§ 6.27 p.m.
§ Earl Howe rose to move, That the draft order laid before the House on 25th March be approved [16th Report from the Joint Committee].
§ The noble Earl said: My Lords, the order is being introduced as part of the Government's drive to improve the quality of public services and to develop better, more efficient methods of delivering those services. The Government's Competing for Quality programme has produced a sea-change in the way public services are delivered.1213
§ Competition has led to better value for money for the taxpayer. In the three years since the Competing for Quality programme has been operating, departments have reviewed, in all, £2.6 billion worth of activities. If managed well and performance matches expectations, the annual cost savings should be around £540 million. Competition has also produced higher standards of service for the customer.
§ The order is to be made under Section 69 of the Deregulation and Contracting Out Act 1994. It specifies administration of the Principal Civil Service Pension Scheme and associated schemes as a function which contractors may be authorised to undertake. At present under the Superannuation Act 1972 only public servants may undertake the administration function.
§ Section 1(1) of the Superannuation Act 1972 provides that the Minister of the Civil Service may make, maintain and administer superannuation schemes for persons employed in the Civil Service and related organisations. Administration covers such activities as scheme induction, answering inquiries, maintenance of personnel data, processing applications to buy added years or pay additional voluntary contributions, the calculation of benefits and paying pensions. The administration of the PCSPS and associated schemes is largely decentralised as far as serving members are concerned.
§ Responsibility for day-to-day administration of Civil Service pension and compensation arrangements is formally delegated under the 1972 Act to employing departments and agencies. They can either perform the full administration function in-house or buy in services from providers within government. The administration of the pension entitlements of retired members of the PCSPS, including those whose pensions are deferred, is undertaken centrally. The Cabinet Office (Office of Public Service) buys the pensioner payroll and associated customer care and banking services from the Paymaster Agency at Crawley.
§ Lest there he any doubt on the point, I confirm that the order will have application to the Paymaster Agency's role in pensions administration, as this point may not be indisputably clear from the course of the debate in another place.
§ The order will enable private sector providers as well as existing service providers to compete for the business, and thus extend the choice available to employing departments and agencies. The Civil Service unions and the Civil Service Pensioners' Alliance have been formally consulted over the terms of the draft order.
§ An efficiency scrutiny of the administration of the Civil Service pension schemes recommended that departments should be encouraged to market test their pension administration operations. Approval of this order will permit departments to test this area of activity against alternative sources in the market. The aim is to give improved quality of service to scheme members and to provide better value for money for the taxpayer.
§ Decisions on the timing and other arrangements for market tests will be the responsibility of individual departments. It will be open to existing service providers to compete on a value for money basis. Such bids will be 1214 on a full cost basis and considered rigorously. If after a market test it is found that the arrangements in place offer the best service and the best value for money, those arrangements will continue.
§ I invite noble Lords particularly to note that the order relates solely to administration of the Civil Service schemes. Concern has been expressed in the Civil Service community, including local branches of the Civil Service Pensioners' Alliance, over the implications of this order for both the active and retired membership of the schemes. Perhaps I may reassure your Lordships on this point.
§ Occupational pension arrangements for civil servants will continue to be provided through the Civil Service pension scheme. The pensions of scheme members will not be affected. Competitive tendering of the administration function involves no changes in the benefits provided by the scheme, and the pensions of retired members will continue to be increased annually in accordance with the Pensions (Increase) Acts. The Minister for the Civil Service will remain responsible for the development of the scheme and also for the rules setting out the benefits and entitlements of scheme members. There is no pension fund—so there are no fund assets which could be put at risk. Cabinet Office Ministers will continue to account to Parliament for expenditure on the Civil Superannuation Vote.
§ A contractor would not be allowed to advise civil servants whether to join or leave the scheme or on the merits of individuals making additional voluntary contributions or buying added years. Explanatory booklets for scheme members would continue to be published by the OPS. Steps would be taken to maintain the confidentiality of personnel records. Computerised records would, of course, be covered by the Data Protection Act.
