Scottish Local Authorities (Tendering) Bill: Stage 1
This afternoon's debate is on motion S1M-1843, in the name of Angus MacKay, on the general principles of the Scottish Local Authorities (Tendering) Bill, and one amendment to that motion. It would help if members who wish to participate pressed their request-to-speak buttons now.
I will not need to detain Parliament long for the measure. The bill is short and technical and comprises two sections. It amends the Local Government Act 1988 to remove the time limit on the period during which competition provisions in that act may be modified.
The measure is necessary to continue the current moratorium on compulsory competitive tendering beyond 31 December 2001. We wish to extend the time limit on those defined activities that are associated with direct service organisations. The bill allows ministers to continue the existing moratorium, which we intend to do only until we can replace the current CCT regime.
We intend to replace the existing provisions within the framework of a new statutory best-value regime. I assured the Local Government Committee that we intend to publish our detailed legislative proposals on best value this autumn. I am pleased to reaffirm to Parliament that the preparatory work for them is well under way.
The existing moratorium on CCT permits a limited suspension of some obligations that the Local Government, Planning and Land Act 1980 and the Local Government Act 1988 impose. Those provisions constitute what is often referred to as the CCT regime. The moratorium suspends the obligation to put work out to tender when European Union rules do not apply. Some other parts of the CCT regime continue to apply. For example, local authorities remain obliged to keep trading accounts for some defined activities and must break even in those activities after accounting for the costs of capital.
The moratorium was originally introduced to help local authorities to cope with a period of change—in particular local government reorganisation in 1996. Following reorganisation, the moratorium was extended to help authorities get to grips with the best-value approach, which was developing at that time.
Members will want to know why we wish to continue the moratorium rather than simply repeal CCT. The simple answer is that this autumn we plan to bring forward legislative proposals for a new regime. That deals with the points in today's rather meaningless Conservative amendment. The proposals will not be straightforward. They will involve complex provisions and complex concepts. It is proper that Parliament will want to scrutinise the legislation closely. There was no way that the detailed new legislation could find time to become law before 31 December 2001. In the meantime, it would not be prudent to have a gap between the repeal of CCT and its replacement.
When it was realised last November that a bill might be needed, we wrote to the Convention of Scottish Local Authorities. We continue to work closely with COSLA on the development of our proposals for best-value legislation. We have consulted widely on our intention to repeal CCT as part of the best-value legislative reform. The task force's recommendations were consulted upon between December 1999 and March 2000. Further consultation took place on the document "Best Value in Local Government: Next Steps" between June and October last year.
I declare my interest as a member and a former official of the GMB. Will the minister assure members that the new regime on best value will not be at the expense of the conditions and wages of the work forces that are involved?
I am happy to give an initial response to that, but there will be much more opportunity for fuller debate on that to take place as the bill is drafted and goes through Parliament. We want to ensure that there will be a level playing field on which the private sector and the public sector can compete. We certainly do not wish the private sector to be put at an advantage, nor do we wish the public sector to be put at an advantage. The matter that Pauline McNeill has raised will be embraced in our thinking.
I apologise for interrupting the minister again as he was getting back into his flow. Will the minister's proposals on best value end the restrictions that have come from the Local Authorities (Goods and Services) Act 1970?
Again, we are currently looking at that matter in great detail. We propose to make changes and remove some of the restrictions on local authorities. The precise detail of that will become apparent in the autumn. We want to create a situation in which we have much more of a level playing field between the private sector and the public sector so that the public sector is not deliberately disadvantaged by current legislation.
As I was saying, further consultation on the document took place between June and October last year. On 2 May, I formally responded to the consultation in my answer to a parliamentary question and by announcing our intention to bring forward detailed legislative proposals this autumn. Because the Scottish Local Authorities (Tendering) Bill does no more than allow us to maintain the status quo until the repeal of CCT, we did not formally consult separately on the bill. I understand that the representations that were made to the Local Government Committee agreed that the continuation of the moratorium was necessary until our legislative proposals on best value could be progressed. I am sure that the convener of that committee will refer to that when she speaks later.
To summarise, the bill seeks a technical change to existing legislation to permit us to continue the moratorium on CCT. That represents a short-term but necessary solution to a technical problem. In the autumn, we intend to bring forward draft legislative proposals for the introduction of best value and the replacement of CCT. Our best value team has already been established and a provisional timetable for the publication of proposals has been set.
I commend the motion to members and move,
That the Parliament agrees to the general principles of the Scottish Local Authorities (Tendering) Bill.
I am sorry that Peter Peacock feels that our amendment to the motion is not necessary. We believe that it is necessary to have a debate and to create some impetus within the Executive to introduce the legislation. I welcome the opportunity to contribute to the debate.
That the Executive is dragging its heels on the implementation of best value cannot be questioned. After four years in Government, best value should be ready to be introduced in Scotland as it has been in England and Wales. The Local Government Committee's evidence makes it apparent that difficulties have been experienced by councils as a result of CCT and best value running in tandem. The aims, objectives, processes and methodologies of the two types of regime are incompatible. Local authorities are still required to keep parallel accounts, meet financial objectives, submit financial reports and maintain the sanctions that fall under sections 13 and 14 of the Local Government Act 1988 for the defined activities. That has cost implications.
Will the member take an intervention?
Not at the moment.
In a written question, I tried to ascertain the scale of the cost of best value but was informed that the Executive holds no information on the cost of implementing the policy. That is a terrible admission, when councils are experiencing great difficulty in sustaining existing core services. Based on the Local Government Association's estimate that local government in England and Wales requires additional funding of £175 million a year because of best value's bureaucratic burdens alone—that is not my estimate—we can safely assume that the additional costs in Scotland will be in the region of £20 million.
Labour has replaced CCT with best value. CCT obliged councils to put the provision of many services out to tender to ensure that council services were delivered to local residents in a cost-efficient and high-quality manner. Such competition reduced instances of overstaffing and restricted practices in local government.
