§ 4. Mr. ButlerTo ask the Secretary of State for the Environment what action he has taken with regard to councils which award contracts to their direct service organisations tendering significantly in excess of tenders from outside private contractors.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key)Under the Local 943 Government Act 1988, the Secretary of State has sanction powers which he may use if he considers that an authority has failed to comply with the statutory requirements for competitive tendering, including the requirement to avoid anti-competitive behaviour. We have used those sanction powers in the case of 22 local authorities, including some which, in our opinion, have rejected lower-priced external tenders without sound reasons.
§ Mr. ButlerIs not it disgraceful that a Labour council such as Warrington should award its refuse contract to its direct services organisation despite the fact that its tender was £100,000 in excess of a private tender, and that a Labour council in Halton should award its refuse contract to its direct services organisation despite the fact that its tender was £175,000 above the outside tender? Is not that financial incompetence ripping off the poll tax payer?
§ Mr. KeyYes, it is. I am grateful to my hon. Friend for the diligence that he has shown on behalf of his constituents. My noble Friend the Under-Secretary of State, Lady Blatch, has recently considered the case and agreed that the Department of the Environment should send an official letter to Warrington council saying that the Secretary of State considers that its decision was anti-competitive and that he is minded to use the sanction powers after 1 August 1991.