External Private Contractors: Government Use and Employment
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The Parliamentary Secretary, Cabinet Office (Julia Lopez)
It is a pleasure to serve under your chairmanship, Mr Pritchard.
I am grateful to the hon. Member for Liverpool, Wavertree (Paula Barker) for securing the debate. The Government are the custodian of public money and it is very important that we retain the confidence of taxpayers about how that money is spent. It is similarly important that we have a robust, highly skilled civil service, with the expertise and capacity to deliver projects and services over the long term and at pace, and that we treat those in the private and public sectors who carry out work for the Government with respect. That is why I welcome not only the way in which the hon. Member has raised issues about external private contractors but the respectful way in which she makes her case.
The civil service has historically used contractors, working alongside civil servants, to provide additional capacity and specialist skills and to manage short-notice urgent requirements. Where it is cost-effective to do so and the requirement is temporary, this makes sense, but let me also be clear that we are focused on driving down the use of consultants, improving internal civil service capability and driving greater value. We will do this in a variety of ways: revamping our in-house training; looking again at procurement rules, particularly relating to social value; and continuing the work of my predecessor, now the Secretary of State for Digital, Culture, Media and Sport, in dealing with issues about outsourcing raised following the collapse of Carillion.
Consultants are used to provide advice on the strategy, structure, management or operations of an organisation, and where an external perspective may be helpful or even necessary. We also use professional services firms to support the implementation and delivery of services—for example, PwC supported the delivery of the reform programme for Her Majesty’s Courts and Tribunals Service—and we use contingent labour to fill gaps in business-as-usual or service delivery activities. It is also right to say that the civil service itself has grown in number over recent years, partly because of the EU exit operations but also because of covid. We have recruited an extra 6,000 civil servants in the Home Office, for instance, to tackle security, counter-terrorism, crime and policing issues.
I will now address some of the points made by the hon. Member for Liverpool, Wavertree. I met the leaders of the three civil service unions yesterday. I have not been in post for long, so it was simply an introductory meeting, but I know that some of those unions also represent workers within private sector contracting companies, and I will be very happy to look into some of the issues that she raised today about outsourced workers and their pay and conditions, particularly as regards sick pay.
Other Members have also raised issues about working conditions during the pandemic and it is important to say that not everybody can work over Zoom. In many ways, it is a privilege to be able to do so and not to have to go into an office. On the other hand, I am also aware many workers’ office jobs are not easily conducted at home, and it is important for the Government, as an employer, to provide safe work spaces, so that we can take into account those who are in shared or cramped accommodation.
The hon. Member for Liverpool, Wavertree also talked about delivering social value through contracts, and we quite agree. We recently took a new look at social value, considering how we take into account environmental factors in how contracts are delivered, whether a contractor is improving the skills of their workforce or their approach to apprenticeships, and so on. We will look at social value in quite a comprehensive way, because once the EU transition period has ended, we will be in a position to come up with a new procurement strategy. Indeed, we are working very hard to draw that up. She raised a number of issues about how we extract value from existing Government contracts, and I will take those away to consider them.
The hon. Member for Birkenhead (Mick Whitley) made a number of important points, but it is important that we recognise that we could not have responded to some of the challenges of the pandemic without expertise from both the public sector and the private sector. Again, I assure him that social value is at the heart of the new procurement strategy that we are drawing up, particularly on issues such as climate change and waste.
The hon. Member for Leeds North West (Alex Sobel) raised a number of important issues about track and trace. We all want this system to work. Let us not pretend that it has been perfect from the outset, but a lot of things have been done to improve that service and we are now conducting hundreds of thousands of tests daily. We hope to be on track to deliver—I do not want to get the number wrong, but there is certainly a much increased capacity when it comes to testing and we have ironed out some of the problems that we saw around September with demand on the system.
It is also important that we understand that this process is a partnership between national and local, and between public and private, and I think that it is naive to suggest that the public sector alone could have built up this service so quickly and delivered it at such a great pace. We appreciate the expertise that we have received from the private sector.
Alex Sobel
Local authorities can furlough staff, so many local authority staff who could not do their normal jobs were still employed by the local authority. There was capacity in local authorities to deliver this programme. Should that capacity not have been taken up and used before going to the private sector?
