weighed particularly carefully.
If what I have said so far is broadly accurate, we may well ask why we do not leave things as they are and encourage the county and the six districts to deepen and develop their partnerships and joint working. As the Minister said at the outset, that was one of the possibilities which the White Paper and the subsequent Bill permitted. If it ain't broke, don't fix it. In many ways, reflecting on the discussions of the past year or two, that would have been the wiser course. It is not where we are now. I agree with the noble Lord, Lord Harrison, that the single unitary authority has obvious objective merits, but the path to get to that other than by a process of much better consensus has been stony and difficult.
Having seven different councils can look a little complex and messy, and so to some extent it was and is, but Cheshire is best seen as a fellowship, a family, of quite distinct, yet closely related and competent, communities: from Neston to Macclesfield, from Congleton, Crewe and Nantwich to Chester, from Alderley and Knutsford to Middlewich and Malpas—I could name many others—each with their strong local institutions and civic traditions, their town and district mayors. I have met dozens of them over the years. All of them are a credit to the county, and all aim to serve their people and to be examples of what we have heard of so far.
The present two-tier arrangements may have degrees of inefficiency, but they are honed to work well and are widely appreciated, so where did the impetus for change come from? Inevitably, we would need to delve into the rather murky world of local politics to understand what started this current juggernaut to roll. There was also a belief, which came to be shared more widely, that a real case can be made for unitary local government. I accept that. Indeed, I lived through it in Yorkshire where I was a vicar before I went to Chester when Humberside County Council was dismantled.
From a combination of political boxing and coxing, on which I would rather not speculate, and from a sense that in an ideal world the unitary structure probably was best, two clear proposals emerged: for a single unitary authority based on the current county boundaries; and for two unitary authorities based on an east-west split. The problem with the east-west split is that there is no natural geographical, social, cultural or business north-south boundary in Cheshire; it is a purely arbitrary line that is drawn to separate east and west in the way that is proposed.
Unsurprisingly, given the strong traditions and many very able people involved in local government in the area, both these proposals were recognised as meeting at least most of the criteria which the Government had set down—for affordability, strategic leadership, empowerment of neighbourhoods, and value for money in public services—although the evidence that I have seen suggested that the bid for a single unitary authority would produce better value for money. It is much less clear to me that either proposal has support across a broad cross-section of partners and stakeholders. Indeed, in one sense it is a little illogical to pretend that both can, because in one sense they are mutually exclusive. This seems to be recognised in paragraphs 7.12 and 7.13 of the Explanatory Memorandum to the order. Paragraph 7.12 says:
"In all areas, a wide range of views was expressed".
That is, there was a lack of consensus right across the views that were expressed. Indeed, if you were to distil the consensus, as has been said, it would be for the single unitary authority.
On proposals to restructure this House, the Government are on record as saying that consensus is by far the best way to proceed. There is no consensus in Cheshire for either of the present unitary proposals, not least for the Government's present proposal. It does seem that the process has gone badly wrong somewhere along the line to get us to where we are this evening. If we need a clear demonstration of the lack of consensus, we need only look at page 9 of the summary of responses in the stakeholder consultation. I will not go through them—the noble Lord, Lord Harrison, has already done that very effectively—but it is difficult to read them and pretend that there is consensus for the proposal for two unitary authorities. One is left wondering why the Government have decided on the other option of two unitary authorities. It certainly does not seem to have been decided on the merits of the case, certainly not to the people of Cheshire. That is why I shall support the amendments.
Let me emphasise that I, and everyone in Cheshire whom I know, will work hard to make work whatever is put into effect, however hard that will be. There is the good will and desire at the end of the day to make things work, but it is very difficult, speaking on behalf of the community in which I minister, to realise that we are starting from such an unsatisfactory proposal. In the short term, there will be much disruption, despite the good will with which the transition will be attempted. In the longer term, I fear especially for the educational provision, which has justly received beacon status and which is so important to the communities themselves. The Government say that achieving a broad cross-section of support does not mean doing a head count of those who support what is being proposed, but that what is being proposed is in the best interests of the people of Cheshire. I can tell the House that people want good schools and good education. They have it. They want a director of education, not a director of adult and children's services all combined together. That is one of the ways in which the two unitary authorities proposal is made to be affordable: by lumping too many things together.
Let me draw my remarks to a close with a more general point. Those who favour the two-unitary solution have tended to do so on the basis that, whereas west Cheshire relates to Liverpool, east Cheshire relates to Manchester. The summary of responses speaks of city regional strategies in this regard, and the Secretary of State's letter giving her decision contains similar hints. I do not believe that the people of Cheshire think of themselves as outlying citizens of city regions. There is simply very little evidence that they think in that way. They think first and foremost with pride of the deep historic links in Cheshire itself. Perhaps those in the areas that were detached in 1974 have come to think of themselves as relating primarily to Manchester and Liverpool, but not those in modern Cheshire, which has many thriving rural and semi-rural areas along with urban areas such as Crewe. The essential unity of Cheshire as such has emerged quite clearly once again during the recent recession in agriculture. One of the things I fear is that, if government agendas are driven so much by city and urban agendas, rural policy will not be given its own integrity and proper consideration. That is one of the consequences of driving a wedge through what is clearly the integrated agricultural county of Cheshire itself. So I hope that there is yet time for the Government to think again, hard though that may be to contemplate, to consult the people of Cheshire more fully and to ponder the right way forward before continuing on the present hasty path.
