Oral Answers to Questions

Lord Maude of Horsham Excerpts

Wednesday 27th April 2011 Commons Chamber

[Amber Rudd (Hastings and Rye) (Con)]

8. What steps he is taking to increase access to Government contracts for small and medium-sized enterprises.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

On 11 February, the Prime Minister and I announced a package of measures, including launching our Contracts Finder website, eliminating burdensome and unnecessary pre-qualification requirements from the procurement process, and introducing new ways to allow small and medium-sized enterprises to challenge contract procedures when they operate in a way that makes life difficult for them. In addition, from the end of April, all Departments will be required to publish a set of specific, targeted actions to increase their business with SMEs.

[Robert Halfon]

Will the Minister set out what steps he is taking to increase access to public contracts for smaller, grass-roots charities as well? Does he agree that for the big society to work properly, we need to build the little society too?

[Mr Maude]

My hon. Friend makes the point very well. All the measures that we are taking to enable small and medium-sized businesses to participate more fully in Government contracts will, of course, apply to the voluntary and charitable sector as well. Indeed, it is estimated that 35% to 40% of the value of the contracts recently awarded under the Department for Work and Pensions Work programme will go to organisations from the voluntary and charitable sector. We believe that that will be worth in excess of £100 million a year.

[Julian Smith]

Will the Minister take this opportunity to name and shame those Government Departments that are doing well in opening up to small businesses and those that are currently doing less well?

[Mr Maude]

I certainly do not want to shame the ones that are doing well. We have found a number of examples of procurement processes that are not meeting the new requirements. For example, Durham police recently issued an invitation to tender for a £50,000 leadership training contract. The pre-qualification questionnaire alone was 38 pages long and contained a request for 163 separate items of information plus a security vetting form. That is unacceptable, because it causes many smaller businesses to lose the will to live, and they simply do not apply.

[Mark Pawsey]

I am the former owner of a small business supplying products to the public sector. When applying to be added to a new tender list, I was often frustrated by the amount of red tape required. Will the Minister confirm that in future fewer company policies and statements will need to be provided to participate in the tendering process?

[Mr Maude]

We want to strip away all that nonsense. Under the last Government, there were 6,000 pages of guidance for some kinds of procurements. It is not surprising that smaller businesses just did not bother to apply; they knew that they were going to be excluded. There were turnover requirements and requirements for a track record of doing exactly that kind of work. The truth is that that is very bad for small businesses and we want to make things much better.

[Amber Rudd]

During a recent meeting, small and medium-sized enterprises in Hastings raised with me the difficulties not just of the paperwork, but of getting the capital requirements in this climate for procurement contracts with the Government. Will the Minister reassure us that that aspect will also be considered, as we try to make it easier for small and medium-sized enterprises to engage with the Government?

[Mr Maude]

My hon. Friend makes a good point. We are concerned that the working capital requirements should be proportionate and sensible and that the turnover requirements should be proportionate to the needs of the contract. All ridiculous requirements such as those that existed under the old regime—for example, always requiring three years of audited accounts, which automatically excluded huge numbers of new and innovative businesses—will be swept away.

[Mr Denis MacShane (Rotherham) (Lab)]

Does the Minister accept the macro-problem? In south Yorkshire, a large number of private sector enterprises depend in whole or in part on public sector contracts. So much demand is being taken out of the economy, because of the deficit reduction plans, that such businesses face serious challenges. Does he accept that small enterprises face a real problem because of his Government’s macro-economic policy?

[Mr Maude]

I acknowledge that there is a problem—and it is one caused by the Government of whom the right hon. Gentleman was a member and supported. They left Britain with the biggest budget deficit in the developed world. I am waiting for the right hon. Gentleman to apologise for that; that would be timely.

[Tessa Jowell (Dulwich and West Norwood) (Lab)]

In looking at an increased role for small and medium-sized businesses, will the Minister let the House know when his Department will publish the public services reform White Paper? It was commissioned last October to be published early in the new year. January became February, and the Prime Minister said that it was only two weeks away. Two weeks have become more than two months and there is still no sign of the White Paper. Is that the Government’s biggest pause, or have they just given up on public services?

