Capita Contract (Coventry)

Debate between Kate Green and Geoffrey Robinson

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.

--- Later in debate ---

[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.