Lord Grantchester (Labour)
My Lords, I shall speak to my amendment on the Order Paper. It is true to say that debate over local government reorganisation in Cheshire has raged between the local authorities for more than a year. The decision has gone to replays and extra time, and many are now of the view that we must get behind the Government's decision. However, this is not the preferred option of Cheshire residents generally and I support all the comments made by my noble friend Lord Harrison and the noble Lord, Lord Wade. Indeed, we three Cheshire Peers have been agreed together, as with the business community and the majority of stakeholder responses, in supporting the county council's proposal for a single unitary authority. Throughout the debate I have been very encouraged by the Minister. She has listened and has taken forward several reports and submissions that I have introduced to her and to her colleagues in another place. It is very disappointing that all three Cheshire Peers have struggled to get audiences with Ministers on their case.
The Government have judged the two submissions for unitary authorities on five criteria; namely, affordability, strategic leadership, stakeholder support, empowering local people and communities, and the quality of public services. The submission for a single unitary authority wins on every one, and in the most comprehensive fashion on the affordability criteria.
The affordability case put forward in the submission for two unitary authorities has been the subject of several challenges. Throughout the review process, the county has expressed deep reservations about the financial robustness of the two-unitary option. Indeed, there has been a constant shifting of the figures. The final figures submitted on
The county council was assured of transparency in the assessment process and the conclusion that can be drawn is that the Government have perhaps less confidence in the IPF report than they claim. The new figures change the whole basis of the implementation process. They call into question any conclusions of Deloitte, which was appointed to carry out a risk assessment on behalf of the district councils.
Surely, the ratepayers of Cheshire should be able to assess the assumptions, the assessments and the working figures of the IPF report which it used to reach its conclusion. This is the basis on which I put forward my amendment in the absence of this report being made fully available. It is now clear however that no matter whether we look at the independent review from Local Government Futures—the assessment done on behalf of the county—or the assessments done by the department, the impact of this reorganisation will be costly. The county will be divided into two. Both unitaries will be faced with direct economic problems and they will both lose money.
The Local Government Futures review investigated the potential impact of any local government reorganisation in April 2009 on the allocation of the formula grant within the county. Under the current needs-based national methodology, the report concluded that the west Cheshire unitary would be entitled to £82.7 million for formula grant and the east £54.1 million. However, the proposed two-unitary model allocates only £76.4 million to the west and £60.4 million to the east. This local agreement deprives the west of £6.3 million of formula grant per annum for each of the next three years—the equivalent of almost 2.5 per cent on council tax. Effectively, this funding has been permanently lost in the form of a financial subsidy to the east, as in three years' time the national grant distribution formula will be applied to the two unitaries using their locally agreed allocation as the base. The latest information from the Department for Communities and Local Government would seem to confirm the intention to recalculate the formula grant in this way.
It is unrealistic to assume that one authority will agree to provide a substantial financial subsidy to the other; it could be in breach of an authority's fiduciary duties to its council tax payers. For the new unitary in the west, there would be genuine concern that the richer east, as defined through the objective needs-based formula, is being subsidised to the tune of more than £6 million per annum on a permanent basis. It is difficult to see how this would be acceptable to the council tax payers of Cheshire West and Chester who would be paying this subsidy through higher council taxes and/or reduced services. For the new unitary in the east, the concern would be the unenforceable nature of this local agreement. Clearly, if the national formula is used instead, this would result in the east losing out by £6 million compared to the current submission by the districts. That would only add to concerns over the financial viability of the districts' submission for the east.
It is vital that a full, independent financial assessment is undertaken when the county council's view points to a frightening scenario. Reserves are overstated and would be insufficient to meet the cash flow requirements of reorganisation. The two new unitaries would in effect be expected to run out of money in the first year of operation. Far from achieving the required five-year payback, the proposed solution would now cost some £103 million and, therefore, fails to meet the affordability criteria. Both new authorities will begin life with inadequate finances to sustain existing service levels and are highly dependent on quick transformation. The objectives of the reorganisation and of the order are unlikely to be achieved.
Baroness Walmsley (Spokesperson in the Lords (Education and Children), Children, Schools and Families; Liberal Democrat)
My Lords, not for the first time, Members of your Lordships' House, including myself, have received a lot of letters and telephone calls from individuals and organisations who feel that their voice has not been heard and that they have not been given the opportunity to express their views. I am delighted to have the opportunity to give voice to some of those views, as have other noble Lords.
