Carillion

Lord Berkeley Excerpts

Monday 15th January 2018 Lords Chamber

[Lord Berkeley (Lab)]

Can the Minister possibly explain something? In the last five years, contracts such as for the railways, HS2 and maybe others have become more and more complex. Therefore, the cost of responding to them can, I am told, be £10 million or £20 million. These companies are not making a lot of money, so if they lose a contract they have lost that £10 million or £20 million. This may happen to rail franchises as well. If this goes on, I worry about who will be next. It is getting more and more complex, the cost is greater and the companies do not really make that much profit to get a reward. I would be interested in the Minister’s comments.

[Lord Young of Cookham]

That goes slightly wider than the Statement. There are a few limited circumstances where the Government have undertaken to reimburse people bidding for a contract for the costs of tendering. As a general principle, the Government do not pay—nor does any customer pay—for people to produce a bid. Obviously, there would be consequences for public expenditure if we went down that road. At the moment, it is not such a deterrent that we are failing to get good competition for contracts. If it appeared to be a serious deterrent, we would look at it again, but at the moment I do not think that that is the case.