Will the member give way?
Not at the moment. I am just getting going and I was asked by the minister not to take too long.
A 1993 study by the Institute of Local Government Studies showed that CCT had led to average savings of 7 per cent, often accompanied by improvements in service standards.
Will the member give way?
No.
CCT fundamentally changed the culture of local government provision of services for the better. Under best value, there is no general requirement for local authorities to put their services out to tender. Instead, best value is based on the concept of the four Cs: challenge, compare, consult and compete. Performance indicators are the main yardstick for determining the efficiency of the delivery of council services, which is overseen by the Audit Commission.
The Conservatives are not against the basic concepts behind best value, but we believe that the scheme that has been introduced by Labour under the name best value is flawed.
Will the member give way?
No.
We are concerned that best value has led to an excessively bureaucratic, centralising inspectorate regime and a mountain of paper.
Will the member give way?
The system is so complex that some councils are returning to the bad old days of unchallenged, uncompetitive, in-house awards. [Interruption.] It is the minister's fault. He asked me to be quick and I always do as he asks.
Will the member give way?
In February 2000, the magazine Public Finance remarked:
"Labour's last general election manifesto … came up with Best Value, but without providing a clear definition. It is a vacuum that the Audit Commission and the DETR are still struggling with."
Is the member scared?
That is the member's opinion and she is entitled to it.
Best value seeks to encourage local authorities to make cost savings, yet it has a target of just
2 per cent efficiencies a year compared to the average 7 per cent that CCT delivered. The publication Local Government Tenders commissioned a survey of local authority contracts and tenders. It showed that there has been an astonishing 66 per cent drop in tenders advertised since Labour came to power. The Scottish Conservatives will seek to devolve more responsibility and autonomy to local councils. Local electors should reward or punish, via the ballot box, councils that are succeeding or failing.
We call on the Executive to get its act together, as its colleagues in Westminster have, and draft a bill to place before the Parliament this year. That was requested by COSLA in its evidence to the Local Government Committee.
I move amendment S1M-1843.1, to leave out from "agrees" to end and insert:
"does not agree to the general principles of the Scottish Local Authorities (Tendering) Bill because it believes that the Executive should give priority to the drafting of a Bill on Best Value so that it can be placed before the Parliament before the end of this year, and therefore calls upon the Executive to make an early announcement of its proposals, together with a timetable, for the publication of a draft bill to introduce a statutory framework for Best Value."
I thank Keith Harding for that entertaining presentation.
The Scottish National Party is broadly supportive of the bill. We oppose the process of compulsory competitive tendering in local authorities. A key policy of the Conservative Government that was elected in 1979 was the promotion of the concept of local government as an enabling authority, with a reduced role in the direct provision of services. The objective was to achieve better value for money and enhanced service performance by subjecting local authority service provision to market competition through inviting tenders from private companies to provide such services. However, as I am sure most people will agree, the end result was often that the cheapest possible tenders won out and quality, efficiency and effectiveness suffered.
Does the member agree that the contribution that we have just heard did not once mention the issues of fairness and the suffering of the work force under CCT? Does he further agree that, under the CCT regime, workers have had to take a reduction in wages in order to achieve a competitive environment? That reduction should end forthwith.
I thank Pauline McNeill for that intervention. I fully agree with what she said and, in fact, her timing was excellent, as I was just about to move on to that topic.
Workers in the private sector would often see their companies win tenders through the erosion of employee pay and conditions, including sick pay and holiday and pension entitlements, particularly for those in low-paid manual jobs. With non-discriminatory employment practices, the single status and the social inclusion agenda, CCT is now clearly out of tune with the wider social agenda. CCT inhibits innovation and leads to a poor response to changing needs. It imposes an excessive level of central Government control, which diminishes local accountability and denies a proper focus to the needs of service users and local citizens.
The SNP believes that all parts of the CCT legislation should be repealed at the earliest opportunity. Although we accept the Executive's view that it would be complex to reform sections of part 1 of the Local Government Act 1988 to remove the requirement on local authorities to seek tenders, we do not want that to result in a lengthy wait before best-value legislation is introduced. Concerns have been raised by COSLA, by the Association for Public Service Excellence and by others that legislation should appear "sooner rather than later". However, I am pleased to accept ministerial assurances on that matter this afternoon.
The minister will be aware of the comments made to the Local Government Committee in evidence, which suggested that we take a close look at the difficulties experienced by councils in fully embracing best value. That evidence also suggested that, at the same time, the provisions of the Local Government, Planning and Land Act 1980 and the Local Government Act 1988 should be maintained and incorporated in the moratorium regulations.
As Keith Harding pointed out, direct labour organisations and direct service organisations have to run with the requirements of CCT and establish new best-value structures that are incompatible. Flexibility is required. In England and Wales, best value has presented a number of difficulties, and Keith Harding pointed them out. For example, there is a restriction on the potential to innovate and limited use of cross-public sector working. I trust that the Executive will look closely at the experience gained south of the border. I find it bizarre that, having mentioned a number of failings of best value south of the border, the Conservatives seem to think that, without considering those failings carefully, we should rush into legislation now.
On a superficial level, the Tory amendment attempts to address concerns about the delay in introducing best value. However, I would have thought that the last thing that we want to do is attempt to rush the introduction of this complex legislation and end up with a less than satisfactory outcome. Of course, that is not the real aim of the Tories. Their real aim is to turn back the clock to reprise CCT in all its glory. Their amendment is a smokescreen for their true aims, and I would have thought it more honest if the Conservatives had simply opposed the bill.
A continued moratorium is essential. CCT is a crude method of attempting to lever the private sector into providing public services and of introducing competition in a number of key areas such as refuse collection, cleaning, catering, and repair and maintenance of buildings. The logic was that subsidised services could be provided better, and unsubsidised, by the private sector. As we know, that process is bureaucratic and cumbersome. It forced local authorities to alter their mindset on service provision, but the promised savings did not materialise, and 90 per cent of contracts under the Local Government, Planning and Land Act 1980 have been won in-house.
