HC Deb 23 February 1995 vol 255 c270W
Mr. John Marshall

To ask the Secretary of State for the Environment what has been the outcome of his review of the prior options for the future of his Departments's Buying Agency.

Mr. Gummer

The Buying Agency acts as a purchasing agent for Government Departments and other public bodies. It has an impressive record of securing favourable terms to the advantage of the Exchequer. Its costs are fully covered by commissions paid by its departmental clients.

I have conducted a review of its future in order to determine, after its initial period of operation, whether these functions continue to be necessary, whether Government need to be responsible for them and whether they might be better carried out by the private sector. This review, in which I was advised by consultants KPMG Corporate Finance, made an exhaustive study of the costs and benefits of this range of options.

The review confirmed that the work carried out by the Buying Agency secures significant savings in the costs of public sector procurement. It is important that savings continue, and that they should accrue to the Exchequer. I have decided therefore that to achieve the best value for money the Buying Agency should continue as a next steps agency for a further five years. The agency's chief executive has already implemented a number of efficiency gains identified by the consultants, and I have asked him to continue to examine the scope for further improvements in performance.

I have also concluded that, subject to parliamentary approval, the Buying Agency should adsorb as soon as practical my Departments's fuel branch, which negotiates contracts for the public purchase of fuels on behalf of a wide range of public sector bodies, and has a successful record of securing advantageous terms for them. These functions are complementary to those of the Buying Agency, and I believe the two bodies will operate more effectively together. My Department is consulting with its trade unions on the staffing consequences of this proposed merger.

These conclusions and consequent adjustments to the financial controls of the agency will he reflected in the framework document which is to be reviewed and updated for the period ahead.