Carillion and Public Sector Outsourcing

Bim Afolami Excerpts

Wednesday 24th January 2018 Commons Chamber

[Bim Afolami (Hitchin and Harpenden) (Con)]

In the time available to me, I will make a couple of points that have not yet been fully brought out in this debate.

My first point is about the action and place of KPMG, Carillion’s auditors. Roughly 40% of Carillion’s balance sheet is intangible assets, largely made up of goodwill. I am a member of the Public Accounts Committee, and I see fellow members in the Chamber; I hope we will get a chance to ask questions about why KPMG did not impair the goodwill on the balance sheet when it was fully aware of the group’s difficulties.

Indeed, many questions have been brought up on both sides of the House about using the private sector in outsourcing the delivery of public services in general. For what it is worth, it seems straightforward to me that using the private sector to provide public sector contracts works best when there is a proper market and competition in the service, so that we can get private sector dynamism and innovation—the things the Minister talked about in his speech. It also works best when the difference between a good service and a bad service, or between good performance and bad performance, can be fully measured on a quantifiable basis.

Will the Minister give a bit more detail on the Government’s view about the role of public and private sector interaction? It is incumbent on the Government to defend the principle of using private involvement to deliver services for the public, because the Opposition’s view is clear: they believe we should nationalise or renationalise everything. When we add up the £55 billion to nationalise energy, the £86 billion to nationalise water, the £5 billion to nationalise Royal Mail and the £30 billion to nationalise the private finance initiative, that is roughly the defence budget and the NHS budget combined—for ideological reasons alone.

I ask the Opposition these questions, if I am permitted to do so. Where is the evidence that nationalisation will mean that services are better or cheaper to run? Why would a state-run monopoly always inherently perform better than a competitive market in this instance? Why, indeed, is it better for the British taxpayer, rather than a private company, to take all the financial risk?

The Opposition claim that somehow the bad bankers and rich fat cats have got off scot-free. The shareholders have lost money, the bondholders have lost money, the bankers have lost money and the British taxpayer—

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. I call Louise Ellman.

[Bim Afolami]

The British taxpayer—

[Mr Deputy Speaker]

Order. Mr Afolami, please let us not test the patience of the House. A lot of people want to speak.