In Glasgow City Council, the legislation introduced by the Conservatives was particularly disastrous when it came to repairs. It was ludicrous even to suggest that any private company could have competed with the city council, simply because we could not have woken up one day and seen a private company take over the amount of work that the council did. It would have had to appear magically with a vast number of depots and workmen to carry out that work. The legislation forced openness and accountability underground and militated against the interests of local people.
Will Mr Gibson give way?
I will not give way, because I have only one more sentence to say and then my time will be up.
The bill was welcomed by all the organisations that gave evidence to the Local Government Committee, and I urge all members to agree to its principles.
It is rather scary, and I hope that it does not happen again, but I actually agree with just about everything that Kenny Gibson has said. I am sure that that will not happen very often in this chamber.
I want to touch on a few points and I will not speak for long, but I think that we need to look behind the Conservatives' amendment, as Kenny Gibson tried to do. The truth is that Keith Harding's amendment is not about introducing best value; it is about returning to CCT. Having listened to Keith Harding's speech, I believe that there is no question but that that is the Conservatives' aim. He actually wanted to support a return to CCT, not the introduction of best value. It is easy to see why that would happen. Even if the Executive published a bill tomorrow to introduce best value, it would not be able to stop CCT going ahead for the contracts that would have to start on 1 January 2002.
The reality is that local authorities would have to start preparing the contracts now. They would have a legal obligation to do so. Local authorities would have to prepare the contracts, advertise them and assess them. Even if we said when the bill finally got through later this year that they would not have to let the contracts, they would have to let them because EU competition law would require them to go ahead and let them. It is nonsense to say that we could continue the moratorium on CCT or the introduction of best value without passing the bill that is before us today. The Conservatives are misleading the Parliament by claiming otherwise.
Let us consider some of Keith Harding's other comments. It is a bit of a joke for him to say that the Conservatives are seeking to devolve more powers to local government. Anybody reading the manifesto that the Conservatives published a few days ago who can stop laughing for long enough to take any of it seriously will find out that they do not want to do that. They intend to remove significant powers from local government. They intend to remove the funding of schools from local government and give central Government responsibility for funding what is the biggest single item in the local government budget. That is not devolving power to local government. They also intend to remove from local government the responsibility for community care and social work and put that in with health. The Conservatives do not intend to give more power to local government; they have a centralisation agenda.
That is all part of the agenda from which CCT emerged. Throughout the 1980s and 1990s, the Conservatives had an anti-local government agenda. They tried to destroy local government. They tried to destroy the DLOs by forcing privatisation on them. They failed to do that, but they managed to create a brand-new industry in how to draw up tenders to ensure that the in-house bids were successful. That was not in anybody's interest, but it is what happened.
Great cost was involved in drawing up the tenders and putting them out to tender, but no one could guarantee that the public got best value for money. It often had the opposite effect to that which the Conservatives wanted. They said that they were trying to privatise and open the work up to competition. It often meant that the council would give minor contracts to small local businesses, such as joiners and plumbers, to do work on council houses or schools. Councils were no longer able to do that, because the requirements of CCT meant that the tender had to go to large bids, which those companies had no opportunity to be involved in.
I am sorry. Keith Harding did not take any interventions, so I am not taking any from him.
The Conservatives want CCT to return. They want to continue with their agenda of the 1980s and 1990s, which was to destroy local government. The Liberal Democrat-Labour Executive is not going to have that. It will continue to support local government, develop best value and give powers to local government, not take them away as the Conservatives propose.
Like Iain Smith, I have to state that I agree with most of what Kenny Gibson said. This is a technical bill to extend the moratorium on CCT. The Local Government Committee was the lead committee on it. We took evidence from a range of interested parties, such as the Executive, the Royal Incorporation of Architects in Scotland and councils. We also took written evidence.
There was no opposition to the bill from the key stakeholders. However, the Conservative member, Keith Harding, dissociated himself from the final report. His reasons are clear in his amendment S1M-1843.1. Although this is a technical bill, it is linked inextricably with best value in local government, as other members have said. "Working together for Scotland: A Programme for Government", included a pledge that
"We will deliver Best Value in local government".
As already stated by the minister and as he said in his evidence to the Local Government Committee, it is the Executive's intention to introduce legislation in the autumn to provide a statutory basis for the best-value regime, which will replace CCT. We are serious about a replacement for CCT, but we are also serious about getting it right, so if it takes longer, so be it.
As I have said, best value is at the heart of our modernising government agenda. Local government is our democratically elected partner. It is critical to the delivery of services that are based on local knowledge and priorities.
Approximately one third of the budget of this Parliament goes to local government. That is an incredible responsibility and agenda for councils. We are currently asking them to respond, review, change and work with other public bodies and trade unions in a way that they have never done before, so that we can deliver services with best value at the core of that delivery.
As Kenny Gibson pointed out, experience in best value is varied, and evidence suggests that the most effective councils have involved the trade unions. In response to Pauline McNeill, I should say that the committee has been very aware that councils that have involved trade unions have also examined conditions of service. In future, the committee will be watching for any references to that issue when councils produce their reports. If public bodies and communities are involved at a very early stage, they can usually make a difference. Furthermore, the Convention of Scottish Local Authorities and every council and professional body that came before the committee stated that the way forward was a concentration on the clear identification of outcomes.
Much hard work has still to be done before the Executive can introduce legislation and we should take the time to get things right. The Parliament must trust local government to deliver best value, having regard to agreed priorities. Although I acknowledge that the bill is technical and brings no policy change, it is linked with future legislation on best value, and as a result the Executive's intention to introduce proposals for legislation in the autumn is very welcome. I recommend that the Parliament approve the general principles of the bill.
This afternoon's debate seems to be a meeting of the Kenny Gibson fan club. I am tempted just to say, "I agree with Kenny," and sit back down again.
