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Departmental Contractors (Cash Limits)

Volume 974: debated on Monday 26 November 1979

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asked the Secretary of State for Scotland if private contractors carrying out reimbursable cost contracts for his Department will be subject to the cash limit contraints which apply to public sector employers, and in what way, or if such contractors will automatically be reimbursed for extra labour costs irrespective of the level of wage and salary settlements they may enter into.

There is a cash limit on the amount available for procurement in my Department. Any excessive increase in the level of contractors' costs would, therefore, reduce the amount of work they can be given. In the case of cost-plus contracts, or contracts where the price may be adjusted to take account of changes in costs, the amount of reimbursement will reflect the level of relevant nationally agreed wage settlements.