Select Committee on Public Administration Minutes of Evidence


Examination of Witnesses (Questions 220 - 239)

THURSDAY 15 NOVEMBER 2001

DIGBY JONES, AMANDA MCINTYRE AND CHARLES COX

  220. I was not sure that was what he was saying.
  (Mr Jones) No, I was not saying that was what he was saying. I was saying what I believe.

  221. Why would he, as someone who knows about these things, come to that view, do you think?
  (Mr Jones) Because he has an opinion. It is a free world and he is entitled to it.

  222. It does show that these things are maybe not as cut and dried as you would lead us to believe.
  (Mr Jones) No, I believe they are not as cut and dried and if I have led you to believe that I think every one is simplistic and easy to understand, I am wrong in the way I have portrayed it. Indeed I did say in my preliminary remarks that this is not a one-size-fits-all. Flexibility has to be the order of the day.
  (Ms McIntyre) If we generalise this into the whole scale of PFI and public/private partnerships, what we have found is that having the financiers involved in PFI projects has often brought very important disciplines in terms of better management of risk. Financiers are pretty risk averse, so they have been watching very carefully through the whole planning of these PFI projects and having the financiers involved has been very key in making sure these projects have come in on time and on budget and helped overcome some of the problems of previous procurement. It is important for the future that we are always looking for new and better models of public and private partnerships. This is a journey we are travelling on. If you look at how we are doing business now compared with five years ago, it is transformed and in ten years' time you would expect to see an even wider range of public/private partnership models with different techniques for bringing private finance in or not, bringing private management in or not. The journey is not over.

Brian White

  223. One of the issues which is rarely talked about but seems to be scattered around is the whole question of Treasury rules. Do you think the current Treasury rules which define what the Public Sector Borrowing Requirement is, and the way that PFI and PPPs work give rise to some of the ways the contracts are all drawn up? Do you think the current Treasury rules are right and appropriate for the modern environment?
  (Ms McIntyre) This question often relates to whether there are borrowing constraints on particular parts of the public sector like local authorities and whether the discount rate is right for example. Our view is that what we really need to do is broaden the analysis of value for money. Too often, in deciding whether you go for an in-house provision or a PPP, the discussion comes down to cost and technicalities like a public sector comparator. What we are encouraging is a much broader analysis of value for money which thinks much more about what is going to deliver better quality as well as better cost and also how you make sure you get the value for money improvements over time from having a different range of players in the market. If you have different players in the market, you get different sources of ideas and you get different sources of innovation and you get the healthy competitive pressure on everyone to do better. If this all works well, Digby and I might both be bidding at one time and there may be very little between our bids, but in ten years' time, both our bids would be better because we were both in the market. It is important that a right discussion now about looking again at Treasury rules also thinks very seriously about the wider value for money debates.
  (Mr Cox) It is not only Treasury rules, the accounting standards and so on and so forth. There are some particulars which would bear examination, things like the risk transfer under FRS5 and where things finish up on balance sheets and so on which are particularly apposite because, as with all things—the previous speakers were talking about the dangers of targets—you can get aberrant drivers and one of the lessons which has been learned over time is that if all you think about is risk transfer in the throw-it-over-the-wall sense, that is not at all helpful to anybody frankly because the truth is that you do not transfer the risk. If the thing goes wrong you may have contractual recourse but the disaster has still happened. The first and overriding consideration has to be to reduce risk to all concerned and then put it in the hands best able to manage it. It is important that whatever rules we are talking about, Treasury rules, accounting standards or any other, you have rules which will reinforce the right motives and the right direction and not ones which will actually put contortions into the system.
  (Mr Jones) My general point would be that I think Treasury rules, in the twenty-first century, if the dynamic of PPP which you have just heard about continues, probably would bear some review. By which I mean that after review they might stay the same. There is nothing wrong with that if they are examined and found to be serving the purpose in the same way. Where I do worry, and it was a worry at the beginning of PPP and it still is today, is at one end, as Charles has just said, you are sometimes getting "Let's get it off the balance sheet here" or "Let's get it into another year there". Here they are unique, and it is not one-size-fits-all, and many times you can think you have got rid of the financial responsibility by putting it into another column but politics being what it is and public perception being what it is and the media being what they are, you might rid yourself of the financial responsibility but you cannot rid yourself of the central corporate responsibility. At the same time, be it a local authority or be it a hospital, be it a prison, be it a school, they in turn, especially local authorities, would have their own rules, where they will be driven by an imperative which is not best value. They are often these days being driven by an imperative which is purely financial and that is Amanda's point which is that the dynamism of PPP should move it to best value, as opposed to cost, which might mean that the rules need to accommodate that more than they currently do. Would they bear review? I think they would.

