Lord Spellar
Main Page: Lord Spellar (Labour - Life peer)Department Debates - View all Lord Spellar's debates with the Cabinet Office
(6 years, 10 months ago)
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Oliver Dowden
Yes, my hon. Friend is absolutely correct. That is why I, and we as a Government, welcome the fact that the FRC is looking into the four major accountancy firms and seeing what lessons we need to learn. Of course we will respond to that and act appropriately.
John Spellar (Warley) (Lab)
May I bring the Minister back to the core issue, which is that there are two separate but linked problems: the business model and the performance of these companies? Like Carillion, Capita seems to be part of the over-concentrated, over-leveraged, dividend-and-bonus-exploiting culture that relies on the state to bail out failure. Capita incompetence is only too clear from its lamentable performance on the recruitment contract for the armed services. When will this Government finally get a grip?
Oliver Dowden
Behind the right hon. Gentleman’s question is an important point about the diversity of suppliers in this market. We do need to look to diversify further. That is why, for example, we have set a target that 33% of all our Government contracting should be with small and medium-sized enterprises—precisely to ensure that we have that greater diversity. On his point about state bail-out, we have done precisely the opposite of a state bail-out. Carillion went into liquidation, so its shareholders paid the price; because Capita has decided to stop paying dividends, its shareholders are paying the price. Therefore, it is not correct to say that the state is bailing them out in this situation.