Those individuals and organisations believe that this is a carve-up which has been steamrollered through another place; which the Government intend to steamroller through to implementation; and would steamroller it through your Lordships' House had they not found such a lot of opposition tonight. I agree with them. They also believe that the Government's refusal to reveal the financial basis of the decision is also a cover-up, with which I also agree.
I oppose the order and I support the amendments for four reasons. First, some of the assumptions are flawed. I shall give three from a letter to the chief executive of Cheshire County Council, which states:
"Cheshire would be too big for a unitary county council. There was a natural line dividing east from west ... cities provided the best form of local government",
for Cheshire. Those assumptions are completely flawed. First, there are 12 counties and unitaries that are bigger than Cheshire on any criteria that one might like to look at. Are they to be split as well? Secondly, on the natural dividing line, the right reverend Prelate the Bishop of Chester has made it clear that there is no such natural dividing line. As a long-time resident of Cheshire, I very much agree with that. Thirdly, the idea that the cities of Liverpool and Manchester provide the focus for local government for rural Cheshire is completely ludicrous. The needs of a shire county are very different from those of a city.
My second reason is that I believe that there is the tiniest amount of public support and organisational support for this proposal. It is delusional of the Government to think that there is "sufficient support". There is not. I shall not go through all the figures quoted by the noble Lord, Lord Harrison, but they speak for themselves. It is nonsense to say that we want to consult local people and then not ask them properly, and certainly not listen to them. In another place the Minister listed seven organisations which support the proposals we are debating tonight, but the noble Lord, Lord Harrison, and I have a list of 19 organisations that are against it.
My third reason is one that noble Lords would expect from me. I am very concerned about schools and children's services. Many noble Lords will have received letters from every single head of organisation in Cheshire and every single one expressed severe concerns. I have also heard from the Cheshire branch of the NUT. I shall give just two reasons out of the many cited. At present, we have a director of children's services who has overall responsibility for the implementation of the very ambitious Every Child Matters agenda. Now it is proposed that we have one director of children's and adult's services. That is simply not good enough; the agenda is too big and the magnitude of the task too great for one person, and I fear that children's services will suffer. The second reason given is school budgets. This Government sensibly announce school budgets three years ahead so that schools have stability and can plan properly. Because we have no continuing authorities under these proposals, schools will not be able to do that.
Finally, the timescale is completely mad. We have here an unprecedented reorganisation, the third for Cheshire in 15 years. I do wish governments would leave Cheshire alone to get on with it. Cheshire provides a very high quality education, and always has. I used to be a member of a school governing body in Cheshire, so I know that from my personal experience. To suggest that you can go through a change such as this one, a change that is totally unprecedented, in the same timescale as some of the other reorganisations that have been proposed is quite barmy.
Lord Slynn of Hadley (Crossbench)
My Lords, I rise simply to express my full support for Amendment No. 1. The arguments put forward by the noble Lord, Lord Wade of Chorlton, in support of his amendment are compelling and I do not think it is either necessary or helpful for me to repeat them. Whether in the end the decision is adhered to and the Government's proposal is accepted, the arguments in favour of a fuller and further inquiry, as proposed by the noble Lord, Lord Wade, seem to be incontrovertible. If they are not incontrovertible, at least there is a strongly arguable case for what the noble Lord has proposed. I strongly support him. If his amendment is accepted, it would follow that the amendment tabled by the noble Lord, Lord Harrison, also has great strength and merit. I would support it as well.
I hope that occasionally in this House brevity can be forgiven, but I do not think it would help to repeat anything said by the noble Lord, Lord Wade.
Lord Soulsby of Swaffham Prior (Conservative)
My Lords, I have listened to the debate with great interest and three questions have come to mind. The first is the question of the release of any independent financial assessment. Another was touched on by the right reverend Prelate: will these proposals meet the needs of local people, especially the rural population? The third is that, unless I misheard her, I thought the Minister said that some of the data were equivocal. If all those questions arise, it seems to me that the Government should think again, particularly with respect to the second question about the needs of local people. Moreover, the equivocal nature of the data is an important aspect. I do not wish to extend the debate with my comments but I strongly support the amendment of my noble friend Lord Wade.
Baroness Hollis of Heigham (Labour)
My Lords, I will not be supporting the amendment of the noble Lord, Lord Wade, or the additional amendments tabled by my noble friends. I do not know Cheshire well enough to be in any position to speak, and it would be impertinent of me to talk about boundaries and the particular alignment of districts, the political history, and the changes of political control which have produced alternative voices on reorganisation issues. But perhaps I may make a few comments about process as I understand it from the papers I have studied and the careful attention I have paid to the debate tonight.
I sympathise with the noble Lord, Lord Wade, and my noble Lord Harrison on their instinctive feel for the history of the historic county of Cheshire, but I understand that the county of Cheshire is not being split into two. That somehow assumes that only the county is a local authority, and that it is being divvied up in some way. In fact, under this order, seven councils are to become two councils. Moreover, the notion that Cheshire has been an unchanging historic entity over the centuries does not conform to my understanding. Changes have already taken place in the historic county of Cheshire, in 1974 and again in the mid-1990s with the Banham review, when I believe my noble friend Lord Hoyle successfully won the case for Warrington being given independent unitary status. These things change over time as populations and business pressures change, and as needs alter.
