Unelected State Bodies

Part of Orders of the Day — Opposition Day – in the House of Commons at 6:41 pm on 24th February 1994.

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Photo of Robert Jackson Robert Jackson , Wantage 6:41 pm, 24th February 1994

The Opposition motion invites the House to review the progression towards an unelected state. If the House wants to review this matter to good effect, it will have to go a good deal deeper than the allegations of the hon. Member for Oldham, West (Mr. Meacher). I hope that he will not object if, following the lead of my right hon. Friend the Chancellor of the Duchy of Lancaster, I try to rise above the level that he adopted in introducing the debate.

To criticise the Government on this matter, the House needs to have a proper appreciation of the nature of the problems in the provision of public services which the Government seek to address. From my experience of serving as a Minister in two service-providing Departments, latterly in the Office of Public Service and Science, I would summarise the problems under two headings.

First, and perhaps most fundamental, there is the problem of funding the public services. In 1976 a distinguished former Labour Chancellor of the Exchequer, Roy Jenkins, speculated on whether there was a limit to the share of the gross domestic product that the Government could safely take in taxation and whether that limit had been reached at about 45 to 50 per cent. of GDP. The politics of the 1980s were dominated throughout the western world by a taxpayers' revolt which led to a new consensus in Britain. Since the 1992 general election, the Labour party has come around on the importance of avoiding tax increases. Today, all round the world, governments are struggling to keep down the proportion of GDP which is taken in tax and spent by governments in the provision of public services.

The second problem is that, although people will vote against tax increases, they value public services and they want the quality of those public services to improve. So the Government and the House must face the danger of deterioration in public services—both absolutely and relative to the quality of service in the private sector—unless we can either find new revenue resources to fund public services or improve the quality of the management of our public services, or both. It is here that the House will find the root of the phenomenon of the "progression of the unelected state".

What is happening within government is not a drive to centralisation for its own sake. It is the application of new ideas about management, which are designed to improve the quality of public services while holding down their cost. There is a new managerialism in Whitehall which derives from the experience of the private sector. Its main themes are a stronger strategic direction from the highest level of the organisation, especially in the form of setting measurable standards of performance, coupled with the devolution of executive responsibilities for delivering services and meeting standards to a level which is as close as possible to the ultimate user of the service. That is the philosophy behind the great wave of public service reforms which began in the mid-1980s and is still rolling forward.

That philosophy was given a classical form in the Education Reform Act 1988. Central standard-setting was established in the national curriculum and associated testing arrangements and this was combined with the delegation of budgets to schools and the opening up of parental choice. It has been developed in the national health service, with the shift of power from the health authorities to GP fundholders and national health trusts. In Whitehall it is embodied in the spinning off of executive functions into "next steps" agencies operated under contract with the central Departments, about which we have heard during the debate.

The logic of the new managerialism has led the Government to look closely at the whole range of inherited arrangements for the provision of public services. Central to those traditional arrangements is the elected local authority as a provider of services, jointly financed by the central state. It is no secret that central Government have viewed local government with some scepticism as to its efficiency and cost-effectiveness as a provider of services.

Three main problems have stood out. First, there has been excessive politicisation in local authority decision-making. That is something that hon. Members on both sides of the House can recognise. Secondly, there has been excessive influence of producer interests in some local authority-run public services, especially where trade unions are closely involved in local power structures with the Labour party. Thirdly, there has been an insufficiency of managerial talent and experience at the political level in local government. That point was touched on by the hon. Member for Truro (Mr. Taylor). Local government leadership is often not at the level appropriate to the tasks that the local authorities now face. Those are serious considerations. If we put our hands on our hearts, we will all admit that.

Nevertheless, the Government's attitude to local authorities has not been one of complete scepticism. The Government have made a serious effort to promote reforms in local government. The concept of the enabling authority, in which responsibility for service provision is separated from the direct provision of the service, has been introduced. New functions have been allocated to local government in respect of community care, following the Griffiths report. Currently, an attempt is being made to promote unitary authorities which are a precondition for greater effectiveness and transparency.