§ In any market test appropriate service standards for scheme administration of the PCSPS would be set. Any contract would require a standard of service that will be at least as high as that under existing arrangements. Those standards will apply from the outset.
§ A new pensions administration software package, tailored to the requirements of the Civil Service schemes, is being procured by the Office of Public Service. It will initially become available later in the summer. The new software will enable more efficient and innovative approaches to scheme administration to be adopted—for example, a one-stop shop for serving scheme members. It will enable service levels to scheme members to be raised while significantly reducing costs. The software will be portable between providers, enabling new players, including small businesses, to enter the market place. It will make market testing particularly effective.
A series of competitive tendering exercises will offer the work in manageable parcels. This will encourage new and existing third party administrators to compete effectively for the business and so offer departments and agencies a number of alternative suppliers from which to
choose. I would remind your Lordships that in its fifth report the Treasury and Civil Service Select Committee stated:
The quest for greater effectiveness and efficiency in the Civil Service is an unending one: the requirement to maximise the return from finite resources will not go away".
§ I believe that, by exposing administration of Civil Service pension and compensation arrangements to competition, it will be possible to raise service standards to scheme members and secure best value for money in the delivery of the administration function. The pension entitlements of scheme members will not be affected. I commend the draft order to the House. I beg to move.
§ Moved, That the draft order laid before the House on 25th March be approved [16th Report from the Joint Committee].—(Earl Howe.)
§ Lord Richard
My Lords, I am grateful to the Minister for setting out the arguments for this change. I am bound to say that my initial reaction was, "Here we go again".
The Government have been informed that I proposed at the outset to say something about the Recruitment and Assessment Services. The Chief Whip on the other side was so informed by my noble friend the Chief Whip on this side this morning. I do so in view of the evidence given yesterday by the Minister's right honourable friend Mr. Freeman to the Select Committee set up by this House following the debate on the RAS. It is no doubt much in the mind of the noble Earl, Lord Howe. The Government were roundly defeated. After that defeat the Select Committee was set up. It was agreed that the RAS would be one of the first issues that it should consider. Considerable pressure was put upon Ministers—I am sure that the noble Earl will remember this too—to give an assurance that they would delay a decision on the RAS until after that committee had reported and the House had had a chance to consider the report. Clearly that was the view of the House. But if one reads the words that the noble Earl uttered, there was no commitment to that effect. I accept that; I checked Hansard again today. But clearly that was the impression left, certainly on this side of the House and I suspect on many of those who voted against the Government on that Friday afternoon.
What has happened? Despite the setting up of that Select Committee, the Government have proceeded. In the debate which took place in the other place on 22nd May, a portmanteau resolution on the Civil Service was put down. It was the very last day of the parliamentary Session. Included in that Motion, among a number of other matters, were the words:That this House … also welcomes the Government's policy with regard to the privatisation of the Recruitment and Assessment Services, with the proposed safeguards to protect the quality of Civil Service recruitment".—[Official Report, Commons, 22/5/96; col. 293.]The Minister's right honourable friend Mr. Freeman spoke in that debate. The issue of the relationship between the Government taking a decision and the setting up of a Select Committee of this House was raised. At col. 300 Mr. Freeman said this:Any conclusions of the Committee that are relevant to the privatisation of RAS will be carefully considered. I give the House and the Committee an assurance that I shall treat the deliberations seriously".1216 Later my right honourable friend Mr. Derek Foster, speaking for the Opposition, asked:Would it not be sensible to defer any progress on the privatisation until the Select Committee has given the Chancellor the benefit of its full deliberations?Mr. Freeman replied:It depends what the right honourable Gentleman means by `progress'. I assume that the relevant Select Committee will report before the summer recess and that I shall have the opportunity to study its recommendations and perhaps even discuss the matter again. Therefore, we shall not conclude the process until that has occurred".Later on he said at col. 302:When that Committee reports, I shall consider its recommendations with care and respond in due course".However, in the next sentence, he said:Meanwhile, we are adhering to the privatisation timetable, which is aimed at a successful completion later in the summer".As I understand the evidence that he gave yesterday in public to the Select Committee, tenders have been put out; 12 offers have so far been received and the Government are drawing up a short list of three. How, with one breath, the Government can do that and with the other breath say that they will consider the recommendations of the committee with care and respond in due course is frankly beyond me. The Government clearly gave the House the impression that they would wait. Now it is clear that they have not waited and they will not wait. The argument that they will give proper consideration to the Select Committee report, while at the same time behaving as they are in proceeding with the process to the extent that they have, is disingenuous, and frankly, treating this House with contempt.