[Mr Maude]

I am thrilled that the right hon. Lady is waiting for the document with such obvious excitement, and I can assure her that it will be well worth waiting for. This Government are committed to breaking up the old public sector monopolies and providing diversity, particularly with the growth of public service mutuals. The document will be published later this summer, and I can promise her that she will be delighted with it.

[Lindsay Roy (Glenrothes) (Lab)]

2. Whether private sector organisations will be able to make applications to the big society bank.

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[Andrew Selous (South West Bedfordshire) (Con)]

10. What recent progress his Department has made on establishing public sector mutuals.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

In August last year, we launched a pathfinder programme of 21 groups of public sector workers setting up mutuals with the help of mentors. In addition, millions of public sector employees will be given rights to provide public services as mutuals, such as those recently announced in the national health service. That will free up public sector workers to innovate and provide better and more efficient services. We have committed to funding a £10 million support programme to help such new organisations get off the ground. [Interruption.]

[Andrew Selous]

Given the evidence that productivity and efficiency increase dramatically when staff are given a role in shaping services, is not the scaremongering about the proposals on mutuals unhelpful to users, taxpayers and the staff concerned?

[Mr Maude]

Anyone who visits the pathfinder mutuals, talks to the staff—now co-owners—of those organisations and sees the excitement with which they are pursuing their new vocation will give up on the scaremongering. This is a profoundly important movement that should command support from throughout the House.

[Mr Peter Bone (Wellingborough) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

I have overall responsibility for the work of the Cabinet Office, while the Deputy Prime Minister has specific responsibility for the Government’s programme of political and constitutional reform.

[Mr Bone]

Last week on the doorstep in Wellingborough, the hot issue was the responsibility of the Cabinet Office for implementing constitutional reform. Why is it that, under the alternative vote, British National party votes and Socialist Workers party votes in my constituency would be counted twice, but Tory votes would be counted only once?

[Mr Maude]

My hon. Friend makes a powerful point. That is no doubt why, I gather, rather more than half of Labour MPs now support first past the post.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

T3. Staff at My Civil Service Pension are concerned that plans to turn the organisation into a mutual are a step towards privatisation. The Minister said in a meeting with union representatives in March that he would not act without the broad consent of the work force. Will he tell us how he has consulted those staff and whether he yet has that consent?

[Mr Maude]

We are moving down the path of freeing up My Civil Service Pension so that it can administer in the most efficient way civil service pensions to the 1.5 million members who are dependent on them. We are exploring different ways in which that might be configured, but crucially, employees will have a meaningful stake in that entity going forward.

[Julian Smith (Skipton and Ripon) (Con)]

T2. Fifty business leaders have got together to offer free mentoring advice to small and new business start-ups in my constituency. Will the big society Minister meet me to see how we can roll out that initiative beyond north Yorkshire?

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[John Mann (Bassetlaw) (Lab)]

T5. Which Cabinet Office conferencing, translation and interpreting services have not been put out to tender for small businesses to win, and why not?

[Mr Maude]

I have not the slightest idea, but I shall find out.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

T4. When can the House expect the Public Bodies Bill? What will be in the Bill, and can we revert to the normal practice, whereby such controversial Bills begin in this House and not in the other place?

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[John Woodcock (Barrow and Furness) (Lab /Co-op)]

T10. Why is the public sector mutual fund late in going out to tender, and when will it be ready to accept bids?

[Mr Maude]

We will announce details in due course. It would have been easy to go ahead and just flash money around, but there is not much money thanks to the legacy of the Government whom the hon. Gentleman supported. We need to ensure that the money is husbanded and spent wisely, for example by providing advice for groups of public sector workers, of whom there are very many who want to form mutuals, and by ensuring that the advice is made available to as many as possible.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

In his discussions about public sector contracts for small business, will my right hon. Friend talk to the Ministry of Defence about its habit of bundling together contracts for multiple services, which means that an expert calibration firm in my constituency cannot offer the specialised service unless it also offers paperclips and toilet rolls?

[Mr Maude]

My right hon. Friend makes a good point, and I will take it up. It is exactly how contracts are bundled up and procurements are undertaken that has squeezed out so many really effective small businesses from the Government market. That is exactly what we now want to change.

The Prime Minister was asked—