Oral Answers to Questions

Debate between Christian Matheson and Oliver Dowden

Thursday 4th February 2021 Commons Chamber

[Oliver Dowden]

May I begin by welcoming the hon. Gentleman to his place and, on behalf of the whole Conservative party, wishing the hon. Member for Cardiff Central (Jo Stevens) a swift recovery? I know that she is doing very well.

The hon. Gentleman mentions press freedoms. I have been working closely with my right hon. Friend the Minister for Media. We will shortly be publishing the material to which the hon. Gentleman refers—that is to say, the action plan to provide safety for journalists. That will be coming forth very shortly.

[Christian Matheson]

I thank the Secretary of State for his kind words about my hon. Friend the Member for Cardiff Central (Jo Stevens); she will be watching and will be very grateful.

Ofcom is to become a super-regulator with a huge breadth of responsibilities and all their technical complexities, particularly in the digital sphere: online harms and safety, the BBC and broadcasting in general, security of telecoms infrastructure against hostile threats, broadband, and the Post Office. Does the Secretary of State agree that the new chair of Ofcom should have at least some knowledge of and experience in those complex sectors in order to be appointed?

[Oliver Dowden]

As the hon. Gentleman will know, the position of Ofcom chair is vacant. I can update the House that I will shortly be launching the competition for that new role, and a number of excellent candidates have already expressed an interest.

Oral Answers to Questions

Debate between Christian Matheson and Oliver Dowden

Wednesday 23rd October 2019 Commons Chamber

[Christian Matheson (City of Chester) (Lab)]

Last week, the Government threw the DUP and every Unionist in Northern Ireland under a bus—presumably the bus with lies on the side about NHS funding and the EU that the Prime Minister spent so much of 2016 riding around the country in—providing the SNP with sackfuls of ammunition for its campaign promoting a referendum on independence. Why are the Government more concerned about Brexit than they are about maintaining the integrity of the United Kingdom?

[Oliver Dowden]

The Government remain committed to maintaining the unity of our United Kingdom. That is why the Prime Minister has negotiated a deal that enables Northern Ireland to leave the customs union alongside the rest of the United Kingdom and has a consent mechanism for the arrangements included in that treaty.

Civil Service Compensation Scheme

Debate between Christian Matheson and Oliver Dowden

Tuesday 19th March 2019 Westminster Hall

[Oliver Dowden]

I should say from the outset that no decision has been taken or agreed by permanent secretaries. There is a very clear process for this, which is that for delegated pay, which is that for civil servants below senior civil service level, the framework is set by the Cabinet Office in conjunction with the Treasury and then it is up to each individual Department to make individual decisions.

On the point about co-ordination, the Chancellor of the Duchy of Lancaster and I want to ensure that we have a proper process of engagement with the principal trade unions as we set the delegated framework, but it is important to say that that is not a pay negotiation. We need to understand their position, but the individual pay negotiation must be done by each individual Department. I think having each Department make its individual determination is the right approach, but I am keen to ensure that we engage with the trade unions and others as we consider the overall approach to delegated pay. As I understand it, correspondence is ongoing with the trade unions on the best way of doing that.

Beyond the delegated framework, there is also potential for further efficiency savings to allow for higher pay rises. I have signed them off as a responsible Minister; for example, the Foreign Office recently agreed a two-year pay deal funded by efficiencies, allowing for a 6.4% average uplift for non-SCS staff. It is possible, through smarter ways of working, to fund higher pay awards. I hope that gives hon. Members an overall sense of the approach the Government take to pay.

[Christian Matheson]

Can the Minister describe some of the smarter ways of working that helped to encourage the signing off of that particular pay rise?

Interserve

Debate between Christian Matheson and Oliver Dowden

Monday 18th March 2019 Commons Chamber

[Christian Matheson (City of Chester) (Lab)]

(Urgent Question): To ask the Minister for the Cabinet Office if he will make a statement on the major Government supplier Interserve entering administration.

[The Parliamentary Secretary, Cabinet Office (Oliver Dowden)]

I have been asked to respond on behalf of my colleague, the Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster.

As I have said repeatedly to the House, the Government are not responsible for decisions taken by companies in the private sector. What the Government are responsible for is the continued delivery of public services, and I assure the House that has happened in this case. Schools continue to be cleaned, roads continue to be repaired and improved, and services in Government buildings continue to run as normal.