I understand that there was always the option of no change at all. My honourable friend in the other place, Mr Healey, extended an invitation to local authorities, saying that it was up to them whether they responded to seeking the unitary structures that, like the noble Lord, Lord Wade, I support. I believe the county council initially proposed a unitary council and that as a result, some of the alternative proposals for two or three unitaries, were brought up—
Baroness Hollis of Heigham (Labour)
My Lords, my noble friend made a very long speech and I hope that I will not be trespassing on the House if I try to pursue my argument. I do not want noble Lords to be kept for too long.
Like the noble Lord, Lord Wade, I agree with the sympathies for a unitary authority, but Cheshire has not been untouched over the years. I think it is therefore reasonable to look at whether the proposed changes will offer the best value for the citizens of Cheshire. Recent research has been circulated by boundary committees in other local authorities which tries to connect the size of a local authority with its performance. It is based on best value performance indicators, comprehensive performance assessment value-for-money indicators and so on. Obviously the results are ambiguous, with some going one way and some the other, but it is clear from the report that in general, once a population goes beyond 450,000 to 480,000 there are real diseconomies of scale in some services. The two proposed unitaries would be for populations of around 320,000 and 360,000 respectively and are therefore the optimum size, based on recent published research. Cheshire, with a population of some 650,000, goes well beyond the optimum.
I take the point made by the noble Baroness that many unitary authorities are larger than Cheshire. However, this is not just about numbers. It also concerns geographical spread. In that sense we cannot compare a county with a densely populated, compact city. There is a real problem, if you have solely a unitary county, of whether at the end of it you have anything that could be called "local" government.
The research also shows that the cost/benefit savings between two-unitary option and the single-unitary option are about the same. It is clear, as my noble friend has explained on previous occasions when we have considered orders of this kind, that this is not about head-counting, but seeing whether there is sufficient support on a well-informed basis, including the business community, for the changes proposed to make them workable. The fact that considerable evidence in the other place showed that the existing authorities are beginning to work well together to deliver these objectives seems to suggest that my noble friend's more pragmatic approach is a more valid one.
Finally, we have heard from the courts today. The judicial review and the appeal process both support the Government, so the courts are saying that there is no reason for delay. I suggest to your Lordships that further delay and possible further doubts about how the future may go will serve only to dislocate a process to the disadvantage of services and staff, of the citizens of Cheshire, and of the resulting follow-on authorities. I hope that noble Lords will agree with that approach and not seek further to delay the order tonight.
The Earl of Selborne (Conservative)
My Lords, the noble Baroness, Lady Hollis, reminded us that this is as much about geographical spread as optimal numbers. However, it is also about the realities of people's loyalties; their understanding of where they belong and with whom they identify.
The noble Baroness also said that this was not a split into two, but that is not the perception of those who live in Cheshire, which I do not. But I have listened with great respect to those Peers from Cheshire who have spoken and, certainly from the correspondence that I have received, I am very clear that people see their county being dismembered for research which may or may not be valid but which certainly does not take into account the reality, as people see it, on the ground.
In her opening statement the Minister made it clear that the forces which are leading the Government to choose the two unitary authorities revolve around affinity to the large cities of Liverpool and Manchester, to the west and to the east respectively. As the right reverend Prelate said, the people of Cheshire do not see themselves as outlying citizens of city areas. If I lived in Cheshire, which my family did at one time—my mother's family—and still do, I would be outraged at the idea that the county should be seen as something merely to support the vibrant economies, which certainly they are, of Liverpool and Manchester. It is a disgrace that Cheshire can be designated to the outlying areas of these two great cities.
I agree that brevity is very important on this occasion. I wish to make it very clear, if I have not already, that I very much support my noble friend Lord Wade.
Lord Greaves (Spokesperson in the Lords, Environment, Food & Rural Affairs; Liberal Democrat)
My Lords, I start by apologising to the Minister for missing the first couple of minutes of her introduction—she seemed to slip her leash a little early—but I got the gist of what she was saying in the remainder of her speech.
It has been 40 years since I lived in Cheshire. I do not claim to be a Cheshire person but, after listening to the debate and the contributions from around the House, I find it difficult to make many points of contact with anyone who has been speaking about anything. I was concerned whether I should say anything at all because I disagree with everyone. The person with whom I came nearest to finding points of contact was the noble Baroness, Lady Hollis, who introduced a degree of reality into the debate and an understanding of the background of local democracy and what it is all about. I agreed with about a quarter of what she said, perhaps a little more.
I cannot support the concept behind the amendments that if there is to be a reorganisation to unitary authorities in Cheshire it should be a unitary county. Cheshire consists of many towns of different sizes and kinds—vibrant towns in many cases—and large areas of contrasting countryside; the idea that a unitary authority over such a large area is the ideal form of local government does not seem to be right. In fact, I would challenge whether such an authority could any longer be called "local".
