HL Deb 18 July 1997 vol 581 cc1148-9

12.44 p.m.

The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn) rose to move, That the draft order laid before the House on 30th June be approved [6th Report from the Joint Committee].

The noble Lord said: My Lords, the draft order was laid before Parliament on 30th June. It will enable the Home Secretary's functions in respect of pension administration services in the Metropolitan Police to be contracted out. It is necessary for all public services to make the most efficient and effective use of their resources.

From April to August last year the Metropolitan Police, on its own initiative, carried out an efficiency review of all its major central support services, including personnel, finance, property and technology services and transport. The relevant departments cover 5,500 civil staff and spend some £500 million. The review's objectives were to achieve best value for money.

For a range of services, the review recommended that partnership with the private sector would achieve significant improvements in cost while maintaining or improving quality. Four areas fell to be proposed in respect of contracting out: property; technology—including IT and voice communications; transport; and pay and pensions administration and processing. These proposals affect some 2,000 staff and TUPE is expected to apply. Contracts will be let during 1998.

The estimated annual cash savings from contracting out will be about £22 million. The net savings are expected to be some £75 million over seven years or £51 million on a net present value basis. The net figure reflects the high up-front costs of transferring pension liabilities.

The Receiver of the Metropolitan Police District has written three times to London MPs about the review. My honourable friend Mr. Michael, the Minister of State, wrote to all MPs in the Metropolitan Police District on 27th June explaining the purpose of the order. He arranged three meetings in the House of Commons and invited all London MPs to attend if they wished to discuss matters further. He has fully discussed the matter with the receiver and with representatives of the trade unions involved in a very constructive atmosphere. The decision to manage services in-house or to contract them out was based on a number of criteria. These included cost, quality, internal constraints, market opportunity, potential risk and flexibility.

I fully appreciate the commitment of the trade union interests to the service provided to the Metropolitan Police by their members and their concern about the quality of the policing service. I entirely agree with them that it is essential to make a proper comparison of contract costs against the in-house service before final decisions are taken to outsource any services. I understand that the Metropolitan Police is committed to doing this and has undertaken to make available to the trade union side the full details of the proposed model for financial comparison.

I am satisfied that the contracting out proposals are in the long-term interest of policing in London. I beg to move.

Moved, That the draft order laid before the House on 30th June be approved [6th Report from the Joint Committee].—(Lord Williams of Mostyn.)

Baroness Byford

My Lords, we welcome this report. The review identified pay and pensions administration as one aspect of the arrangements that was capable of improved efficiency through partnership with the private sector. The order is in line with the previous government's policy, and that policy has not changed under our new leader. Savings of up to £75 million can be made by contracting out provisions and other arrangements. This will be beneficial both to the taxpayer and to the rate payer. We on this side of the House welcome the order and I am grateful to have the opportunity to support it.

Lord Williams of Mostyn

My Lords, I am grateful for that support.

On Question, Motion agreed to.