I reassure hon. Members that nothing in Interserve’s refinancing will affect the delivery of public services. No staff have lost jobs and no pensions have been affected. The company has executed a contingency plan that it had prudently developed in case shareholders rejected the proposed refinancing deal. This was a pre-agreed transaction, known as a “pre-pack” administration. Hundreds of pre-pack administrations are performed every year, including by well-known companies. It is a well-established and normal process, typically used when a shareholder is blocking a business’s restructuring.

To be clear, the operating companies responsible for the delivery of all Interserve’s services, public and private, have remained wholly unaffected. As a result of shareholders failing to reach agreement on the proposed refinancing, the parent company—Interserve plc—was put into administration. The operating companies, the companies that actually deliver the services, were then almost immediately purchased by a new company, Interserve Group Ltd.

This new company has been considerably strengthened. It now has a much stronger balance sheet, £110 million of additional cash and a greatly reduced debt burden. It is in taxpayers’ interest to have a well-financed and stable group of suppliers, so this has been a positive outcome for the company’s customers, supply chain and employees.

I am clear on the benefits of outsourcing. Working with the private sector allows us to access expertise and economies of scale that can help us to deliver more innovative public services at better value for the taxpayer. As I have said before, this Government are driven by what works, not by political dogma, and the evidence is clear. Research shows that outsourcing delivers savings of between 20% and 30% compared with bringing services in-house.

However, we recognise there is more we can do to improve how we outsource. We have learned from the collapse of Carillion, and we are implementing changes to our procurement and commercial processes, as the Chancellor of the Duchy of Lancaster and I have set out in several speeches. For example, we have published “The Outsourcing Playbook”, which was developed with industry and outlines a range of measures designed to ensure that outsourcing projects succeed.

We are now asking suppliers of critical contracts to provide detailed information to help to mitigate any risk to service delivery in the rare event of corporate failure. These “living wills” are now being piloted by five strategic suppliers, including Interserve. We are taking action on prompt payment, including excluding suppliers from Government procurement if they cannot demonstrate prompt payment to their supply chain. We are also taking steps on embedding social value in Government procurement, and I launched the consultation last week.

These sensible and prudent steps will help us to ensure that we get procurement right first time, that we identify and remedy financial risks to Government services and that we manage taxpayers’ money in a way that achieves the best value for money. Indeed, the fact we had ongoing engagement with Interserve throughout this process, through our Crown representatives and the Government commercial function, demonstrates the strength of the Government’s approach to managing our strategic suppliers.

Once again, although the corporate structure of Interserve changed on Friday, I reassure all hon. Members that public service delivery remains wholly unchanged. No jobs have been lost, no pensions have been affected and no services have been disrupted.

[Christian Matheson]

Mr Deputy Speaker, would you pass on my thanks to Mr Speaker for granting this urgent question?

The slow-motion car crash that is the Interserve crisis seems finally to have come to a dreadful conclusion. Let us first remember the company’s 45,000 employees and hundreds of small subcontractors living with uncertainty today. In June 2018 the Cabinet Office gave Interserve a red rating, which indicates:

“Significant material concerns for Cabinet Office Commercial Relationships Board to consider High Risk designation.”

That followed profit warnings issued over the previous year. Despite this, Interserve continued to receive public sector contracts worth hundreds of millions of pounds, including from central Government—a situation remarkably similar to the problems with Carillion just over a year ago. According to the GMB union, the largest of those contracts is worth £66.7 million and was awarded by the Foreign and Commonwealth Office in August.

What checks did the Government make to ensure the contracts they were signing were being given to a company capable of delivering them? Can the Minister also confirm reports that his Department drew up secret plans to nationalise some of these contracts—in other words, to take them back in-house—should Interserve fail? Incidentally, we would support such plans in principle. If such plans were drawn up, why did contracts continue to be awarded to a company that Ministers knew was struggling and was possibly unable to fulfil them?

Will Ministers now activate those plans? If not, what steps will the Government take to ensure continuity of services, especially if parts of Interserve’s business are sold off? Among many other things, Interserve builds motorway junctions, provides maintenance on military bases and runs probation services—badly in the last case, even by the Government’s own admission.

