HC Deb 19 February 1998 vol 306 cc858-60W
Mr. Bill Michie

To ask the Secretary of State for Social Security if she will make a statement on the outsourcing of the Benefits Agency Medical Service. [31017]

Mr. Keith Bradley

My right hon. Friend the Secretary of State for Social Security announced on 31 July how we would proceed with a number of projects for the use of the private sector which were in the pipeline and which we had inherited from the previous administration.

As we have previously said: this would be a government of ideas and ideals but not of outdated ideology, what counts is what works; it would reject the dogmatic view that services must be privatised to be of high quality, but equally, we see no reason why a service should be delivered directly if more efficient means are available.

We reviewed the projects against

  • our objectives for modernising the Social Security system;
  • our commitment to work within the announced spending totals for the first two years of Government;
  • our aim of getting best value for public money and of reducing the burden on taxpayers;
  • the scope to apply private sector expertise, discipline and economies of scale in procuring public services and the ability to secure increased investment from the private sector;
  • the need for continuing flexibility for Government to make future changes to services;
  • the opportunities for improving the quality of service for customers; and
  • the implications for staff.

In support of our clear commitment to a quality Social Security service, we have established a minimum quality of service threshold against which we have assessed all bids from the private sector. If a supplier failed to reach this threshold, we would not expect to award them a contract no matter how low their prices.

We also required greater evaluation and feedback on performance against the new quality standards. We have made clear our commitment to take account of the needs of staff in considering the involvement of the private sector. We have therefore placed greater emphasis on management of people when evaluating the contracts; we have carefully evaluated suppliers' management of past staff transfers.

I can today announce that all three contracts for BAMS will be awarded to the Sema Group for five years with an option to extend the contracts for two years.

Their proposals have been carefully considered in the light of our criteria.

The contracts have been awarded on the basis that Sema will:

  • bring enhanced management expertise to BAMS, with investment in new technology,
  • will deliver service improvements to customers, ensuring speedier appointments and reducing waiting time,
  • will maintain and improve quality of service,
  • will provide good value for money for the taxpayer.

Sema will provide medical advice to support the delivery of incapacity and disability benefits. Payments made to Sema for the service they will provide will not be related in any way to the outcome of individual medical examinations.

The contract award is not part of the welfare reform programme. The responsibility for the overall service and for the determination of entitlement to benefits remains with the Department. This announcement makes no change to the rules for entitlement to benefits and the rights to customers will not be changed in any way. Rigorous procedures will be put in place to ensure that we continue to receive independent, objective medical advice.

The value of the contracts over five years will be £305 million.