I thank my hon. Friend the Member for Hereford (Mr. Shepherd) for raising this issue. I wish to pay more than the usual tribute to him, because he has raised an issue which is not the common currency of Parliament, but which, as he put his finger on it, raises the questions of effectiveness and visible accountability.

My hon. Friend has not gone in for press-release politics. For all I know, he may not have put out a press release on this in the past. Instead, he has taken the matter up with the city and county officers and tried to bring them together; with the Audit Commission and put forward his own view for its consideration; in parliamentary questions; and in letters to the Department of Transport. No constituency could ask its Member to do more on this type of issue, which may not have the glamour of wet-fish politics — hitting one's opponent over the head with a wet fish just to wait for him to hit back. He has raised an issue which, sadly, has not attracted the attention of the alliance parties tonight and he has made the case for clearing up what appears to be unclear responsibility over the function and effectiveness of spending, and who should determine the outcome of a dispute between two authorities.

I intend to be fairly serious and detailed, because this debate will be of interest to county councils and district councils throughout the country. We recognise that the condition of roads and pavements is always a matter of great local concern and that there has been particular distress about the state of pavements in Hereford Maintenance of local roads is for local authorities, but we in the Government attach high priority to maintenance and have given clear signals about priorities.

Our determination that the county council had not acted unreasonably did not imply any judgment about the state of the roads in Hereford or the efficiency with which the city council is carrying out their maintenance. That is primarily a matter for the city council and the county council to examine. I have no other powers to intervene or to terminate a district council's powers to maintain urban unclassified roads. I hope that Hereford city council and the county council will continue to make every effort to accommodate maintenance needs and resources. Both the city council and county council exist to serve the people.

My right hon. Friend the Secretary of State for Transport is the highway authority for motorways and all-purpose trunk roads. County councils act as his agents in non-metropolitan areas. Local authorities are responsible for the rest of the road network. Outside the metropolitan areas the county council is the highway authority for local roads. The county council may make arrangements under section 101 of the Local Government Act 1972 for a district council to act as its agent in respect of some or all its highway functions. Alternatively, district councils can carry out certain duties by claiming the right to maintain footpaths, bridleways and urban unclassified roads in its area under section 42 of the Highways Act 1980. I confirm my hon. Friend's explanation of the position. In such cases the county council remains the highway authority and is responsible for funding the maintenance work that is carried out by a district council. The county council may withhold payment until it is satisfied that the works are properly executed.

About two-thirds of the 333 district councils in England and Wales possess a section 101 agency for at least some highway functions, but arrangements vary greatly. In general, agents deal with the cyclic and routine tasks rather that with the major capital works. In contrast, only about 12 district councils have claimed the right under section 42 to maintain minor local roads. I hope my hon. Friend will understand that I shall not be able to give him the information on how that number varies, because only a small number of councils use section 42.

A district council which is claiming section 42 maintenance powers is required to submit a detailed estimate of costs to the county council each year. Under schedule 7 to the Highways Act 1980, the county council must not unreasonably withhold approval of the estimate. My right hon. Friend the Secretary of State has powers under section 7 to determine whether approval of a district council's maintenance estimate has been unreasonably withheld by a county council. He may also determine whether a particular road falls within the relevant powers, whether any maintenance works have been properly executed, and the liability of a county council to make a payment to a district council.

A highway authority is responsible for determining maintenance standards and, where work is delegated to agents, ensuring that standards are complied with and that adequate funds are provided. I think that that makes it plain that there is unlikely to be a similar dispute when there is an agency agreement. The responsibility is tied to one pair of hands, and although people look to their agents for advice and professionalism the responsibility lies with one authority. District councils which are claiming section 42 maintenance powers are responsible for deciding standards, subject to funds being made available by the county council as the highway authority. The House will understand how Hereford city council and Hereford county council have fallen into disagreement in the past.

Highway maintenance standards should reflect a range of factors, including engineering judgment, availability of resources and value for money. Standards for routine repairs for national roads, for which my right hon. Friend the Secretary of State is the highway authority, are laid down in the Department's code of practice for routine maintenance. Standards for local roads are a matter for local highway authorities.

In 1983 the local authority associations published a code of good practice for highway maintenance. That recommended standards and warning levels, while acknowledging the need for flexibility to meet local conditions. The associations are currently reviewing their code, and the relationship between the local authorities' and the Department's code is being jointly considered.

We have continued to give high priority to maintaining the local road network. Public expenditure provision has been generous in recent years, with a 13 per cent. increase in 1987–88, most of which feeds into authorities' grant-related expenditure. There was a 15 per cent. increase in 1986–87, and earlier years' increases were well above inflation.

Local authorities must determine their own spending priorities. We hope that they will act in accordance with the increased provision and give highway maintenance high priority. The national increase in provision should enable authorities to halt the trend of deterioration that was revealed by the recent national road maintenance condition surveys. It should also allow authorities to start work on bridges that are overdue for repair or in need of upgrading.

