HC Deb 26 April 1960 vol 622 cc17-8
23. Mr. Frank Allaun

asked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will take powers to place municipal direct works departments in a comparable position to private building firms by allowing them to prepare annual profit and loss accounts, without having to make a profit on each individual contract.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Sir Keith Joseph)

No, Sir.

Mr. Allaun

If to retain their working forces and cover their overheads private firms may occasionally accept contracts at under cost, why not public works departments? Will the Minister therefore reconsider his recent circular on tendering, which prevents such departments applying the surplus or profit on one contract to another?

Sir K. Joseph

A direct works department does not sink or swim on the basis of its quotation in the same way as a private builder does, and to weaken still further the link between market value, the quotation and the cost would not, in the view of my right hon. Friend, encourage efficiency.

Mr. Emery

Does not my hon. Friend realise that 25 per cent. of the local authorities which have used direct labour forces for house building since 1951 have now given them up? Will he consider giving the strongest warning to local authorities that direct labour forces usually cost the ratepayers large sums of money?

Hon. Members

Rubbish.

Mr. M. Stewart

If comparisons like those just made by the hon. Member for Reading (Mr. Emery) are to be made, and the question at issue is the cost to the ratepayers, surely it is desirable that the two concerns, the direct works department and the private firm, should be able to work on equal terms? Why will not the Parliamentary Secretary give an affirmative answer to my hon. Friend's question?

Sir K. Joseph

I am trying to explain that the quotation of a direct works department and that of a private builder are not on all fours, and that it is for this reason that my right hon. Friend has tried to establish the link between the market value, the quotation and the cost.