Capita

Lord Hunt of Kings Heath Excerpts

Thursday 1st February 2018 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the Minister for repeating the Answer. Clearly, this is a matter of concern in the light of the failure of Carillion. The Minister said that the Government do not believe that any of their strategic suppliers are in a comparable position, including Capita. I wonder whether he can tell me what risk assessments have been undertaken and whether the Government will publish their criteria? Can he also say which contracts the Government are in the process of considering granting to Capita and its offshoots at the moment? Has a Crown representative been appointed to the board of Capita?

I understand that Capita was given 154 contracts last year, and that only last week, in the light of the Carillion collapse, contracts were being brokered to Capita, even though the firm is clearly facing challenges. That given, is the Minister really assured that the current outsourcing programme and restriction, essentially, of contracts to a very small number of companies does not deserve a fundamental review? Can he give assurances about the workforce? Is he confident of the viability of Capita’s pension scheme? He will know that Capita runs a lot of public sector pension schemes, including Teachers Assurance; I remind the House that my wife is a teacher. Are the Government confident that, in the event of Capita failing, the pension schemes that it runs will not be affected?

Finally, I want to ask the Minister about the impact on SMEs—and I should declare that my stepson and brother-in-law both run SMEs that contract for government contracts. The Minister will know that many SMEs were badly affected by Carillion’s collapse. I looked at the study published by the NAO last year. It showed that, partly because of the cuts in departments’ commercial capacity, but more generally because departments would prefer to contract with a limited number of large suppliers, SMEs will essentially get contracts only as part of a supply chain managed by the prime contractor. Given that SMEs can be particularly vulnerable in those circumstances, I wonder whether the Government felt that they responded adequately to the NAO report and whether they are changing their procurement practices.