Interserve

Tommy Sheppard Excerpts

Monday 18th March 2019 Commons Chamber

[Oliver Dowden]

I thank my hon. Friend for his question; as a former member of his Committee I know about his considerable expertise in this field. Indeed, the expertise provided by his Committee helped to frame the Government’s response post-Carillion. For example, that is why I launched the outsourcing playbook a couple of weeks ago. It deals with exactly this point, and is a guide to how Departments should allocate risk as between the Government and the private sector.

My hon. Friend is absolutely right about the overall approach that should be taken. I have been clear, as has my right hon. Friend the Chancellor of the Duchy of Lancaster, that outsourcing companies that provide services to the Government should expect reasonable but not excessive rates of return. Through the programme of reforms we have introduced, we are moving towards a new model for outsourcing.

[Tommy Sheppard (Edinburgh East) (SNP)]

The Minister puts a brave face on things and tries to spin well but the truth is that, first with Carillion and now with Interserve, the collapse of these major multinational multi-service companies seriously damages the entire credibility of the Government’s outsourcing procedures and policies. If I understood correctly, he confirmed that contracts were awarded to Interserve last year, after it was known that the company was crippled with debt and facing imminent collapse and restructuring. If that is the case, I seriously suggest that the procedures for the protection of public money in this context are not adequate, and his Department ought to look into revising them.

Will the Minister give an assurance that no further contracts or spending will be lodged with the group that has taken over the Interserve contracts from this day forward? Will he put in place procedures such that any other companies facing imminent collapse are taken off the tender shortlist and contracts are not awarded to them?

We are all mindful of the fact that a no-deal Brexit has not yet been taken off the table. It may still be the case that, in the weeks and months ahead, the Government are scurrying around trying to find private contractors to undertake large amounts of work at short notice. What assurance can the Minister give the House that, if that is the case, the procedures will be more robust than they were in this case, to make sure that public money is protected?

[Oliver Dowden]

I will take as a compliment the hon. Gentleman’s opening remarks saying that I have spun this well. I have not spun it well; I have set out the facts, which are that the situation for the companies delivering the services in question remains wholly unchanged as a result of the change in the parental ownership structure.

The hon. Gentleman asked about the contracts that the Government have awarded, and I have already set out that position. Again, if he thinks it is irresponsible to be awarding contracts to Interserve, I suggest he has a word with his colleagues in Scotland, where Interserve has been winning contracts left, right and centre. In fact, it is even protecting the pandas at Edinburgh zoo through an outsourcing contract. Back in November, the Scottish Government awarded a contract, saying it would

“deliver benefits for the North Ayrshire communities as well as long-distance road users upon completion”.

Who was that contract awarded to? Interserve.