Does the Minister agree this company has simply been hoovering up contracts willy-nilly, regardless of expertise and clearly without regard to the financial implications of such a strategy? Does he agree that Ministers have allowed this to happen based on a false economy of impossible contract prices that, as in the case of Carillion, brought down the whole company and much more around it? Does the Minister accept that the Government’s policy of focusing on just a few major contractors owned by big financial institutions has not only squeezed smaller UK businesses from the scene, but driven the risk to an unacceptable level, at great cost to the taxpayer? The Conservatives’ claim that outsourcing provides value for money has again been shown up for the ideological baloney that it really is. Finally, will the Minister confirm that the Government are looking at all major suppliers to ensure that their finances and ability to deliver contracts are watertight? After Carillion, and now Interserve, the public are entitled to ask who is next.

[Oliver Dowden]

I thank the hon. Gentleman for his questions. As he knows, I have great respect for him, but he rather overstates the case in respect of Interserve. Let me go through some of the points he raised. First, he asked whether checks were performed on the company before contracts were awarded. Yes, of course those checks were performed.

Rather than trading rhetoric around, let us look at the facts. Interserve issued a profit warning in September 2017, after which no major central Government contracts were awarded to Interserve until it completed its refinancing in April 2018. Since that refinancing, two such contracts have been awarded: one in August 2018 for facilities management for the Foreign and Commonwealth Office in Europe, where Interserve was the incumbent supplier, so it was essentially a continuation of that service; and secondly, a contract with Highways England was awarded in September 2018 for a £12 million bridge over the A63. Of course, contracts are being awarded across the wider public sector but, in respect of the contracts awarded by central Government and for which Ministers are responsible, those are the major contracts that were awarded in the relevant period.

The hon. Gentleman asked whether we will nationalise the company. The point here—indeed, the point about all the contingency—is that there is no need to invoke the contingency. Contingency is used if a company collapses —if it goes into liquidation—whereas in this case the companies that deliver services for the Government are entirely unaffected. All that has changed is the ownership by the parent company. Indeed, what has changed is that the company has got stronger—it has £100 million more on its balance sheets and fewer debts because of the restructuring—so there is absolutely no need to invoke the contingency preparation.

The hon. Gentleman talked about a few major companies winning Government contracts; let me tell him the figures: more than 5,000 companies bid for and win Government contracts. We have set a demanding target of a third of all business going to small and medium-sized enterprises.

If the hon. Gentleman is worried about contracts going to Interserve, perhaps he should speak to a few of his colleagues. For example, a £10 million contract was awarded to Interserve in June 2018—by Labour-run Southwark Council. Perhaps the hon. Gentleman could have a word with Labour-run Wales, which awarded a contract to Interserve just in December.

I really have to say to the hon. Gentleman that at this time when employers, suppliers and public service workers are seeking calm heads and reassurance, we are absolutely clear that they are completely reassured. I would have thought the hon. Gentleman would have done better.

Oral Answers to Questions

Debate between Christian Matheson and Oliver Dowden

Wednesday 6th February 2019 Commons Chamber

[Oliver Dowden]

I thank the hon. Gentleman for his question. I hope that he will acknowledge the progress that this Government have made in introducing a national living wage for the first time. The effect of that national living wage, which will rise by almost 5% this April, is that an average person working full time on the national living wage will be almost £3,000 a year better off—and that is not counting the massive increase in the personal allowance that also cuts their taxes.

[Christian Matheson (City of Chester) (Lab)]

Of course, it is not a living wage; it is just a minimum wage re-badged.

The Government have repeatedly insisted that Interserve’s

“current intentions are a matter for the company itself.”

However, it emerged last night that Cabinet Office officials were playing an active role in talks to negotiate a rescue package. It seems that the Government cannot make up their mind whether they have a responsibility to intervene and protect public services and jobs or whether to let the market decide, so which is it?

[Oliver Dowden]

The Government are absolutely clear that their principal task is to ensure the continued delivery of public services, and that is what we have ensured in respect of our strategic suppliers. The hon. Gentleman raises the case of Interserve. I welcome this morning’s announcement, which I am sure he has seen, which demonstrates that it is making good progress towards refinancing, but we are clear that that is a matter between the lenders to that company and the company itself. The Government are not a party to those negotiations.

Oral Answers to Questions

Debate between Christian Matheson and Oliver Dowden

Wednesday 27th June 2018 Commons Chamber

[Oliver Dowden]

Yes, my hon. Friend is absolutely right, and we will be launching a consultation shortly to deal with exactly that point.

