Standing Committee B
Tuesday 16 February 1999
(Afternoon)
[Mr. William O'Brien in the Chair]
Clause 18
Transition from compulsory competitive tendering to best value
Amendment proposed [this day]: amendment No. 219, in page 12, line 20, leave out `2nd January 2000' and insert
`the date on which any provision of this Part comes into force'. —[Mr. Jenkin.]
4.30 pm
Question again proposed, That the amendment be made.
The Chairman: I remind the Committee that with this is it will be convenient to take the following amendments: No. 229, in page 12, line 20, leave out `2nd January 2000' and insert `30th September 1999'.
No. 15, in page 12, leave out lines 31 to 33.
No. 230, in page 12, line 31, leave out `2nd January 2000' and insert `30th September 1999'.
Sir Paul Beresford (Mole Valley): I shall be brief, and, having pulled the Under-Secretary's leg for incessantly referring to his notes, I shall refer to mine.
We were discussing the apparent gap between the disappearance of CCT and the implementation of the best value. Tomorrow's Hansard will show that the Liberal Democrats wish to expand that gap and that the Government wish to tighten it. We must examine possible dates: I support my hon. Friend the Member for North Essex (Mr. Jenkin) in his desire to ensure that the gap is filled. It does not seem desirable to dismantle compulsory competitive tendering before 2002.
The timetable in the Bill implies that implementation will commence in January 2002. That assumes that Royal Assent will be received in late 1999, and that clauses 1 to 19 will come into effect 12 months later. However, the Government must still produce guidance and orders, which must pass through the appropriate procedures. Thirty-nine pilot best value studies will not be concluded until late 1999, at best. They must be evaluated and, as a result, the Government must produce guidance on consultations, reviews and so on.
New PIs are currently out for consultation and pilot results will be available by, at best, mid-2000. That assumes that the new PIs can be brought in by 1999-2000, or by 1 April this year. The first full year for the new PIs will therefore be 2000-2001, and results from those will be available between the middle and end of 2001.
Standards and targets have not been set in many areas in which consultation is required. In general, no reviews will be concluded until the end of 2000-2001. When such reviews are concluded, they will not have reference to the new guidance, indicators and so on. Reviews must be based on real comparisons. For the new PIs, however, that will not be possible until 2002 and 2003.
It seems unrealistic to expect local authorities to publish their local performance plans before the end of the financial year 2001. Even then, they would only be able to publish skeleton plans. To add to the complications, inter-borough comparisons will not be available until 2001-2002.
Conservative Members of the Committee are always helpful, and are being especially helpful today. My hon. Friend the Member for North Essex said that we do not want a black hole between the old and new systems to damage the progress and implementation of the Bill. It would be appropriate to apply some parts of the Bill to local authorities at a later date, especially under the next Conservative Administration. I am therefore keen that the gap should be filled. I await the Minister's explanation of how she will shorten the consultation to produce the desired result.
The Minister for Local Government and Housing (Ms Hilary Armstrong): I always enjoy the helpful points made by the hon. Member for Mole Valley (Sir P. Beresford). I will address those that he has just made later on.
I am grateful to hon. Members for raising the question of the balance between ending CCT and introducing best value. It is important that we get that right so that authorities are clear about what is expected of them and about the way forward.
A repeal date of 2 January was carefully identified to take account of existing CCT timetables for the initial implementation of professional white collar services in England. I consider it important to ensure that authorities receive a clear message that they must comply with the existing legislation and not anticipate the introduction of best value by abandoning tender exercises at a late stage in the process. That in itself would involve them in a loss of money which it would be difficult for the Government to justify.
In order to comply with the implementation dates for white collar services up to 1 January 2000, authorities will have commenced the tendering process well before Royal Assent might be expected. It usually takes around 12 months to prepare for and complete a tendering exercise and commence the contract. This principle also applies to existing CCT contracts which become due for re-letting in the same period.
However, balanced against that prime consideration I am anxious to provide as much time as possible for authorities to make sensible preparations for best value without the distraction of CCT. Amendment No. 219, by contrast, would ensure that the provisions of the CCT legislation remain in force until the best value regime begins. The date we specified in the Bill, 2 January, immediately follows the last planned implementation date for white collar professional services, which is 1 January. No other new, white collar services will become due for implementation between this date and the date when the relevant provision is brought into force by an order under subsection 20(2). That will probably be on 1 April 2000, but we shall come to that later.
