Twelfth Standing Committee on Delegated Legislation
Wednesday 23 June 1999
[Mr. Humfrey Malins in the Chair]
Draft Local Authorities (Contracting Out of Highway Functions) Order 1999
4.30 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson): I beg to move,
That the Committee has considered the draft Local Authorities (Contracting Out of Highway Functions) Order 1999.
First, Mr. Malins, may I say what a pleasure it is to serve under your chairmanship once again?
This contracting out order seeks to allow local highway authorities to delegate, where they wish so to do, a wide range of operational road maintenance decisions to private sector contractors. That will benefit local authorities and contractors by reducing bureaucracy and improving efficiency, and it will certainly benefit taxpayers by reducing costs.
For example, a private contractor will no longer have to ask the local highway authority to obtain the removal or repositioning of a badly placed skip. The order will empower the contractor to deal directly with the owner of the skip. Similarly on roads that are subject to flooding, the private sector company will be able to position posts or stones indicating the depth of flood water where they consider them appropriate and without seeking permission from the local highway authority. At present, a local authority must still authorise many minor day-to-day decisions relating to such maintenance contracts, delaying operations and adding an unnecessary layer of administration. That is inevitably reflected in the price of the contract.
The order is permissive. It will give local highway authorities the power to delegate functions. Although the order provides a menu of powers, the authority will delegate only those functions it sees as appropriate and it will not be under any obligation to delegate functions should it not wish to do so. That will ensure that local authorities retain all the responsibility and control that they require to ensure good service to the local population, while giving them flexibility when they choose.
The order will also have benefits for the maintenance of local roads operating under a private finance initiative contract. Under the terms of a PFI road contract, the contractor assumes responsibility for constructing, managing and maintaining the road for a period of usually between 25 and 30 years. The order will allow contractors to assume for the duration of the contract statutory responsibility for the functions that the local authority has delegated.
These are not novel powers. They are similar to those in the 1995 order SI 1995/1986 which enables the Secretary of State to contract out certain statutory functions as the highway authority for the trunk road and motorway network. In the same way that the 1995 order has given the Highways Agency increased choice and flexibility for trunk road and motorway maintenance, the corresponding order before us will allow local highway authorities to enjoy similar benefits.
As a consequence of the order, the local highway authority will remain responsible for its network and nothing in the order reduces the range of its responsibilities. The underlying purpose of our approach is to widen the range of options available to local highway authorities for managing and maintaining their networks effectively and efficiently. The order will help that process. I commend it to the Committee.
4.34 pm
Mr. Nigel Waterson (Eastbourne): May I also begin, Mr. Malins, by saying what a pleasure it is to serve under your chairmanship again?
I congratulate the Minister on introducing this eminently sensible Conservative measure. If I had closed my eyes for a moment when I was listening to the Minister, I might have thought that I was listening to a Tory Minister and that the events of 1997 had never occurred.
Ms Jackson: Dream on.
Mr. Waterson: Dream on, the Minister says. For the time being, she is right but only for the time being.
It is interesting that the Minister's speech could have been written for, and delivered by, one of her Tory predecessors, and a similar speech may well be delivered by her Tory successor. It will be galling for the Minister if I heap too much praise on her for introducing the measure.
The Minister did not say so, but I understand that the measure is being introduced under section 70 of the Deregulation and Contracting Out Act 1994, a ground-breaking measure introduced by the previous Government in the teeth of opposition from the Labour party. However, times change; almost 100 per cent. on some issues. It is important that regulations continue to be made following the 1994 Act.
I want to question the Minister on a couple of small, factual matters that relate to section 70 of the 1994 Act. Section 70(3) requires consultation with authorities in England and Wales and representatives of local government. I am sure that the Minister or her officials have done that but I should like confirmation of it. I should also like to have some idea of the breadth of organisations and authorities who have been consulted.
