Local Spending Reports

Part of Opposition Day — [20th Allotted Day] – in the House of Commons at 1:25 pm on 28 October 2009.

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Photo of Caroline Spelman Caroline Spelman Shadow Secretary of State for Communities and Local Government 1:25, 28 October 2009

Most hon. Members find it an extraordinary afterthought that, so late in this Parliament, the Government have realised that there might be a problem with lack of accountability in the regional structures that they have tried to create. All of us understand that there is something fundamentally wrong with the regional structures that the Government have set up. My party would seek to solve that by returning powers to local government, where there is democratic accountability.

At a time of recession, when households are having to account for every penny carefully, and our national debt is forecast to grow by £240 billion a year, it is all the more poignant that people cannot see where their money is going. Insulating quangos from public scrutiny will serve only to strengthen people's suspicion and distrust of quangos. They are seen as mandated by Whitehall to take the decisions that Ministers do not want their fingerprints on, and the bodies which spend taxpayers' money are free from interrogation.

In recent years, the quango machinery has accelerated. In 2007, spending on non-departmental public bodies rose from £37 billion to £43 billion. That information comes from the Cabinet Office. There are now 1,152 quangos in the UK employing more than 500,000 people. The TaxPayers Alliance estimates that every year £90 billion of taxpayers' money is spent by unelected quangos-equivalent to more than £3,500 for every household. The fact that the best that we can obtain is an estimate is telling in itself. Surely, we should all be entitled to know exactly how much money is being spent. My sense is that, if anything, £90 billion is probably on the low side.

Under the current regime, the figure will certainly be escalating. Let us take two examples with which the Secretary of State will be dealing. The Infrastructure Planning Commission is forecast to cost £10 million a year and will take the most controversial planning decisions out of the hands of elected representatives, but despite the scale of its finances and the impact of its decision-making power, it is not covered by the 2007 Act.

Just when we thought that public patience with elaborate and unaccountable quangos, which have failed to deliver in important areas such as housing, had run out, the Government have put them on a life support machine in the Local Democracy, Economic Development and Construction Bill. RDAs will now be spending vast sums of taxpayers' money on functions that they were never designed to deliver and taking decisions over some of the most controversial aspects of housing and planning. Yet RDAs, along with the rest of the quangos, have been exempted from the 2007 Act.

At a time when every publicly funded organisation is having to demonstrate its value for money, I cannot believe that the RDAs welcome being veiled in secrecy. Ironically, the RDAs might be better placed to advocate their case if they were covered by the 2007 Act. The quango culture is of a piece with public suspicion that politicians seek to abrogate responsibility and spend taxpayers' money without recourse. That corrosive cynicism is undermining our democracy and we need an antidote to it. People need to know how much is being spent, by whom and on what. Could it be the case that at the back of the Government's decision to dilute the requirements for publishing spending, there is a genuine concern that people would be horrified at the level of waste? What is incontrovertible, however, is that opening up the books would enable people to see just how their area compares to others in the share of funding that it gets.

Having set out how and why I believe that the Government have got it wrong in compromising the scope of local spending reports, I want to advocate how we might better match the reality of the 2007 Act with the rhetoric of the Local Democracy, Economic Development and Construction Bill. For a start, we should honour the commitment given by Parliament to enact the legislation in full. As legislators, we should aim to meet not just the letter but the spirit of the legislation and really open up spending to local scrutiny and counter-bid.

Hon. Members on both sides of the House have sought opportunities to do this, and I know that my hon. Friends the Members for Peterborough (Mr. Jackson) and for Wycombe (Mr. Goodman) recently tabled amendments to the Bill to that effect. Sadly, however, those were to no avail. It is clear, therefore, that if the public's desire for transparency in local spending is to be realised, it will take bold action. On my part, I believe that we should go further than the terms of the Bill, and that we should be bolder and even more radical in the quest to get transparency and accountability into public spending.

The Conservative party has made it clear that under a Conservative Government councils would have to publish online details of all expenditure over £500-already some Conservative councils, such as Windsor and Maidenhead, do that. That will let people see, at the click of a mouse, how their local authority is using their money. The emphasis will be on making the data easy to access, easy to understand and easy to compare with other councils.

That cannot be said of the current format in which the sustainable communities spending reports are being published. I consider myself to be fairly adept with Excel, and those reports are a cautionary lesson in making information at best opaque, and at worst simply indecipherable. However, the key to making those council spending reports valuable as a means of scrutiny is our pledge to abolish the entire regional tier of government and repatriate power to democratically elected councils. That would solve at a stroke the problem of regional bodies not being covered by the 2007 Act.

Our approach of discharging as much power as possible to elected councils, rather than unelected quangos, will give real force to the power of publishing spending online. We would also go back to the source-the grant formula-and make it more transparent. That, along with the power of local referendums and our commitment to phasing out ring-fencing, would deliver a sea change in the way we do politics. We are intent on devolving real power to councils so that they can deliver on the priorities and needs of their communities.

That approach is best summed up in our policy of giving councils a general power of competence-a power to enshrine the presumption that councils could, and should, be free to act in accordance with the wishes of the communities that they serve. However, in return, the communities deserve to be given the tools to hold those councils to account. They have to have at their disposal the information and the levers of power to challenge spending decisions and get things changed.

Is that not at the heart of the original motivation behind the spending reports that we are debating? It is a silver thread that has been running for some time in various incarnations but with very limited success-from local area agreements, to local strategic partnerships, the 2007 Act and, most recently, the Total Place initiative. Sadly, however, none of those manifestations has delivered what we need, which is why we find ourselves here today. We are in the early days of the Total Place pilots, and Conservative Members are watching with interest to see whether the Government can crack it.

It all goes back to the money, however. Bringing budget holders around the table can yield great results, but it is predicated on knowing what money is spent, by whom and on what.