I agreed with everything that Kenny Gibson said about getting rid of CCT and with Iain Smith's comment that the Tories were just trying to reintroduce it. In my speech, I will therefore focus on what I hope any proposals on best value will reflect. I have been reading the working group's very good suggestions for the key principles behind best value. For example, I particularly liked the suggestion that
"Best value should be developed through partnership with minimum prescription."
Furthermore, the working group suggests that any proposals should build on what is good and avoid new bureaucracy. I hope that the working group's proposed key principles of accountability, transparency, continuous improvement and ownership are reflected in any proposals that are introduced for the Parliament's scrutiny.
I had some experience of best-value requirements when I worked with the performance standards set by Scottish Homes for housing associations. The standards were very prescriptive—sometimes verging on the ridiculous—as far as the level of monitoring and priorities were concerned.
A small anecdote might help to keep those points in mind when the key principles for best value are introduced. One performance standard that housing associations had to meet was the length of time that an organisation took to re-let a house that had become vacant. A particular housing association had had only one house vacant in a particular year. However, the house had gone on fire and it had taken three months for the house to be brought back up to standard and re-let. Because of Scottish Homes' prescriptive performance standards, the housing association had had to divide those three months—or 93 days—by the one house, which gave a performance standard of an average 93 days before it re-let a vacant house. Nothing within the Scottish Homes guidelines allowed any discretion or special case status for that housing association, which was accordingly marked down. We must be able to consider individual circumstances and ensure that we do not make the rules too prescriptive.
I appreciate Linda Fabiani's points. However, can I ask her whether the housing association used the council DLO for its own repair service? Does she know how widely used DLOs are for such services and how they compare with other agencies or players in the market? Are there any lessons that we can learn from that?
I will be very honest. I have worked in three or four housing associations, and in one instance I recommended not using the DLO because it was not particularly good and did not perform well. However, that was mostly down to the fact that its level of service had been mucked about by Conservative policies.
That is specious.
No, it is not suspicious; it is a fact.
Does the member agree that there are two sides to every coin and that Glasgow City Council's building services department won the contracts for all the housing co-operatives in Glasgow on a free and open tender basis, in competition against the private sector, on grounds of price and quality?
Yes, absolutely. As I said, I am speaking only from my experience, and I have not worked in the co-op sector in Glasgow. Nor can I give the figures for every different housing association. I suspect that what Andy Kerr says is right, and that council DLOs undertake an awful lot of housing association work throughout the country.
I am afraid that I have run out of the time that I am allowed for interventions, although Colin Campbell has offered me his.
I conclude with two issues that I want to throw open to members. First, would the roads contract that recently went from local councils to the private sector have gone to the private sector on the basis of best value as the Executive regards it, bearing in mind the fact that cost is not the ultimate measure of best value? Secondly, I agree with Pauline McNeill that workers' rights and conditions must be protected, and I ask members to think about the likes of national health service trusts, in which the rights and conditions of workers have been eroded and ancillary workers' jobs sold off to the private sector.
It seems that, either by accident or—as is more likely—by design, there has been a misinterpretation of the Conservative amendment. What we are suggesting is not an argument about CCT versus best value; we are merely suggesting that it is time—after four years—for the argument to move on.
Over the years, the argument seems to have changed fairly dramatically. I remember well the constant grief and aggravation that I used to get during my days on Glasgow City Council when there was any suggestion that any of our DLOs was not performing as a paragon of efficiency. Andy Kerr, Pauline McNeill and many other Labour members would say that best value is the way forward; however, in those days, council members thought that the status quo was highly acceptable, although manifestly it was not.
That is a misrepresentation of views. In those days, councillors were arguing for a level playing field and the ability to compete. Comparing the wages and conditions of employees in the private sector with those of employees in the public sector—which contributed to social inclusion in local areas—and the training budgets of local authority DLOs with those of the private sector shows that the DLOs were making a much greater social contribution than the private sector at that time.
Of course, there is merit in that argument. Mr Kerr will acknowledge that, whenever we have debated the issue of housing stock transfer, for example, I have underlined the fact that there is a difficulty, that there should be a level playing field and that we should ensure that conditions of service in the public and private sectors are comparable. Nevertheless, the situation in those days was highly unsatisfactory.
What cannot be gainsaid is the fact that the matter seems to have dragged on for an inordinate length of time. I cannot think why. Is it because the Executive is a little uneasy about dealing with it, as it is slightly controversial within the Labour party? There will be difficulties with trade unions and councils, which is why it was being kicked well into touch prior to the general election. By any standard, four years is far too long to spend on a bill. If similar legislation could be passed down south, why on earth can we not do it here? It is not so difficult. I have a copy of the Local Government Act 1999: if the minister wants to borrow it, he is at liberty to do so.
The existing situation is highly unsatisfactory. Councils are required to operate in tandem two differing and incompatible systems, which is causing much difficulty and expense.
Does not Bill Aitken think that we should learn lessons from the English legislation before battering on with ours?
If we did that for every bill, nothing would ever happen.
Clearly, we have to consider such matters. Frequently, in the chamber and elsewhere, I have made it clear that I think that there are dangers in introducing legislation hastily—my position is a matter of record. By any standard, however, four years is certainly too long and something should have been done to get the process moving.
The minister said that complex law and complex issues were involved. That is true: the innovation of the European dimension and the competition requirements have implications. However, if that aspect was dealt with down south, we could deal with it up here. In the meantime, a great deal of resource is being lost to councils through the failure to have any legislation in force.
Iain Smith stated that the situation that we are in was a result of some well-laid Conservative plot to ensure that everything was privatised. He might find himself in a dilemma, of course, being part of an Executive in Scotland that has a Labour connection. I am sure that he would deny certain of his statements in a UK context.
Having listened to the Prime Minister yesterday, we cannot be sure whether the situation with regard to public services will change, but we can be sure that the private sector will have an increased role to play in the provision of public services. The day of the DLOs could well be under threat if the Prime Minister has his way. I advise members to listen carefully to speeches that Iain Smith might make on the subject.
