New Clause. — (Reduction in Cost of Civil Servants.)

Part of Orders of the Day — Selective Employment Payments Bill – in the House of Commons at 12:00 am on 4th August 1966.

Alert me about debates like this

Photo of Mr John Temple Mr John Temple , City of Chester 12:00 am, 4th August 1966

I have a suspicion that the other part of the Labour Party may be engaged in private discussions, and that may be where the Prime Minister is as well. It is significant that when we are debating new Clause 2, which is directed specifically to employment by local authorities, neither the Minister of Housing and Local Government nor his Parliamentary Secretary is present.

The revenue expenditure on local government services in 1965–66 was £3,200 million, and that was an increase of 11½ per cent. on the previous year. It is an easy figure to say, but that was nearly 50 per cent. greater than the total of defence expenditure. No one will ever convince me that there could not be a substantial reduction in the administrative staffs if we set about it in the right way. Unfortunately, the present Government have set about it in the wrong way in the last two years.

I shall concentrate on the question of employment in local government, giving a few concrete examples of additional administrative strain put and being put upon local government, and I shall question whether the net result from some of the schemes introduced by the Government has been a real benefit to the nation when weighed against the actual cost of operation of the schemes themselves.

On 14th June last, on the Second Reading of the Local Government Bill, the Minister of Housing and Local Government said: … we are asking them"— that is, the local authorities— to administer a whole lot of other improvements in rating, rate rebates, rate instalments and, as I shall show presently, domestic rerating. Local authorities are being asked to do more changing during these two years than they have had in the whole period since the war. They have been bitterly complaining about these changes…".—[OFFICIAL REPORT, 14th June, 1966; Vol. 729, c. 1273.] I would ask whether it was wise, in face of the admitted economic difficulties, to seek to bring about administrative chaos throughout more or less the whole of local government. Was it necessary to over-turn all the schemes which were working comparatively smoothly in a period when, admittedly, the whole administration was under strain? I do not believe that it was.

4.30 p.m.

I quote now from the Financial Times of 9th June in which the President of the Institute of Municipal Treasurers and Accountants, in referring to this, says: New services or changes in existing services had often been introduced with little foundation in research, inadequate statistical information and few pilot schemes. This had resulted in signs of strain in the administrative machine. The President of the Institute of Municipal Treasurers and Accountants is well qualified to give his opinion on the strain in the administrative machine.

I now turn to a few specific examples where I believe this strain is building up unnecessarily on local government. Firstly the effect of the Selective Employment Tax itself. Nobody has answered the question as to whether the tax on local government employees is to be on a pay-in pay-out basis or whether it is to be merely a paper transaction. I understand that a Working Party is sitting on this problem at the moment. From an administrative point of view, it would be far easier to have this as a purely paper transaction, with no money changing hands, as against paying the money first to the Treasury and receiving it back through the Ministry of Labour later. This is one of a hundred problems on which working parties are sitting to consider various administrative difficulties in local government at the present time. All the best brains in local government at the moment are employed on these working parties. This is a result of the administrative chaos which has been created by the present Government. Was it wise, I ask again, to get all the best brains employed on this non-productive work at a moment when the country was facing a financial crisis?

I do not know how many right hon. and hon. Gentleman looked at the City columns of The Times yesterday, but significantly there was a photograph there of the dealing office of Long, Till and Colvin. They are local government loan brokers, and I understand that they have never had a busier time than they are having at present. If local authorities have to finance this Selective Employment Tax over a period of months, I forecast that that firm and all other firms lending money to local authorities will have an even busier time in the next few months.

I turn to another matter directly affecting local authorities as a result of the operation of this Clause. It is a matter to which I have referred frequently before on the subject of the Selective Employment Tax. The Clause refers to workers in office premises, or, in other words, cleaners. The local authorities, if they employ cleaners directly, will have the Selective Employment Tax repaid, but if they employ a firm of office cleaners, which is what they are doing to a considerable extent at the present time, the firm will be treated as a service industry. If the Clause is accepted by the Government the effect will be to stop local authorities employing additional cleaners and to continue with contract cleaning services, thereby having a more efficient type of office cleaning operating in their establishments.

