Crown Suppliers (Hansard, 28 July 1988)

§ Mr. Chope

I announced on 3 February the Government's intention to sell those of the Crown Suppliers' businesses which can be undertaken on a normal commercial basis. Such businesses can be carried out more efficiently in the private sector and should provide an improved source of competitive supplies for the public sector. I have excluded from the package for sale only those of TCS activities which are not run on commercial lines; which raise questions of security; or which, because of the very specialised nature of the business, exceptionally provide better value for money within the public sector.

The package for sale will therefore include the Crown Suppliers' businesses of selling furniture, furnishings, floor coverings, domestic appliances, electrical, mechanical and laboratory equipment, building materials and vehicles, together with its associated repair, design and technical services. It will also include the transport hire business and the interdepartmental dispatch service between Government Departments. All these are businesses which are commonly carried out by private firms with which I hope the Crown Suppliers will be able successfully to compete.

For security reasons, I have decided to exclude from the sale the design and procurement of security furniture and equipment and the car service which transports Ministers and senior officials in London.

On value-for-money grounds, the Crown Suppliers' fuel business will not be sold. I accept that the extremely specialised nature of fuel procurement is such that the Crown Suppliers, once privatised, would be unlikely to be able or willing to secure as low prices as it can at present. The business will therefore be retained in Government, and the possibility of establishing it as an executive agency will be examined.

Also on value-for-money grounds, I envisage that the expertise necessary to procure those few highly specialised items of equipment where the Property Services Agency is the only customer and there is a single supplier should be retained in the agency, since in these circumstances there are no additional cost advantages to be gained fron using the Crown Suppliers to find sources of supply or to purchase in bulk for a number of customers.

Finally, the special unit in the Crown Suppliers which provides services to the Palace of Westminster and other royal palaces and civil residences in Whitehall and elsewhere is not presently run on strictly commercial lines; it is not therefore suitable for inclusion in this sale, although I would not wish to rule out contracting out part of the work of the section in due course.

When the Crown Suppliers is sold, staff working on the activities being privatised will be protected by the Transfer of Undertakings (Protection of Employment) Regulations 1981 which, inter alia, provide for the automatic transfer 442W of staff with their jobs to the new employer. Staff in those groups for whom there may be prospects of alternative employment within the Civil Service will be asked whether or not they wish to remain in the Civil Service or stay with the Crown Suppliers. We shall use our best endeavours to meet their wishes where they are consistent with the smooth transfer of functions, but I cannot guarantee that we shall be able to satisfy all preferences.

I shall now be consulting the trade unions on these proposals and working up detailed plans for the sale. A number of efficiency improvements are being made so that the Crown Suppliers will be structured and ready for the challenge of privatisation.