HC Deb 03 July 1995 vol 263 cc40-1W
Mr. Spellar

To ask the Secretary of State for Northern Ireland what was the total competitive tendering costs for NHS support services for each year since 1990 for each health and social services board, defined so as to include market testing process costs, HPSS staff and consultants, monitoring and contract management costs, redundancy and early retirement costs, avoidable overhead costs and national insurance costs. [31080]

Mr. Moss

The total expenditure on market testing— competitive tendering—for HPSS support services is given in the table, on a financial year basis since 1990–91. The figures include the expenditure on the market testing process—HPSS staff and consultants; monitoring and contract management; and redundancy and early retirement.

There is no additional expenditure incurred with regard to "avoidable overhead costs". These relate to in-house overheads such as personnel, training, finance, supplies and payroll services which are not included in the direct costs of the in-house service. The estimated costs of these overheads are set against in-house tenders to ensure fair comparison between tenders and calculate the bottom line net savings. They are included only to the extent that they would be saved if a service is contracted out. Outside contractors include such overhead costs in their tenders.

Similarly, there was no additional expenditure incurred against notional insurance costs. The estimates of the costs of insurance are set against in-house tenders to ensure fair comparisons between tenders and the proper calculation of net savings. Outside contractors must have insurance cover and the costs of this are included in their tenders.

All national insurance costs are included in the bids submitted by tenderers, either in-house or commercial, and are therefore not appropriate to these costs.

Total market testing expenditure: HPSS support services—by board area
Board area 1990–91 £ 1991–92 £ 1992–93 £ 1993–94 £ 1994–95 £
Northern 41,270 65,000 134,000 140,000 148,000
Southern1 330,245 554,677 108,878 117,182 128,721
Eastern2 632,464 851,531 496,699 464,097 489,232
Western 160,000 678,400 182,000 200,000 220,000
1 The figures for Southern Board area include those for the HSS Trusts which are based within the area.
2 The figures for Eastern Board area include those for the HSS Trusts which are based within the area and the Central Services Agency.