I refer to another administrative scheme. I am not saying that some of the schemes are necessarily bad, but I say that they add to the cost of administration in local authorities. I refer specifically to the rate rebate scheme, which I understand—I say that because even the Minister's estimates of the effects of the scheme have been proved to be off-beam—is estimated to cost some £4 million a year to local authorities. Nearly 4,000 additional administrative workers will be required to operate this scheme which is estimated to cost £29 million. I would accept that it may cost less than that because fewer people will benefit from the scheme than anticipated and that therefore the administrative cost may be under £4 million. Nevertheless, if the figure is £20 million and the cost of administration is half of the figure originally estimated, namely, £2 million, it means that the cost of administering the scheme is some 10 per cent. of the benefit which will actually go to ratepayers. I believe, however, that the cost of administration will be nearer 20 per cent., or, in other words, that administratively it will be an extremely costly scheme.

I pass now to the operation of the Land Commission. I will not make any general reference to it because my right hon. Friend has more or less dealt with it on Clause 1. This is a central Government scheme which will mean an enormous number of extra staff. I believe the estimated number is 2,000. But, quite apart from the extra staff employed, there will be the side effect that valuers will not be available to local authorities to do the work. In a market where there is at present a scarcity of staff, the result will be to force up salary levels, and this is a direct result of Government policies.

I now make a brief reference to another piece of unnecessary administrative chaos which is being introduced, namely, the amalgamation of highway grants. It may be a good idea in the long term to treat them differently, although it has not been found necessary to do so over a period of years. But why do it at a time when the administrative machine is already under severe pressure? I remember only too well the time when a Conservative Government was criticised for moving too slowly, but I believe that in past years they were wise to do so, because they saw behind the schemes which appeared to be palatable and acceptable to everyone the wall of administrative difficulties. That is why when we were in government we moved more slowly but much more surely and steadily than the administration now on the Treasury benches.

I make reference now to another aspect of administration where the present Government thought they had all the answers. I refer to the planning field. I must admit that some of the largest files under the control of my secretary deal with planning matters. The Labour Government of 1945–50 were responsible for the Town and Country Planning Act, 1947. We amended it to a certain extent, but I always understood it was the intention of the present Administration to simplify planning procedures. We are still waiting for that to be done, but the way in which we can cut down administration is by simplifying procedures, and I would quote here a sentence from the wise words of Mr. H. R. Page, City Treasurer of Manchester. The Financial Times of 9th June, 1966, in their report of the conference of the I.M.T.A., state: What we want as well as a Royal Commission on Local Government Organisation is a Royal Commission on the Simplification of Local Government Administration. That is a tip I will give gratuitously to the present Government. I believe it would be much more valuable than some of the work the Royal Commission are studying at the present time.

This administrative overlapping and unnecessary work in administration has been the subject of comment in various quarters. I happened to pick up the presidential address of the President of the Institute of Municipal Treasurers and Accountants. He referred to administrative overlapping and the work of a Miss Penelope Hall in a study of the Welfare State and the welfare society. I quote from one sentence: … one City Council which was recommended drastically to overhaul its social services in the light of a report which disclosed that as many as eight visits were being made by different social workers to a single problem family". As my right hon. Friend said, it would be a very strange situation in which any local authority could not cut down by six out of 100 the number of administrative staff which it employed. A great deal of overlapping is going on and it should be carefully considered.

The Government appear to be rather proud of the statement that throughout the country new town hall building has been stopped. When I heard that statement, I imagined in the mind of the Minister making it the picture of great big town halls with banks of flowers against the platforms and chandeliers hanging down and of course portraits of past mayors hanging on the walls. In fact, the town hall in local government is the chief administrative office of the authority. What the Government are doing, not selectively but wholesale, is to cut down on the building of new local government administrative offices. Unless the building of these offices is permitted in certain circumstances, we will not get the cut down of administrative staff which is both possible and vital.

In a speech at the same conference Mr. H. R. Page referred to the necessity for local government bringing in computers in order to cut down the number of administrative staff. This is the advice given to British industry by the Government, but they do not give the same advice to their own Departments or to local authorities. The administrative tail of local government should be pruned, and the administration of local affairs could still be just as effective.