I look to the Minister to try to clear the matter up tonight. Are the Government prepared to give the Select Committee's report proper consideration? By "proper consideration", I do not merely mean, "Yes, of course we won't conclude everything in the sense of dotting every T and crossing every 't' until the report has been received". I mean give it proper consideration on the merits of the issue. So far, I see nothing in the Government's statements to show that they are prepared to do that.
I turn to the regulation before us. It is yet one more example of the Government's intense commitment—intensity almost to the point of passion, it seems to me—to a dogma of privatisation which seems to be accepted by no one else. Who is dissatisfied with the present arrangements? Certainly not the consumers. The people who are subject to the Civil Service pension scheme seem to be unanimously against the proposed changes. The reactions of the Council of Civil Service Unions and the Civil Service Pensions Alliance show that they are both vehemently opposed to the order. The truth is that there is no support for the order from civil servants, Civil Service pensioners or deferred Civil Service pensioners. It is not often that I am in the position of praying in aid the words of a former Conservative Prime Minister, but I commend people to read what 1217 Sir Edward Heath said on the issue in another place. He concluded by saying that he thought the Government were making a grave mistake and he used the word "dogma" on a number of occasions in relation to government policy. The only people who favour this are the Government.
Why do I say it is wrong? First, Civil Service morale is low and is getting lower. There is a deep sense of insecurity now felt in Civil Service ranks and the proposal adds to the feeling of insecurity. Civil servants want their Civil Service pensions to be administered by civil servants. There is no reason at all why they should not have it. Secondly, I say that it is wrong because the existing system works well. In another context, one hears a great deal of the American phrase which I do not like: "If it ain't broke, don't fix it". I wish that the Government would take that to heart in this context as firmly as they appear to do in relation to another one.
Is the scheme working properly? It has been examined, there has been an efficiency scrutiny report. What did it say? Paragraph 23 states that the present scheme, because of its size, achieves great economies of scale. Paragraph 24 points out that the PGO's unit costs are currently around £16, which is broadly in line with what the private sector would charge for a large-scale pension paying service. It costs no more than an equivalent private scheme.
The report goes on to state that most large employers with above, say, 1,000 staff run their own employees' scheme and administer it in-house. The pension, consulting and insurance firms manage many schemes for employers but most of these are schemes of less than 1,000 members, a few are between 1,000 and 2,000 members and a small number are larger than that. Where larger schemes are contracted-out—and there is a handful of examples—it tends to be for particular reasons reflecting a strategic decision on the part of management. The report goes on, in paragraph 52, to produce a draft which suggests that above about 20,000 staff, in-house operations are actually cheaper than contracting out.
Finally, paragraph 56 states that it is thought that the efficiency of contracted-out pensions and administration is likely to improve significantly over the next few years as new technology is introduced. That is the current position. It works well and the people affected by it are on the whole remarkably satisfied with it.
