asked the Chancellor of the Exchequer what advice is given to contracting Departments to ensure that they do not award contracts involving unlimited liability which cannot be covered on the insurance market.

None. As in the private sector, a contractor may be held responsible without limit for costs arising from any default which would otherwise fall on the public purse as a result of his action. This is reflected in the standard conditions used in departmental contracts. In certain cases he may be required to carry specified levels of insurance cover. Otherwise it is a matter for him to decide what insurance he needs and can obtain.