HL Deb 10 March 1982 vol 428 cc201-4

3.2 p.m.

Lord Orr-Ewing

My Lords, I beg leave to ask the Question standing in the name of my noble friend Lady Gardner of Parkes on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government how many local authorities in the United Kingdom have put any of their services out to private contractors.

The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)

My Lords, I regret that comprehensive information on the number of local authorities that have employed private contractors to provide their services is not collected centrally at the present time. Nevertheless, I can say that the extent to which authorities are considering and taking up this option has increased significantly and is continuing to do so.

Lord Orr-Ewing

My Lords, does this extension of the private sector, in order to save money and achieve higher efficiency, extend not only to refuse collection but, for example, to catering and cleaning services? Would my noble friend agree that we should have the opportunity of judging the effectiveness of this move by auditing in order to show that there are real financial savings and improved services as a result of this application?

Lord Bellwin

The options are open, my Lords. There should be no service which is not compared so as to see what the private sector can provide by way of competitive value for money. Thus, the two suggestions which my noble friend makes are certainly valid, but there are very many more. As to the role of the district auditor, in future, under the 1980 Act, the auditor will be much more involved than in the past in looking at value-for-money possibilities within local authority accounts. It may well be that all authorities will want to know what are the possibilities of perhaps obtaining greater value for money than with their own in-house labour.

Baroness Birk

My Lords, would the Minister agree that putting services out to private contractors does not necessarily promote efficiency or result in direct savings? Is he aware that, by winding down the sub-units of road construction units and using independent consultants rather than direct labour, the extra cost is estimated at £13 million up to the end of 1983, though it may be much more, and that new construction and improvements to roads have had to be cut by at least £13 million?

Lord Bellwin

My Lords, I do not know the instance to which the noble Baroness refers. However, I cannot get away from the basic premise that it cannot be wrong to obtain competitive tenders for anything. I should have thought that any local authority which is really concerned about value for money would always want—and many of them are now doing it—to obtain tenders from whatever source, and, should it prove that they are not as competitive as their own workforce, then that is fine, but at least everybody should want to know.

Lord Harmar-Nicholls

My Lords, is my noble friend aware that many people will be surprised and disappointed to learn that central Government are not collecting evidence on this issue and are not sorting out whether it is good or bad? Is he further aware that the point made by the noble Baroness, Lady Birk, should be confirmed or denied by the facts, facts which would be available if central Government took the trouble to get all the evidence collated?

Lord Bellwin

My Lords, we are in many ways in relatively early days on this matter. There is now such a significant movement in this direction that to attempt to compile statistics at this time might be self-defeating. Nevertheless, the point made by my noble friend is absolutely correct basically, and I assure him that we shall continue to watch matters very carefully. I can tell him, for example, that in the case of one service alone, I know of more than 100 authorities which are at present looking into the possibility of provision by the private sector. That indicates the extent to which the trend is growing, but I certainly take the basic thrust of what my noble friend said.

Lord Shinwell

My Lords, if the Minister is satisfied that a great deal of money can be saved by transferring the collection of refuse from local authorities to private contractors, may I ask him why he is confining it to the removal of refuse? Why not ask private contractors to undertake all the functions of local authorities and then abolish the local authorities? Consider the amount of money we should then save.

Lord Bellwin

My Lords, I was not aware that I had suggested that the removal of refuse was the only service. On the contrary, I suggested that all services should be looked at. If, however, as the noble Lord, Lord Shinwell, suggests, it should prove to be the case that all services can more competitively be provided by the private sector, then what greater incentive could there be for an authority, which is responsible for giving to its electorate that for which it was elected in the first place—namely, a proper level of service provided at a proper and most advantageous level of cost?

Lord Boardman

My Lords, can my noble friend confirm that, in those cases where facts and figures have been published, such as in the case of Southend's refuse collection, it has been shown quite clearly that this has benefited the ratepayers both in the level of costs and the standards of service?

Lord Bellwin

My Lords, from all the information available to me, I gladly so confirm, and I am glad my noble friend referred not just to the level of savings, substantial though they are, but also to the standards of service, because that, too, is a very important factor.

Lord Davies of Leek

My Lords, is the Minister aware that we are all concerned with seeing that value for money is obtained? Is he further aware that over the years we have set up between local authorities, local hospitals and all kinds of organisations dealing in radioactive material a system for getting rid of effluent and burying radioactive material so that the public shall not be damaged thereby? Will he ensure that, in the aim to get value for money, that aim is not measured without taking into account the serious responsibility undertaken by any private contractor who gathers refuse from the public for local authorities?

Lord Bellwin

My Lords, the noble Lord is referring to the subject of waste disposal, and I know he is aware that the private sector has worked together with the public sector for many years in providing that service, and of course the basic point he makes is absolutely right.

Lord Kaldor

My Lords, would the Minister agree that it is difficult to conceive how, in respect of certain vital services—street lighting, for example—the private sector rather than the public sector could provide it?

Lord Bellwin

My Lords, not at any time, despite my answer to the noble Lord, Lord Shinwell, would I say that every aspect of every service necessarily lends itself to the involvement of the private sector. It is a matter, as always, of common sense in deciding what is the right thing to do. But, then, unfortunately we do not always get that prevailing, do we?

Lord Bruce of Donington

My Lords, further to the point raised by the noble Lord, Lord Harmar-Nicholls, concerning the necessity for the collection by the Government of statistics relating to the relative performances of private contractors in various fields, may I ask the Minister to take steps to ensure that the information is not only collected but is also made public?

Lord Bellwin

My Lords, as I am sure the noble Lord, Lord Bruce of Donington, well knows, such information as we have is always available to anyone who requests it. I consider that in this particular case the answer I gave was a fair one; namely, that it is a moving situation and that the statistics that are required I do not have. Nevertheless, I would gladly make available to the noble Lord or to anyone else at any time such information as we do have.

Lord Orr-Ewing

My Lords, will my noble friend bear in mind that from both sides of the House there has now been a request for a measure of the comparative cost effectiveness of the different services? After the new auditing arrangements have come into force will my noble friend consider collecting and collating comparative statistics, so that we can measure what is good, what is moderate, and what is bad in this area?

Lord Bellwin

My Lords, I would commend your Lordships to read the recent survey carried out by Coopers and Lybrand for our department on service provision and pricing in local government. It is an extremely informative, arguably the most informative, publication on this whole subject, and could well be read with advantage by all who are interested.

Lord Glenamara

My Lords, will the noble Lord bear in mind that many of us would have no ideological objection to such arrangements, but what we would object to would be the removal or weakening of democratic control of the provision, supervision and monitoring of local services? If this movement gains pace, will the noble Lord see to it that democratic control is not weakened in any way?

Lord Bellwin

My Lords, the noble Lord is absolutely right. In no way should that control be weakened. In any case statutory obligations rest with the local authorities to ensure that the services are carried out; the end responsibility is still theirs. However, there is no reason why carrying out a service through the channel that we have been discussing need in any way be to the detriment of local authorities.