It is a pleasure to respond to this debate, introduced by my hon. Friend Anne Snelgrove. I congratulate her on securing this opportunity to discuss her concerns about the way in which Swindon borough council introduced borough-wide wi-fi. As she knows, local authorities act independently of central Government, and Ministers such as I have no remit to intervene in their day-to-day affairs, except when specific provision has been made by Act of Parliament. However, local authorities are accountable to their electorate for their actions. If a member of the public suspects fraud, corruption, or misuse of public money, they should contact the appointed auditor for that authority. If a member of the public believes that the council has acted illegally or not in accordance with its constitution, they should contact the authority's monitoring officer. Despite the limitations on central Government intervention, measures are in place to secure local intervention.
The fact that Swindon is working with the private sector to make the town the first in the UK to provide free wi-fi internet access for all its residents has been widely reported in the press. That is a good aim, and may have replaced Swindon's magic roundabout as an identifying feature of the town. The challenges of the current recession make it even more important that successful partnership works to make effective use of public money, and that available resources are deployed as efficiently and transparently as possible to pursue local priorities.
The concerns expressed by my hon. Friend are primarily about the procurement process and the decision-making aspects of the project. They include the way in which the council handled the wi-fi zone roll-out in Swindon; the pilot scheme that was set up with Digital City UK, a company that started with a £450,000 loan from the borough council; the transparency of the decision-making process as only three councillors were involved in the agreement; the fact that a council employee is a member of the company's board; the fact that taxpayers' money seems to be at risk because the business risk does not seem to have been underwritten; and the lack of information on wi-fi, especially its effects on health, which are, hon. Members know, a cause of great concern.
Finally, my hon. Friend said that wi-fi is not necessarily the best solution for delivering broadband to any community, let alone excluded ones. In a city area, it may be difficult for wi-fi to penetrate housing, especially if the walls are thick and were built in Victorian times. Wi-fi is unlikely to support next-generation access speeds, so it may be quickly superseded by cable and fibre-optics, and wi-fi speed suffers as more people use it-the contention ratio. All in all, there are many concerns about the way in which Swindon borough council went about the provision of that laudable item, and about the research it carried out.
I shall now outline the Government's established policy on procurement to clarify the matter for my hon. Friend. Our policy is that public procurement should be based on value for money, having due regard to propriety and regularity. The European Union's procurement directives set out the legal framework, detailed procedures and criteria for the specification, selection and award of contracts above certain thresholds. Even below those thresholds, the EU treaty-based principles of non-discrimination, equal treatment, transparency, mutual recognition and proportionality must apply. The EU procurement directives and implementing regulations enforce EU rules on transparency, free movement of goods and non-discrimination. They require that, in most cases, there should be a competitive procurement advertised across Europe.
Subject to their legal duties-including the duty of best value-and to public procurement law, local authorities are responsible for taking their own procurement decisions. The duty of best value, as laid down in legislation, requires authorities to make arrangements to secure continuous improvement in the way in which they exercise their functions, having regard to a combination of economy, efficiency and effectiveness. Any specific complaints that best value is not being met in a particular set of circumstances would need to be addressed in the first instance to the authority's external auditor. I stress again that Ministers have no ability to intervene in individual procurement decisions made by local authorities. Local authorities need to satisfy themselves that any aid provided by them does not contravene the European Commission's prohibition on the granting of state aid and that it meets the requirements of competition law.
I shall turn now to the audit and inspection of local authorities. Systems are in place to assess and audit decisions made by local authorities. Auditors perform an annual audit of financial statements. However, they also have wider responsibilities to review and report on whether an audited body has made proper arrangements for securing value for money, economy, efficiency and effectiveness in its use of resources. The auditors are obliged by the code of audit practice, which is approved by Parliament, to consider whether any representation or information that they receive needs investigation or action under their specific powers. They must consider whether to make a public interest report under section 8 of the Audit Commission Act 1998 on any matter that they judge should be considered by the audited body or brought to public attention. I am dwelling on these specific matters because some of the issues that my hon. Friend has raised could possibly be addressed through these means, if members of the public felt that they should be.
Those external auditor assessments of value for money in the use of resources feed into the performance framework for local services for all outcomes secured by local authorities working alone or in partnership. Such a partnership is known as the comprehensive area assessment. The CAA use of resources assessment considers how well individual public bodies manage and use their resources to deliver value for money and better sustainable outcomes for local people. The assessment focuses on the importance of sound, strategic financial management, strategic commissioning, good governance and the effective management of natural resources, assets and people.
My hon. Friend has raised several points about governance in the council, particularly in regard to the transparency of the process for decision making and to the fact that an employee of the council was and is a member of the company board. My understanding is that Swindon borough council operates a leader and cabinet model, made up of the leader of the council and a cabinet of up to nine councillors to whom the leader allocates portfolios. The cabinet makes decisions in line with the council's overall policies. If it wishes to make a decision that is outside the budget or policy framework, this must be referred to the council as a whole to decide. To speed up decision making and to allow the cabinet to concentrate on major matters, members have the delegated power to make day-to-day decisions in relation to areas within their portfolio. However, specific questions about an individual decision would have to be addressed to the council.
One issue raised by my hon. Friend was how just three councillors can make a decision that affects the whole authority. Sadly, once again, it would be inappropriate for me to comment on an individual case. However, in terms of governance, there are times when it could be appropriate for decisions to be made without the participation of the full council. However, the council's particular decision-making process will be outlined in its constitution.
A further issue was whether there is a conflict of interest when a council employee is a member of the board of a company-in this case, the wi-fi company. Again, it is not appropriate for me to comment on an individual case. However, it is reasonable to expect councils to have in place mechanisms to deal with conflicts of interest such as that one, because employees may live in the authority and use its services, so they may have to come to decisions on matters that have a material effect on them and their lives.
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