Notwithstanding those positive approaches to local authorities, there is no doubt that one of the most important features of the new managerialism in government has been the shift of responsibilities and power from local authorities to other bodies which are charged with providing public services. That is why we are debating this subject today.

The hon. Member for Oldham, West is in danger of misleading the House if he seeks to persuade it that the changes that have taken place are all in one direction—the direction of centralisation and the substitution of appointment for election. The shifts of responsibility have gone in a variety of directions. Not all the changes have been in the direction of centralisation; nor is it the case that everywhere elected people have been replaced by unelected people. Much of the shift of power from local authorities has been downwards to more local levels. For example, power has been shifted from local authority housing committees to elected, estate-based housing action trusts; from local authority education committees to elected school governors; from many NHS regional and district health authorities to GP fundholders and hospital trusts.

Moreover, much of the reorganisation has affected bodies which have never been elected. I think particularly of the NHS. My right hon. Friend the Chancellor of the Duchy of Lancaster pointed out that NHS bodies have never been elected bodies; they have always been appointed. Where shifts have taken place in this area, they have been downwards, away from the centre.

Nevertheless, it is certainly true that the Government have created a wide range of new unelected bodies responsible for public services and they have expanded the powers and responsibilities of many such bodies.That is the essence of what has been said in the House. Hence the expanding world of the new magistracy to which this debate calls attention and it is a real and important phenomenon.

I have tried to describe the background to these changes and I hope that, in doing so, I may have persuaded some hon. Members that there is a genuine attempt on the part of the Government to grapple with genuine dilemmas. The picture is much more complex than can be summed up by slogans about the benefits of election as against appointment, or about the virtues of decentralisation as against the exercise of central power. I do not agree with Dr. Pangloss, however, that everything is for the best in the best of all possible worlds, and what I want to do in the rest of my speech is to say something about what I see as difficulties in the Government's approach and what might be done to address those difficulties.

I am afraid that the vehemence of the partisanship of the hon. Member for Oldham, West has largely blinded him to the real nature of those difficulties, although they surfaced in the speeches of the right hon. Member for Manchester, Gorton (Mr. Kaufman) and the hon. Member for Truro.

The first difficulty is concerned with efficiency and with what might be called systems overload. There is a real risk of each Government Department pressing its own reform agenda and promoting too many changes too quickly, with insufficient regard for the interaction of those changes across the different areas of policy which fall within the spheres of different Government Departments. For instance, that is a real problem in the current reform of the machinery of central Government. In my own experience, another difficult area has been in respect of Government initiatives overlapping, duplicating and running into one another in inner city areas, where there is now a welcome shift to more local initiatives with the city challenge concept. Meanwhile, we are all aware of the way in which the process of local government structural reform is clashing with the reform agenda in a host of other areas, from the operation of community care to the funding of magistrates courts.

A second set of difficulties concerns a problem that has been touched on in the debate, that of accountability. I have no doubt that the managerial changes that we are seeing and that we are discussing today are improving what might be called "high accountability"—that is, the accountability of local managers to the centre, to the Treasury and to Parliament in respect of general policy and of finance. We have only to look at the sheer volume of the management information now published, although all too rarely debated here. There is, however, a gap opening up at the level of what I think of as "low accountability", the accountability of service providers in matters of detail to particular individual users. That is where I have sympathy with the point made by the right hon. Member for Gorton.

The Government are making valiant attempts to address the problem through the citizens charter, and through the setting of detailed performance standards and the establishment of accessible channels of redress. But I do not think that these are as effective as the discipline imposed by a disgruntled voter tackling his elected representative. That is certainly true in relation to services at the local level. Hon. Members have also only to think about their attempts to deal, on behalf of constituents, with the Child Support Agency, to name but one, to recognise this problem at the national level.

The third problem that I see arising from the current wave of managerial changes is that of legitimacy. When the Government of Lord Salisbury created the county councils at the end of the 19th century as a vehicle for the provision of the new services that the state was then undertaking, there was a certain Tory statecraft behind the new arrangements which we forget nowadays at our peril. It held that there were advantages for the state in a wide diffusion of responsibility, so that the workings of the national government were not clogged up with detailed problems of local administration and so that a wide cross-section of people were involved and indeed implicated in the processes of local government.

