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Competition (Local Government)

Volume 169: debated on Tuesday 13 March 1990

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To ask the Secretary of State for the Environment what progress is being made in relation to the enforcement of the competition provisions of the Local Government Act 1988.

My right hon. Friend has today issued a direction under section 14 of the Local Government Act 1988 prohibiting the London borough of Hillingdon from carrying out its vehicle maintenance through its own staff as from 1 September 1990. He has taken this action because he was not satisfied with its response to the notice issued under section 13. That notice set out his belief that it had acted contrary to the requirement of section 7(7) of the Act which is that, in awarding a contract it must not

"act in a manner having the effect or intended or likely to have the effect of restricting, distorting or preventing competition"
in that it awarded its vehicle maintenance work to its own direct services organisation when it had received a bid which was over £109,000 lower over a four-year period after taking redundancy costs into account.This makes it absolutely clear that we shall not hesitate to take action when we believe that authorities are distorting the competition process. We have strong powers of enforcement under the Act, and we shall use them where necessary to ensure that charge payers get the full benefits that competition, fairly administered, can bring.