Julia Lopez
It is important to understand that the private sector has provided the framework for the system, with local authorities able to plug into that framework. The private sector provides the national call centres and so on, but a lot of the local expertise is provided at local level from healthcare experts on the ground, particularly in some of those harder-to-reach instances where we need to go knocking on people’s doors. Ultimately, we share the hon. Gentleman’s aim to improve the service and build plenty of public confidence in it because it is such a key tool in dealing with the pandemic.
The hon. Member for Stockport (Navendu Mishra) is a PCS union member, and I met his leader yesterday. It is important to remember that successive Governments of all colours use outsourcers. In a previous life, I was a councillor in Tower Hamlets. There were a number of outsourced contracts there and not very impressive in-house management of them, I should say. Outsourcers can provide a lot of expertise and capacity and it is naive to suggest that the public sector alone has all that capacity and expertise in house. Let us not do down some of the people who work for those contractors and bring a lot of capacity and sense to the system.
Both the hon. Member for Liverpool, Riverside (Kim Johnson) and the hon. Member for Leicester East (Claudia Webbe) seem to take an ideological view that effectively says private bad, public good. That is a great shame because it fails to acknowledge what the private sector can provide for public good.
Claudia Webbe
Leicester has been in extended measures and lockdown for the longest time, as the Minister will appreciate. On the test and trace system alone, the private contractors delivering that have a success rate of less than 50%. Our own local authority, which understands the issues, was able to deliver a success rate of more than 85%. That is the difference between the private and the public sector. That is the reality. It is not ideological; it is the reality on the ground. That is what is happening and it is serious.
Julia Lopez
I thank the hon. Lady for her comments. Does she believe that the local authority in Leicester would be capable of delivering a fully functioning test-and-trace system that would do all that such a system needs to do? I think that is not the case. The private sector has been able to achieve impressive things during the pandemic and provide a lot of public good at speed and in innovative ways. That has been critical in procurement of all manner of goods and services, from PPE to new diagnostics, which have been fundamental to how we have protected the public.
The hon. Member for Luton South (Rachel Hopkins) raised a number about the justice system, but I am afraid that, as a Cabinet Office Minister, I do not have the expertise on some of the issues she raises. I am happy to look into them for her and reply in writing. The hon. Member for Ellesmere Port and Neston (Justin Madders) raised a number of issues on contractor pay. I am working on the very issue of value from contractors with my ministerial colleague, Lord Agnew. Some hon. Members may be aware that he has recently set out his concern about some of the reliance in Whitehall on management consultants and that we have infantilised civil servants and deprived some of our brightest public servants of
“opportunities to work on the most challenging, fulfilling and crunchy issues.”
Our reliance on consultants and other contractors can, at times, hinder the development of internal civil service capability. We have discussed that at length and are keen to improve what we do in terms of in-house learning capability and expertise.
I am always glad to see the hon. Member for Strangford (Jim Shannon) in this Chamber. He talked about civil service churn and skills, and I reassure him that we want to upskill our civil service. We are looking again at the quality of our training, as I mentioned, and he might be interested in the comprehensive Ditchley lecture given by my right hon. Friend the Member for Surrey Heath (Michael Gove), which talks about some of these issues.
There are many other issues to cover, but I am cognisant of the time. I reassure hon. Members that we need tighter controls around contractor expenditure, supported by better quality data and management information.
Julia Lopez
I do not think I have time to give way. Mr Pritchard, what time does the debate finish?
Julia Lopez
I want to leave time for the hon. Member for Liverpool, Wavertree to respond, so I will not give way.
There will always be situations where it makes sense to use contractors, working alongside our high-quality civil servants, to deliver specialist advice and services and to tackle short-notice urgent requirements where the civil service does not have sufficient capacity. We also need to reverse the trend we have seen over recent years, which has eroded civil service capability and led to an over-reliance on consultants and other contractors.
Hon. Members raised a number of other issues today about outsourcing and I am happy to take them away. I thank the hon. Member for Liverpool, Wavertree again for her thoughtful contribution.