Interserve: Provision of Public Services

Lord Stevenson of Balmacara Excerpts

Wednesday 12th December 2018 Lords Chamber

[Lord Young of Cookham]

On the first point, I made inquiries to Interserve about the suppliers: 90% are paid within 60 days or less. The Government have now insisted that, where they place new contracts with suppliers, there is a contingency plan to take effect if and when that contract runs into difficulties. Interserve, along with four other companies, is piloting this new arrangement, which was introduced post the problems with Carillion.

[Lord Stevenson of Balmacara (Lab)]

Does the Minister agree that one of the real problems is that more than 20% of government procurement now goes to a small number of strategic suppliers, a figure that has doubled since 2013? The top three suppliers are all having financial problems. After Carillion, a new system was introduced, which I think the Minister was referring to; rather surreally, it is called “living wills”. Has this been completed for Interserve—he mentioned a pilot—and can he reassure the House that no new contracts will be offered to Interserve until such time as the miracle of the new company emerges, and that public services delivered by Interserve will be continued without the cost penalty of £148 million which occurred after Carillion?

[Lord Young of Cookham]

The noble Lord is quite right. On 19 November, the Chancellor of the Duchy of Lancaster made a speech to the BSA outlining new arrangements. The noble Lord referred to some of them; we prefer to call them resolution plans rather than living wills. We have recently announced plans for all suppliers to draw up resolution plans in the unlikely event of a business failure, to ensure continuity of services and, where necessary, to enable another provider or the Government themselves to step in. Interserve has volunteered to lead the way as one of the first suppliers to design one of these resolution plans.