1. '.—(1) The Audit Commission and the Scottish Accounts Commission shall, before issuing directions under this Part, have regard to the need for involving the public in setting and monitoring standards of performance.
2. (2) The Secretary of State, in making any order under this Part relating to competitive tendering, shall ensure that any directions contained in the Order shall take into account the importance of involving the public in any decision making.'. —[Mr. Bellotli]

Brought up, and read the First time.

I beg to move, That the Clause be read a Second time.

The new clause goes to the crux of local service provision. It is really a question of whether we believe that central Government should direct local services, or whether we should now take the opportunity of putting local people—the local electorate—back in charge of those services.

In a sense, this is about whether the people should be the final arbiter in regard to how services are delivered and monitored. In our view, it is not for a commission or for the Secretary of State to dictate to local authorities how their services should be delivered. Of course, both the commission and the Secretary of State will have important roles in providing advice, information and guidelines on good practice, but neither should be the final arbiter.

The commission could have a role in encouraging the development of a new form of local government structure. The Secretary of State can encourage local authorities to go for competitive tendering to obtain quality at an affordable cost. There are advantages, however, in making the people the final arbiter again—in ensuring that the public not only understand the services that are provided, but are consulted fully about their quality.

Many local authorities already test public opinion about the delivery of services in their area. Richmond council, for example, regularly runs surveys to determine whether local people consider the quality of service important. Recently, Tower Hamlets council conducted a referendum on what the local poll tax level should be. It received a 28 per cent. return of questionnaires, and 45 per cent. of respondents opted for the highest of four offered poll tax levels—which showed, I think, that local people wanted a high-quality service and were prepared to pay for it, but it also showed that they were prepared to enter into a dialogue with the local authority about what they thought of the services provided. I might add that the survey was carried out at mininum cost and has provided the council with useful information.

The choice is this: should there be central guidelines and blueprints, or should local people be left to enjoy services and then comment on them in a way which could lead to improvements? The question whether the Secretary of State should have power to dictate to councils about compulsory competitive tendering is at the core of the current arrangements, but I propose to change that by putting the people back in power. If a local authority and the public are satisfied with the cost and quality of an in-house service, why should the local authority be forced to put that service out to the private sector? If local people are happy and are prepared to pay, central Government should not interfere.

It is also important that, if a tender is undertaken, some customer reaction is obtained. After all, anyone can put a service out to tender at the lowest possible cost, but no one may be pleased with the way in which the service is delivered. According to recent statistics, 28 per cent. of people in the Dorset county council area are unhappy with the services delivered by that council. If more than one in four people who live in the Dorset county council area are unhappy with the services delivered, it says something about those services. Changes ought to be made.

The new clause is about turning the Bill into one which puts local people back in charge. I hope that I have said enough to enable the Minister to tell me why he wants central Government to be put in the driving seat and why he does not intend to allow local people to take decisions which affect their local communities.

I shall try to emulate the commendable brevity of the hon. Member for Eastbourne (Mr. Bellotti). However, the way that he has drafted new Clause 10 shows that he has misunderstood the Government's intentions. The first part of it calls upon the Audit Commission and the Scottish Accounts Commission to have regard to the need, before issuing directions, to involve the public in setting and monitoring standards of performance. However, we do not propose that the Audit Commission and the Scottish Accounts Commission shall set standards. What we are asking them to do is to provide objective measurements by which all local authorities can measure the standards that they have set and the service that they are providing to the electors.

It is absolutely central to our proposals that the public will be able to make judgments as to whether they are satisfied with the services that their local authorities are providing for them. Their local authorities will account to them for the standards of service that they are delivering, measured objectively. They will use measurements that are common to all other local authorities. It will be possible, therefore, for people to make comparisons between what the local authority promised and what it has delivered, and also between what one local authority delivers and what another local authority delivers. It will all be measured in exactly the same terms. The first part of new clause 10 shows that the hon. Gentleman has misunderstood our intentions. What we intend puts the public very much in the driving seat. It provides the public with the information, objectively derived, that they need in order to be able to judge their council.

The second part of the proposal in new clause 10 once again shows that the hon. Gentleman has misunderstood the position. In setting out the specification for anything that is to be the subject of competitive tendering, it is for the local authority to determine for itself the standard at which it wishes its services to be delivered. The local authority should be concerned if subsequently it finds that people are not satisfied with the services delivered. That could only be for one of two reasons: either the specification was wrong, in terms of what local people expected, or the tenderer had under-performed against the specification. If the tenderer has under-performed against the specification, because he is working under contract to the local authority it has redress against the contractor —a redress that it would not normally have against a directly employed labour force operating outside the competitive tendering process.

I have no quarrel with the hon. Gentleman that local people should be able democratically to deliver their judgment about the standard of service that the local authority delivers, whether or not it be a service for which there has been competitive tendering. However, local authorities will have a greater opportunity both to set the specification and to call a contractor to book where the compulsory competitive tendering process has been gone through than would otherwise be the case.

We debated this subject fairly fully in Committee, when I put forward a range of opportunities by means of which local authorities could consult people and identify customer care. Having listened to the Minister's reply, I do not think that he has moved any further forward since the Committee debate. It is a little late to suggest that a local authority will have redress if a contract is not fulfilled. At the point of redress, local people will have lost the service that they were supposedly going to get. It will be a little late for the local authority to reinstate services that the tenderer failed to deliver.

Before a local authority considers awarding another contract to a private tenderer who was awarded a contract for which there ought to be redress and under which the contract has not been delivered to the standard required, it ought to think carefully about what it is doing The contractor will have clearly demonstrated that he is unable to deliver a service to a certain level of quality. That argument was put forward throughout the whole of the Committee proceedings. It was clear there that cost is the Government's first concern and that quality comes second. In my view, quality is as important as cost. I would not consider awarding anybody a contract if that person had not fulfilled a previous contract to the necessary level of quality.

For those reasons, it appears that the Minister has not moved any further forward since Committee. I believe that the Government are not putting people and quality of service first but are following a cost-led policy. I therefore intend to press the new Clause to a Division.

Question put, That the clause be read a Second time:—

The House divided: Ayes 119, Noes 241.

Question accordingly negatived.