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Local Authorities (Direct Labour)

Volume 722: debated on Tuesday 21 December 1965

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16.

asked the Minister of Housing and Local Government why he issued Circular No. 50/65; and, in the light of the withdrawal by that circular of the requirement of one competitive tender in three, how he proposes to ensure that an adequate check is kept on the costs of local authorities' direct labour organisations.

I want all agencies which can contribute to a rising housing programme to give their maximum help. This circular frees local authority direct labour organisations from conditions which stood in the way of continuity of work, and therefore of efficiency. Direct labour estimates of cost will be checked by my Department.

But does it make for efficiency to treat any organisation of this kind as being in the position that it may never have its costs checked against competitive bids by other people? In view of what the Minister has said about an increasing programme, is not the need for this valuable check the greater and the need for such a provision to secure continuity of work the less?

I do not know whether the right hon. Gentleman remembers what we discussed in the previous debate. What was needed was to enable direct labour organisations to contribute to industrialised building. This cannot be done without negotiated contracts. Therefore, this one-in-three rule was the problem. I have not said that there should be no tendering. Indeed, it is essential to have tendering and genuine competition.

Is my right hon. Friend aware that his Measure has been widely welcomed throughout the country and that it will expedite the building of municipal houses which are so essential? Would he take all measures to extend the policy of direct building which brings these results?

What I shall do is to try to enable direct building organisations to contribute as much as they can. They do only 9 per cent. of house building now. In my view, they can do more, and a high proportion of it can be done on industrialised building.

If the right hon. Gentleman is so satisfied that this system will not cause costs to rise, why does he put in the circular itself an appeal to local authorities to devise a new method of keeping a check on them?

It was because I was convinced that the innovation of the one-in-three rule was easy for the inefficient to evade and merely an obstacle to the efficient that I removed it. I want to insist on efficiency in these organisations and ensure that they do things properly and test their efficiency.

Is my right hon. Friend aware that this does not give direct labour an advantage over private enterprise? All that it does is to bring it into line with private enterprise procedure which we have had in the past.

That is a perfectly fair comment. It is brought into line in negotiating for industrialised building contracts.