It was interesting that, although the Tories claim that they are not defending CCT, they have not condemned it either. However, CCT is most worthy of condemnation.
It is a matter of some regret that we have been unable to introduce alternative legislation, but I understand why. This is not a simple matter. Best value regimes, while sounding great, have inherent difficulties in regard to the production of appropriate measurements that would allow us to say that one mechanism provides better value than another. It is to the credit of the Accounts Commission that it was able to help to draw up appropriate comparitors. That is not an easy task, and one of the dangers of producing national benchmarks is that we might reduce everything to the lowest common denominator, thereby taking the local out of local government.
It was almost hypocritical of Keith Harding to suggest that the current arrangements involved additional costs. Of course there are additional costs, and the Conservatives are responsible for them. Of course the client-contractor split costs money, but there is no point in his complaining about that now when his team brought that in. Mr Harding's suggestions are not feasible, and if we do not pass the bill in short order, CCT will continue.
The current arrangements do not allow the possibility for lateral thinking. There is a need for change in local government—nothing stays the same for ever. If, for example, local government wanted to address the issue of janitorial services as well as catering, which is the example given in the report of the Local Government Committee, it could not do that. However, that is the kind of innovative thinking that we want to bring in. It is also true to say that the detailed contractual arrangements for CCT inevitably led to difficulties with regard to service delivery. That has happened in relation to other areas in which there has been private involvement and public-private partnerships. If the local authority wants to vary the contract, that comes at a price, which is determined by the contractor, rather than that being built into the agreement in a way that would deliver value for money. Once the contractor has the job, he controls what happens.
A recent example of that is in Falkirk. According to evidence given to the Education, Culture and Sport Committee recently, school pupils who returned from a school trip were locked out because no arrangements had been made with the private contractor. That is the sort of nonsense that can happen when watertight contracts are not entered into. It is difficult to produce such watertight contracts: although there are many experienced and able people in local government, that is not necessarily their area of expertise.
I am aware of the circumstances to which Brian Adam refers, as I read about them in the newspaper. Is not that a matter for Falkirk Council to negotiate with the contractor? If the school concerned was a council school, the service would have been provided at a cost—is not it simply a matter of establishing a proper cost to be paid by the private finance initiative operator? Incidentally, it is nothing to do with CCT.
It might not be to do with CCT, but it is very much a parallel arrangement. Indeed, it is an arrangement that should be entered into between the contractor and the council. If the arrangement was with the same organisation, the matter could be sorted out by a phone call, avoiding the need to renegotiate the detail. Once there is a contract, it is difficult to establish variations, and that is the significant weakness of private involvement in a public function. I am not saying that it should not happen, but there are difficulties, which should be considered.
The Tories' position is utterly hypocritical, and I hope that, having aired their views, they will not press their amendment to a vote later this afternoon.
It is not uncommon for members to make comment during non-contentious debates or consideration of technical motions or bills. However, it is difficult to speak without repeating what was said earlier, or to generate sufficient interest among the public in what is being debated. That never stops us carrying on with the debates, however. So I will participate in the debate without any belief that I am adding substantial enlightenment to the subject, and without believing that I can engender any more public interest than any previous or subsequent speaker. In fact, as an enthusiast for the wit of Oscar Wilde, I could say that I am following his advice, that the best possible form of exercise is to talk, not walk. I have only a few minutes and, although I need the exercise, I do not expect to lose much weight.
I find the Conservative amendment strange. Although I can understand Keith Harding's dissenting from the Local Government Committee's report on the bill—because he had not participated in the consultation debates—I cannot comprehend why, if he had read the final committee report and studied the information that had been discussed in committee during the consultation, he and the Conservatives would find it necessary to propose any opposition to the general principles of the bill.
In spite of what Bill Aitken said, I, like others, can only assume that that derives from an ideological hankering for a return to CCT. The evidence provided to the Local Government Committee made clear a strong desire on the part of all concerned to continue the development of the best-value regime. There was also substantial opposition to the re-implementation or continuation of CCT, even on the part of those representing the private sector.
Most representations conveyed the message that CCT had been remarkably unpopular in Scotland, and was opposed by local authorities and the private sector. The feeling was that continuous improvement was shunned in favour of emphasis on rigid contracts. Innovation was inhibited and the ability to respond to changing requirements constrained. The result was often poor standards, service inefficiency and constricted flexibility. That perpetuated cuts in wages and subsequent objectionable conditions of employment.
The evidence that we took highlighted the imposition of excessive central Government control, diminishing local accountability and neglecting the needs of service users in the local community. The CCT straitjacket, as it was known, limited the way in which local authorities could provide their services, reduced flexibility and jeopardised best practices.
Not everything about the bill is universally welcomed. Although I have encountered favourable responses to the bill's proposals, a number of concerns were voiced about the extension of the moratorium. It is clear that there is overwhelming support for the transition to a best-value regime, but it should be delivered as quickly as possible within a definitive time scale in order to assist in the development of partnership, avoiding competition between local authorities and private companies.
There can be no doubt that local authorities have expressed enthusiasm for fully embracing the best-value principles, but they remain concerned about the fact that they have been forced to maintain the provisions of the Local Government, Planning and Land Act 1980 and the Local Government Act 1988, because they form part of the moratorium regulations. As DLOs and DSOs are required to run both CCT regimes and the early days of a best-value regime in parallel, we must recognise the fact that those two types of regime are totally incompatible, and that that places a significant burden on service providers.
Modernising local government is essential to the progress of our communities. I am sure that the Executive is listening and responding to the voice of local government. On that point, I was pleased to hear Peter Peacock say to the Local Government Committee that the Executive firmly intended to publish its legislative proposals in the autumn. Therefore, there is all the more reason to question the motive behind Keith Harding's amendment. The Executive's proposals should be presented as soon as possible, but they should be progressed with a degree of caution. A new statutory framework is required to replace CCT, but I hope that the Executive will ensure that it is done right rather than quickly, so that we avoid problems in the future. I am sure that the Parliament will acknowledge that such an important change cannot be introduced overnight. Nevertheless, a majority of members of the committee and of the organisations that it met welcome and commend the general principles of the bill. I hope that the Parliament, too, will endorse them.
