Outsourcing (Government Departments)

Ian Mearns Excerpts

Wednesday 25th April 2012 Westminster Hall

[Grahame M. Morris]

I thank the hon. Lady for her intervention, but there is a danger of fragmentation, even with some of the models that she mentions—for example, in the national health service and social care. If we are trying to promote integrated services, a plethora of private sector and even voluntary sector providers works against that ethos. That is a risk.

My argument is that public sector workers and service users know the difference between private profiteering and public services. Let us not forget that the key difference is that the first duty of a business is to its shareholders and the pursuit of profit.

The coalition Government are trying to do two things in developing their own brand of public service reform, which is quite distinct from what the Labour party did when in office. First, they are trying to tie down companies with more stringent contracts in the belief that setting targets will guarantee performance—ironically, the Government argued against targets in the national health service and wanted them to be ditched by public sector providers. Secondly, they believe that with stricter conditions for private sector providers, there should be no limits on where those providers should be allowed to tread within the public sector.

[Ian Mearns (Gateshead) (Lab)]

My hon. Friend is developing a pertinent point. If we outsource public services—a public commodity—to the private sector, in some way, shape or form the private sector has to make a profit to give to its shareholders. That seems to be the logic from the Government’s perspective, but it will be impossible for public services to become more efficient or reinvest savings back into the development of the service.

[Grahame M. Morris]

That is an excellent point, and we should be guided by the evidence. If the Minister can demonstrate that that is not the case, I will be interested to hear his response. Certainly, in relation to the national health service, the detailed impact assessment published with the Health and Social Care Bill proved that in-house services were considerably cheaper than those offered by the private sector, as well as being more responsive, accountable and fitting in with the wish for better integration.

A little earlier, different models of provision were mentioned. The coalition Government are promoting different models for outsourcing different services within different Departments—for example, academies and education, the utilities model and the NHS, or payment by result for welfare and benefits. However, although those are different models, the driver is the same. Emergency 999 call centres have been privatised and outsourced together with the administration of the benefit system. The roads on which we drive are the latest to go, as the pace of outsourcing to the private sector speeds up.

--- Later in debate ---

[Mr Hurd]

I want doctors and nurses to be paid at fair value. I am also interested in the value that they offer to the taxpayer for the work that they do, which brings me on to my next point about public services and how they are commissioned.

The Government’s view is that, when expectations about public service standards are rising, we need to find more creative solutions. There is dissatisfaction and a challenge, because there is less money about and therefore greater pressure to get better outcomes with less money.

My hon. Friend the Member for Thurrock (Jackie Doyle-Price) made an important point: the direction of travel here is not driven by ideology, although there is more ideology communicated from the Opposition than the Government. This is driven by a desire to deliver better outcomes on behalf of the taxpayer and the people we are trying to help in a way that is much more transparent than before.

[Ian Mearns]

The Minister belabours the point about making additional efficiencies within government since the coalition came to power. Of course, one of the biggest elements of public expenditure is local government. Conservative control in local government has been at a high watermark for eight or nine years now. Would he criticise Conservative councils in that respect?

[Mr Hurd]

I resist any invitation to criticise Conservative councils, particularly at this moment. My point is about attitudes to taxpayers’ money. The previous Administration were cavalier with taxpayers’ money and this Administration are trying to deliver better