Compulsory Competitive Tendering (Hansard, 19 January 1994)

§ 11. Mr. Duncan Smith
To ask the Secretary of State for the Environment what savings have been made by local authorities in the last year as a result of compulsory competitive tendering.

§ Mr. Baldry
Details of annual savings are not held centrally, but the results of independent studies by the university of Birmingham show that compulsory competitive tendering has reduced costs by an average of 7 per cent. between 1989 and 1992 and up to 20 per cent. for some services, and also improved services.

§ Mr. Duncan Smith
In the light of my hon. Friend's answer, will he look carefully at my local council, Waltham Forest, and join me in condemning it for dragging its feet on the application of CCT? As a result of that delay, the council has now started to lay off managers as well as workers in the direct works organisation, which could have been avoided had it applied CCT. Does that not demonstrate that yet another socialist council is failing to work for the people?

§ Mr. Baldry
Waltham Forest's record on competitive tendering is pretty miserable. We have had to give two directions to it in respect of financial failure of its direct labour organisations, one for failure on building maintenance work and one for failure on ground maintenance work. That meant that Waltham Forest's direct labour organisations were making losses, which were inevitably passed to local tax payers as higher local taxes or reduced services, or both. We are determined that such losses should not continue.

§ Mr. Gerrard
When the Minister is attacking Waltham Forest council by suggesting that it should be more efficient and producing savings, will he also consider what is happening to the housing action trust in Waltham Forest? It seems that the local authority is expected to make savings by putting services out to tender, whereas the housing action trust, which spends millions of pounds of 887 public money, is allowed, unilaterally, to dispense with contracts with the local authority and to set up its own direct management, without any tendering process. Is not that a case of one rule for the local authority and another for the quango?

§ Mr. Baldry
It is very sad that the hon. Member should seek to attack the Waltham housing action trust, because he knows, as other hon. Members know, that local tenants voted for it because they saw that it would bring considerable benefits to them. It is clear from the exchanges in the House this afternoon that the Labour party does not like tenants voting for their own management or local authorities providing better services through competitive tendering.

§ Mr. Matthew Banks
My hon. Friend has drawn attention to the benefits of CCT. He is also aware that his Department had to issue an instruction recently to close the contract services department of Sefton metropolitan borough council, which holds sway over my constituency, at least until we recapture our unitary authority status in Southport. Will he join me in expressing regret that it was necessary for the Government to step in to look after the genuine interests of the council tax payer instead of being able to leave the matter to the local authority leaders concerned?

§ Mr. Baldry
I very much regret it when it is necessary for Ministers to issue statutory notices and directions. I hope that we can achieve a situation in which Ministers are no longer concerned with CCT, because I would hope that every local authority, be it controlled by Labour, the Conservatives or others, would appreciate the virtues and benefits of exposing their services competitively to the marketplace, and the benefits that that brings to local people. It is clear from this afternoon's exchanges that Labour still has a real ideological hang-up about competition. It seems that for the foreseeable future, Ministers will have to continue introducing statutory notices and directions to ensure that local authorities behave properly.

§ Mr. Skinner
Is the Minister aware that one person who hopes to benefit from compulsory competitive tendering is none other than the person mentioned by the hon. Member for Amber. Valley (Mr. Oppenheim)—Geoff Lennox, the ex-director of education with Derbyshire education authority? He used the Labour movement and tried to close schools in my constituency, until I stopped him. I smelt a rat seven or eight years ago and warned my Labour colleagues that he would desert them in the end—and now they all agree with me.

§ Mr. Baldry
As always, my hon. Friend the Member for Amber Valley scored a palpable hit. It is clear that the gentleman concerned was only appointed by the Labour party because he was a socialist—and for no other reason of merit.