I think that Michael McMahon was a little too modest at the beginning of his speech—he certainly did his best to make a subject that has been well raked over as interesting as possible by making literary allusions.
Brian Adam talked about the problems of PFI and CCT, which are about the application of business standards to business life. As someone who is not a Conservative and never will be, my problem with PFI and CCT is that they introduced the standards of competition into an area of what is fundamentally service—local government is about service rather than about ruthless competition and profit making.
Will the member give way?
I will finish my point and then the member can decide whether to intervene.
Local government is a service. That is not an excuse for bad management or overstaffing. Local government service should be delivered as efficiently as possible. Does that cover what Murray Tosh wanted to ask about?
No. I was going to suggest that there are many local government activities for which a businesslike approach is necessary and welcome. I draw Colin Campbell's attention to paragraph 48 of "Best Value in Local Government: next steps", which recognises that the general response of those who participated in the consultation was that CCT had
"brought benefits in terms of greater specification and a more business-like approach".
That is the Executive's point of view. The SNP's point of view this afternoon has been ludicrously black and white and one dimensional. The SNP ought to recognise the arguments around these issues.
I am many things, but I am not black and white—grey possibly.
You said it, not us.
Who said that?
I accept that the Convention of Scottish Local Authorities recognised that there were some benefits, however harshly learned, from CCT. There is no doubt that CCT sharpened attitudes in local government. Like other SNP members, I feel that best value rather than CCT best meets the principles of service that characterise local government.
I will briefly divert from addressing the principles of the bill, on which we all agree—except the Conservatives, who are lurking away in the darkness that they inhabit. I realise that the debate is on the principles, but they have been so well discussed and there is such a unanimity of opinion—except among the Conservatives, who are committed to the past—that I will take the liberty of exploring a practical area for future tendering processes in local and central Government: paperless tendering. While reading the Defence Bills Agency annual report recently, which is the kind of sad thing that I do, I realised that the organisation is trying to go down the road of paperless tendering. That clearly eliminates much wasted time, effort and paper and is altogether more efficient. I ask the minister whether paperless tendering is desirable, practical and on the cards. If it ultimately leads to greater efficiency and less waste, it is a necessary adjunct to what we are discussing today.
We have been looking back at CCT too favourably. We should not forget some of the downsides to CCT, although I appreciate that the CCT process meant that many DLOs, such as those in which I worked, had to learn quickly. Many proved themselves to be flexible and innovative enough to respond to CCT. We should remember the non-commercial matters, such as training, wages, use of local labour and work force conditions, that are covered under the Local Government Act 1988. Until European legislation came along, CCT was a purely price-based regime in which quality was not a consideration.
CCT involved other costs, such as specification and tendering costs, which were exorbitant in relation to the services that were being provided. As previous speakers have said, there were also the restrictive costs in relation to the client-contractor split.
We should remember the contributions that DLOs have made to the wider social community, such as providing local employment. DLOs have had beacon employer status within areas of deprivation in relation to wages, conditions, trade union recognition, training and other matters that fit within the Executive's social inclusion agenda.
I am concerned about the best-value model that is being deployed in England and Wales. It could be argued that that model is over-prescriptive and does not leave local authorities enough flexibility to deliver the services that they see fit for their local communities. Therefore, I look forward to the minister's proposals on best value.
Given Andy Kerr's background, I am sure that he will recall, as I do, that the CCT regime often produced paperwork the size of telephone directories on each contract. I looked after about 11 contracts and had 11 catalogues on my desk, which I found quite disturbing. I am not in favour of going back to CCT, but does Andy Kerr believe that there should be an element of prescription in best value to ensure that, when quality is not reached, we can point to the contract and hold the service provider to account?
Towards the end of CCT, when we were bound to develop best value, most local authorities were moving on to output-related specifications, which allowed the service delivery performance indicators to be the criteria for awarding the contract, as opposed to specifications based on inputs—how many vehicles one had or how many people were in the labour force. Local authorities were being adaptable and innovative and could deal with some of those issues. Let us make no mistake: we cannot afford to ignore public services, which must be accountable. Their reporting regimes must be delivered.
I will revisit an important issue that Michael McMahon raised. I had to run two contradictory regimes when I worked in local government. Under best value, we looked innovative. We worked with and consulted employees and the community in order to develop a quality service that was acceptable to them. We also had to take a negative look back at our old reporting regimes, which were laid out under sections 13 and 14 of the Local Government Act 1988. Those regimes made us report in reverse, in the sense that they were a complete waste of management time and a diversion away from the real task of delivering high-quality public services.
We are moving forward, and people are desperate to see the Executive's proposals, which will be discussed thoroughly in the chamber. Tony Blair's vision for public services has been mentioned, and I will quote the Labour party's Scottish manifesto:
"Thanks to committed public servants, we have shown rapid progress is possible and begun to break the fatalism that says public services are always second class".
That is the strength of best value and of what it can deliver. I look forward to the minister's proposals.
I am happy to confirm that the Liberal Democrats fully support the bill, as Iain Smith said. It has great merit, in that it is very brief—not everything that is produced by the Parliament is brief—and clear cut. If the Executive and the Parliament want to bring CCT to an end, we must repeal the reference to 31 December 2001 in the Local Government Act 1988—that is the purpose of the bill and it will make permanent the end of CCT.
The Tories propose to replace the bill with a best-value bill, which would take a long time to draft. Best value is not like a butterfly that one can pin on a board with great ease; it is a living butterfly that will flutter away and escape. It takes a lot of time, effort and thought to identify best value, and the Tories' proposal is no substitute for the bill.
