Oral Answers to Questions

Debate between Lord Grayling and Sam Gyimah

Monday 10th January 2011 Commons Chamber

[Mr Sam Gyimah (East Surrey) (Con)]

T8. Although I welcome the Government’s payment by results model as a way of delivering value for the taxpayer, the challenge for a lot of small organisations is that it will pose huge cash-flow problems. They will have to deliver the work and pay their staff, and then they will be paid by the Government. What steps is the Minister taking to ensure that small organisations that can deliver effective work programmes are not disfranchised by the Government’s payment by results model?

[Chris Grayling]

I recognise the problem to which my hon. Friend refers, which is one reason why we have been absolutely clear to would-be bidders for the prime contracts for the Work programme that we expect them not simply to build but maintain a network of smaller providers. Where they have such cash-flow problems, it will be the big guys with the capital who are expected to carry the burden. In addition, we have put in place the Merlin standard, a code of conduct for contractors that basically states that if they do not do right by smaller organisations, and if they treat them badly commercially, they can lose their contracts.