Capita Contract (Coventry)

Debate between Geoffrey Robinson and Kate Green

Tuesday 8th November 2016 Commons Chamber

[Mr Robinson]

My hon. Friend speaks pointedly to the issue. She is absolutely right in every respect, and I thoroughly agree with her. I would go a little further and say that the irony is that we have ended up with a terrible service that is costing more than the previous service ever would, because the company was not properly prepared, did not have a commitment to providing the service, and was unable to do so, and because of the competing and irreconcilable claims about short-term gains in the form of profits and illusory savings for the health service.

[Kate Green (Stretford and Urmston) (Lab)]

The situation in Coventry that my hon. Friend describes is also being experienced by GP practices in my constituency. GP practice managers have told me that the system was trialled in west Yorkshire and proved unsatisfactory, yet the contract was rolled out regardless. Does my hon. Friend not agree that that is a further irony?

[Mr Robinson]

Well, we learn something every day. I did not know that, and I am grateful to my hon. Friend for bringing it to my attention. That fact was not mentioned to me in Coventry, where people felt that the new system had been sprung on them completely without trial. When I was a Minister, I was a great supporter of the idea of trialling programmes. After all, we trialled them for a purpose, which was to see whether we were ready for them and whether the contractor was able to provide them. However, that seems to have been ignored in this instance. I shall say a few words at the end of my short contribution about learning lessons. This is not the first time we have been in this position. It is not as though we have suddenly discovered that contracts are not easily transferred, and there are lessons to be learned.

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[Mr Robinson]

I am so sorry, dear. I shall not live that one down in a hurry, but I thought I had detected a Scottish accent. I welcome my hon. Friend to the debate. She is the only one who did not tell me she would be participating tonight, Madam Deputy Speaker. I do apologise, but I cannot correct Hansard and I am afraid to say that the error will stand. I am sure she will forgive me, even if others may enjoy the mistake I have made.

There is no doubt that we are facing a major threat with this situation, and we hope we can stop it before we get to a major incident or catastrophe of some kind. That is the point of tonight’s debate. There is no doubt that this threat exists in Coventry, and we want to see what the Minister has to tell us about it. It is also clear from the interventions, which I have been pleased to take and to respond to, that this problem is widespread in England as a whole. As we have heard, in Bristol and in Manchester, and in the constituencies of those others who have made interventions, the problem is growing, not waning. Given the situation, we have to take steps.

Although we have risen to the challenge put out by Mr Paul Conroy, it is not enough for any Member just to speak up and expose this situation. That is a public duty we have as Members of this House, and the BBC has a duty as the national broadcaster to speak about these problems. We have all had experience of this. Not only have I had my business experience, but I have had experience of problems of this kind while in ministerial office and from others. Everybody in the country knows—it is no secret—that these privatisations, unless they are carefully controlled and well thought out, go wrong, so why do we keep doing them? This particular one involves Capita—it is in the hot seat tonight. It should know what this is about by now, as it has been through several of these and got them all wrong—Capita seems to learn nothing either. Ministers change, and it may be that the Minister knows about it but then gets moved. That is the nature of our appointments system, and I would not want to change anything there, but the civil servants who run these Departments should start to understand these things.

Contract management has many attractions to Ministers and to Government, who contract the problem out and lose direct responsibility for things. Everybody then heaves a sigh of relief and closes the file as if the thing is nothing more to do with them, but that is an illusion, because it comes back to bite them harder than it would have done had they kept the problem under their direct responsibility. It is an illusion to think that we can contract out. The responsibility for a contract remains with the person issuing that contract, and where it is for a major national public service, that contract must be taken seriously. What I did learn in the private sector is that the best companies spent more time preparing the bids for a contract, the assessments of the validity of the contracts and the validation process for a contract than they ever spent in negotiating the thing, which civil servants and Ministers often like to think they are good at. They say, “We had a hard-nosed negotiation on that one. We got them down from Y to X and we saved all this. It is great. We really screwed the private sector, didn’t we?” That is all a total illusion.

The most important thing when we do a contract of this complexity and of this kind is to get to the basis of the issues: to see who is really competent to take it on; who can make the savings that are being claimed in the real world; and who can do the other elements of the contract that have to come into play in a difficult situation competently. It is a question of competence.

[Kate Green]

My hon. Friend brings his extensive business experience to the debate about value for money when issuing private contracts. Does he agree that whatever the cost savings that may apparently be achieved under this contract, the cost to GPs and to practice managers of coping with the chaos, chasing records and trying to contact the help desk but failing to get through has been substantial? Does he also agree that those GP practices deserve compensation for the additional costs they have incurred?