The Liberal Democrats are concerned about a remaining element of CCT in relation to public services being provided at the expense of public servants. For example, the case of the road workers who were transferred to a private firm and who lost their pension rights was highly unsatisfactory, but such situations still seem to be part of our system. Best value must include adequate and fair remuneration for employees and must not be at the employees' expense. I hope that the minister will take that into account.
That said, we fully support the bill and I hope that Parliament will, too.
The bill is very short and, as I know from committee meetings and the speeches that I have heard this afternoon, uncontroversial. The SNP backs the bill and has lodged no amendments. The bill contains no new policy initiatives; it seeks only to maintain the status quo until such time as a system of best value can be introduced into local authorities for the provision of direct services.
I seek assurances and guarantees from the minister on certain points. Keith Harding painted a rosy picture of CCT. However, every member in the chamber would surely agree that CCT was unfair, inefficient and disastrous. It resulted not in savings for local authorities but in poor standards of service and poorer treatment of workers. We do not want it to reappear and we want an alternative in place as soon as possible.
The aim of best value is to introduce an accountable, transparent and continually improving framework for the provision of direct services—but where is it? At the last UK general election, the Labour party made a manifesto commitment to replace CCT with a system of best value. In 1999, the final report of the best value task force was published. In October 2000, the Executive ended its consultation process. The Executive has had a long time to get best value up and running.
Obviously, if best value is to be implemented in a way that is of most benefit to local authorities and the wider public, adequate consultation and development time must be spent on it. The minister has mentioned legislation in the autumn, but can he give us a time scale for the implementation of a system of best value in local government? Will it be implemented in this parliamentary session? The fact that the bill extends the moratorium on CCT indefinitely does not bode well for a swift introduction of best value. I hope that the minister will address that issue in his closing speech. It is dangerous to agree with anything that the Tories have to say on the matter, but I agree with them that four years is a long time to wait for change.
I thank the Scottish Executive for ensuring that there is no default return to CCT and I commend the proposal to extend the moratorium. However, I give a warning about delaying the introduction of the new system that will enable us to dump CCT for ever.
Gil Paterson said that the Executive has had plenty time to get its bill up and running and he wondered why there has been a delay. That delay is the only reason behind our amendment. I am glad that the SNP has signalled its support for our position.
Brian Adam went a little further and asked us to condemn CCT out of hand. In an intervention, I made it clear that that view caricatures the debate. As we are well aware from the Executive's documentation and consultation process, CCT has had demonstrable benefits in defining local authority tasks and specifications, which in many cases were simply not specified before. It focused councils on delivering service objectives, started to stimulate strategic thinking in many local authorities and created a more businesslike approach across the field.
As the Executive's consultation document says, those were real benefits and real steps forward. We should not throw them away. I recognise that that is probably about as far as CCT could have taken us, but its benefits should not be lost.
We were invited to acknowledge that there were downsides to CCT. I am happy to do so and to put that on the record because it is what we have been saying in the debate. We are not opposing the move to a best-value regime. We see distinct advantages in it.
Brian Adam referred to the bureaucracy and the costs that are involved in the client-contractor split. Pauline McNeill referred to the great height of the paperwork on her desk and the bureaucracy that was involved in CCT. Ultimately, CCT was largely unworkable if it did not have the consent of the people who were implementing it. Iain Smith indicated in an intervention that there was a growth industry in getting round the process. I dare say that Pauline McNeill might have written the manual "101 Ways to Frustrate CCT", but all of us who have a local government background knew a great deal about that issue.
The late Nicholas Ridley was asked at a Conservative conference what he found the biggest obstacle to introducing what we now call outsourcing across the board in local authority services. His answer was, "Conservative councillors." As a local authority councillor, I recognised—although I was on the tendering side of the process, including some voluntary tendering—the difficulties of entering into legally binding contracts on service levels with private contractors as opposed to having in-house contracts that are not binding. The legally binding contracts were inflexible and got in the way of any attempts to substantially reprioritise local authority services.
The Conservatives are not blind to the deficiencies of CCT. We are perfectly happy—indeed, we are keen—to move the debate on to a more satisfactory and rigorous approach.
The Conservative amendment says that
"the Executive should give priority to the drafting of a Bill on Best Value so that it can be placed before the Parliament before the end of this year".
Does Mr Tosh agree that the proposal for the Executive simply to place such a bill before the Parliament before the end of the year does not mean that the bill would be passed this year? CCT would therefore come back on 1 January next year. Unless the Conservatives' aim is to bring back CCT, is not their amendment incompetent?
If Mr Gibson thinks that the amendment is incompetent, he should take that up with the Presiding Officer, who accepted it. The purpose of the Conservative amendment is to make it clear that we cannot simply live in limbo and that, if we are going down the best-value route—which the Conservatives support—it is time that the Executive made greater steps in that direction. I am pleased that the minister mentioned the idea of a bill being published in the autumn.
I will make a personal observation about best value, because I was deeply involved in a best-value project—although I did not call it that—as a local authority councillor in Ayrshire. The housing department that I worked with for four years introduced what it called a total quality management project. The project ran for most of those four years and, in effect, amounted to the staff revisiting almost every aspect of their work in order to introduce a consumer focus and to bring about best value. That meant lowering costs and, more important, improving service output. Although the stimulus for that project was the threat of CCT for housing management, the staff's reaction was positive. The staff achieved real progress and secured advantages that are still part of the service delivery of the successor authority.
Although my local government experience stopped at the 1996 reorganisation, I have seen best value work. Best value can work and has the makings of a demanding and rigorous regime for driving forward the ultimate goal of permanent and substantial service delivery. If that is the objective, surely all of us involved in the delivery of public services can subscribe to it. We insist that it must be rigorous—the audit process will be important. The degree of internal scrutiny will also be important, particularly the empowerment of those councillors who are given the task of scrutinising the performance of council executives.
