Carillion

Alex Sobel Excerpts

Thursday 12th July 2018 Commons Chamber

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I should start by putting on the record a mistake that I made in my speech in the previous debate, when I said that it was my 100th contribution to the House. It was actually my 99th contribution, so this is my 100th contribution to the House. I made a slight miscalculation.

As my hon. Friend and neighbour the Member for Leeds West (Rachel Reeves) said, the collapse of Carillion happened six months ago. I was here in the House on that day, six months on from my maiden speech. It is quite apt that a year on, we are back here to review the collapse of Carillion.

Let us make no mistake: the collapse of Carillion as a company was a complete disaster, putting at risk 420 public sector contracts, more than 1,400 jobs and tens of thousands of subcontractor jobs. It had contracts with Network Rail, the Ministry of Defence, the Ministry of Justice, HS2 and more. The Local Government Association counted 30 councils as being directly affected, and 220 schools. The ripple effects could be seen in every town, city and county in this country, and in such diverse areas as construction, maintenance, the armed forces and the NHS.

How can we restore public values in public procurement? We must use public money not only wisely but strategically, in the interest of communities and regions. UK plc commissions over £250 billion of goods and services, and we can use that to get the best deal for the country. There are lessons and recommendations for the future from the collapse. We should insist on in-house options being considered alongside outsourcing and commissioning, particularly within local government. When a service cannot feasibly be provided in-house, we should look at working together with local authorities. In Leeds, we set up Civic Enterprise Leeds, which uses municipal staff in areas like catering, cleaning and plant nurseries. We can use our £250 billion of buying power to ensure that every worker who is employed with a company using a Government contract receives the real living wage—as independently calculated by the Living Wage Foundation, not the supposed living wage brought forward by the Government.

Speaking as chair of the all-party parliamentary group on social enterprise, I know that there is some unfinished business on the Public Sector (Social Value) Act 2012. That is an Act without teeth. It asks for public bodies only to consider social value in commissioning. Instead, it should compel social value in commissioning. If we had that compulsion, then perhaps instances of commissioning risky businesses such as Carillion would never have happened. We can also look at how we score contracts and measure their social value so that we have the same standards across the piece. We cannot allow the risky behaviour that led to the collapse of Carillion to happen again.