Public Services: Private Sector Companies

Debate between Lord Wallace of Saltaire and Lord Haskel

Monday 28th October 2013 Lords Chamber

[Lord Haskel]

To ask Her Majesty’s Government what assessment they have made of the reliability and value for money of public services provided by private companies.

[Lord Wallace of Saltaire (LD)]

My Lords, the Government’s overarching principle in procuring public services in the private sector is to secure the best quality and value for money for the taxpayer over the life of the contract. On coming to power in 2010, the Government found that public sector procurement was fragmented, bureaucratic, protracted and expensive, both for bidders and for procurers. The procurement reforms we have introduced since 2010 have made the way we do business more competitive, more transparent, better value and far simpler than before.

[Lord Haskel (Lab)]

Does the Minister agree with me that blaming the past for our problems in the present does not actually get us very far? Does he also agree with virtually everybody else that we are being ripped off by these companies, not only on energy prices but also in the Work Programme and in health assessments and rail fares? We learnt from the Financial Times only this morning that the Government are concerned that we are being ripped off by the water companies. What steps are the Government taking to rebuild public trust, and hold down the cost of living, by giving social obligations a higher priority and encouraging an attitude of public service?

Local Audit and Accountability Bill [HL]

Debate between Lord Wallace of Saltaire and Lord Haskel

Wednesday 19th June 2013 Grand Committee

[The Deputy Chairman of Committees (Lord Haskel)]

I have to inform your Lordships that if Amendment 14BB is agreed I cannot call Amendment 14BBA on the supplementary list because of pre-emption.

[Lord Wallace of Saltaire]

My Lords, we are, in a sense, continuing the previous debate. Before I directly address the amendment in terms of defining “independent”, I shall speak with another hat on. As noble Lords will know, I speak for the Cabinet Office on issues of civil society and I am struck by the fact that the largest single part of the population that is becoming more active in all civil society activities is the fit retired. There is a very large and growing element there and it is precisely the area from which local bodies are likely to find the independent members that they are looking for. Looking around this room, I note that many of us would fit into that category but, unfortunately, we are not retired. Therefore we have less time than we would otherwise like to have. The noble Lord, Lord Tope, is particularly fit, although I like to think that I am fitter than he is.

We are happy to look into the question of how one defines “close friend” and of course we will have discussions on a range of these issues between Committee and Report. However, I reiterate that a third of audit committees already have independent members and 15% have two independent members. We see the independent panels which will appoint external auditors as not having the heavy weight of work that audit committees have but as fulfilling a rather more distinctive function.

The proposal in the amendment for mandatory audit committees is addressed more directly in other amendments but, as I understand it, this specific amendment is intended to ensure that, as well as being independent of the authority, members of an auditor panel or audit committee do not have wider conflicts of interest that might compromise their independence. I agree that potential conflicts of interest should of course be taken into account in appointing members of auditor panels. However, the Bill already includes a duty for relevant authorities to have regard to guidance issued by the Secretary of State in relation to their independent auditor panels.

We intend that such guidance will cover exactly these sorts of issues, such as how auditor panels will operate and who should sit on them. We intend to work closely with the sector and interested parties on developing such guidance and identifying what wider interests should be considered in appointing members of a panel. I hope these reassurances are sufficient for the noble Lord to withdraw his amendment, or perhaps to ask for further discussion between the Committee and Report stages.

Public Services: Security of Provision

Debate between Lord Wallace of Saltaire and Lord Haskel

Wednesday 19th October 2011 Lords Chamber

[Lord Haskel]

To ask Her Majesty’s Government what steps they are taking to ensure that companies providing public services are financially secure.

[Lord Wallace of Saltaire]

My Lords, it is the responsibility of the relevant contracting authority to take appropriate steps to ensure that companies providing public services are financially secure, initially when selecting suppliers and then on an ongoing basis through contract management and supplier relationship management. For each of the major suppliers to government, we have appointed a Crown representative responsible for managing the relationship with that supplier.

[Lord Haskel]

My Lords, I find that response a little worrying, because we all depend on public services. Does the Minister agree that, at this time of volatile markets and financial difficulties, the services that we get from these companies are at risk from too much debt, from hidden debt and from hit-and-run investors who try to take over these companies? Are the Government taking any extra precautions in these circumstances, because, at the end of the day, it is we the taxpayers who have to clear up the mess?

[Lord Wallace of Saltaire]

My Lords, one cannot entirely eliminate financial risk either from private or public sector providers so long as public sector providers have a degree of financial and accounting autonomy. We have seen that in a number of public sector cases as well as in private sector cases. The Government are taking considerable care in contracting to ensure that we look at the financial viability of all suppliers and, in particular, do our best to encourage small and medium enterprises and social enterprises to be able to bid for public service contracts. That takes rather more sophistication than dealing simply with major suppliers.