§ Mr. Cordleasked the Secretary of State for the Environment in his proposed rationalisation of local authority direct labour departments, what investigations have been undertaken by his Department into their efficiency and productivity in comparison with that of independent commercial building firms.
§ Mr. FreesonIn dealing with the question of efficiency I intend, among other things, to establish a financial objective supported by charging, tendering and accounting requirements for the future operation of direct labour organisations.
§ Mr. Cordleasked the Secretary of State for the Environment if, in his proposed rationalisation of local authority direct labour organisations, he will take into account the fact that losses are made by various direct labour departments of local authorities; and if he will consider transferring these functions to independent commercial organisations.
§ Mr. FreesonI am aware that there have been cases where rate funds have had to carry additional costs arising from the operation of both direct works building contracts and private contractors employed by local authorities. There have been other cases where savings have been achieved. Under the proposed legislation the intention is that a local authority should keep a separate account in relation to its DLO activities. And we shall ensure that all appropriate costs, including overheads, are taken into account. The organisations will remain a part of their local authority, but I propose to examine their possible development into more widely based organisations for the future.