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Philip Hollobone Excerpts

Thursday 11th July 2013 Commons Chamber

[Chris Grayling]

On the last point, it is important to say that we are learning the right lessons. That is why the issue emerged in the first place. The tighter contract management procedures that we are putting in place have revealed shortcomings that took place under a contract that was let in 2005, and information that came to the Department in 2008. The right hon. Gentleman will remember who were in government in those two years. This Government are taking a more robust approach to contract management, and this issue has arisen as a result.

The right hon. Gentleman makes a point about the privatisation of the probation service. We are outsourcing probation to a range of different organisations not linked to today’s situation, and a large number of organisations have expressed an interest, including those from the voluntary sector that have immense skills in this area. I would not countenance a situation in which those organisations are tainted by the actions of two individual companies, or where we allowed a debate about two contractors to taint the reputations of outsourcing organisations that work and do a good job across government.

The right hon. Gentleman made some specific points about the two companies involved. Last night, we put to those companies that we would ask for a forensic audit, at a level that will meet any kind of investigative standards, to be carried out by PricewaterhouseCoopers, one of our leading independent auditors that works on such investigations. I am satisfied about the quality of the investigation it will carry out with Serco, and the management of Serco has accepted that the consequence of that investigation, if dishonesty is found, will be a joint reference to the authorities. To my mind, that audit meets any test we need to address. Unfortunately, G4S has not chosen to accept such an audit, and we have therefore passed the matter straight to the Serious Fraud Office.

I must be careful because this is a sensitive legal process. At this time, I do not have evidence of dishonesty. I have a situation of unacceptable practice, but not of dishonesty, and that is why I have commissioned a detailed forensic audit from those with expertise in such matters. For G4S we have done what people would expect us to do and invited the Serious Fraud Office to rule on the matter.

The right hon. Gentleman mentioned the Public Accounts Committee and the National Audit Office. I confirm that the National Audit Office has been aware of this investigation from the start. It is already investigating contracts within Government, and we are liaising closely with it. He mentioned all other contracts, and my right hon. Friend the Minister for the Cabinet Office and Paymaster General will today set out his plans to take forward work he has already started to address contract management across Government. The review I have announced led by Tim Breedon, our lead non-executive director, will address the issue raised by the right hon. Gentleman about all contracting with major contractors across the Department, including smaller contractors.

I can reassure the right hon. Gentleman on public safety as I sought to establish that very early in this process. I have seen no evidence whatsoever to suggest that public safety has been compromised. The issue is about people who were recalled to court or to prison but where the charging continued, so I can lay to rest the right hon. Gentleman’s concerns on that point. He also asked about the acceptance of guilt, but, in the legal process, I cannot comment on the position of the companies. They must set that out themselves. I have said that Serco is being constructive and collaborative, and I have set out the process for G4S. I say clearly that there have been failings at the Ministry of Justice that go back over the past decade, possibly longer. Those shortcomings are now being addressed but they should not have happened in the first place and I have indicated that, if necessary, disciplinary proceedings will be undertaken.

These are serious matters. We are entering a legal process and hon. Members across the House will understand that I must be cautious in what I say to avoid compromising legal proceedings. The House should be under no illusion, however, that I am dealing with the issue with the utmost seriousness. We will take all appropriate action and we cannot allow such things to continue unchecked.

[Mr Philip Hollobone (Kettering) (Con)]

May I praise the strong, expeditious and decisive action taken by the Lord Chancellor in response to this issue, and the way he has co-ordinated the Government’s response with the Minister for the Cabinet Office and Paymaster General, and the Attorney-General? As he indicated in his statement, Whitehall needs to raise its game on contract management. Will he continue to work as closely as possible with our right hon. Friend the Minister for the Cabinet Office and Paymaster General to get this matter resolved at permanent secretary level as soon as possible?

[Chris Grayling]

I am grateful to my hon. Friend for his comments and I give him that assurance. Looking back to when the issue first became visible in the Department, it is clear that existing expertise in contract management was not up to the job. Those failings and shortcomings should never have happened, and I intend to introduce measures to ensure that they never happen again.