Authorities will be able to make good use of the period between 2 January and the commencement date of this legislation to prepare for early best value action by, for example, making preparations for the production of local performance plans and the conduct of their reviews. We intend to use our guidance powers under subsection 18(2) to assist authorities in managing the transition from CCT to best value.
In Wales, CCT has been generally suspended since April 1994 following local government reorganisation. The moratorium for work subject to the Local Government Act 1988 extends beyond 2 January 2000. The moratorium for work subject to the Local Government Planning and Land Act 1980 currently expires before 2 January and is scheduled to be extended to 2 January to align it with the date of abolition. In my view, the 2 January date offers a realistic balance to ensure that both of these requirements will be met. I therefore ask the hon. Member for North Essex to withdraw that amendment.
It would not be sensible or appropriate to remove subsection 18(2)(a), as amendment No. 15 proposes, as that would prevent the Secretary of State from issuing guidance to authorities in respect of the transitional period from the revocation of CCT to the coming into force of the relevant provisions of best value. As a transitional arrangment, I intend that there should be scope for authorities to incorporate evidence of compliance with certain CCT requirements in the final year of that regime in their early best value reviews of performance in order to provide a basis of comparison in the summaries of performance which they will be required to produce under best value.
Furthermore, in contrast to CCT the test of competitiveness under best value will take a variety of forms and a coherent strategy on competition and procurement issues will be very important. Many authorities will need, and welcome, guidance, especially guidance that disseminates information about best practice such as that which emerges from the best value pilot exercise.
It is important that guidance on those requirements be provided to authorities to send a clear signal on future obligations. Only in this way can the Secretary of State ensure the ordered transition from CCT to best value. Therefore, I again request that amendment No. 15 not be pressed.
Amendment No. 227 would bring forward the date for the repeal of CCT legislation from 2 January 2000 to 30 September this year, and amendment No.230 accordingly seeks to alter the period in respect of which the Secretary of State can issue transitional guidance. Members of the Committee will be aware that in both the best value Green Paper and the local government White Papers we sent robust messages about the importance of competition within best value.
We therefore considered carefully the date for the abolition of CCT to reinforce the importance of competition while simultaneously giving local authorities an appropriate room for manoeuvre to allow them to prepare for the application of the duty of best value.
Jackie Ballard (Taunton): Those documents were, by their nature, consultations. Will the Minister say what responses local authorities gave on the date for the abolition of CCT and how they felt it would impact on their preparations for best value?
Ms Armstrong: There were a variety of response but I do not have them to hand. Local government was not the only organisation that responded, and, when drafting the Bill, we took account of consultations. There was pressure from local government to, on the one hand, make the position absolutely clear, and, on the other, be flexible. We felt that we needed to be clear about the dates and to give guidance—not instructions—on the transition period.
I was explaining the importance of the transition period. I understand that hon. Members may wish to lengthen it to give authorities more time to prepare. But in doing so they may not have thought through the position of authorities that were reorganised on 1 April 1998. We realise that these authorities need some breathing space before becoming subject to the CCT regime, which is why they enjoy an 18-month moratorium before having to do so. However, the moratorium ends on 1 October 1999 and they must have exposed their blue-collar manual services to CCT by then. I have just said that, typically, it takes about one year for authorities to let CCT contracts, so many of those that were organised in April 1998 will already be in the early stages of tendering to meet that obligation.
I do not wish to create uncertainty for, or send mixed messages to, those authorities. I have already said that CCT has both its problems and its benefits. An organisation that has been subject to recent reorganisation will be helped, through the discipline of CCT, to prepare for best value in terms of specifying services and identifying local markets for delivering them. I want them to capitalise on those disciplines in the same manner as any other type of authority. I do not want the thoughtless selection of a repeal date to tempt some of those authorities to abandon tendering exercises which they may already have begun and which may already have involved them in expense; indeed, doing so would put them at risk of criticism from their auditors.
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