HC Deb 25 October 1993 vol 230 cc572-3
36. Mr. French

To ask the Chancellor of the Duchy of Lancaster by what factor the savings arising from his Department's market-testing programme exceeded its costs.

Mr. David Davis

The savings arising from market testing by the Chancellor of the Duchy of Lancaster's Departments since 1 October 1992 exceed costs by a factor of more than four to one.

Mr. French

I am grateful to my hon. Friend for that information, as it underlines the importance of the market-testing programme. It is widely reported that £750 million-worth of business opportunities is available in information technology. What proportion is going to in-house bids and what proportion to external suppliers? Of the latter, what proportion goes to small businesses?

Mr. Davis

I suspect that the £750 million to which my right hon. Friend referred applies to the whole programme, not just to the Department for which I am responsible. It is rather early at the moment to assess that. There is a huge amount of information coming in, which is being collated. To give my hon. Friend an idea of the order of magnitude, my first impressions are that about half and half is going inside and outside the public sector, which I think is a good indicator.

Mr. Flynn

Does the Minister agree that the British civil service is still the least corrupt and even now the least politicised of any civil service in the world? Is not there a grave danger that, by market testing, contractorising and privatising the civil service, we shall end up with a civil service, such as those in many countries, run by Group 4 and Mega-greed plc? Is not it true that the savings made in the 1980s on civil service changes have come almost entirely by cutting the wages and conditions of low-paid staff?

Mr. Davis

As to the first part of the hon. Gentleman's question, I agree entirely. We have a superb civil service of enormous integrity. As to the second part, it is perhaps best answered by the fact that the First Division Association, which knows our civil service as well as anybody, has said quite clearly that it is not against market testing. It sees market testing—as do many impartial observers—as the best route forward for reducing costs and improving efficiency in our service.

Mr. Paice

Without market testing, would not it be impossible to know whether the organisations that have traditionally provided those services were as efficient and up to date as it is possible to be? Is not it clear that not only does market testing sometimes bring in outside organisations, but time and again the traditional suppliers still win the bids, and improve their service and the quality of what they produce and give the taxpayer better value for money?

Mr. Davis

My hon. Friend is right. The typical savings on market testing, irrespective of whether the service stays inside the public service or goes outside it, are 25 per cent. That is an enormous saving for the taxpayer and an enormous improvement in value for money. In addition, the whole process of market testing sets both standards and levels of quality and measures them in a way that has not been done before.