Market Testing (Hansard, 22 May 1996)

§ Sir John Wheeler

This is a matter for the chief executives of each agency. They will write to the hon. Member.

Letter from Jan Walters to Mr. Martin Redmond, dated 17 May 1996: The Secretary of State has asked me, as Chief Executive of the Training and Employment Agency, to reply to your question about market testing the Agency's services. The Agency already outsources the delivery of programmes and services which account for 80% of the Agency's annual budget. Since 1992 the Agency has undertaken a vigorous competing for Quality programme and has continued to scrutinise its programmes and services. Scoping studies have been carried out in the following areas:-

1992/93: Training Centre Network
1993/94: Business Support: Jobclubs
1994/95: Disablement Advisory Service
1995/96: Careers Service (Including Jobskills pre-entry)

These studies have not led to further contracting out of services or programmes but have resulted in substantial savings being identified and realised. Most notable so far, the examination in 1992/93 of the potential for market testing the Agency's network of Training Centres prompted a major reorganisation of the network, involving running costs of £10.6m and 626 staff (approximately 40% of Agency staff). This re-organisation resulted in total annual running cost savings which rise to approximately £2m by the end of 1995/96, as well as total annual programme cost savings rising to approximately £2m over the same period. The Business Support study resulted in cash savings of £ 134k per annum. The Agency's revised Framework document includes a commitment to continue to examine the scope for and, if appropriate, implement proposals for market testing with a view to ensuring best value for money. Furthermore, a comprehensive study due for completion shortly is examining the current and future potential roles of the private sector in delivering the Agency's services.

Letter from F. G. McConnell to Mr. Martin Redmond, dated 17 May 1996: The Secretary of State for Northern Ireland has asked me as Chief Executive of the Industrial Research and Technology Unit (IRTU) 201W to reply to your question about market testing within Executive Agencies. An independent study of the scope for market testing of IRTU's activities has recently been completed. The study involved a detailed examination of the Agency's activities and recommended that none of these is appropriate for market testing. This recommendation is being considered. I hope you find this reply useful.

Letter from D. J. Bell to Mr. Martin Redmond, dated 17 May 1996: The Secretary of State for Northern Ireland has asked me to reply to your Question about what market testing has been carried out into the services provided by the Valuation & Lands Agency for Northern Ireland. Since its launch as a Next Steps Agency on 1 April 1993, only once has market testing been fully carried out on a service provided by the Agency. In that instance, market testing was carried out by the Northern Ireland Housing Executive (NIHE) and as a result, the valuation service previously provided by the Agency to the NIHE throughout Northern Ireland, was restricted to that part of Northern Ireland covered by the NIHE's Western Region. I trust this information is sufficient for your purposes but if you think I can be of any further assistance, please do not hesitate to let me know.

Letter from F. Jardine to Mr. Martin Redmond, dated 17 May 1996: The Secretary of State for Northern Ireland has asked me to reply to your Parliamentary Question on market testing on behalf of the Northern Ireland Statistics and Research Agency (NISRA). NISRA was established as a Next Steps Agency within the Department of Finance and Personnel on 1 April 1998. Its role is to provide statistics, social research and civil registration services and to undertake the Census of Population. The Agency thus shares a number of functions in common with the Office for National Statistics (ONS). In the short period since it was established NISRA has not market tested any of its services but is committed in the Framework Document to examining the scope for future market testing. The collection and processing of much regional statistical data in Northern Ireland is closely linked to analogous GB activities and the market testing of such work is normally undertaken in association with the ONS. Prior to Agentisation Northern Ireland with GB to market test the collection of prices information which contribute to the Retail Prices Index (RPI). The collection of RPI data was transferred subsequently to the private sector.

Letter from D. Court to Mr. Martin Redmond, dated 16 May 1996: You recently tabled a Parliamentary Question asking the Secretary of State to list for each of his Department's Agencies what market testing has been carried out into the services they provide and what were the results. As Chief Executive of the Government Purchasing Agency, I am replying on his behalf. The Government Purchasing Agency was launched on 1 April 1996 and is responsible for the provision of a professional procurement service for Northern Ireland Departments, their agencies and the Northern Ireland Office. It also manages the procurement process and advises Ministers on all issues relating to procurement policy. Each year Departments will review their Service Level Agreements with the Agency and are free to obtain their services from elsewhere, if they so wish. Therefore the Agency, while unable to market test itself, is subject to a continuous market test by its customers. The Agency does contract out some of its work and it is intended to continue to examine opportunities for this in the future. I hope this is helpful.

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Letter from Alec Wylie to Mr. Martin Redmond, dated 17 May 1996: I have been asked to reply to your recent parliamentary question on market testing. The Social Security Agency has not market tested any of its services since its establishment in July 1991. I hope this explains the position for you but 1 would be happy to provide any further information you require.

