Public Services: Security of Provision

Lord McFall of Alcluith Excerpts

Wednesday 19th October 2011 Lords Chamber

[Lord Wallace of Saltaire]

My Lords, one or two of the providers of public services in the private sector are now among the largest companies in Britain and the world. Noble Lords who read the financial pages may know that G4S has just taken over another major multinational company. Liberata, a back-office outsourcing firm, nearly went bankrupt in 2008, partly because of its pensions liability, and had to be restructured. It is now partly owned by its employees and partly owned by the Pension Protection Fund. The Government, as with all others in such circumstances, do get engaged in trying to re-establish companies in difficulty that are playing a valuable role.

[Lord McFall of Alcluith]

My Lords, given the sorry example of Southern Cross and the burgeoning outsourcing of public services, which is estimated to go from £80 billion to £140 billion by 2014, is there not a case for the utmost transparency on the part of the Government through extending freedom of information to private companies undertaking public services so that they can catch the failed business model, which they did not do in the case of Southern Cross?

[Lord Wallace of Saltaire]

My Lords, I have to repeat: one cannot entirely eliminate financial risk from activities which take place either in the private or the financial sector. We all know that cases of mismanagement have taken place in schools, hospitals and other areas in the public and private sector. The Government have established a new major projects authority within the Cabinet Office and a group of strategic suppliers. They are working extremely hard to ensure that as much transparency as possible can be provided. However, if the noble Lord thinks that there is insufficient transparency, I encourage him to return to this issue on future occasions.