Competitive Tendering (Hansard, 27 February 1991)

§ 2. Mr. Rooney
To ask the Secretary of State for the Environment whether he will publish the results of investigations into the costs to local authorities of the compulsory competitive tendering legislation under the Local Government Act.

§ The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key)
Research is being carried out by the Institute of Local Government Studies. We hope to publish the report on its first year's work in the near future. That research has shown that the cost of tendering is some 2.5 per cent. of total contract costs and that CCT has produced average savings of just under 6 per cent. in the annual cost of providing services—often linked to a higher quality of service.

§ Mr. Rooney
Is the Minister aware that thousands of contracts have been called into question throughout Britain on the ground of quality? Is he further aware that hundreds of headteachers have complained about the low standard of cleaning in their schools? Will he comment on the economic consequences of thousands of part-time, low-paid local authority workers losing their jobs as a consequence of the legislation?

§ Mr. Key
Of course I have read the report. That is why we are anxious to evaluate the projects as they are carried out. The Department is responsible, under legislation, for ensuring that the section 13 or section 14 notices may sometimes have to be issued. I hope that the hon. 961 Gentleman will agree, however, that we are interested in the quality of service and the value for money offered to the charge payers who are financing that service.

§ Mr. Barry Field
Does my hon. Friend agree that the competitive tendering legislation has enabled Conservative councillors on Medina borough council to cut community charge not once but twice, benefiting charge payers in the Isle of Wight?

§ Mr. Key
My hon. Friend is absolutely right. Competitive tendering has played its part in that. I congratulate Medina borough council, which has cut its community charge by some 50 per cent. this year.

§ Mr. O'Brien
Is it true that the survey will not reveal any substantial financial savings for local authorities? Will the report outline the position before and after compulsory competitive tendering? I put it to the Minister that a substantial number of local authorities spend a great deal of time and money on drawing up tenders, only to find that the private sector is simply not interested in tendering.
Will the report also give comparisons relating to the quality and the full value of the service provided for poll tax payers and will it mention the decline in the proper training of personnel? I suggest that CCT represents a further failure of the Government's local government policies.

§ Mr. Key
The hon. Gentleman ignores the Audit Commission's claim that voluntary competitive tendering can produce savings of between 10 and 30 per cent. That is a substantial amount. We are, of course, always considering whether there should be more compulsory competitive tendering—whether the scheme should be increased. That can only be in everyone's interests. I do not think that the hon. Member for Sheffield, Brightside (Mr. Blunkett) would disagree. He wrote on 15 February: It would be foolish to pretend that the jolt given to many local authorities has not had some beneficial effect in stimulating their own concentration on quality as well as improved managerial practice.