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  Local Government in Norfolk

This speech was given as part of an Adjournment Debate in Westminster Hall on 20 November 2007.

Mr. Richard Bacon (South Norfolk) (Con): It is a pleasure to follow my hon. Friend the Member for North-West Norfolk (Mr. Bellingham). I shall take up where he left off on the theme of change, because it seems to me that the proposals are just the latest example of an insatiable desire that affects all Governments to engage in fiddling and changing things. I shall examine that theme generically and discuss the lessons that can be learned for Norfolk.

Wherever proponents of change are found—in the private or public sectors—it can be useful to look at how the same issues emerge, the same dramatis personae take to the stage, and the same stratagems are employed to achieve change despite strong and often compelling arguments against it. That applies in activities as apparently diverse as mergers and acquisitions of commercial companies and in delivery of changes in the adult education system or in the tax and credit system—to take two examples purely at random. I do not know why the Minister smiles, because the record shows that a lot can be learned in both of those areas. He should know that better than most, but I shall not dwell on that subject. The delivery of new computer systems is another such activity, as are private finance initiatives and the conversion of mutual building societies into banks.

Mr. Bill Olner (in the Chair): Order. The hon. Gentleman is not discussing local government in Norfolk.

Mr. Bacon: Thank you, Mr. Olner. I was about to mention the reorganisation of local government. Whichever activity is under discussion, the proposed changes usually have certain common features. The benefits of the change are often questionable and unproven. It is worth saying at this point that one is not opposed to all change, in all circumstances, all the time. Nevertheless, the right hon. Member for Norwich, South (Mr. Clarke) correctly articulated the Conservative position, which is that, if change is not absolutely necessary, it is necessary not to change—not least because change can itself bring all kinds of unpredictable and undesirable consequences in its wake.

Mr. Charles Clarke: Does the hon. Gentleman accept that nevertheless, for my constituents in Norwich, South, it is indeed absolutely imperative to change, for the reasons that I set out?

Mr. Bacon:
Not necessarily. The first thing that the citizens of Norwich need is a council that can look after their money properly, rather than one that, as the Audit Commission has said, is not fit for purpose. Once the council has got its basic management sorted out, it could think about other things, but it should put the tasks in the right order first. However, let me repeat that my party is not opposed to change in all circumstances.

Mr. Keith Simpson: My hon. Friend may not be aware of an article that was published in September in the Eastern Daily Press in which the right hon. Member for Norwich, South (Mr. Clarke) put forward his arguments in favour of unitary authorities. It illustrates the very point made by my hon. Friend. The right hon. Gentleman was quoted as saying:

“I think the position of the city council to reject a 20m investment in one of the areas of greatest need is educationally ignorant and particularly backward-looking.

You have to question the seriousness of the city’s unitary bid. People will look at the position the city council has taken and think—what is it doing turning 20m down?”

His assessment of his own city council is pretty abysmal, therefore.

Mr. Bacon: My hon. Friend makes the point very eloquently. As I was saying, a number of common themes emerge. One is the theme of huge financial costs, which are usually much larger than originally stated. Another is the presence of characters who stand to benefit from change whether or not the wider interests of the organisation and of its customers are served. Last is that of a jargon or patter that, at least superficially and on first hearing, makes what sounds like a convincing case for change.

It is no coincidence, therefore, that the proponents of change often adopt the same approach, in which the first tactic is to overstate the benefits. For example, most GPs say that it would have been better not to have proceeded with the NHS IT system, even though it promised huge benefits. Another example is that of mergers and acquisitions, most of which fail—although loads of people make money from them.

The second tactic is to understate the risks and costs. The Minister knows all about that from the example of individual learning accounts, which I mentioned earlier. And who would now doubt, despite the benefits that were touted at the time of demutualisation, that Northern Rock would have been better off had it remained a mutual building society rather than converting to a bank?

Another important tactic is to act very fast so that there is little time for those who doubt the wisdom of the proposal to examine the case against it. A good example of that is the tax credits mess, in which the timetable for testing whether it would work was compressed almost to the point of extinction. Many hon. Members have seen the results of that in their constituencies.