Manchester has fewer people than the new Cheshire would have, but big cities such as Birmingham, and perhaps some others, are communities in themselves. Cheshire consists of a vast constellation of communities, many of them interlinked in a complex way. Indeed, there is no point in pretending that there are not many people in Cheshire, particularly in the north-east and in the west, who look to Manchester and Liverpool as their main centres of employment—it is where they commute to—and they have moved out. They are part of those economic regions. But that is not an argument for incorporating them in city regions. Indeed, in parts of the south of Cheshire people would look to Stoke-on-Trent, and to Newcastle, perhaps, in some areas.
The questions of what kind of place Cheshire is is crucial. I do not like these proposed two new unitaries which seem not to make a great deal of sense. If you are going to divide Cheshire into two, that might be the best way to do it, but we are back to the obsession of this country with local authorities having to be larger than in any other part of the democratic world. We already have the largest local authorities in the democratic world and the Government are trying to make them even larger. I oppose that general trend. That is why I cannot support the Government in their Motion, but I certainly cannot support the amendments, which would make it far worse.
On the question of timescale and delay, if this is going to happen it is important to have elections as soon as possible. That is what is happening here—although not in all the new unitaries—so at least the people who are setting up the new authority have got democratic accountability and credibility. The decision to go for early elections is right, although it causes all political parties—not least my own—great difficulties. If you are going to do it, 12 months is long enough.
In 1973-74 the whole of local government in England—apart from Greater London—was reorganised. It was all two-tier; there was an upper tier—the counties—and the metropolitan areas. Everywhere outside Greater London was reorganised and it was not a disaster; it happened very efficiently in many areas. Many counties were set up that people thought were abominations and it is an interesting observation that the councils which have not been successful and have not taken off, whether at county level or at district level, were artificial creations. Places such as Tyne and Wear, I think it was called, and Avon were totally artificial creations and they were abolished. Of the districts which were created—south-east this and north-west that and places that had to be invented with funny names which people did not know before the district was created—some have been successful and many have not.
I worry that authorities have to be given names such as East Cheshire or Cheshire East, West Cheshire or Cheshire West and Chester because you cannot think of sensible names to give them that people would know referred to that particular area.
My final point is that local democracy and local government in this country are in crisis. Most of the debate has been about efficiency, economics, loyalties to areas and so on. The Minister talked about what really mattered being the long-term outcomes. I do not say for a moment that these things are not crucial; you have to have what is now called best value, efficient structures and structures that make sense in an economic way. However, no one has been talking about local democracy. The vision of what local democracy in this country ought to be about in future is something we all ought to start talking about seriously.
One of the problems with local democracy is that it needs councillors. Reorganisations that reduce the number of elected councillors mean that everyone has to represent more areas and spend more time doing what councillors do on the council rather than in the community. That is an erosion of my vision of local democracy.
Towns are important places when it comes to civic involvement, civic culture and, if you like, civic vibrancy. It is the towns, by and large; I am not saying that villages do not have their own institutions, society and all the rest of it since they clearly do, but the civic culture of this country—the word "civic" shows this—is based essentially on towns. It is always towns that give the lead. The problem with lumping towns together in hotchpotch authorities—even quite large towns that have a real sense of civic pride and civic involvement, whether Macclesfield, Crewe or Ellesmere Point—is that some of those towns will lose out in terms of status and future involvement. Many of the casualties of previous reorganisations, particularly the one in 1974, were towns that had a vibrant civic culture but lost it. Keighley, for example, was forced screaming into Bradford, and a great deal of its problems since then have been because it lost its civic culture and has had nothing; it became just two or three wards in Bradford. There are towns like that all over the country that got taken into hotchpotch, larger, amalgamated local authorities in 1974. What worries me about somewhere like east Cheshire or west Cheshire is that that is the fate that awaits some of those towns, which might not be resilient enough to avoid it.
I am advised by my party that I should abstain on all these things, although I do not like abstaining on anything. I would happily vote against this order and kick it out, but I am told that that would be hot-headed and I should not do it. I am advised to abstain, and that is therefore what I shall do.
Baroness Scott of Needham Market (Spokesperson in the Lords, Department for Communities and Local Government; Liberal Democrat)
My Lords, the Minister must be relieved that we are at the end of the current batch of orders, because they get more controversial as they go along.
We on these Benches support the principle of unitary government. However, it is a question of process. It is disingenuous of the Minister, however, to talk about this as a bottom-up process. The Government set the ball rolling, they have set all the frameworks within which these decisions have been made and they have made the decision to give Cheshire the two-authority solution. It is even more disingenuous to pretend that somehow it is the councils themselves that have come up with this solution. If local authorities were able to work together and share a vision for local government in their area, we would not be talking about local government review at all; we would live in a sort of two-tier nirvana where everyone worked well and the citizens all knew what everyone did. It is precisely because of the rivalries between councils that two-tier working has problems, and that is why we have this process now. To pretend that we can leave it all to the local councils and that what emerges is consensus is quite clearly flawed from the outset.
