§ 7. Mr. Franks
asked the Chancellor of the Exchequer what is his policy regarding competitive tendering for Government services; and if he will make a statement.
§ The Chief Secretary to the Treasury (Mr. John MacGregor)
Our policy is to contract work out of the public service wherever this is commensurate with sound management and provides good value for money for the taxpayer. As the House knows, Government Departments are now required to test the market in specified areas.
§ Mr. Franks
Does the Minister accept that the scope for competitive tendering for Government services is almost infinite? Does he further accept that many Conservative Members are rather impatient with the progress being made?
§ Mr. MacGregor
In some key areas of central Government Departments the proportion is already high: in cleaning, it is 84 per cent.; in laundry, 73 per cent.; and in maintenance, 81 per cent. We are pursuing the policy, but I agree with my hon. Friend that there is considerable further scope. That is why I recently initiated a multi-departmental review to extend the application of competition and improve ways in which the policy is delivered.
§ Mr. Meadowcroft
What guarantee does the Minister require against bankruptcy in the tendering firms? Does he accept that if they go bankrupt it is almost impossible for the public sector to take back the services?
§ Mr. MacGregor
It is not impossible. I know of one case where a company was removed from its contract because of inefficient performance. The service specified in the contract and the company's performance are thoroughly monitored, and the contracts contain penalty or break clauses to cover the eventuality that performance does not match specification, or the sort of event to which the hon. Gentleman referred.