§ Mr. Philip Hollandasked the Secretary of State for Transport whether he has now reviewed the tendering threshold for highway work for local authorities; and with what results.
§ Mr. David HowellYes; we have reviewed the position on the basis of information provided by local highway authorities. The £50,000 tendering threshold, which was introduced on 1 October 1982, is leading to a welcome increase in competition for highway work between private contractors and direct labour organisations; that in turn will lead to net savings on highway work, taking into account the additional administrative cost of putting work out to tender.
We therefore propose that, from 1 October 1983, 30 per cent. by value of highway work below the threshold of £50,000 should also be made subject to competitive tender. The change will, as before, involve some additional administrative costs which will be reflected in the agency fee which falls on the Department's vote.
Initially, these could be of the order of up to £0.5 million, depending on a range of assumptions. Although we cannot yet forecast precisely the savings that will arise from this further increase in competition, we expect the savings to offset the costs in due course and the situation will be kept under close review.