[Mr Robinson]

I entirely agree with every single word my hon. Friend says. I would add, by way of a warning, that it is not a question of trying to punish the private sector by making it pay for this. Capita has to put the necessary resources into trying to correct the problem, and that must be its first priority. Something must give in the drive for profit, the drive to cut the costs of the services and the drive to improve the services. Those are irreconcilable objectives to start with, and in rectifying them the first thing that has to go is the drive for profit. Capita must realise that when it comes to put this right, it has to put the resources behind that. Compensation for GPs is important—I do not disagree with my hon. Friend for a minute on that—but I put it secondary to the provision of resources to get the contract right. I am sure that she would agree.

One other aspect of this shows an unacceptable, unpleasant and displeasing aspect of the privatisation process. It appears—I do not know this first hand—that Capita has turned to CitySprint to deliver these things. The effect of that is that we are employing drivers with no contracts, no sickness benefits and no breaks. This continual turning of the screw downwards is leading to a low-wage, low-productivity, low-output and impoverished economy. The workforce is suffering from that and it seems to be characteristic in many areas. For the public service to be involved in that process and almost to accelerate it, tightening that screw, is unacceptable.

This is another aspect of the commitment to negotiation and to the evaluation and validation process. The Government must learn to consider the quality of the service being provided and the quality of the means by which they intend to provide that service. CitySprint does not measure up to the standards we would expect from a good public sector contractor or employer.

To return to the main theme of tonight’s debate, what do we learn from this? The Government—principally the civil service, but Ministers, too—must learn to evaluate and validate the process of contracting out services. They cannot be driven by short-term savings, which are invariably illusory, but must consider the quality of the underlying contract. That is an art that must be learned, but I think it can be.

Finance (No. 3) Bill

Debate between Geoffrey Robinson and Kate Green

Wednesday 4th May 2011 Commons Chamber

[Ms Abbott]

That is an important intervention. This is a Government who know the price of everything and the value of nothing. Had they been willing to continue both halves of our policy—taking away tax relief for higher-income taxpayers and extending child care to two-year-olds for low-income families—in the long run, they would realise a cash benefit. I know from my own constituency that the earlier we can make an impact on people, the earlier we can give families support with properly funded child care, the sooner we can save the state money on education and a range of social issues. As I said, these are people who know the price of everything and the value of nothing.

Clause 35 is the shell of something that the outgoing Labour Government introduced, but it lacks the counterbalancing measures that we were going to introduce. It reflects a Government who do not understand that families are struggling in the current climate, and who do not understand the significance of those tax and welfare arrangements for women. They will pay a price for that lack of understanding in the local elections tomorrow, as middle England looks on the Conservative-led coalition and says, not that this is the most family-friendly Government ever but that this is the most middle-income-family-hostile Conservative-led Government ever.

[Kate Green (Stretford and Urmston) (Lab)]

I am pleased to speak in this stand part debate. I, too, want to express concerns about the proposals on child care, particularly the intention to change taxation.

It is not the change to taxation in relation to child care with which I wish to take issue but the broader context of funding and provision for child care, and the lost opportunity that the clause represents. Opposition Members accept that in straitened financial circumstances it is appropriate to look at the taxation system and tax breaks for higher earners and better-off families, and that it may be appropriate to rebalance the tax take and those tax breaks. However, we believe very strongly that there are better ways to redistribute—a word that is perhaps more popular among Opposition Members than Government Members—that money for the benefit of families and children and, in relation to clause 35, to achieve adequate child care provision.

[Mr Robinson]

Did my hon. Friend attend Prime Minister’s questions, given that she said that “redistribute” was a word heard more often among Opposition Members, and redistribution is perhaps a policy more often pursued by the Opposition? The Prime Minister ruled out redistribution almost unilaterally as a means by which we could help—

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[Kate Green]

I beg your pardon. This was not intended to be a general discourse on child poverty. There was a specific reference in the OECD report to the importance of child care, and it is specifically that element of the report that I feel is relevant to the clause, but I entirely accept that we are discussing the implications particularly of the provision to remove the tax break for higher earners. My point is what do we do with that money. That must be a financial consideration too.

[Mr Robinson]

Does my hon. Friend agree that a big opportunity is missed to extend more widely the provision of child care for two-year-olds? That is directly relevant to clause 35. In my constituency, for example, there are two child centres that already have facilities in place for that extension, which cannot be funded because the Government have decided not to pursue the policy that we had in mind. That could have been the basis for using those facilities, which now lie idle.

[Kate Green]

Indeed, and that does not make good fiscal sense. It cannot be sensible for public money to be invested but then not exploited for the benefit of the community, those families and, indeed, the economy. In the context of this Finance Bill debate, that surely has to be at the heart of our scrutiny of its clauses.

It is also important that we understand just how much is going on to make it even more challenging for parents to afford child care, and therefore why it was all the more important to use the funding that the tax break before us is saving in order to replace some of the funding that is being lost for the provision of child care.

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[Kate Green]

Of course, my right hon. Friend proposed a full review of the overall impact of the Government’s provisions on child care. Naturally, a full review would be informed by the fullest possible input from experts in the field, including child care professionals and providers, families and even children and young people. I certainly am not aware of any such consultation or discussion.

