Local and Health Authority Contracts

Oral Answers to Questions — Scotland – in the House of Commons at 12:00 am on 22nd July 1987.

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Photo of Gerald Howarth Gerald Howarth , Cannock and Burntwood 12:00 am, 22nd July 1987

asked the Secretary of State for Scotland what information he has as to how many local and health authority contracts have been put out to competitive tender in Scotland.

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

Details of the number of local and health authority contracts put out to competitive tender are not available centrally. However, the most reliable figures available show that of local authority works subject to competition under the Local Government, Planning and Land Act 1980, 58·8 per cent. was undertaken by the private sector. Since 1985, 29 contracts for support services have been let in the Health Service.

Photo of Gerald Howarth Gerald Howarth , Cannock and Burntwood

Does my hon. Friend agree that that is a pathetically small figure and compares most unfavourably with England and Wales, where savings of 25 per cent. have been achieved, compared with the 10 per cent. saving achieved in Scotland? Is he aware that private contractors wish to bid? Is it not disgraceful that five of the 15 health boards refuse to go out to tender? Will he please ensure that Scotland has the full benefit of Conservatism?

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

I am grateful to my hon. Friend, who has obviously made a close study of this matter. He will have seen that the recent National Audit Office report concluded that slow progress in contracting out in Scotland was due to a lack of availability of private contractors, strong opposition to the initiative from the trade unions and structural reorganisation within the National Health Service. I can assure my hon. Friend that I shall examine these matters closely in the coming weeks.

Photo of Mrs Maria Fyfe Mrs Maria Fyfe , Glasgow Maryhill

Is the Minister aware that when the canteen provision at the Glasgow college of technology was recently privatised wages were frozen at £2·20 an hour? Will he undertake to assure Scottish canteen workers in health and local authorities that their pay will be better when privatisation is forced on them?

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

It is not my responsibility to ensure that the pay of canteen workers or of anyone else is held at a particular level. I am responsible for ensuring that maximum resources are directed to patient care and our policies are geared to that purpose.

Photo of Mr Norman Hogg Mr Norman Hogg , Cumbernauld and Kilsyth

Is it not the case that the best means of providing support services in the Health Service is a matter for the health boards to determine? Is it not also the case that the health boards are appointed by the Secretary of State for Scotland, so are largely Conservative? If the Minister does not accept from me that nobody in the Health Service wants privatisation, will he accept that view from the largely Tory-controlled health boards, about which the hon. Member for Cannock and Burntwood (Mr. Howarth) complains?

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

First, I take this opportunity of welcoming the hon. Gentleman to the Dispatch Box from the turmoil of the Whips' Office. He asserts that because health boards are appointed by the Secretary of State they must be Conservative-dominated. That will be a considerable surprise, but I note his expectation. I am sure he will agree that all health hoards will be committed to ensuring that every penny is directed towards patient care. Therefore, it should not be a matter of conflict between us that if tendering for services results in the best value for money in patient care it should be welcomed on all sides and certainly by health boards.

Photo of Mr Neil Hamilton Mr Neil Hamilton , Tatton

asked the Secretary of State for Scotland what action he proposes to take in response to the publication of the National Audit Office's opinion that expansion of competitive tendering in the National Health Service in Scotland has been too slow.

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

I shall be discussing progress on competitive tendering of support services with Health Board chairmen in the light of the National Audit Office report and our manifesto commitment. Boards were asked in 1984 to ensure that all support services had been put out to tender by April 1988.

Photo of Mr Neil Hamilton Mr Neil Hamilton , Tatton

I thank my hon. Friend for that reply. However, does he agree that, while discussions are all very well, what we want is action? Is he aware that, according to the recently published National Audit Office report, £5·9 million has already been saved by contracting out and in-house services provided under the pressure of the threat of contracting out, but that potential savings of between another £9 million and £15 million could be looked for? Are not the Scottish health boards robbing the taxpayers of the United Kingdom, and those who might otherwise benefit from an improved level of services in their areas? What can he done?

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

The only way in which to ensure that we are able to realise all the possible savings is to ensure that the efficiency of in-house services is tested against outside competition. My hon. Friend is right to point out that even the threat of privatisation seems mysteriously to produce savings, and there has been some progress in that respect. To date, savings in Scotland amount to about 10 per cent. In England, they are between 20 and 30 per cent. There is a great deal to be done in Scotland if our priority is to ensure that patient care is maximised.

Photo of George Galloway George Galloway , Glasgow Hillhead

The Scottish people decisively rejected the thieves' charter of privatisation just a few weeks ago. Scottish Ministers have come here today buttressed by the motley crew of English placemen and deracinated Scotsmen to ignore the salient points——

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. The hon. Gentleman must ask a question.

Photo of George Galloway George Galloway , Glasgow Hillhead

The question is this, Sir. When will those Ministers, with the green acres stretched out behind them where their Scottish colleagues used to be, come to terms with the fact that 78 per cent. of the Scottish people and 62 out of 72 Scottish Members of Parliament reject them and everything that they stand for?

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

I read in yesterday's Glasgow Evening Times that the hon. Gentleman was concerned about the provision of kidney machines and that he was going to have a meeting with me about it. I look forward to that, because when he comes to see me I shall point out that the savings that the NAO report estimates could be made from tendering in Scotland of between £15 million and £22 million are roughly equivalent to the cost of the purchase of 1,500 kidney dialysis machines.

Photo of Mr Allan Stewart Mr Allan Stewart , East Renfrewshire

Is my hon. Friend aware that some of the Scottish health boards have been up to some tricks, including, for example, the award of an in-house contract at up to 50 per cent. more than private contractors would have charged? In the light of that, will he in the course of his consideration agree to meet representatives of the industries concerned to hear from them what they think are the opportunities and the problems?

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

I should be delighted to meet any such representatives to get to the bottom of the problem identified in the NAO report of an apparent lack of interest on the part of private contractors. It is essential that the cost of in-house operations is properly examined, and comparison is made on a like-for-like, apples-for-apples basis. When in-house savings are promised, we must have proper procedures to monitor them, and to ensure that they are achieved.