All the financial information, and all the ways in which support has been expressed and assessed, has been provided by local authorities that have a vested interest in the outcome. What has been lacking is any sense of how the Government have assessed all that. Among the public and what the Government like to call the stakeholders, there is no real sense of confidence about how the Government have assessed the information they have been given by local authorities. The Government have made that even worse by claiming an exemption from freedom of information when it comes to the financial aspects. Just because you can claim an exemption from freedom of information does not mean that you should. In this case, more transparency would have done a great service to this process by showing the basis on which these decisions were made.
I share many of the concerns that were expressed by the noble Lords, Lord Wade and Lord Grantchester, about the way the costings have been done. It has been suggested that the transitional costs are about £17 million and the efficiency savings about £30 million. It is a highly optimistic payback period. When we debated the other orders last week, I asked the Minister what would happen in the event of those calculations being inaccurate. She made it very clear that it would be for the councils themselves to deal with the fallout from that; in other words, if councils have got their sums wrong, whether through overenthusiasm to make their case or because they do not understand the big services, it will be local people who will be hit by a combination of council tax rises, cuts in services or both together.
The Minister has said strongly that the figures have all been independently verified and are all robust. If they are so robust, why are the Government not prepared to underwrite these costs? Why are they saying that it has to fall back on the councils? I fear that the district tier always underestimates the challenges involved in providing education and social care; they are services on a scale of which that tier has no experience. She made it clear that it would be for the councils to deal with the fallout. In other words, if councils have got their sums wrong, be it through over-enthusiasm to make their case or because they do not understand the big services, local people will be hit with a combination of council tax rises, cuts in services or both. The Minister said that all the figures have been independently verified and are robust. If they are so robust, why are the Government not prepared to underwrite the costs? Why do they say, "Well, it has to fall back on the council"? I fear that the district tier always underestimates the challenges involved in providing education and social care. They are services that are on a scale of which they have no experience.
There are three reasons why one would consider local government review. The first is that people want it. Well, I have seen no evidence to suggest a great clamour anywhere in Cheshire for this review. The second is that the process of review would provide economies and somehow be cheaper. It might be, but we do not know because government will not let us see the figures. The third reason is that services would be improved. However, the current council is already a four-star authority; it is a highly rated council; so there is no evidence to suggest that services will be improved by this process.
The process in the case of Cheshire is very hurried. It is the only outcome from the current round of reviews which has created totally new councils. The authority which is providing 80 per cent of the services is to disappear, and we are to have a new authority within 12 months. I agree with the noble Baroness, Lady Hollis, that we should not delay making the decision, because that would leave a vacuum and make life very difficult. However, it is possible to delay the implementation a little longer. I am worried that we are to have elections this year. Many of the decisions have already been made. Due to the way in which the timetable has been set, they have been made by officers. There is no political leadership in the way that the Government have said that they want.
It is unclear what the Government are seeking to achieve by reorganisation in Cheshire. There have always been problems with two-tier working and there always will be, but, in this case, it is possible that the cure is worse than the disease.
Lord Dixon-Smith (Shadow Minister, Communities and Local Government; Conservative)
My Lords, if we have listened to a classic tale of how things should not be done, then this is it. When I was in local government, we used to have an apocryphal tale of how Governments came to conclusions on anything. It ran along the lines that a problem was perceived, which was soon identified across the department. Eventually, some bright little clerk at about the fourth tier would say, "Well, my gosh, this is a solution". He would talk to his superior, who would say, "Yes, by gosh, that might work. That's a solution". And he would talk to his superior, who would talk to the Permanent Secretary, who would talk to the Minister. And that was that. Of course, I am sure that that is not what is happening here.
What we have been talking about, tragically, is process. This is the end of the process. I hope that, when we get to the end, the noble Baroness will say, "Well, these are non-fatal amendments and, in fact, the order will be implemented". It seems to me that, whatever we say tonight, that is going to be the reality, which we unfortunately have to recognise. If the Minister is going to say anything else, I shall be very surprised.
Other counties or areas are climbing up this greasy pole. The real question is whether the process is sufficient and sufficiently robust. Here, I come to the conclusion that the Government have been at fault, because they have not released sufficient information to the public for them to be persuaded. If one has listened to the whole of this debate, it is clear that, as people increasingly realised the implications of what was being proposed, opposition to those proposals strengthened. That is not unusual, but the problem is that there is no mechanism within the system to allow that opposition to have explanations or, when the opposition is as strong as it is in this case, to change the decision. This decision has not changed one iota, as far as I can see, from the original proposition. The Government will of course say that they invited proposals and they got these proposals. But the problem for the Government is that they then choose the wrong conclusions. The difficulty that they have is that they cannot get off that hook.
This is not a happy situation to be in. One report that I saw said that the process corrupts the body politic. That is a highly opinionated report and I would not give it any greater credence than that, but it is written by academics. We should never as a Government allow ourselves to get into a position where that could be an academic view of what was going on in government. It is incredibly damaging to the whole structure—everything that we do and that we stand for as a House of Parliament.