  224. Why should my local authority which happens to do its own vehicle repair pretty well, not be able to compete with the private vehicle repairers doing MOT certificates, etcetera, on a level playing field and if people want to use the local authority they do and then use that as an income stream to subsidise other public services?
  (Mr Jones) I am agreeing with you. One of the sad things of this is that it has become so polarised that people either say public sector bad, private sector good, or public sector good, private sector bad, and everybody is suspicious of each other. There are some seriously good, not just caring public sector ethos points, but some good quality people working in public services where they are not allowed by the system to give full rein to their own talents and to be respected and admired accordingly simply because the system does not allow those avenues. One of the things that PPP should do, it will do, but it is whether the system in the public sector will allow it to happen, is flavour it with competition to the point where you are doing the good employees in public sector life a favour by showing up the inadequacies of their colleagues and allowing the good ones to come through. The system should at that point allow for those vehicle repairers to say they have stood up to the rigours of competition and they are better. Why can we not do it? I absolutely agree with you, but it is not just about whether the vehicle repair is better, it is about whether then, because that system allows that to shine through, there is somebody—matters not, in a prison somewhere or in a hospital somewhere—who thinks they have the chance to shine as a public sector employee.

  225. How do you get that public sector entrepreneurship into the public sector?
  (Mr Cox) You are doing already. There are already examples of it coming through, whether it is Working Links in the employment area or other examples. There is a scheme available to all of us, the Wider Markets initiative, which allows us to take public assets and in partnership make the most of them. In a richer model, a more diverse model, a set of models for the way the public and private sector work together, we need absolutely to look at how public servants and public assets, in conjunction with private employers and assets can be put together to deliver the right model. What matters is what works. This is not a dogmatic point: this is a pragmatic point. There are good examples. If you look at the current performance of the Working Links organisation it is putting some of the most difficult people in the economy back to work. They are doing extremely well and it is one third the Employment Service, one third Cap Gemini/Ernst & Young, one third Manpower. They have gone in together and made it work.

  226. An example I keep quoting is that we cannot do in this country what Stockholm City Council did which was to set up a company, let it go and raise its own capital, cable the whole of Stockholm for the Internet and then let private companies and public sector companies compete on those cables. It got its money back within 18 months. The rules we have in this country would not allow any local authority to do that.
  (Mr Jones) If you believe in the dynamic of PPP, I think we will get there and we should. I am agreeing with you.

  227. Would you tell the Chancellor?
  (Ms McIntyre) It is important that local authorities reach the decision to go ahead with such a scheme on the right basis. If relaxation of the capital finance rules is sold to local government as "Phew, what a relief. You won't have to deal with that nasty private sector any more. Just get on and do it yourself", that would be a great shame. It is important that authorities think about whether they really have the managerial capacity to start doing other work, when they really have a challenge to improve their own core services. It is also important that they think about whether they can take on the risks and manage them well and whether their accounting standards for that exercise really reflect the true costs and benefits of getting involved. The appraisal has to be right. If you still have a what-matters-is-what-works attitude, it is not about getting away from dealing with the nasty private sector; the analysis says it is a good thing to do and I do not see why not. We would also say that relaxation of the rules could well free out more for public/public/private partnerships. There is a real issue for local authorities and health trusts: why are they not teaming up together? Why are they not trying to share services and maybe relax some of those rules, but also trading more encouragement for wider market schemes within that overall collaborative action could be a very good thing. I just predicate it with the importance of making sure this is not sold as "You don't have to deal with the nasty private sector".