Thirdly, the proposal is wrong because there is still confusion as to its scope. The noble Earl put right the confusion that was left by his honourable friend Mr. Willetts in another place, who ended the debate by contradicting what he said at the beginning of it. As I understand it, the order relates to the administration of the Civil Service scheme. Administration covers such activities such as scheme induction, calculation of benefits, answering inquiries, maintenance of personnel data, processing applications to buy added years or pay additional voluntary contributions and paying pensions. So let there be no doubt about it, the Minister has confirmed tonight—and I am grateful for it—that the Paymaster is included within the scope of the order.
1218 The only thing that still causes me confusion is a Written Answer given by the Minister's right honourable friend Mr. Freeman in another place on 25th March 1996. He was asked by Mr. Peter Luff whether, when he expected to make the order, he would make a Statement. Mr. Freeman said:Approval of the order by Parliament will enable Departments to market test their day-to-day administration of the principal civil service pension scheme, and associated schemes. Occupational pension arrangements for civil servants will continue to be provided through the PCSPS".—[Official Report, Commons, 25/3/96; col. WA 449.]I am not sure what that means in the context of the speech that we have just heard from the noble Earl. The Written Answer continues:Market testing of the administration function will not affect pension benefits in any way".There we have the ritual genuflection to Conservative Party dogma: "Competition will ensure value for money, the focus on performance outputs will help raise the quality of service to scheme members". We have heard that before.
The Written Answer continues:Decisions on the timing and method of competitive tendering will be for each employing Department to take".Is that still true or will they now be taken by the Government?It will be open to existing service providers, such as the Paymaster agency, to compete on a value for money basis".Then occurs the sentence which I do not understand:Responsibility for management of the PCSPS—and associated schemes—including setting the rules, will remain within government".Responsibility for management? What is the difference between "management" and "administration"? Is there some distinction which I do not quite appreciate? I do not see how the Government can at one time privatise the administration of the scheme and at the same time claim that the responsibility for management of the scheme will remain within government. If it is intended that the management will remain within government, then what is to be privatised? If it is intended that management should go with administration, how could Mr. Freeman make the statement that he did?
Doing the best I can, for the life of me I cannot see the purpose of the proposal. It seems to me to fly in the face of logic, administrative good practice, good man management and the wishes of the people who are most affected by it—namely, the pensioners. Why on earth are the Government doing it?
§ Lord Harris of Greenwich
My Lords, I would like to add a few words to what the noble Lord, Lord Richard, said. I agree with him on both points of substance that he made. First, this is another piece of doctrinaire nonsense coming from a Government who have clearly lost the confidence of the people of this country and are clinging to office with one of the smallest majorities one can recall of any recent British government. As their grip on power lessens, their enthusiasm to proceed with doctrinaire absurdities of the kind we are discussing this evening becomes even greater. When, in his introductory statement, the noble 1219 Earl referred to the unions being consulted, he did not find it necessary to tell us that the unions had been consulted but had indicated their strong opposition to what the Government proposed. It might have been a little better if he had indicated that when he made his speech.
I turn to the other issue raised by the noble Lord, Lord Richard, at the beginning of his speech; namely, the extraordinary way in which the Government are treating the Select Committee set up to discuss the RAS. The noble Earl will recall our debate in this House when the Government were decisively defeated, a number of senior figures in his own party being among those voting against.
From what Ministers said on that occasion and subsequently, we understood that the Government would take seriously into account the views of this House. They have chosen not to do so. Instead, as the noble Lord, Lord Richard, pointed out, there was a debate in the other place on the last day before the Whitsun Recess at which, according to press reports, there were half a dozen MPs on one side of the House and eight on the other. That contrasts with this crowded House on the occasion of our debate on RAS. At the end of the Commons debate, the Government secured their majority. In the meantime, a Motion had been passed in this House—a Motion with which the Government themselves were associated—asking a Select Committee of this House to consider the RAS issue and submit an interim report.