[Christian Matheson (City of Chester) (Lab)]

Edward Timpson was appointed chair of the Children and Family Court Advisory and Support Service and of the new Child Safeguarding Practice Review Panel. Andrew Tyrie has been appointed chair of the Competition and Markets Authority. Baroness Stowell was appointed chair of the Charity Commission. They are all probably worthy appointments individually, but a clear pattern is emerging, so will the Minister confirm that the main criteria now for senior public appointments is that someone has to be a former Tory MP or Cabinet Minister?

[Oliver Dowden]

As ever, the hon. Gentleman makes a rhetorical flourish. Sadly, the facts just do not bear it out. The Government’s code for public appointments is clear that political activity is neither a judgment of merit nor a bar to becoming a political appointee. If he looks at the statistics, he will see that of 1,000 candidates in the past year—2016-17—4.9% were Conservative and 4.8% were Labour.

Public Sector Pay Policy

Debate between Christian Matheson and Oliver Dowden

Tuesday 5th June 2018 Westminster Hall

[The Parliamentary Secretary, Cabinet Office (Oliver Dowden)]

It is a pleasure to serve under your chairmanship, Mr Owen. I congratulate the hon. Member for Glasgow South West (Chris Stephens) on securing the debate. I know that, in his role as chair of the PCS union parliamentary group, he takes a keen interest in matters relating to the civil service—as do I, as a responsible Minister.

This has been a valuable debate, with intelligent contributions from most—not all—hon. Members. I think I will be able to address most of those points in my speech, so if hon. Members will forgive me, I will not go into detail at the beginning. However, I shall try to cover any remaining points at the end of my remarks, because I am conscious of how much time we have left.

The starting point has to be the role of civil servants. I know from my experience—both recently as a Cabinet Office Minister and in the five years I spent in Downing Street as an adviser—the standard of our civil service. I have worked with some of the most genuinely committed, talented and hard-working public servants in our country, and I pay tribute to every one of them. At a time when our country faces many challenges, not least how we deliver Brexit, we can rely on our civil servants to help us. I see that every day in my role as a Minister, whether in the groundbreaking work of the Government Digital Service or the critical work of our civil contingencies team. Day in, day out, I see the tremendous quality of the work that they deliver.

The starting point for me and the Government is that all civil servants deserve to be rewarded for the work that they do, so that we can attract the brightest and the best. At the same time, that has to be balanced against the wider constraints faced by our public finances. I will set out some context. The shadow Minister spoke about who caused this situation, so let us remember. When we came into government in 2010, the UK had the largest deficit in its peacetime history. We were borrowing £1 for every £4 or £5 that we spent. Who caused that? It is quite clear: the last Labour Government. We had to deal with that legacy.

In that context, I make no bones about the fact that we had to take some very difficult decisions. As has been said by many hon. Members, including my hon. Friend the Member for Solihull (Julian Knight), one of those difficult decisions, given the proportion of public expenditure accounted for by public sector pay—about a quarter—was that public sector pay had to be restrained, which is why we introduced a pay freeze for the first two years of the Parliament, followed by the 1% pay cap.

[Christian Matheson]

I am most grateful to the Minister for giving way; I will only intervene once. If what he says is the case, can he explain how the last Labour Government were responsible for the crash of the sub-prime mortgage market in the United States, which caused the crash here?

[Oliver Dowden]

The problem was that the last Labour Government did not fix the roof while the sun was shining. We entered this situation as the least well prepared of any G7 country, so that when we faced those challenges, instead of having a robust fiscal situation, we were already borrowing.

Oral Answers to Questions

Debate between Christian Matheson and Oliver Dowden

Wednesday 16th May 2018 Commons Chamber

[Oliver Dowden]

I know that the right hon. Gentleman is very passionate about this issue. I can reassure him, rightly again, that we remain absolutely committed to getting the new hospital built as quickly as possible, and we are supporting the trust to achieve that while ensuring that taxpayers’ money is spent appropriately.

[Christian Matheson (City of Chester) (Lab)]

Although we warmly welcome moves to open up Government contracts to SMEs, the fact is that they are still being crowded out by big suppliers that regularly fail to deliver, including G4S with its youth custody provision; Capita with its failing Army recruitment contract, among many others; and, of course, Carillion. Will the Government introduce a new requirement that firms cannot bid for new Government contracts while they are still failing to meet quality standards on their existing public sector jobs?

[Oliver Dowden]

Individual contracting Departments clearly keep the performance of all contractors under review. The hon. Gentleman says that we should ensure that small businesses can bid for Government contracts. I announced a range of measures over Easter precisely to deal with that issue. Indeed, we have introduced a requirement for all subcontracting opportunities by principal contractors to be advertised on the Contracts Finder website, which gives SMEs a great chance to bid for work.