Letter from P. Devlin to Mr. Martin Redmond, dated 17 May 1996: The Secretary of State for Northern Ireland has asked me to reply to your question about market testing carried out into the services provided by his Department's agencies and the results. I should like to explain that there has been no market testing of child support maintenance services. I hope you find this information useful.

Letter from Ronnie Brown to Mr. Martin Redmond, dated 17 May 1996: I have been asked to reply to your recent Parliamentary Question on market testing in agencies. On 1 November 1992 Health Estates commenced the market testing of design, consultancy and site supervision services in respect of clients' healthcare buildings. In each of the three reporting periods since then the in-house team has demonstrated its ability to offer competitive bids for these services and to win sufficient work to ensure the full utilization of the current staff resources.

Letter from D. A. Stanley to Mr. Martin Redmond, dated 17 May 1996: The Secretary of State for Northern Ireland has asked me to reply, on behalf of the Compensation Agency, to your recent Question regarding market testing. As part of the Agency's Prior Options review in 1994 an entry was placed in Market Testing Bulletin inviting those with an interest in the Agency's work to respond. In addition, the Northern Ireland Office, the Agency's parent department, wrote to a number of organisations who were viewed as having an interest, these included the Law Society of Northern Ireland, the Chartered Institute of Loss Adjusters, the Association of British Insurers, the Northern Ireland Bankers Association, the Institute of Chartered Accountants in Ireland and the Northern Ireland Bar Library. Letters were also written to the Chairman of the Northern Ireland Select Committee and to the 17 Northern Ireland MPs. There were responses only from the Law Society, the Chartered Institute of Loss Adjusters and one MP. In each case the view was that administration of the compensation schemes in Northern Ireland should be carried out by a public body, such as the Agency, accountable to Parliament and Ministers and that it would be inappropriate for the private sector to handle such sensitive material.

Letter from Alan Shannon to Mr. Martin Redmond, dated 17 May 1996: The Secretary of State has asked me to reply to your question about market testing undertaken by Government agencies. The Northern Ireland Prison Service became an executive agency on 1 April 1995. None of its functions have been subject to direct market testing in the intervening period. However, a prior options review of its payroll services, which was completed in 1995/96, resulted in a number of recommendations for a more efficient organisation of the service, including a reduction in the number of posts required. In addition, prior options reviews of the works department, pharmacy services and fire prevention arrangements were started in 1995/96 and will be completed during the current year.

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Letter from R. A. Hall to Mr. Martin Redmond, dated 16 May 1996: You recently raised a Question to the Secretary of State for Northern Ireland asking if he would list for each of his Department's Agencies, what market testing had been carried out into the services they provide and what were the results. I have been asked to reply to you directly. My Agency was launched on 1 September 1995 after a prior options study had been conducted on the provision fo the service. That study concluded that the service should be established as an Executive Agency of the Northern Ireland Office. No market testing of the service was carried out.

Letter from D. W. Gallagher to Mr. Martin Redmond, dated 17 May 1996: I have been asked to reply to your Parliamentary Question about market testing of our services. No market testing has yet been carried out though there are plans to market test our services in toto after 1 April 1997.

Letter from J. F. Codd to Mr. Martin Redmond, dated 17 May 1996: The Secretary of State for Northern Ireland has asked the Chief Executive to reply to your question about market testing by Ordnance Survey of Northern Ireland. In the absence of the Chief Executive I am replying on his behalf. We had two core activities in the market testing programme for 1993–94:

(i) resurvey at basic scales for preparation of master survey documents; and
(ii) data conversion of large scales topographical archive to digital information.

A judgement was made that their small size meant that the cost of preparing for formal market testing would have exceeded potential savings. Consequently we kept the work in-house on condition that we achieved at least 10 per cent. cost reduction in 1993–94 and succeeding years.

Letter from J. B. Watson to Mr. Martin Redmond, dated 17 May 1996: I refer to the question which you recently put to the Secretary of State for Northern Ireland, asking for Information on market testing in each of his Department's Agencies. This matter has been referred to Chief Executives for reply and this response covers the Driver & Vehicle Testing Agency. The Agency was set up with effect from 1 April 1992, following a complete review of the activities. This review considered all options for the future provision of Driver and Vehicle Testing and concluded that a Next Steps Agency represented the optimum means of delivery. In 1993 privatisation of the private car vehicle testing operation was examined. This review also concluded that the existing arrangements were the most efficient. A full review of the Agency is planned to commence next year.

Letter from Brendan Hagee to Mr. Martin Redmond, dated 16 May 1996: The Secretary of State for Northern Ireland has asked the Chief Executive to reply to your question in relation to Market Testing which has been carried out into services provided by the Department's Agencies and the results. DVLNI invited tenders in relation to a market test on Local Vehicle Licensing Offices during 1994. The bid was won in-house and a new contract commenced 1 July 1995.