I am a member of that committee. I have no intention of referring to its private discussions. I shall comment only on what has been said in public session. It was made quite clear to us by Mr. Freeman that the Government's decision on principle was clear, unmistakable and unyielding. Mr. Freeman indicated the position to us in the clearest terms. I do not believe that anybody who was present yesterday afternoon could have had the slightest doubt about what he was saying. He went on to add that, of course, the Government would consider what the Select Committee said. Then—I hope that I do not do him an injustice in quoting him, but I believe that I remember his words correctly—he said that the Government would "respond within days" to our report. What does "within days" mean? Does it mean that there will be any serious discussion among Ministers collectively on a serious report from what I hope is a serious Select Committee, which is, and will he, devoting a substantial amount of time to discussing the major issues involved and raised during our debate in this House?
As I indicated, speaking for myself, I was astonished that the Government chose to table this Motion in the Commons which, as the noble Lord, Lord Richard, said, so far as the other place was concerned, had had RAS slipped into the middle of it. The Motion was not solely about RAS. Obviously, RAS was inserted deliberately by Ministers, so that they would obtain their majority on this particular question in the other place before the Select Committee started its work.
I do not wish to be disagreeable about this matter, but I find it inconceivable that, had the noble Viscount, Lord Whitelaw, still been Leader of this House, the 1220 House would have been treated in such a fashion. A Select Committee was set up to look into the Government's proposals to privatise RAS. It is outrageous not only to have in reality that decision questioned but to have a government Motion put down in the other place on the fundamental issue of principle and then for the Minister's colleague, Mr. Freeman, to use the decision in the other place to justify the Government's decision to proceed in the way in which the noble Lord, Lord Richard, indicated.
I find it extraordinary, at a time when Ministers are queuing up to proclaim their enthusiasm for this House as at present constituted, in order to prevent significant constitutional change in terms of its composition, that they have behaved in this manner. They have testified enthusiastically to our almost unique qualities. But when their own interests are involved, they are prepared to be involved in an episode of this kind, which indicates a degree of contempt for this House which is truly remarkable.
§ Lord Taylor of Gryfe
My Lords, I should like to say a few words in support of the speeches that have already been made. I was appointed to the committee which met yesterday and considered this matter in public. I was delighted to be invited to serve on that committee because I felt that it was to consider a matter of great importance.
The noble Earl will recall the circumstances of the appointment of the committee and the overwhelming expression of view in this House—initiated from the Cross Benches by the noble Lord, Lord Bancroft, with the support of his own side and indeed all parts of the House—to reject this particular proposition. I thought that was one of the occasions when this House was performing its responsible job. It was examining a proposition initiated by the Cross Benches and considered on its merits.
The Government responded by setting up a committee. I always assumed that when a Select Committee was formed in this House, it would produce a report which would be discussed in the House before a judgment or decision was formulated. It is quite obvious to me that that will not happen. First, there will be no time to consider the report. Secondly, consideration of these matters will be rushed into a few weeks before the Recess.
The House of Lords has always prided itself on the quality of the reports from its Select Committees. I suggest that in the timescale now made available, it will be impossible to produce a balanced and sensible report on this matter. Let us consider the situation. A group of fairly experienced individuals sit on the committee and examine this matter. They hear evidence from various experts who are commanded to attend. But at the end of the day the report will be of no significance whatsoever because on the last day before the Recess the Government announced that they were now going to proceed with the privatisation of the RAS. As the noble Lord, Lord Richard, said, the announcement has been made and an invitation published in the Financial Times for proposals to be submitted for the scheme. The Government are in the process of selecting and shortly 1221 will give their final conclusions on this matter; and at the same time a committee in the House of Lords is considering that same matter but with no relevance whatsoever.
If anything is a matter of contempt of the House of Lords, that is contempt. It is also wasting the time of a lot of people who have a contribution to make to these matters. It is a rather surprising coincidence that the piece of legislation which is before us tonight enables us to express these anxieties. In the Order Paper for tomorrow is printed a Question for reply on Thursday. It invites the Government to delay the proposals in connection with the privatisation of the RAS until the committee of the House of Lords has made its report. Perhaps between now and Thursday the Minister will influence his colleagues to accept that perfectly reasonable request. I look forward to a positive response on Thursday.