The present position is that Government-sponsored reforms are putting Ministers in the front line of responsibility for a whole range of matters where the competence of Government is limited and their execution of policy is all too fallible. The best instance of this is the sorry saga of the implementation of the national curriculum. It is an important and valuable instrument which I strongly support, but it represents a real challenge to the capacities of the Government and it is one that we must recognise they may not be capable by themselves of meeting. The danger is that if the Government take too much responsibility to themselves they will be faced more and more with an erosion of consent which may spill over from one area of policy to another, perhaps until there is an overall crisis of confidence in the capacity of Government. Some may argue that this is an aspect of the currently prevailing political mood.

The fourth problem has also been touched on in the debate. It is the problem of democracy. Although it may not be how the new managerialism sees the matter, local government is not simply a provider of services, nor is it only one among a wide range of possible alternatives for providing services. Local government is also a vital element in the fabric of democracy, in the operation of a society based on the principle and practice of self-government. Even the element of party, which is sometimes thought to undermine the efficacy of local government, is critical for the working of democracy. All of us here depend upon the health of the party system and if one of the roots of that system, local government, is being damaged by our attentions, we in this House are among those who will suffer.

What should the Government be doing about all this? I would not urge them to abandon the drive for managerial reform. The issues that I outlined at the beginning of my speech are too important and too difficult for that. But I do urge them to beware of the seductiveness of what Hugo Young, I think it was, christened "the big idea". In our system of government Ministers have only a short time to make their mark on their Departments and it is all too easy to take some prevailing idea—for example, the introduction of the concept of the market into the provision of public services, which was a valuable and good idea, by the way—as a sort of leitmotif and be led by it up hill and down dale until in the end the idea and its integrity seem to matter more than the complex reality to which it is being applied. So my first advice is to beware the big idea.

My second piece of advice would be to pay attention to the question whether particular ideas really work and whether they will work in the way that is intended. Too often pilot projects are not really pilots but vanguards. Too often ideas are taken over from the private sector without much attention either to their proven value in the world of business or to their applicability in public sector conditions, which are often very different. I have in mind the way in which performance pay is being introduced into public service management without sufficiently serious evaluation of its effectiveness in motivating public servants.

I conclude with two suggestions about institutions. The first is local government. I believe that the Government are sincere in their desire to turn over a new leaf with local government, but what we need is a clear, consistent and well-explained policy for strengthening the institutions of local government. The philosophy of unitary local government is a welcome step in this direction, however disruptive its introduction will be. The Government should think again about the way in which the business rate is raised. More will have to be done to build the confidence and strengthen the morale of local government and to attract better people to seek election to it. We should look again at payment for councillors. The Government must recognise that the more they create alternative vehicles for service provision, the less incentive they offer to good people to seek election to local government. In that sense, there is a self-fulfilling element in the analysis which criticises local government as being short of talent.

Finally, and very close to home, there is Parliament, the one institution that has so far remained almost untouched by the wave of managerial change. That is not just because of the difficulty of making any changes here without all-party consent. It is also because it suits Ministers to have a House of Commons that was designed for a system of government quite different from the system now emerging.

A time-hallowed phrase has it that our role in the House is to hold the Government to account. In reality, we are hardly equipped to secure the kind of accountability required by modern government. Our historical role, which was expressed cogently by the right hon. Member for Gorton, has been to represent constituents, voice grievances, vote supply and sustain the Government of the day. The trouble is that, today, that role is not enough. Perhaps this debate is an effective illustration of that proposition.

If Parliament is to hold modern government to account, it will require a much more professional structure in which power will inevitably be more widely diffused than it is today. For example, we shall need to think in terms of the constitution of powerful Committees, embracing the functions of present Select and Standing Committees and enabling their members to be real partners in government with the Executive.

The Opposition have done a service to the House by raising this important issue. I just wish that they had presented the case at the level which the issue deserves.