There is a range of exclusions from the powers, which are eminently sensible, especially in matters relating to quasi-legal powers or rights of search and entry and so on. That is worth commenting on in this context. The Minister gave us some examples of the sort of powers that the regulations envisage for the highway authorities and it would be helpful if she could expand on those examples in her reply. I thank her for confirming that highway authorities will remain responsible and democratically accountable for the way in which the duties are discharged by the company or the individuals to whom the powers are deputed. I would have raised the matter myself if she had not.
To what extent will new provisions for best value apply when matters are being dealt with at arm's length by a third party or parties? Although I welcome the Minister's confirmation that highway authorities will remain accountable and responsible, I want to be sure that she and her Department are determined to ensure that there is no deterioration in services as a result. Does she accept that with such delegation, even though we agree that it is sensible and practical, if the funding and resources are not available, it will make no difference to the standard of service provided? In my county, East Sussex, a cumulative total of £24 million has been cut from the highways maintenance budget by the Lib-Lab pact that runs the county.
The Minister gave a helpful explanation of the private finance initiative. Does she remember the DBFO design, build, finance and operate project in my constituency and that of the hon. Member for Lewes (Mr. Baker)? She answered a question from me on the Polegate bypass earlier this week said that £5 million has been given in compensation to contractors for not building the project, which has already been delayed for two years. Can she assure me that her remarks about the PFI mean a new enthusiasm and support for such projects by the Government?
I shall end as I began by saying that this is a thoroughly Tory measure. It is sensible and practical, and has the support of Conservative Members of the Committee.
4.39 pm
Mr. Norman Baker (Lewes): I confirm, from an independent point of view, the analysis of my next-door neighbour, the hon. Member for Eastbourne (Mr. Waterson) that this is a Conservative measure. I listened to the Minister's speech with bemusement; we live in strange times when we change the Government but the policies remain the same in so many regards. I wonder how comfortable Government Back Benchers are with the measures introduced to date.
Does the measure suggest a widening of the Government's commitment to the PFI for highway matters? Does it imply that the Government will eagerly reactivate DBFO agreements for trunk roads, which are directly within their power? If they are as signed up to this philosophy as they appear to be, logically they should extend it even more for roads in their trunk road network. I had formed the impression that they had accepted the DBFOs introduced by the previous Government but intended to go no further. It would be interesting to learn whether the philosophy has changed so much that we are now to see an extension of that on the trunk road network. I would be slightly concerned about that because I do not believe that the DBFO arrangements have entirely worked.
The hon. Member for Eastbourne referred to the fiasco of the Polegate bypass and the ensuing waste of public money. With some DBFO arrangements, those who win the contracts are paid according to the number of cars and vehicles that use the roads in question which encourages road transport at a time when the Government are committed to road traffic reduction. A member of the Highways Agency confirmed that it would in theory be possible for successful DBFO contractors to advertise to attract people off railways and on to the roads to attract further receipts for their contract. The Government need to clarify their philosophical approach to the PFI and DBFO.
In respect of the nitty-gritty of the order
The Chairman: Order. We are discussing highway authorities and contracting out by local highway authorities rather than functions of Government, trunk roads and so on. It is fairly narrow, so I hope that the hon. Gentleman will stay within the confines of what we are talking about this afternoon.
Mr. Baker: I am happy to do so, Mr. Malins. I was moving on to the nitty-gritty of what is before us today. I should like clarification from the Minister about liability. Does it remain with the local highway authorities in all cases? Paragraph 1 of Schedule 3 contains powers relating to, for example,
``the competent authority's power to give notice requiring removal of structures from highways''
and the
``removal of overhanging hedge, tree or shrub''.
The order gives powers that are not simply discharged by the highways authorities in an abstract way, but affect third parties, for whom there are thus implications. I should be grateful if the Minister could clarify where liability rests in that case. What steps do the Government intend to take, or require local highway authorities to take, to ensure that liability issues are properly covered in advance? How will they ensure that there is no deterioration in public service as a consequence of these measures? Will the local highways authorities be required to ensure that any measures that are delegated as a consequence of the order represent no diminution of the standard of maintenance, or other function, currently exercised by the local highway authority?
4.44 pm
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