Transfer of Property Services Agency and Crown Suppliers

Part of Orders of the Day — Property Services Agency and Crown Suppliers Bill – in the House of Commons at 8:30 pm on 12 February 1990.

Alert me about debates like this

Photo of Christopher Chope Christopher Chope Parliamentary Under-Secretary (Department of Environment) 8:30, 12 February 1990

I cannot go into the details of particular cases. The principle is that it should be for individual clients to decide whether they wish to use the PSA and then to invite quotations from those who may wish to tender. Following the financial management initiative, I am sure that this is becoming common practice throughout Whitehall and that as a result the Government are obtaining better value for money.

My hon. Friend the Member for Hastings and Rye (Mr. Warren) was worried about clients' responsibility for security clearances of staff and contractors. To ensure that sensitive information does not get into the wrong hands, the PSA, like all Government Departments and private sector contractors, for example, in defence procurement, has arrangements for its staff to be security cleared. More rigorous clearances are required for the most sensitive work. There is a wide range of private sector consultants who, for many years, have been carrying out many aspects of design on sensitive projects under the PSA's overall direction. For example, almost all the work of construction, other than small scale maintenance jobs, is done by private contractors. The main radioactive liquid treatment plant at Aldermaston and the floating jetty for Trident submarines at Coulport have been designed by the private sector. All the staff involved were appropriately security cleared. No security distinction is made between a design done by secure consultants and that done by civil servants.

The PSA does certain types of design, such as prisons or airfield pavements, with its own staff rather than with consultants because, over time, it has developed those areas as specialisms, not because the design has been kept in-house for security reasons.

In answer to my hon. Friend, when the PSA is privatised it will be in the same position as the consultants with whom it will compete for work and its staff will be vetted in the same way as are the staff of the present consultants. Decisions about clearance requirements will turn on the nature of the work that the PSA wins or the arrangements that its Government customers demand, since it is the client, and not the consultant, that settles the security regime to be followed.

As I said earlier, although the vast majority of the PSA's current work is such that we are confident that privatisation will have no deleterious effect on security, there are exceptions to that. There is the remaining very small proportion of work that will be retained within Government. In the case of the Crown Suppliers, a review that we carried out in 1988 concluded that some of the Crown Suppliers' work should be retained within Government. In the case of the PSA, there are one or two areas where more work needs to be done before final decisions are taken about precisely which activities should be retained in Government. The security and privacy of Her Majesty the Queen and the royal family will be an essential consideration. Other activities concern specialised work at very sensitive facilities, including the development, installation and maintenance of high security equipment that the PSA carries out for a range of Government clients.

Discussions are currently taking place with all the interested parties in Government to decide how those functions should be handled in the future. But the privatisation of the PSA cannot take place before late 1992, so there is adequate time to make sure that we take the right decisions. If it is necessary, as it may well be, to retain specific functions in Government to preserve security, we shall certainly do so. I can assure the House of that.

The hon. Member for Brecon and Radnor (Mr. Livsey) raised the issue of United States forces. I can tell the hon. Gentleman that the building work managed by the PSA, with few exceptions, is undertaken by private sector building contractors, which have far more men on site at any one time than the PSA has. The United States air force has no general security bar on the use of private contractors on its bases in relation to the sort of services that the PSA provides. Indeed, it has private contractors on its bases for a number of purposes. I know that on one base it has a private sector security agent as well. Following privatisation, the PSA will be in the same position as are the other private sector companies on those bases.

The hon. Member for Hammersmith (Mr. Soley) referred to Northern Ireland. In Northern Ireland, as elsewhere, security is the responsibility of the customer who commissions the work, rather than of the PSA. The PSA undertakes work in Northern Ireland that is not related to the security services. For example, it works for Northern Ireland Departments, such as the Department of the Environment and the Department of Agriculture, and it maintains Hillsborough castle. Those who have been to the castle recently have been much impressed by the work that the PSA has done there. It also works for the Inland Revenue and for Customs and Excise, and in the new competitive world that it now faces it could well offer very attractive services in areas in which it has skills and resources.

The purpose of clause 6(2) is to allow the PSA's organisation and facilities in Northern Ireland to be included in the privatisation. They represent a sizeable slice of the PSA's business, and Northern Ireland offers an important area of the United Kingdom where the company could seek to expand its markets.