Capita

Debate between Christian Matheson and Oliver Dowden

Tuesday 24th April 2018 Commons Chamber

[Oliver Dowden]

I thank my hon. Friend for his question. He is absolutely right that what we discovered yesterday was that the rights issue is proceeding exactly as planned. In terms of the overall market, I have tried to be clear all along that suppliers should expect a decent rate of return—not an excessive rate of return, but one that allows them to run a profitable business, while ensuring that there are savings for the taxpayer. That is why we use private companies. It is not because of ideology; it is because they deliver savings to the taxpayer, which means more money to be spent on health, education and other public services.

[Christian Matheson (City of Chester) (Lab)]

May I thank you, Mr Speaker, for granting the urgent question and congratulate the right hon. Member for Twickenham (Sir Vince Cable) on securing it?

Capita is one of the strategic suppliers to the Government, providing services of particular strategic importance, yet, as we heard from its boss today, it had no strategy aside from mucking up the management of the dental register, leaving hundreds of dentists to stand idle; failing to maintain the primary care support service in England, which supervises GP and patient records; and failing on the Army recruitment contract, among many other failings. Members have been highlighting those and other failures to the Government over a period of years and will not be surprised at the latest news. I echo the call from the right hon. Member for Twickenham for the Minister to outline what contingency plans he has put in place to deal with a possible default on any one of those contracts.

The Government claim to be monitoring the situation and have a Crown representative in place, but do they even know what they are monitoring if they are not sure about the number of contracts Capita runs? I and other Members have asked for a list of Government contracts undertaken by Capita and have not been provided with one. Do the Government know how many contracts Capita undertakes across central Government and, indeed, across local government? Will they publish a list of all those contracts?

Will the Minister confirm what improvement plans have been agreed with Capita since its string of profit warnings or yesterday’s refinancing? What quality thresholds will be built into Government contracts to ensure that Capita and other privateers reach an acceptable standard of service delivery, particularly in view of their precarious financial situation?

This latest episode in the saga of outsourcing scandals again shows the public that the Government’s commitment to this practice is nothing more than ideological. Despite the danger to public services, along with the treats to Capita’s staff and subcontractors, the Government will not shift from their view that these giant multinational firms should make huge profits from the public purse, until the point when they fold, taking our public services with them. The Government act as though these firms should be allowed to privatise the profit of the public sector, while nationalising the risk to the British public. We need a change in direction now. Will the Minister use this latest episode involving Capita to finally introduce a presumption in favour of in-house provision of public services?

[Oliver Dowden]

I have a great deal of respect for the hon. Gentleman, and he could have done a little better than some of the overblown rhetoric in his contribution. Yesterday’s announcement was entirely in line with market expectations.

The hon. Gentleman asks what is being done in relation to strategy. The strategy has been set out clearly by the new chief executive. It includes a revised divisional structure and executive team to better manage and enhance services and client value, as well as a rights issue, which, as I said, has proceeded as planned and will materially improve the company’s financial stability, thereby reducing its debt, enabling it to invest in core services, allowing it to reduce the pensions deficit, which it has done by £21 million—I hope all Members will welcome that fact—and allowing it to reduce its cost base.

The hon. Gentleman asks what contingency planning the Government are doing. As I have said, we undertake appropriate contingency planning in respect of all our strategic suppliers. I take a close personal interest in that as a Minister, and I know that the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office takes a similarly close interest in it.

The hon. Gentleman asks about contracts that have been awarded to Capita, so let me give him the numbers. Of the current major central Government contracts that have been awarded to Capita, nine were awarded under Labour, which is 20%, 24 were awarded under the coalition, which is about 53%, and 12 were awarded under the current Conservative Government, which is about 27%. This is not a party issue; all three formations of government have decided to use outsourcing companies.

To conclude, I had thought that the hon. Gentleman would agree with the words of a previous Labour leader and somebody who many regarded as being, at least in some senses, a successful leader. Gordon Brown, hardly a rabid right-winger, said:

“It simply would not have been possible to build or refurbish such a number of schools and hospitals without using the PFI model.”—[Official Report, 14 November 2007; Vol. 467, c. 665.]

That was a sensible Labour Government who were committed to delivering public services. We do not see such sense from the current Labour party, I am afraid.