  228. So is the demise of the Modernising Government Unit in the Cabinet Office a major blow in not taking forward that whole modernisation of government?
  (Ms McIntyre) The questions of wider markets and the questions of relaxing capital finance rules are very much on the public sector agenda. The Government has changed the way it has organised itself to deal with those issues, but they are very live issues. Certainly we have been talking to the Government about it this week.
  (Mr Jones) I would hope that one driver of a review of it, both from the Treasury's point of view and then also from the local authority or the health authority's point of view, would be that at the moment you have 32 London boroughs, so you will have 32 of everything. Why can you not have one call centre? With all the police authorities you are going to have every police authority having the same. Why can you not have one of many things, pooling resources, just like the private sector would do in any other environment? I would submit that does not go to the core delivery aspect of PPP, it goes to the financing and getting better value out of the application of resource part of PPP, which is a systemic thing not a management thing. Because it is a systemic thing—going back one—it is a function of the dosh and that is why a review would be necessary. There is no imperative or incentive at the moment to get individual local authorities or individual health authorities or individual police authorities to pool anything. They might pool it at conferences and they might pool their brain power, and I am glad for that, but they can actually pool their resources on capex terms and yes, they should.

Mr Trend

  229. Earlier you were implying, and I would agree with you, that choice is a good thing. Our earlier witnesses spoke widely about choice in the public services. Let us just concentrate on the public services. How would you see a greater element of choice being made available to people who use the public services? Health and education are the two main subjects. It is easier to understand in education, in that we all have local experience of a very popular school closing its doors because it simply has nowhere to go, nowhere to grow, and not wishing to cast aside schools which have become sink schools, you wish to find a way of improving them. As long as it is a publicly managed and publicly accountable service, how do you get greater choice into the systems we have?
  (Mr Jones) With a small "e". Above all else you educate the consumer. You give the consumer more confidence in their choice-making ability. The PR battle has to be won and you have to get over one of the biggest obstacles which is the vested interest which will be ranged against giving the choice down in the trenches not up at strategic level but down in tactical level. There will be many vested interests against allowing choice because they might be the loser. The consumer, who at the end of the day exercises that choice, has to have more confidence, more information at their fingertips and more ability in feeling they are qualified to make that choice. One of the biggest problems on education particularly is this, and this is a role—Chairman, in our first exchange we touched on this—where actually the public side of PPP would work very well. I do not think you took further what I believe in personally very much, which is socially inclusive wealth creation, the ability for businesses and the private sector to reach out and win its spurs in the community, you do not serve that if all you do by allowing complete exercise of choice untrammelled, is where you have an incredibly bad school on all criteria you just close it and you just say "That's it". That would be an act of social exclusion eventually and not social inclusion. There has to be a public drive, albeit often using private sector to get to that public service, which allows choice to be exercised throughout society on a universal basis without running away from what only the private sector would do in those cases if they were left completely on their own, which is close it because they are only driven by the shareholder value argument. There has to be a partnership and it is a genuine partnership. You might not use the public sector to deliver it, but you would need the public sector drive to say, "Just a minute". Closing this completely and excluding geographical or age or ability sectors of the community, excluding them from choice which others do have, is not an option in my view. If social inclusion means anything in a business equation it means you might use the private sector to get there, but you have a public drive to get there because it is different to 100 per cent private sector.