The position in Hereford and Worcester, as I do not have to explain to my hon. Friend, is that the county council is the highway authority. It directly maintains most of the classified roads and all local roads outside the principal urban areas.

The county council has an agency with the city of Worcester covering all classes of county roads and agencies with three other district councils for the maintenance of unclassifed urban roads. Hereford city council declined a formal agency agreement. Instead, it claimed the right, under section 42 of the Highways Act, 1980 to maintain urban unclassified roads.

The Government have increased Hereford and Worcester county council's grant-related expenditure for highway maintenance by 30 per cent. between 1985–86 and 1987–88. Spending priorities are a matter for the authority to decide. In recent years the county council has chosen to spend below grant-related expenditure.

Part of the county council's highway maintenance expenditure is allocated to Hereford city council for the maintenance of its urban unclassified roads. I understand that there was a significant increase in the funds made available between 1985–86 and 1986–87. However, I am aware that the allocations were substantially lower than the estimates for those years submitted by Hereford city council. I regret that I do not have the figures for 1986–87.

Hereford city council has consistently claimed that the funding provided by the county council for unclassified roads in the city is markedly insufficient. As my hon. Friend said, the failure on the part of both sides to agree resulted in the city council asking my right hon. Friend the Secretary of State for Transport to determine whether the county council had unreasonably withheld approval of the city council's maintenance estimates for 1985–86 and 1986–87.

The city council argued that once it had claimed the right to maintain its urban unclassified roads the county council was under an obligation to meet the reasonable costs, irrespective of the county's spending plans. It said that "reasonableness" should be judged in the context of the condition of the city's roads. The city council argued that its roads were heavily trafficked and in an unacceptable condition.

In response, the county council argued that the city council was adopting standards that were unachievable in the present economic climate. The county council said that it had set its standards in the context of the national codes of practice and that Hereford city had consistently received the highest allocation per kilometre, or per mile if that is an appropriate standard for my hon. Friend, of all districts in the county. Most important, the county did not accept that the city council was failing in its statutory duty to maintain the highway.

My right hon. Friend the Secretary of State concluded that the county council had had regard to the relevant considerations and had not acted unreasonably. He took the view that the county council, as highway authority and provider of funds, could reasonably weigh maintenance standards and priorities against the available finance and, if necessary, reduce the city council's estimate in the light of that.

I appreciate that the points I have made concerning our determination that the county council had not acted unreasonably does not imply a judgment about the state of the roads in Hereford. My hon. Friend has rightly concentrated attention on questioning how one can have visible accountability and determine that the system is effective and that roads are effectively maintained. The Hereford case raises broader issues of the optimum arrangements for the maintenance of local roads. My right hon. Friend and I have both said that the Audit Commission is currently undertaking a special study of highway maintenance including agency and section 42 arrangements. The commission expects to publish its interim report dealing with this matter in late summer. That answers one of my hon. Friend's questions.

I am certain that the commission's findings will help local authorities and their auditors to examine and improve their efficiency. I know that many hon. Members would like to pay tribute to the work of the Audit Commission on this and other matters. The solicitor who recently transferred from the borough of Greenwich to the Audit Commission will add to its professionalism. The commission has a tradition of recruiting people who know their job and can work with local authorities to produce useful reports.

I look forward to receiving the commission's report. The Government will consider the role of district councils with regard to highway maintenance as a result of that report. I believe that my hon. Friend would agree that it is premature to reach any conclusions on agency and section 42 powers while the Audit Commission study is still under way.

I hope that my answer in this relatively short debate is helpful. I am grateful to my hon. Friend for raising a matter that is clearly of concern at least to the 12 district councils that use section 42 powers. I suspect that it will also be of interest to the two thirds of the district councils which have an agency role with the local county council highway authority. It is the kind of matter that is best dealt with by a Member of Parliament who is responsible for a constituency rather then a multi-Member system, whereby people may not bother to pick up points of such a nature.

I hope that you will not judge me out of order, Mr. Deputy Speaker, if I turn my remarks rather more to you. I came to the House in 1975 when you had already served for 11 years. It will be accepted on both sides of the House that it has been an honour to serve with you as a colleague, as a Minister and as Deputy Speaker. There are relatively few countries in which someone can move from being a teacher to being an Under-Secretary of State for Education and Science, as you did, followed by years of distinguished service in the Department of the Environment.

Speaking for hon. Members who sit below the Gangway on the Front Benches, as well as for those who sit on ministerial Benches and on the Opposition Front Bench, may I say that your presence in the Chair has led to rather better behaviour, rather better debates and a great deal more affection for the occupant of the Chair than we could say has occurred in years past, although I do not wish to cast any reflection on Mr. Speaker or your fellow Deputy Speakers. You are held in great affection, Mr. Deputy Speaker, by the leaders of all parties, There are many who cannot be here this evening but who would like to join me in wishing you a happy retirement and the hope that your memories of this place will be as good as our memories of you.