Competitive Tendering (Hansard, 14 June 1988)

§ 4. Mr. Page
To ask the Secretary of State for Social Services how much health authorities have saved to date as a result of competitive tendering.

§ The Secretary of State for Social Services (Mr. John Moore)
Our latest estimate, for the quarter ending 31 March, shows that annual savings of about£106 million have been generated from contracts awarded for domestic cleaning, catering and laundry services during the initial round of competitive tendering, now virtually complete.

§ Mr. Page
Does not the size of those savings show how wise those people have been in insisting that the tendering process be introduced? Has my right hon. Friend any idea of how much more could be saved if all services capable of being tendered were put out to tender?

§ Mr. Moore
I am conscious of the amount that has been saved. It is an important addition to health care spending in the National Health Service. Only 75 per cent. of catering, 95 per cent. of domestic services and 97 per cent. of laundry services are out to competitive tender. Therefore, there is still some space for further savings in the areas that are already out to competitive tender.

§ Mr. Nellist
Has the Secretary of State investigated to find out how many jobs have been lost because of the introduction of competitive tendering? Has he investigated the consequences of that for the payment of benefits by the other side of his Department—the social security offices? Is it not often the case that the introduction of competitive tendering results not in a net saving for his Department, but merely in a transfer of profits to the firms, many of which are represented by Tory Members of Parliament?

§ Mr. Moore
I never cease to be bewildered by the way in which Opposition Members, and especially the hon. Member for Coventry, South-East (Mr. Nellist), seem to forget that the purpose of the National Health Service is to look after patients. Patients are the prime interest of the National Health Service. So utterly trapped are some Opposition Members by their relationship with their trade union bosses that they fail to understand that savings of about £100 million have gone to additional patient care. We should all welcome that.

§ Mr. Rathbone
With savings such as those and more expected, will my right hon. Friend consider making more resources available to meet the urgent recommendations of the Advisory Committee on the Misuse of Drugs contained in its report "Aids and Drug Misuse"? Some of my hon. Friends feel that unfortunately the Government are doing too little too late.

§ Mr. Moore
I am filled with admiration for the legitimate way in which my hon. Friend makes his point. We are looking at the Advisory Committee on the Misuse of Drugs recommendations and will come to the House with the advice that we receive. I cannot accept my hon. Friend's implied criticism that the Government have not been vigorous in trying to ensure that we attack the awful problem of drug abuse.

§ Mr. Battle
Will the Minister confirm that in the Leeds Western health authority area the laundry services that were privatised under the direction of his Department are running at a loss? If so, is that not an indictment of the privatisation policy, because it undermines economic efficiency?

§ Mr. Moore
I hope that the hon. Gentleman will ask himself who is losing money in that instance. I imagine that it is a private sector company. He should be glad to see the efficient work that is being done through tenders that have gone out. I know that he will be interested to know that 85 per cent. of competitive tenders that have saved money have gone to in-house contractors who have improved the way in which they deliver their services and have therefore provided more money for the Health Service.