I am tempted to say that another common theme is emerging in cases in which there has been a mess: the presence of the Minister. I shall not say that, however, because it would do him a disservice. He was a Treasury Minister for many years, and I am told that once one puts on a Treasury hat one can never entirely take it off. I am hoping, therefore, that he will view the proposals with a very jaundiced eye—not because change is always bad, but because one should make the case for it stack up, which nobody has yet convincingly done.

The people who benefit from change go by different names. Sometimes, they are called merchant bankers and lawyers. They look for transaction fees. Sometimes, they are called chief executives—a phenomenon that is common to both the public and private sectors. On occasions, they stand to receive an enormous pay-off if they lose their positions, and so face the enticing prospect of financial independence for many years to come without the inconvenience of actually having to work. Sometimes, the people benefiting are called professors of local government, who receive commission for writing long and important reports. The people who lose are often the same, although with different names: council tax payers, shareholders or people who want their garbage collected once a week and find that that is not possible.

The last category is the cadre of professional explainers or witch doctors who explain how marvellous everything is going to be. Sometimes they are called PFI consultants;
sometimes they are called financial PR consultants—I should declare an interest in that regard—and sometimes they are called Ministers. The key is to develop a convincing patter. Plausible examples are needed of how silly the present system is. An example might be that parish councils cut the grass, but district councils clean the pavements or county councils clean the roads. It might be that district councils collect waste but county councils dispose of it, or that counties deal with social services, whereas districts deal with housing.

The essential point about all these examples is that the proposals—if one can call them proposals in the absence of terms of reference—for local government change in Norfolk exhibit all these characteristics. The benefits are entirely theoretical. We can have a debate about the benefits, but as the hon. Member for North Norfolk (Norman Lamb) said, they are benefits on paper. We have had loads of experience in this respect. If 25 reorganisations of the national health service since 1982 have taught us anything, it should be that organisational tinkering must be treated with great caution.

There are enormous risks. The creation of, say, four social services departments where there is currently one involves enormous risks. There is the potential nightmare of organisational change, with vulnerable children—goodness knows, we have had experience of that issue in Norfolk—falling through the gaps in the new organogram, at a time when we have barely digested the changes caused by the merger of educational and social services for children into a new department.

The cost estimates vary, but they have been put conservatively at 100 million. I should like to know where that money is coming from. We have just had a very tight settlement through the comprehensive spending review. Why should the poor council tax payer stump up for what are at best theoretical benefits? For that matter, why should the central Government taxpayer stump up—after all, they are mostly the same people—when there are so many better things, as the hon. Member for North Norfolk pointed out, on which we desperately need to spend money?

In any case, those are conservative estimates. By how much will we see the costs explode? The largest component of the reorganisation of the police service in Norfolk, Suffolk and Cambridgeshire proposed by the right hon. Member for Norwich, South—the cost was 88 million—was merging the IT, at a time when people were saying that they wanted more police officers. How much will it actually cost to merge the IT of the different local authorities in Norfolk? No matter which proposal is chosen, we have to have the status quo as an option.

Of course there are characters around who stand to benefit from the process of change, whether the wider interests of the organisation and its customers are served or not. If we had several unitary councils, there would be several new social services directors, education directors—call them what you will; even with the merger of children’s services, there would be new senior staff—and directors of planning and transportation. My hon. Friend the Member for Mid-Norfolk (Mr. Simpson) mentioned the transformation director, on a stipend of 90,000. How much transformation we get for 90,000 quid remains to be seen. The answer is probably not much. If, however, we have a unitary council, there will be a number of highly paid officers taking enormous redundancy packages, as we have already seen in relation to primary care.

Once again, we have seen the tactic of acting very fast so that there is little time for those who doubt the wisdom of the proposal to examine the case. The chairman of the boundary committee is going around prejudging what form of government will emerge from the process in a way that is possibly unlawful, as we have heard, and certainly dangerous for democracy and consultation. Astonishingly, councils are expected to provide intelligent answers on local government reorganisation when they have not even been told what the question is.

Finally, a jargon or patter is needed that will at least superficially, on first hearing, make what sounds like a convincing case for change. Fortunately, that is not my job. I await a reply from the Minister, but I remain to be convinced.



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