§ Mr. HindTo ask the Secretary of State for the Environment what amendments he will be seeking to make to the regulations made under the Local Government, Planning and Land Act 1980 relating to direct labour organisations, in the light of consultation.
§ Mr. GummerMy right hon. Friends the Secretaries of State for the Environment and Wales have now decided, in the light of a consultation exercise carried out earlier this year, that all building and maintenance work other than highways and sewerage work should be subject to competition from October of next year and that the present exemption for direct labour organisations with not more than 30 employees should be reduced to 15 employees.
We are also prohibiting authorities from renewing maintenance contracts with their direct labour organisations without first going out to tender. We are examining the scope for restricting the kinds of emergency work which can be carried out by direct labour organisations without open competition.
The present regulations, made under part III of the Local Government Planning and Land Act 1980, have been in force since 1983 and the Government feel that there is no longer a case for any competition-free allowance for this work. Some authorities already expose all their maintenance and minor construction work to competition.
We estimate that an extra £400 million of work would be exposed to compulsory competition each year. A 30-employee de minimis threshold no longer seems justified. This could allow an authority to carry out work worth £600,000 a year without competition.