Compulsory Competitive Tendering (Hansard, 22 February 1994)

§ Mr. Baldry

We are today issuing a consultation document inviting comments on the Government's detailed proposals for extending compulsory competitive tendering to local authority professional construction-related and property services, including architecture, engineering, valuation and surveying services.

When my right hon. and learned Friend the then Secretary of State for the Environment announced to the House the Government's decisions on proposals to extend CCT to local authority white-collar corporate and professional services on November 10 1992, Official Report, column 744, he undertook that the Government would discuss details of implementing these decisions with representatives of local government and other interested parties. Since then, my officials have had very useful discussions with the local authority associations, the Audit Commission and Chartered Institute of Public Finance and Accountancy on a number of joint working groups.

Detailed proposals for CCT for the first of the new services to be brought into the CCT regime, local authority legal work, were issued for consultation last December. The paper issued today on professional construction-related and property services will be followed later this year by our detailed proposals for IT, finance, personnel and corporate and administrative services.

Copies of today's consultation paper will be placed in the Library. It includes a definition of these services, indicating how much of this work local authorities will be required to subject to CCT. The definition includes all professional construction-related and property management work undertaken for the management, maintenance or development of local authority buildings and land, and we are seeking views on whether it should also encompass professional support to regulatory and enforcement work.

As with the legal services, it also gives details of modifications which we intend to make to the statutory framework for competitive tendering to ensure that authorities will continue to be able to deliver services in a way which meets their own objectives and local people's aspirations.

We propose that local authorities be permitted to carry out up to 35 per cent., by value, of all professional construction-related and property services work using their own staff without going through competition, subject to smaller authorities being able to retain a minimum of £450,000 worth of work in-house and free of competitive tendering. This recognises that certain work must be retained both to enable an authority to fulfil its democratic responsibilities and to act as an intelligent client for bought-in services.

We propose that an authority will not be able to award any of the remaining 65 per cent. of work to their own staff 114W unless they have won it in fair and open competition. This requirement will be phased in over six months to allow authorities time to make proper preparations. We also intend to make provision to exempt professional work supporting construction or maintenance projects under way at the time at which CCT first bites to prevent undue disruption to work programmes.

Following consideration of comments received on the proposals included in this consultation document, I will submit to the House the statutory instruments required under the Local Government Act 1988 to give effect to our proposals. I anticipate that CCT will take effect from 1 October 1995 in metropolitan districts and in London. My hon. Friend the Minister for Local Government and Planning announced on 17 December last year a modified timetable for white collar CCT, including construction-related services, in shire counties and districts which are subject to review by the Local Government Commission.

Experience with the manual services already subject to CCT has shown that competition brings not only financial savings, but significant improvements in the management, efficiency and quality of public services. I fully expect that CCT will bring the same benefits to construction-related and other white collar work.