§ 7 p.m.
My Lords, the noble Lords, Lord Richard, Lord Harris and Lord Taylor of Gryfe, have taken this opportunity to raise the question of the possible privatisation of Recruitment and Assessment Services. With the leave of the House, I shall gladly respond to their points.
Let me state the position on this issue as it affects your Lordships' House and your Lordships' Select Committee. Your Lordships will be aware, as has been mentioned, that this matter was debated and approved in another place—incidentally, it was approved by a majority of 75. The noble Lord, Lord Harris, suggested that it was quite wrong that another place should have been debating this issue. I put the question to him: why should not the other place be allowed to discuss this matter? If the position had been reversed and another place had discussed it first, does he believe that this House should have been prevented from discussing it?
By allowing debate in the other place it was not our intention to place in jeopardy the recommendations of the Select Committee. My right honourable friend the Chancellor of the Duchy of Lancaster indicated that we expect to be able to give careful consideration to its report, assuming that it is available as expected before the Summer Recess. He indicated yesterday that there were areas where he hoped the committee could provide advice, including safeguards. Therefore to suggest that this House has been ill-treated is misplaced.
§ Lord Richard
My Lords, perhaps the Minister will allow me to intervene. Shall I tell the noble Earl what is wrong? If we look at the terms of the Motion moved by the Chancellor of the Duchy of Lancaster on 22nd May, it was not that the House,[notes] the Government's policy with regard to the privatisation of Recruitment and Assessment Services";but that it,welcomes the Government's policy with regard to the privatisation of Recruitment and Assessment Services".What is wrong is the use of the word "welcomes" and the use of the Whips to obtain a majority behind that at the very time when the Government are saying to us, 1222 "Yes, we wish to have the examination of the Select Committee; we wish to look at it before reaching a final conclusion".
My Lords, I fail to see the noble Lord's point and must take issue with him. The future of Recruitment and Assessment Services has been under consideration since early 1994, when the three-year review was announced. As a result of debates in your Lordships' House, your Lordships are aware that we believe privatisation to be the best way forward. That view was endorsed by the other place.
We shall look carefully at the committee's proposals on specific points related to the sale. However, it is important that we stay with the broad timetable that we set because further uncertainty for staff, customers and bidders should be kept to a minimum.
§ Lord Taylor of Gryfe
My Lords, with regard to the timetable, does the Minister realise that contracts with the successful bidders will need to be made? Presumably the contracts will run for anything from three to five years. Is it responsible for the Government, with only a few months to run by any standards, to make contracts of that kind three to five years ahead which will be inherited by a subsequent government?
My Lords, this Government were elected for a full term and I do not see any reason why we should not pursue our policies during the time allotted to us. My noble friend the Leader of the House indicated in the Written Answer which appeared in Hansard on 22nd May that the timetable that we have set will allow us to study the Select Committee's report—assuming it is available; it will enable us to make a response before the House rises for the summer. Clearly the timing will be tight but with goodwill on both sides, which I am sure will exist, it can be achieved.
To say that the committee's report, as the noble Lord, Lord Taylor, suggested, is of no significance whatever and that the Government's actions amount to contempt of the House, is completely wrong. We have every intention of considering the report with the seriousness that it deserves. I would make the simple point that the main purpose of the committee established in your Lordships' House was to consider the public service. Consideration of Recruitment and Assessment Services is merely a part of that activity—an important part, I concede, but only a part.
I hope that the House will accept the assurances that I have given not only to the letter, but in the spirit in which I give them. We shall take due note of the committee's conclusions. The debate in another place has not affected the undertakings given to your Lordships and I hope that on reflection noble Lords opposite will see that there is no reason for them to be exercised in the way that they now appear to be.
