HL Deb 24 June 1993 vol 547 cc468-9

3.12 p.m.

Earl Russell asked Her Majesty's Government:

Whether they intend to privatise or contract out the administration of any social security benefits during the lifetime of this Parliament.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)

My Lords, there are no current plans to privatise the administration of any social security benefits. Some contracting out is already done by local authorities for housing benefit and council tax benefit, and by the Information Technology Service Agency for the issuing of payments of benefits.

Earl Russell

My Lords, I thank my noble kinsman for the assurance that there are no current plans, which I am relieved to hear. Does he agree that the lifeblood of private industry and commerce is profit? How can there be legitimate profit margins in the administration of social security without either increasing the total costs or reducing the standard of delivery?

Lord Henley

My Lords, I said—and I am grateful that my noble kinsman noticed it—that there are no current plans for privatisation. However, I shall not rule out any further look at privatisation, and we shall certainly not rule out any further market testing. We wish to provide the best possible service for those who are entitled to it in the most cost-effective manner. If that means a degree of privatisation or further market testing, so be it. We are under a duty to provide the best possible service. If one of those two avenues provides that, that is the avenue that we shall take.

Baroness Hollis of Heigham

My Lords, does the Minister appreciate that should plans for contracting out and privatisation be pursued, that would raise real ethical issues? DSS staff are dealing with the most sensitive information about extremely vulnerable people in our society. The Permanent Secretary, Sir Michael Partridge, has warned that privatisation may bring "simple blackmail" and "commercial use". Do we really want to risk sleaze in social security?

Lord Henley

My Lords, we have no intention of risking sleaze in social security. We are trying to administer our benefits in the most cost-efficient manner and to provide value for money for the taxpayer. The cur rent administration of social security costs some £4 billion. Therefore, it is legitimate to look at ways of providing that service in a better manner arid achieving better value for money. I am trying to make clear that the activities which we are market testing at present and which are to be tested are, in the main, activities which are not core activities; for example, accommodation and office services, accountancy services, archival storage, audit, catering, and so on. I do not believe that those go to the core of delivery of benefits other than those which I mentioned in my first Answer.

Baroness Hollis of Heigham

My Lords, will the Minister explain why the Permanent Secretary, Sir Michael Partridge, believes, in an internal report, that the Government's proposals may bring "simple blackmail" and "commercial use"?

Lord Henley

My Lords, there is no contradiction between what I have said and what the Permanent Secretary, Sir Michael Partridge, said. I am saying that we wish to deliver the services in the best possible manner. Therefore, we shall market test those services which it is possible to market test within the present constraints. I do not wish to rule out any further look at privatisation or market testing if those avenues can provide the services in a better manner, providing better value for money for the taxpayer and at the same time providing as good a service in terms of delivering benefits for those who are entitled to them.

Lord Hylton

My Lords, will the Government ensure that complete confidentiality for individual clients is maintained when outside computer agencies are used?

Lord Henley

My Lords, I can give the noble Lord that assurance. Confidentiality will always remain of paramount importance.