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Competitive Tendering

Volume 175: debated on Wednesday 27 June 1990

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To ask the Secretary of State for the Environment what savings he estimates could be made throughout local government by the introduction of competitive tendering and other efficiency measures.

Earlier this month the Audit Commission identified possible savings in local government of £1,328 million, of which about 50 per cent. has been achieved. Competitive tendering has been a powerful element in reducing those costs, but clearly there are very large savings still to be made.

I am grateful to my hon. Friend for that answer. Does he agree that failure to implement competitive tendering is a fraud on the community charge payer, that local authorities that are not implementing competitive tendering properly are probably pandering to the interests of local trade unions, which are totally opposed to the interests of local residents and will mean a higher community charge?

I agree with my hon. Friend. Compulsory competitive tendering is an indispensable mechanism for ensuring high-quality services at lower cost. It is a matter of regret, although hardly surprising, that the Labour party is therefore against it.

If the Minister is serious about savings for local authorities through greater efficiency, will he have a word with the Secretary of State for Energy about the pricing policy of British Gas? Is he aware that yesterday the finance committee of Coventry city council decided to turn up the heat in 14 schools and old people's homes and open the windows to use an extra 56,000 therms of gas before November so as to qualify for a £30,000 lower bill from British Gas? What is the point in the Prime Minister, across the water this morning, giving £5 million to combat global warming when we in Coventry have to burn more gas to save money?

Energy pricing is a matter for my right hon. Friend the Secretary of State for Energy, but it is clear that privatisation of the electricity industry will be a powerful factor in controlling energy costs in the future.

Would my hon. Friend agree that the Government's policy on competitive tendering is very good? Will he consider the implementation, particularly by Middlesbrough council, which seeks to find a way around almost everything when it comes to competitive tendering? It recently awarded a contract for security services to a company which it set up with one of its councillors on the board, which did not have employees, against a proper tender submitted by a recognised and long-standing security firm? At the end of the day the tender was a small amount in favour of the newly-formed company, as can happen with a system in which only the chairman of the committee opens the tenders. Is not it time, therefore, for the Government to ensure that at least one person from the opposition can be on the tender committee when the documents are opened?

The 1988 Act gives my right hon. Friend the Secretary of State sanction powers against local authorities that have apparently acted anti-competitively. If my hon. Friend the Member for Langbaurgh (Mr. Holt) has evidence, he should submit it and I will ensure that it is drawn to the attention of officials and of my right hon. Friend the Secretary of State.

Does the Minister accept that there was more than a little hypocrisy surrounding the answers given by Ministers about financial efficiency and local government? Financial efficiency in local government is acres and years ahead of the Government, given the over-run and overspend in the Ministry of Defence. If such overspending were translated into local government, councillors would be surcharged, as they have been in Lambeth, and would end up in gaol. It is time that the Government accepted the restrictions that they place on local government.

I am disappointed that the hon. Gentleman seeks to overlook the undoubted examples of waste and extravagance among local authorities. Compulsory competitive tendering is necessary, and I should be more interested in the hon. Gentleman's attitude to that.