§ Mr. Harold Walkerasked the Secretary of State for the Environment if private contractors carrying out reimbursable cost contracts for his Department will be subject to the cash limit constraints which apply to public sector employers, and in what way, or if such contractors will be automatically reimbursed for extra labour costs irrespective of the level of wage and salary settlements they may enter into.
§ Mr. Geoffrey FinsbergContractors are not reimbursed extra labour costs under firm price contracts but, where a contract provides for the reimbursement to the contractor of actual or calculated costs, that reimbursement will reflect the level of relevant nationally agreed wage settlements.
There is, however, a cash limit on procurement by my Department. Any excessive increase in contractors' costs would therefore mean less work for them.