It is clear from the local government settlement that, whatever happens over the next few years, there will be no big cash bonanza for local authorities. We live in an era in which councils are being asked to reflect on their priorities and, in the elegant phrase of the minister, to reprioritise. In such an era, we must accept that if a council wants to increase its spending in certain key areas, it will be able to do so only if it winds down operations and achieves economies in other areas.
There are important financial indicators and imperatives in the best-value regime. It cannot all be cuddly; it must involve difficult choices and tough decisions. We are keen to see best value introduced as a rigorous and demanding tool that local authorities can embrace with confidence and enthusiasm as they react to the Executive's initiatives and to devolution and as they set their own priorities.
CCT had its day; it moved the debate forward. As Andy Kerr pointed out in his thoughtful speech, CCT, as modified by European procurement and competition directives, had already moved the debate on substantially. It is time to move the debate further. We think that the best-value regime offers a way forward. We ask the Executive to get the work done of introducing the bill so that the Parliament can pass it and put it into operation.
I welcome most of the comments that have been made today from the SNP, from the Liberals and from our own benches. The convener of the Local Government Committee, supported by Michael McMahon, pointed out, rightly, that it is important to get this measure right rather than rushing it. For reasons that I will come to in a moment, that is the right approach.
I do not often get the chance to agree with Kenny Gibson, so I will take this one. I thank the SNP for its support for the measure and I thank Kenny Gibson for his acceptance of our assurances of our intention to introduce legislative proposals this autumn and to act on them quickly. In response to Gil Paterson's point on that, I say that when we reach that point, we will be able to set out the timetable much more clearly. Parliamentary procedures and protocol prevent me from announcing future legislative programmes. However, we would not be putting in the effort that we are putting in—there is a lot of it—to prepare the ground for a best-value regime if it was not our firm intention to proceed with it at the earliest opportunity.
Bill Aitken and Keith Harding accuse us of dragging our feet on best value. As I have said, it is important that we learn the lessons that are being learned in England and Wales. We must also learn lessons from what is happening in Scotland. Far from best value being a thing of the future, best value is here now, and it is being operated voluntarily by local authorities across Scotland. It is important to learn lessons and to apply them to the construction of the legislation that will place duties on local authorities to secure best value. It will not be a soft option; it will be an onerous option.
Michael McMahon pointed out, rightly, that the Conservatives have a tendency to aim towards control of such matters in a way that is much more centralised than any other party would want. They are not, it appears, in favour of the local freedoms that we support; they are in favour of prescription from the centre.
I am glad to tell Colin Campbell that we are well down the road to e-procurement—electronic procurement. That will involve contracting electronically. The modernising government fund is funding a programme to develop an e-procurement system not only for the Executive, but for a range of local authorities. We will make progress on that.
Andy Kerr spoke about the importance in the new regime of ensuring that quality, and not just cost, is a major feature in future. In the past, the problem was that we narrowed down costs and prescribed them in a way that led to an inevitable conclusion that was based on cost, but which paid no regard to whether services, quality of services, or delivery mechanisms were appropriate for a particular area. That was a restriction on local government rather than a help to it.
Does the minister acknowledge and accept the point—which Andy Kerr and I made—that, when local authorities chose the European procurement method, they were perfectly capable of setting quality standards and making those the centrepiece of the competition regime?
The principal point that Andy Kerr made—rightly—was that we must consider quality and not only price. That might come about as a consequence of European rules or our own rules. I would rather it was done by our own hand, because quality is important.
Iain Smith was right to mention the need to look at what was behind the Tories' amendment. Unfortunately, I got the first version of the Tory amendment. Murray Tosh referred to the Presiding Officer having approved the amendment; but, of course, he asked that it be changed before it was approved. The original amendment said that CCT should remain in force. So, to say that the Conservatives have been genuine—
On a point of order. How has the Administration seen an amendment that has not been lodged?
We have not seen it either. I will consult on that, and come back to you.
On a point of order. This is the third time that the Administration has had a copy of either a Conservative or an SNP pre-lodging amendment. I urge the Presiding Officer's office to carry out an inquiry.
I think that you are talking about amendments that have been lodged but not taken, but I shall consult and come back to you.
I have obviously touched a raw nerve, because the original amendment was not about the reform of local authorities' procedures to make them freer and give them more powers and more capacity to help them become more efficient. Instead, the amendment displayed the same old sad Tory tendencies, which existed between 1979 and 1997. It appears that they learned nothing from that period in office. They still want to tie up local authorities in red tape. They still want to stop local authorities from innovating and configuring services. They are still committed to compulsion and narrow political dogma on these matters. As has been pointed out, the Conservatives' real agenda for local government is revealed in their manifesto; it is to make local government marginal and irrelevant and to strip it of its powers and capacity, for reasons that only the Tories understand.
I am sorry that the Conservative amendment in its final form takes the tone that it does. Had Keith Harding been present when I gave evidence to the Local Government Committee, he would have known that we are well down the road to preparing draft legislation for best value. He would have known that I indicated that we would produce proposals in the autumn. He would have known that we have established a bill team to plan the legislation. He would have known that we have appointed a bill manager and he would have known that there have been several detailed discussions between ministers and officials to set out the details of that legislation. It is unfortunate that the Conservatives have lodged their amendment today.
As I explained in my opening remarks, the Scottish Local Authorities (Tendering) Bill is a short technical bill, which has been introduced to maintain the status quo and to preserve the moratorium on CCT beyond the end of the year. Without the bill to amend the existing legislation, the CCT moratorium would cease to operate for direct service organisations beyond December. That would mean that DSO managers would be forced to prepare—by default and unnecessarily—for the reintroduction of CCT, just before its planned abolition. The extension of the moratorium is intended to be a short-term solution to a technical problem. It is being considered now only because insufficient legislative time exists in this calendar year to produce the necessarily complex proposals for an alternative best-value regime.
I am grateful for the Local Government Committee's constructive consideration and support for the Scottish Local Authorities (Tendering) Bill. I am grateful for the support for the bill that has been expressed in the chamber today, and I am pleased to commend the bill to Parliament.