Open Public Services White Paper

Debate between Oliver Letwin and Hazel Blears

Monday 11th July 2011 Commons Chamber

[Mr Letwin]

I entirely agree with my right hon. Friend, which is why the White Paper specifically makes clear not only that we will treat individual services differently from community services and services commissioned centrally, but that we will take each service on its own merits and design a regime that applies the general principles differently. That is clearly the right way to go. However, his point is vital. The purpose of giving choice and power to individuals and communities is not just to benefit the particular individuals making the choices; it is to benefit everybody by ensuring that those choices are brought to bear in a way that improves services for all.

[Hazel Blears (Salford and Eccles) (Lab)]

The right hon. Gentleman will know that I am a long-standing supporter of decentralisation and involving more local people in their public services. His White Paper and previous statements have made much of involving social enterprises and charities and the third sector in the provision of public services. On that basis, will he confirm that there will be an asset lock when services are transferred, particularly to social enterprises, to ensure that the organisations carrying out these services are genuine social enterprises? If he really means what he says, why have 90% of major contracts for the Work programme gone to big companies such as Serco, Capita and G4S, leaving the social enterprise sector and charities to pick up the crumbs from the table?

[Mr Letwin]

In answer to the right hon. Lady’s first point, I would say that when assets are being transferred provision needs to be made to ensure that they are there for the public good and on a permanent basis. We intend to do that in every case in which it applies. On her point about the Work programme, I think she is missing a vital component of what the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), who has responsibility for employment, has done. It is a textbook case: he was concerned that not all the bids would come from consortia in the voluntary and community sector—only a few did—so he took steps to create a protocol relating the prime contractor to the subcontractors, as a result of which the prime contractors have to treat properly the small voluntary and community bodies that in many cases are also the subcontractors. We desperately need—and intend—to get that into the mainstream of how the Government go about business.

Oral Answers to Questions

Debate between Oliver Letwin and Hazel Blears

Wednesday 27th April 2011 Commons Chamber

[Mr Letwin]

Yes, the estimated amount to be raised from dormant accounts remains at £400 million. The Reclaim Fund will now assess the exact amount that it can release in the first year, and the current estimate is somewhere between £60 million and £100 million. Then there are, of course, the negotiations that my right hon. Friend the Minister for the Cabinet Office and Paymaster General is having with the four main lending banks that were party to the Merlin agreement about another £200 million of funding. Altogether, there should be a considerable amount of funding coming through this year and in following years.

[Hazel Blears (Salford and Eccles) (Lab)]

The NESTA report referred to earlier by my hon. Friend the Member for Hemsworth (Jon Trickett) stated that the big society bank

“should not expect to achieve commercial returns on all its investments”.

By far the majority of demand for capital is for soft capital and patient capital. Why, after two months of intense talks between the banks and the Treasury, do we still not have an agreement? The banks are saying that they want commercial returns. Will the Minister confirm today that the big society bank will not be about commercial returns for the banks but about genuine support for social and community enterprises?

[Mr Letwin]

The right hon. Lady is confusing two levels of lending and investment. There is the question of what the big society bank demands of the investments that it makes, and as I have said, that will be both a social return and a modest financial return, but not the type of commercial return that one might make with a hedge fund or in another such way. Then there is the relationship between the big society bank and the main commercial banks that are party to the Merlin agreement. My right hon. Friend the Minister for the Cabinet Office and Paymaster General is currently discussing the exact terms on which that investment will be made. It will have to be compatible with social objectives and the social returns that the big society bank is intended to make.