This is a mess and nothing we do tonight will change that. We can—and I hope that we will—pass one of these Motions, because that is the only protest that we have and the only possibility that we have to make the Government process more sensitive in the future. I am sorry for Cheshire. I have listened to the story and I am all too familiar with the territory—not with Cheshire as a county, but with what has happened. That die was cast a long time ago and it is a warning to other authorities in the country that they need to look at what has happened to Cheshire. They need to examine what has been said in this debate tonight and then think very carefully about where they really want to go in the future. Counties already involved in this process will have to look at that and take a decision, but I hope that they will be more fortunate than the county of Cheshire.
Baroness Andrews (Parliamentary Under-Secretary, Department for Communities and Local Government; Labour)
My Lords, this has been, predictably, a hotly contested and passionate debate. It is no surprise to me that the loyalties expressed about the county of Cheshire were done so in the tone and language that noble Lords used. I think that we agree on much of what has been said. Certainly, we all want the best for Cheshire. When it comes to the point, however—and I pay tribute to the excellence of Cheshire County Council to which tribute has been paid throughout the House this evening—the Government have to make a decision. Ministers have to show leadership, just as the noble Lord, Lord Wade, said. We have made a choice, which does not command the support of many of your Lordships, but which we genuinely believe on the best of evidence is the one that stands the most prospect of actually delivering outcomes. I will not repeat what I said in a long opening speech. I will just make a few points, primarily about the deliverability.
Baroness Byford (Conservative)
My Lords, the Minister has reflected again on the position that the Government have taken, but the Government's decision was not based on consensus in any way at all. I hesitated to speak in this debate because I do not come from Cheshire, but the Minister cannot claim that the Government are doing this with the consensus of the people because, clearly, they are not.
Baroness Andrews (Parliamentary Under-Secretary, Department for Communities and Local Government; Labour)
My Lords, I did not claim that in my opening speech and I have not claimed that in any debate on any of the unitary authorities that we have had so far because the invitation that was issued specifically said that we would not seek consensus and we would not look for a majority decision. I will come on to that.
The noble Baroness, Lady Walmsley, said, "Why don't you simply leave Cheshire alone to get on with it?" We would have been very happy if Cheshire had wanted to get on with it. There was absolutely no pressure at all on Cheshire to come forward with any proposal, as my noble friend Lady Hollis said. It could have adopted enhanced two-tier status. That would have been perfectly proper.
I also take issue with the noble Baroness, Lady Scott. We were not disingenuous about there being a consensus. This was a genuine response by the local councils in Cheshire and there were two contradictory responses. That is what we were faced with. We were in a unique situation. We had to make a judgment on that basis. The two unitaries solution was proposed by those local councils. It was not imposed and was not of our design. It was put forward to us as a democratic choice.
I have heard apocalyptic language this evening. I shall explain why I think that noble Lords ought to have confidence in the people of Cheshire, in the local officers who are developing the proposals and will take them forward and in the committed local councils. For all the reasons given by noble Lords, Cheshire is a powerful idea. It has a long, complex and changing history, as the right reverend Prelate told us. I understand that Lewis Carroll of Alice in Wonderlandfamecame from Daresbury—a unitary authority, which is interesting to reflect on. There has been a history of change, as there has been across this country. I come from East Sussex, a powerful and terrific county, but that does not make me any less conscious of the identity and history of Sussex itself. For all the reasons given by noble Lords, I cannot believe that what has been suggested will be Cheshire's fate, either. It is too powerful a county. We are looking at a way forward that enables east and west Cheshire to take advantage of what is offered and not to be driven by cities or confused by them, as some noble Lords suggested. All I am saying is that economic opportunities may more easily be realised by having two counties that can take advantage of what is on offer in a more focused way. No one is suggesting anything other than that.
Noble Lords challenged the process. However, this was the most thorough process that we could have invented. It was open from start to finish. It proceeded by invitation and went through two stages of consultation. The financial information that was presented was returned twice to be reviewed and was then independently assessed. I can only repeat the reasons that I gave with regard to the Freedom of Information Act about why we thought it better to preserve Ministers' capacity to take advice and make decisions. That is a very important principle. However, the process was very open and, as I said, the result proves that the measure is affordable.
I turn to why we think that this will work. There was broad but not popular support; we have not made that defence. All the polls that were taken threw up a different result. However, there was support from sufficient partners—people able and willing to deliver successful change. We made no further claims, but that was what influenced our decision. We think that the measure will work, given those critical partners, which include industry, some rural parishes and towns. We also think that it will work because it meets the affordability criteria, as I said. I also believe that it meets the criterion of local democracy. The noble Lord, Lord Greaves, brought that out in his positive speech. We will have two new authorities but within that there will be new local arrangements for local connections and local identities. Those local identities will build on present identities and enable them to flourish. I believe that we have that balance right.
