Oral Answers to Questions

Lord Maude of Horsham Excerpts

Wednesday 24th November 2010 Commons Chamber

[Stephen Phillips]

One of the problems with the delivery of public services in the past was the previous Government’s focus on delivery through either private contractors or existing local and central Government bodies. Many public sector workers were thus prevented from suggesting innovative ideas for the more efficient and cost-effective delivery of services. How will they now be encouraged to come forward with their ideas?

[Mr Maude]

We have already encouraged them to come forward with ideas. As part of the spending challenge that we launched in the summer, we invited public sector workers to come up with ideas to save money while protecting front-line services, and 65,000 of them did so, indicating a huge amount of pent-up frustration. We are now encouraging as many of them as possible who are interested not only in having ideas but in putting them into effect to form worker co-operatives to spin out of the public sector while continuing to deliver services.

[Jon Trickett (Hemsworth) (Lab)]

Given that there are strict procurement rules designed to demonstrate probity and value for money, and to avoid political interference, does the Minister think that it was wise for the Department for Education to hand out a £500,000 contract to the New Schools Network, an organisation led by a former associate of the Secretary of State? Was that contract fully compliant with all the relevant tendering regulations?

[Mr Maude]

I certainly do not know the details of that procurement, but I am confident that it would have followed all the rules to the letter.

[James Morris (Halesowen and Rowley Regis) (Con)]

2. What progress he has made on the establishment of public sector mutuals.

[Alun Cairns (Vale of Glamorgan) (Con)]

9. What progress he has made on establishing public sector mutuals.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

I announced last week that every Department will put in place “rights to provide” for public sector workers to take over the running of their services. The first wave of 12 pathfinder projects was launched in August this year. Leading organisations in the sector, including Local Partnerships, the Employee Ownership Association and Co-operatives UK, have come together to launch an information and support service for public sector workers interested in mutualisation. I hope that Members on both sides of the House will encourage and support these worker co-operatives.

[James Morris]

Many public sector organisations and employees in my constituency are interested in this idea. Will my right hon. Friend clarify whether he sees these policies applying more to local community organisations, or whether he envisages organisations on the scale of, say, NHS trusts being able to take on mutual status?

[Mr Maude]

I do not think that we should be prescriptive about how large or small, or how local or broad, these co-operatives could be. The pathfinders range enormously in size: I think that the smallest has only three potential employees or members, while the largest has 1,100, and it is possible to imagine them being even larger. I hope that groups of public sector workers from right across the sector will consider whether this could be a good route forward for them to take, and we will make it as easy as possible for them to take it.

[Alun Cairns]

What action is the Minister taking to protect the interests of innovative public sector workers who come up with exciting ideas for public sector mutuals, but whose senior management do not support them because it might not be in their personal interest to do so?

[Mr Maude]

It is possible that such a situation could come about, which is why we have encouraged the organisations that I mentioned to set up the information and support service for groups of public sector workers. We will also establish a challenge group, into which this service can feed thoughts and suggestions. If there are concerns that middle and senior managers are obstructing the right of public sector workers to form these co-operatives, I hope that people will feed them directly to us, through the challenge group, so that we can take the appropriate steps.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Does the Minister accept that there is a fundamental difference between a worker co-operative and an organisation that is fully mutual? Can he assure me that there will be a democratic process within public sector mutuals and that there will be a membership element to it?

[Mr Maude]

We do not have a dogmatic view about exactly what form these should take. I hope there will be considerable innovation. Some will want to form joint ventures with outside providers; in other entities, the Government or whatever other state agency is the commissioning body might want to retain a stake in the organisation. There will be strong democratic worker involvement in many of them, but the key element is a degree of ownership by the employees themselves.

[Lindsay Roy (Glenrothes) (Lab)]

May I probe the Minister further on what specific advice and support the Government are offering to organisations that wish to become mutuals or co-operatives?

[Mr Maude]

A range of advice is available. The 12 pathfinder projects are supported by organisations that are able to provide support—for example, Co-operatives UK and the John Lewis Partnership, which have enormous experience in this area. The advice and support service that these organisations are putting together will be able directly to channel support and advice from organisations such as the Employee Ownership Association. That should help organisations to find the right advice for the particular circumstances of a particular group of workers.

[Mr David Ruffley (Bury St Edmunds) (Con)]

3. What steps he is taking to increase the participation of voluntary and charitable bodies in bidding processes for Government contracts.

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[Mr David Amess (Southend West) (Con)]

6. What estimate he has made of the change in his Department’s spending on consultancy between 2009-10 and 2010-11.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The Government have cut the previous Government’s profligate spending on consultancy. In the first six months of this financial year, consulting spend by the Cabinet Office fell by 42% compared with the trajectory for the previous year. In the first six months of this year, consulting spend right across central Government fell by £350 million—or more than 50%, so it has more than halved—compared with the same period last year.

[Mr Amess]

The whole House should welcome that news. Will my right hon. Friend confirm that proper processes were proceeded with on the procurement of the DLA Piper contract?

[Mr Maude]

I can only assume that the proper processes were followed, because this happened under the previous Government, when the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) was Minister for the Cabinet Office. Any suggestions of a conflict of interest arising from the position of the Deputy Prime Minister’s wife are wholly misplaced, because the contract was placed before he was anywhere near government.

[Mr Denis MacShane (Rotherham) (Lab)]

I welcome the Minister’s statement on a reduction in consultancy fees, but hundreds of millions of pounds of taxpayers’ money is still being spent with these firms. Why does he not simply say no and get civil servants to do their jobs?

[Mr Maude]

I am grateful for the right hon. Gentleman’s robust support for this Government’s change in direction from that taken by the Government of whom he was a member. We believe that the incontinent use of consultants is demeaning for civil servants, who would, in many cases, like to be doing this work and are very capable of doing it. [Interruption.]

[Mr Speaker]

Order. Far too many private conversations are taking place in the Chamber. This is very discourteous and it should end.

[Jeremy Lefroy (Stafford) (Con)]

10. What recent progress he has made on his proposals for reform of the civil service compensation scheme.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The Superannuation Bill, which will impose caps on compensation payments and permit the reform of the civil service compensation scheme, is proceeding through the other place. I remain confident of being able to introduce a new scheme before the House rises.

[Claire Perry]

I thank the Minister for that reply. More than 30% of the work force in my constituency are employed by the public sector, given the heavy proportion of Army personnel and Ministry of Defence civil servants. Many of the MOD civil servants are members of the Public and Commercial Services union. Has it come to the table and joined the negotiations, or does it still stand alone?

[Mr Maude]

Sadly, despite repeated invitations, the PCS has not come forward with concrete proposals. The other five unions engaged constructively and their proposals formed the basis for the new scheme that we have developed. I am sorry that the PCS, which represents so many civil servants, particularly lower-paid civil servants, has not chosen to take part in a constructive spirit.

[Jeremy Lefroy]

In my right hon. Friend’s proposals for reforming the scheme, what account is he taking of the protection of the lowest paid staff in the civil service?

[Mr Maude]

That has been our principal concern in fashioning a new scheme. Civil servants’ average pay is lower than that in the private sector and the wider public sector, and it is right that they should be at the forefront of our concerns. The scheme that we have developed, in negotiation and consultation with five of the six unions, gives particular protection for them by deeming that the salary on which their compensation calculation is based is £23,000, so anyone paid less than that will have their compensation calculated on that basis.

[Dr Julian Huppert (Cambridge) (LD)]

8. How his Department plans to measure and promote well-being.