Letter from A. P. W. Malcomson to Mr. Martin Redmond, dated 17 May 1996: The Secretary of State for Northern Ireland has asked me to reply to your Question as to what market testing has been carried out for the services provided by this Executive Agency and what were the results. 204W The following Public Record Office areas have been subject to market testing (ie, Competing for Quality): cleaning, catering, wordprocessing, reprographics and information technology. The first two functions were contracted out centrally; the third was reduced in scale but retained in-house; and the fourth and fifth were retained in-house. Another area, namely Repository, was also retained in-house subject to the achievement of 10% efficiency saving.

Letter from C. E. Ronaldson to Mr. Martin Redmond, dated 17May 1996: I am replying to your Parliamentary Question to the Secretary of State for Northern Ireland about Market Testing of the services provided by his Department's Agencies. A Prior Options Study was carried out on Works Service (Construction Service's predecessor) prior to the launch of the Agency on 1 April 1996. Since 1 April 1996 none of the services provided by Construction Service have been Market Tested. I hope you find this reply helpful.

Letter from Robert C. Martin to Mr. Martin Redmond, dated 17May 1996: Mr. Moss has asked me to reply on behalf of the Environment and Heritage Service, to your parliamentary question about what market testing has been carried out into services provided by his Department's agencies and the results. Grounds maintenance at the 2 largest of the 7 Country Parks, managed by this Service, was market tested in 1991. In both instances the work was won by the in-house bid, which proved to be the cheapest. Grass cutting operations at 42 of the 181 State Care Monument sites managed by us in the eastern half of Northern Ireland were market tested in 1994. This area was chosen as it contained the greatest concentration of monuments in commercially viable groups. In all, 4 groups were market-tested and the work was won by the in-house bid in each case.

Letter from Arthur H. Moir to Mr. Martin Redmond, dated 17 May 1996: A Prior Options Review of the activities of the Land Registry. Registry of Deeds and Statutory Charges Register which was completed in 1995 recommended Agency Status and was accepted by the Office of Public Service on the basis that the new Agency would consider the market testing of non-core functions. None of the Agencies activities have yet been Market Tested. All of the Agencies activities are being fundamentally examined, as part of the current efficiency plan, in a Business Process Re engineering Project. This will be completed by the Autumn. The Agency is also attempting to secure a private sector partner under the Private Finance Initiative to computerise the Land Registration process. Market Testing will be considered further when these projects are completed.

Letter from H. R. F. Flester to Mr. Martin Redmond, dated 17 May 1996: You recently tabled a written question on the issue of market testing for answer by the Secretary of State for Northern Ireland. As the Water Service has been a Next Steps Agency within the Department of the Environment for Northern Ireland since 1 April 1996 this has been forwarded to me, as Chief Executive, for reply in respect of the Agency. The Water Service has been engaged in a market testing and efficiency review programme since the late 1980s and will, within 2 years, have market tested or carried out efficiency reviews of 50% of all its activities. 205W The activities covered in the most recent part of this programme, between October 1994 and March 1996, are:

1. Collection and transportation of water quality samples
2. Sludge tinkering

Septic tank emptying
Minor to major sewage treatment works, and major sewage treatment works to disposal points.

3. Sewer maintenance

Clearing of blockages and desilting.
Sewer and manhole repairs and construction.
Of these recent market tests 64% were won by the in-house teams.

Letter from V. Crawford to Mr. Martin Redmond, dated 17 May 1996: The Secretary of State for Northern Ireland has asked the Chief Executive to reply to your question about market testing which has been carried out by Roads Service. In his absence I am replying on behalf of the Chief Executive. Prior to becoming an Executive Agency within the Department of the Environment for Northern Ireland on 1 April 1996, Roads Service market tested a number of road maintenance and inspection/testing functions. In addition, street lighting maintenance, car park management, the Strangford Ferry Service, Roadman Training Centre, Castlenavan Quarry and the materials testing maintenance contracts were lost to the private sector, but the remainder, representing approximately 90% of the work tested, was won by in-house teams. The agency has not completed any market tests since it was created. It does, however, intend to test approximately three quarters of its work during the next 3 years.

Letter from T. W. Stewart to Mr. Martin Redmond, dated 17 May 1996: Mr. Moss has asked me to reply to your question about what market testing has been carried out in the services provided by The Planning Service and what were the results. The Planning Service since it became an Agency, within the Department of the Environment, on 1 April 1996, has not carried out any market testing. In 1993 The Planning Service market tested the "Area Plans Research and Analysis process" which is the first stage in the preparation of Area Development Plans. The work market tested was for 6 Area Plans extending over a period of 18 months and was awarded to the In-House team. A second market test to revisit the market is scheduled for completion by 31 March 1997 and is included in the Agency's Business Plan.