Perhaps I may proceed to the Motion on the Order Paper. I noted with care the remarks of the noble Lord, Lord Richard, regarding the Motion. He spoke of the opinion that is current among the Civil Service unions particularly. We have taken fully into account the representations made against market testing of PCSPS 1223 administration. The central point, however, is that competition will ensure value for money and the focus on performance output will help to improve the quality of service to scheme members. That encapsulates the reason for the order.
The Government fully understand that civil servants value their pensions highly and that is entirely right and natural. But the changes being made in the way that the scheme is run will help to improve the quality of service to scheme members. The noble Lord referred to morale within the Civil Service. Morale is best maintained by allowing staff to perform to the best of their abilities in their chosen career. The reforms that the Government are enacting enable the staff to do just that; that is, to focus their attention on delivering high quality public service. That is surely the best way of satisfying both them and the users of the service.
The remarks made by my right honourable friend Sir Edward Heath were referred to, and again I noted with all seriousness what was said. But I re-emphasise that it is scheme administration that is being opened up to competition. The Civil Service pension arrangements will continue to be managed and controlled by the Office of the Public Service. The noble Lord, Lord Richard, asked what the difference was between management and administration. As I said earlier, administration encompasses such activities as operating the scheme in respect of individual scheme members; keeping files and so forth in relation to those scheme members serving in departments and agencies as well as retired members. Management of the scheme involves fixing the scheme rules; it involves the control of benefits that are available under the scheme; the resolution of disputes; accounting to Parliament for expenditure under the Civil Service Superannuation Vote. Those activities, as I stressed, will not be contracted out.
The noble Lord, Lord Richard, mentioned the efficiency scrutiny and said that it found no evidence to suggest that outside contractors could do the work any better. Neither was there evidence that they could not. Under the Competing for Quality programme, departments and agencies are required to test areas of activity to see whether alternative sources in the market give better service and value for money. If after a market test it is found that the arrangements already in place offer the best service and the best value for money, those arrangements will continue. Therefore it is not a case of the Government ignoring the maxim of "if it ain't broke, don't fix it"; if it ain't broke it will not need to be fixed.
§ Lord Richard
My Lords, can the Minister say why, in this order, he has taken such comprehensive powers as opposed to powers just to market test? Why does he not simply take those powers?
My Lords, I am not quite sure what the noble Lord is referring to. The central point of the order 1224 is to enable those departments to see whether better value for money and a better service can be provided outside. That is what market testing means.
§ Lord Harris of Greenwich
My Lords, I apologise for interrupting the noble Earl again. In the light of what he has just said, can we be told about the timescale? How long will this procedure take? Will it be during the time that the present Parliament is in existence, or will it conclude before then?
My Lords, this is an enabling order only. It enables Ministers in departments and agency chief executives to take a look at the whole question for themselves. It will be up to them whether they proceed in short order or whether they decide that it is a matter better left for the medium term. But it is of course incumbent on both Ministers and chief executives to pursue the market testing route at some point. That is government policy. Therefore, it is impossible to answer the noble Lord's question. It will remain a decision for Ministers and chief executives as to how long the process will take.
The noble Lord, Lord Richard, referred to the private sector. In fact quite a number of employers in the private sector contract out their pensions administration work to specialist advisers. The National Association of Pension Funds and other organisations hold regular conferences for delegates to discuss the pros and cons of outsourcing, and a number of employers with in-house services are actively considering their options. That indicates that the private sector as well as government believe that in certain circumstances there is better value to be found outside.
As I have stressed, the order is about securing value for money for the taxpayer and a better service to scheme members. I am surprised and a little disappointed that the Benches opposite do not embrace those aspirations. Perhaps I should not be. However, on that somewhat melancholy note, I trust that the House will nevertheless agree to the order.
§ On Question, Motion agreed to.