Let me turn to the crucial part, which is how this will work in the future. I have been slightly dismayed by the lack of confidence that noble Lords have shown in those who are going to deliver the change. I understand that these are new authorities and I understand that the county council was a repository of excellence and experience. That excellence and that experience are already being made available to the new councils as they proceed with implementation; we would not expect it to be otherwise. The joint implementation teams that have been set up have created work groups that are looking at the different service streams.
For example, on education, about which the noble Baroness, Lady Walmsley, and other noble Lords have spoken passionately, the Cheshire schools associations have already provided a very constructive paper that covers the entire range of issues under the people services block, which is going to guide this. Those who are leading implementation include the most senior county council officers, the Cheshire County Council director of children's services and the director of adult services. They will bring the best of their experience to bear on what must be the future for the new councils. This is what will give the best start and the greatest confidence.
It is suggested that existing programmes and services are going to be disrupted or put at risk through the new unitary arrangements. Let me give noble Lords two examples. The specialised service for vulnerable children will meet the needs of children and their families in both the east and the west. There will be pragmatism at work to determine the best way in which to deliver services. The children's trust is very important and there is no intention of disrupting the arrangements for it. I am told that it will continue on the present basis. We are looking to pragmatic decisions about how best to deliver services.
On schools, dialogue has already begun with head teachers through the lead chief executives for the east and west. Head teachers are setting out their concerns, but they are now part of this dialogue about how to make the transition and build on the very best. The DCSF is committed to this and has made clear how closely it will work with schools and education agencies in east and west Cheshire to deliver the best of those services. There is evidence that those people who need to bring their experience and excellence to make the new services work are not only willing but determined to do so. The very least that we can do is to support them in that process. I believe passionately that, if we in any sense promote delay this evening, we will do nothing but harm to those who are committed to this process and to the people of Cheshire.
The time for disagreement and division has passed. That has been said time and again, both in another place and here this evening. We are not steamrollering this through, as the noble Baroness, Lady Walmsley, suggested. We are being urged by local leaders to allow them to get on with the job after a period of unhappiness. They are desperate to be able to do that. I quoted the leaders of the two critical councils. I conclude by quoting an e-mail that the Labour leaders of all the Cheshire councils have sent directly to my noble friends. They said:
"Whatever our views might have been in the past, the decision by the Secretary of State has now been made. We must make the best of it, and time is scarce. I would hope that you would support the orders".
This has been an important debate, but I urge noble Lords to heed those views and the views of the leaders of the local councils that I quoted earlier. I commend the order to the House.
Lord Harrison (Labour)
My Lords, I have already been admonished for the lack of brevity of my speeches tonight, so I shall take inspiration from Raúl Castro rather than from Fidel Castro in the length of what I have to say. Only three points have been made, so I can keep it brief.
First, I thank my noble friend for summing up, but I remind her that, when the Government asked the district councils to look again at the financial implications of their case and when they put Deloitte in charge, Deloitte was surprised by the poor and threadbare nature of the debate. Indeed, they found that 28 of the 33 financial assumptions were above or beyond average risk.
Secondly, I was intrigued by what my noble friend Lady Hollis said. She said that, as she had little knowledge of Cheshire, she wanted to make some general comments. However, she went on to say that Cheshire County Council, of its own accord, brought forth the proposal for the unitary authority. I can assure her that Cheshire County Council made every effort to get agreement on the proper way forward among the seven councils involved. It was only when no consensus emerged that Cheshire County Council decided to propose a unitary authority, which was glowingly accepted by the Government.
Finally, the noble Lord, Lord Greaves, was the only voice against everyone. His memory of Cheshire is good. It is a patchwork of towns across a principally rural county. The advantage of the Cheshire County Council proposal was exactly that, under the overarching county, the ambition to set up five local boards would have had the effect of meeting and greeting local communities in a superior way to the existing example. Neston and Parkgate, with Ellesmere Port, would be separated and responded to. Crewe and Nantwich, famously locked together, would each be able to speak for themselves. The same would apply to Northwich and Winsford. Cheshire is essentially a centripetal county, not a centrifugal one. The Government have argued all evening that somehow it is disappearing across its borders. However, people want to come and join Cheshire because it has locus, or location. It means something.
I have every hope and belief that the county officers, if this decision is taken, will take on the burden and responsibility of dissolving the councils. They will do that because they are professional, right down to the bottom of their boots. I shall withdraw my amendment to the amendment proposed by the noble Lord, Lord Wade of Chorlton, in the hope that your Lordships will support his amendment. I beg leave to withdraw the amendment.
Lord Wade of Chorlton (Conservative)
My Lords, I thank everyone who has taken part in this debate, in which the views of the majority of this House have been made very clear. I appreciate that the Government are in a difficult position, but it is of their own making. This is the first time that we have had an opportunity to hear the views of Members of this House and it is the first time that we have had an opportunity for the views of noble Lords from Cheshire to be expressed on these matters. Judging from the views of Peers in this House, and taking into consideration the views of the vast number of people in Cheshire who are extremely concerned about this, I would like to test the view of the House.