§ Mr. HendryTo ask the Secretary of State for the Environment if he has yet considered the responses by Erewash borough council to the notice served on it on 7 September 1995 under section 13 of the Local Government Act 1988; and if he will make a statement. [10411]
§ Sir Paul BeresfordMy right hon. Friend has considered carefully the responses which Erewash borough council has made to the notice served on the authority on 7 September 1995, and has today given the authority a direction under section 14 of the Local Government Act 1988.
After careful consideration, the Secretary of State remains of the opinion that the authority acted in an anti-competitive manner in awarding a contract to its in-house direct labour organisation in favour of a bid which was £70,000 cheaper, because it did not have well founded reasons for doing so. He feels that, in assigning the contract of £326,150 to its DSO, the authority did not show that it had carried out an adequate assessment of the private contractor's abilities.
The direction given to Erewash borough council requires the authority to retender the contract for a ground maintenance contract, which was the subject of the notice, so that new arrangements are in place by 1 January 1997, and to seek my right hon. Friend's consent should it wish to reassign the work in-house.