It would have been very useful if the Government had carried out such a consultation, because they would have begun to understand the impact of this provision not just on individual families but on the child care market. The impact of clause 35 on the child care market is just as important an issue because of the wide social and economic consequences that it will have for the Government. I am confident that a proper consultation at this point, taking account of the economic context and the other financial measures brought forward by the Government in the emergency Budget, the spending review and this year’s Budget, would produce useful input from experts and families on the pressures and stresses that would be faced, and on the consequences they would have, not least on the propensity to take, extend or remain in paid work. I think we can all agree that paid work will be key in getting our country out of recession, and into recovery and economic growth.

[Mr Robinson]

Listening to my hon. Friend, it is clear that she has an in-depth knowledge of this sector and of how child care can most effectively and cost-effectively be used. Reflecting on her experience, does she see any economic rationale or moral principle underlying the idea inherent in clause 35 that if only one parent is working and is in the higher rate tax bracket, they are not eligible for child care, but if two parents are working, they are? That seems to be a perverse incentive. All it will do—this is why some Labour Members had reservations about our Government’s policy, which led to clause 35 —is to put higher rate taxpayers in the same position with child care as they choose to be with comprehensive schools, whereby they do not bring their middle-class, extreme commitment to them. We will force them out of the national provision of child care and create social division as opposed to greater social cohesion.

[Kate Green]

I am confused by the Government’s direction of travel, specifically on the clause and on its interaction with their other choices about financially supporting parents to make or not to make decisions about child care, such as whether both parents in a couple go to work or whether one parent stays at home to care for the children—the Government’s preferred model that we seem to see in the development of universal credit and the different treatment of lone parents and parents in couple households, as well as in the differential support that the Government want to provide for child care that is targeted at the most vulnerable people. We might say that clause 35 is part of that package.

The Government have welcomed the work of my right hon. Friend the Member for Birkenhead (Mr Field), who suggested that bringing all children within the ambit of Sure Start, for example, is good for communities, families and children, so I am also confused about the philosophical direction of travel that the Government are taking in relation to child care. Indeed, I am forced to conclude that there is no philosophical direction of travel. There is entirely opportunistic fiscal decision making—grab a bit of money here, take a bit of money there, forget those families over there—that might save the Government some money in the short term, but it will be absolutely disastrous in the long term for our economic future and for children’s outcomes.

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[Kate Green]

That is right. There is plenty of evidence that parents, especially women, will always make financial sacrifices for their children’s well-being. We should be concerned by the fact that families will have to stagger under considerable financial pressure for the best of reasons—to keep their children in good-quality child care places. They know that that will help their children’s well-being, because they will be happy and enjoy their child care setting and the friendships and relationships that they make there. Let us not underestimate the importance of social interaction in child development, and good-quality child care can offer that.

Parents will do everything they possibly can in the interests of their child’s well-being and happiness. They will do everything to hold on to a good-quality child care place, even if they find themselves under financial pressure, possibly for a prolonged period. That has a knock-on effect elsewhere in the family budget, which might lead to the problems of debt, financial difficulty and stress that my hon. Friends have mentioned.

Financial stress among parents tends to feed back into children’s well-being, and children become aware of it in the household. They are aware of tensions and anxieties in their parents’ attitudes and behaviour. We have to understand how central good-quality, sustainable and stable child care is to children’s much wider well-being. That is why it is of concern that funding for that child care provision is being eaten away at by the provisions of clause 35.

There are opportunities to compensate for what is happening within the market. I particularly highlight the need to ensure that we maintain a supply of well-qualified child care workers, because pressures elsewhere in the public finances may mean that we see fewer good-quality child care workers coming through from training. Indeed, the loss of education maintenance allowance may have an impact on that. There are real concerns among parents about the nibbling away at the different pillars of the child care market.

When we ask parents what they worry about in balancing the family budget, they repeatedly highlight the high cost of good-quality child care. They do not want to buy poor-quality child care if it is at all possible to avoid it, because they are mindful of the value of getting their child into a high-quality, professionally run child care setting with excellent developmental and social activity, which the children can enjoy and in which they can flourish. Parents know that quality costs, and they do not want to compromise or cut corners when it comes to their children’s well-being, so they want to spend all they can on quality care.

[Mr Robinson]

Does my hon. Friend agree that one of the encouraging things that took place under the previous Government was that the quality aspect of Sure Start and child care provision was emphasised right from the beginning? Expansion was not allowed to go unchecked—it could only follow the existence of quality. That high quality has, on the whole, been maintained, but of course it is now under threat from the cuts.

[Kate Green]

We are worried about whether the quality of child care will be maintained as less funding becomes available in the child care market. Achieving quality is partly about ensuring that children from mixed backgrounds—