§ Mr. McAllionTo ask the Secretary of State for the Home Department what was the total cost, including redundancy payments, incurred by his Department as a result of the abandonment of the prison service supply and transport market test.
§ Mr. Peter LloydResponsibility for this matter has been delegated to the director general of the prison service, who has been asked to arrange for a reply to be given.
Letter from Derek Lewis to Mr. John McAllion, dated 4 May 1993:
The Home Secretary has asked me to reply to your Question about the costs incurred as a result of the abandonment of the Prison Service supply and transport market test.
In July 1992 approval was given for the award of a contract, subject to negotiation of satisfactory terms and consultation with the TUS, to Beck and Pollitzer for the operation of the warehousing and distribution function of the Prison Service Supply and Transport Branch. The operative date of the contract was to be 1 April 1993.
At the time of this decision, it was anticipated that all staff working in the function would be made redundant, although some might be re-employed by Beck and Pollitzer. The estimated redundancy payments for all the staff were £875,000.
As it was not possible to negotiate a satisfactory contract with Beck and Pollitzer, a 3-year service level agreement was awarded to the next best bid, the in-house bid. Staff, who had received redundancy notices in September 1992, were given the option of accepting redundancy or agreeing to the withdrawal of the redundancy notice. Redundancy payments to those who decided to accept redundancy were £620,000.
The Prison Service did not incur any other costs as a result of the abandonment of the market test.
§ Mr. McAllionTo ask the Secretary of State for the Home Department what contract was awarded to Beck and Politzer following the abandonment of the prison service supply and transport market test; whether it was a result of a competitive tendering exercise; and whether an in-house bid was permitted.
§ Mr. Peter LloydResponsibility for this matter has been delegated to the director general of the prison service, who has been asked to arrange for a reply to be given.
Letter from Derek Lewis to Mr. John McAllion, dated 4 May 1993:
The Home Secretary has asked me to reply to your recent Question about the contract awarded to Beck and Politzer.
Following the decision to award a 3-year service level agreement for the in-house management of the Prison Service Supply and Transport warehousing and distribution function, a 1-year consultancy contract was agreed with Beck and Politzer to provide the in-house management team with advice and assistance in achieving operational and administrative improvements to the function.
74WA great deal of preparatory work was carried out by Beck and Politzer in the seven months from the original decision to award them the contract for the management of the function up to the decision to retain the work in-house and this latter decision was made only 4 weeks before the operative date of 1 April 1993. There was therefore not time to arrange for competitive tendering, nor would it have been practical for either another contractor or an in-house team to act as consultants, as the new computer systems to be used after I April for stock control and distribution planning were based on the original Beck and Politzer proposal. They were therefore the only organisation capable of providing the necessary consultancy advice.
The agreement reached with Beck and Politzer is an example of the private sector working closely with the public sector to enhance services quality and provide value for money.