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Wednesday Volume 519 24 November 2010 No. 78 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Wednesday 24 November 2010 £5·00 © Parliamentary Copyright House of Commons 2010 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ Enquiries to the Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 247 24 NOVEMBER 2010 248 does the Minister think that it was wise for the Department House of Commons for Education to hand out a £500,000 contract to the New Schools Network, an organisation led by a former Wednesday 24 November 2010 associate of the Secretary of State? Was that contract fully compliant with all the relevant tendering regulations? The House met at half-past Eleven o’clock Mr Maude: I certainly do not know the details of that procurement, but I am confident that it would have PRAYERS followed all the rules to the letter. Public Sector Mutuals [MR SPEAKER in the Chair] 2. James Morris (Halesowen and Rowley Regis) (Con): What progress he has made on the establishment of Oral Answers to Questions public sector mutuals. [25850] 9. Alun Cairns (Vale of Glamorgan) (Con): What progress he has made on establishing public sector CABINET OFFICE mutuals. [25857] The Minister for the Cabinet Office was asked— The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude): I announced last week Public Bodies that every Department will put in place “rights to provide” for public sector workers to take over the running of 1. Stephen Phillips (Sleaford and North Hykeham) their services. The first wave of 12 pathfinder projects (Con): What steps his Department is taking to support was launched in August this year. Leading organisations in the sector, including Local Partnerships, the Employee public bodies in contracting out public services. [25849] Ownership Association and Co-operatives UK, have The Minister for the Cabinet Office and Paymaster come together to launch an information and support General (Mr Francis Maude): I announced last Wednesday service for public sector workers interested in mutualisation. that the Government are identifying a range of additional I hope that Members on both sides of the House will commercial models for public bodies wishing to contract encourage and support these worker co-operatives. out services, such as joint ventures and public sector worker mutuals, alongside traditional outsourcing options. James Morris: Many public sector organisations and A major barrier to this is the extremely cumbersome employees in my constituency are interested in this idea. procurement process left behind by the previous Will my right hon. Friend clarify whether he sees these Government. An average process here typically takes policies applying more to local community organisations, almost twice as long as it does in Germany. This makes or whether he envisages organisations on the scale of, tendering less competitive and effectively excludes many say, NHS trusts being able to take on mutual status? smaller suppliers and social and voluntary enterprises. We are taking steps to streamline the process. Mr Maude: I do not think that we should be prescriptive about how large or small, or how local or broad, these Stephen Phillips: One of the problems with the delivery co-operatives could be. The pathfinders range enormously of public services in the past was the previous Government’s in size: I think that the smallest has only three potential focus on delivery through either private contractors or employees or members, while the largest has 1,100, and existing local and central Government bodies. Many it is possible to imagine them being even larger. I hope public sector workers were thus prevented from suggesting that groups of public sector workers from right across innovative ideas for the more efficient and cost-effective the sector will consider whether this could be a good delivery of services. How will they now be encouraged route forward for them to take, and we will make it as to come forward with their ideas? easy as possible for them to take it. Mr Maude: We have already encouraged them to Alun Cairns: What action is the Minister taking to come forward with ideas. As part of the spending protect the interests of innovative public sector workers challenge that we launched in the summer, we invited who come up with exciting ideas for public sector public sector workers to come up with ideas to save mutuals, but whose senior management do not support money while protecting front-line services, and 65,000 them because it might not be in their personal interest of them did so, indicating a huge amount of pent-up to do so? frustration. We are now encouraging as many of them as possible who are interested not only in having ideas Mr Maude: It is possible that such a situation could but in putting them into effect to form worker co-operatives come about, which is why we have encouraged the to spin out of the public sector while continuing to organisations that I mentioned to set up the information deliver services. and support service for groups of public sector workers. We will also establish a challenge group, into which this Jon Trickett (Hemsworth) (Lab): Given that there are service can feed thoughts and suggestions. If there are strict procurement rules designed to demonstrate probity concerns that middle and senior managers are obstructing and value for money, and to avoid political interference, the right of public sector workers to form these 249 Oral Answers24 NOVEMBER 2010 Oral Answers 250 co-operatives, I hope that people will feed them directly Mr Speaker: Order. I think that the hon. Gentleman to us, through the challenge group, so that we can take wants to be reassured that that will not be the case. We the appropriate steps. are grateful to him for so indicating—[Interruption.] Order. That is the end of it. Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co- op): Does the Minister accept that there is a fundamental Mr Hurd: As my hon. Friend knows, there will be difference between a worker co-operative and an cases where large-scale contracts are more efficient, but organisation that is fully mutual? Can he assure me that we want to make sure that voluntary and community there will be a democratic process within public sector sector organisations do not feel excluded from them mutuals and that there will be a membership element and are treated fairly by the prime contractors within to it? any consortiums. The White Paper will address that issue. In addition, the private Member’s Bill of my hon. Friend the Member for Warwick and Leamington (Chris Mr Maude: We do not have a dogmatic view about White), which the Government support, will place a exactly what form these should take. I hope there will be firmer requirement on commissioners to consider social considerable innovation. Some will want to form joint value in their buying decisions. That will help. I should ventures with outside providers; in other entities, be delighted to meet representatives of the local voluntary the Government or whatever other state agency is the and community sector organisations in the constituency commissioning body might want to retain a stake in the of my hon. Friend the Member for Bury St Edmunds organisation. There will be strong democratic worker (Mr Ruffley) and I extend the same offer to all hon. involvement in many of them, but the key element is a Members. degree of ownership by the employees themselves. Roberta Blackman-Woods (City of Durham) (Lab): I Lindsay Roy (Glenrothes) (Lab): May I probe the am sure that the Minister will agree that bidding processes Minister further on what specific advice and support and the awarding of Government contracts must be the Government are offering to organisations that wish transparent and fair—and seen to be so. Does he therefore to become mutuals or co-operatives? think it good practice that his Department awarded a huge £4.1 million contract to a charity founded by his Mr Maude: A range of advice is available. The policy adviser, Lord Wei? Will the noble Lord consider 12 pathfinder projects are supported by organisations his position as a result of this matter? that are able to provide support—for example, Co-operatives UK and the John Lewis Partnership, which have enormous Mr Hurd: I am not entirely sure to which contract the experience in this area. The advice and support service hon. Lady refers, but if she means the recently announced that these organisations are putting together will be able awarding of contracts to 12 providers of the national directly to channel support and advice from organisations citizen service, that process was run in an impeccably such as the Employee Ownership Association. That transparent way. We are absolutely delighted with the should help organisations to find the right advice for outcome and with the prospects for that programme. the particular circumstances of a particular group of workers. Dr John Pugh (Southport) (LD): On probity and transparency, what puts most charitable organisations Government Contracts off is the time, the expense and the long drawn-out nature of the process. Is the Minister going to do something about that? 3. Mr David Ruffley (Bury St Edmunds) (Con): What steps he is taking to increase the participation of Mr Hurd: Absolutely. That is a hugely important voluntary and charitable bodies in bidding processes point. Everything I have learned over the past two years for Government contracts. [25851] suggests that for many organisations the whole process of applying for and reporting public money is a bureaucratic The Parliamentary Secretary, Cabinet Office (Mr Nick nightmare—often totally disproportionate to the sums Hurd): The Office for Civil Society will shortly publish a involved.