Public Services: Private Sector Companies

Debate between Lord Wallace of Saltaire and Lord Sugar

Monday 28th October 2013 Lords Chamber

[Lord Wallace of Saltaire]

My Lords, I wish that every potential risk was clear before one ever signed a contract, as that is part of the problem. The Government are aware that part of the problem with public procurement is that it has proved easier to contract with very large-scale providers which then very often subcontract to other suppliers. We are moving towards the target of 25% of contracts going to small and medium-sized suppliers so that there are direct relations with those who are actually on the ground providing the service in the regions and the localities. That is one of the things that we hope will improve the quality.

[Lord Sugar (Lab)]

My Lords, does the Minister agree that the original concept of hiring commercial enterprise to conduct the business of the Government was meant to gain better efficiency and value for money? Does he agree that this has failed in the sense that most of these private contractors actually spend most of their time enhancing their profit margins instead of looking after the service that they are supposed to be providing? Serco, as he has already mentioned, is the classic example where, I believe, there are allegations of fraudulent activities.

[Lord Wallace of Saltaire]

My Lords, in the case of Serco, the noble Lord will have seen that a number of senior executives have resigned in recent weeks. We welcome that and see it as a positive first step in the process of corporate renewal. Across the board, however, I am not sure that I would wish to blacken every company providing services for the state in the way that the noble Lord has perhaps suggested.