  230. Down on the ground when we are dealing with schools we often find an education authority saying they are very sorry but there is a class-worth of pupils who wish to go to school X and there is no more room for them, or they cannot build on the site because it is Green Belt or whatever and therefore they will, despite their parents' wishes, have to go to school Y and they produce endless, sometimes I am sure very valid objections but couched in bureaucratic language which is not attractive to encouraging an atmosphere of choice. This is what you are actually faced with in towns and cities throughout the country. How do you get round this? A business, to use a parallel, would close and relocate and go to Hemel Hempstead.
  (Mr Jones) That is what I said. Where the culture has to change in the public sector in your example would be that not one parent would object to school Y being the alternative for their child if it were good enough. I accept there might be a transport point but other than that, if it were good enough, they would not object. Instead of "They'll just have to go", there should be an element of saying "Let's benchmark. Let's compete. Why is this school better than that school? Right, let's start sorting out some teachers on the basis of their ability to deliver there. Does the head need to be changed? Have some difficult decisions like dismissal got to happen? Do teachers have to think that if they do not perform they are out on their ear?" That concept, that culture, does not apply in the same way as it would in the private sector and if the end driver were that we wanted to make school Y good enough by benchmarking against school X over here, then the parents would not mind. Instead of which it is, "They have to go there and we all know it is not good enough". It is a fact of life in the twenty-first century, with the taxpaying consumer that they are going to ask what you are doing about that standard, those employees in that school, to deliver for their child. Let me give you an example. If you are at Nissan and you are a member of the AEEU or at Toyota and you are a member of the TGWU you have jumped through every hoop known to man in the last 15 to 20 years. I have been to both of those plants and they are high quality, highly skilled, hard working people working in those plants; they have become flexible, benchmarked employees, fully paid-up members of unions. I should think they go home at night pretty fed up when they get home and the schools might be school Y in your example, Auntie Flo has been waiting for an operation for two years and when she gets there it is not particularly brilliant and at the end of the day the standards of care in other areas of society are not good enough. They are wondering to themselves, why the employees in those public services will not change and be flexible and benchmark and accept competition, and at the end of the day take the worrying insecure part of that like they have had to in their place of work. This is not about business, employers and public sector, it is about everybody involved in both those cultures. If I were a fully paid up member of a union in the private sector, who had really had to change fundamentally and become flexible, I think I would demand the same of my union colleagues in the public sector.

  231. I understand that and I would agree with you too. What I was rather hoping was that you would have a different perspective on this, perhaps a more radical, novel approach. What you said about education is what local authorities say. They say they are not going to start new schools or let parents genuinely increase a school or decrease a school, a much more difficult thing to say. No, they are just going to make sure they manage everything so school X and Y are of comparable attraction to the parents.
  (Mr Jones) There is nothing wrong with that, as long as that management is forceful and radical enough to make a difference, which it probably is not.
  (Mr Cox) The only way you will get to a situation where you can physically produce the options you are talking about when there are given constraints is to make the best use of the resources available to you. Just to extend your analogy a little, as it happens, next door there is a public sector building, maybe an office block or something, just closed or which has a wing which is empty, maybe we could find a way of putting that class in there under the same management regime. This comes back to our basic thesis that you have to drive out the maximum flexibility among all concerned with different models What is right is what works. There will always be different answers. It depends what is next door to your school which is closing. It depends what other options are available. There is no formulaic single answer to your question but there is a systemic answer in driving out the maximum opportunity of providing options.
  (Ms McIntyre) In the best value regime, local authorities are supposed to challenge, think about using competition, they are supposed to compare their performance with others and they are supposed to consult the community. Of the four Cs, the one they clearly find most difficult is to challenge. What we need to do is encourage and support all public sector bodies to get better at challenging themselves.

  232. I agree with that but if we are trying to give consumers, ordinary people, a choice in public services, it seems to me at the moment, and despite many changes made in government over a number of years, people do not feel any more connected or able to make a choice. They feel as impotent as they always did.
  (Mr Jones) I disagree with that one point. There is a long, long way to go to get them to a point where they have the confidence and they have the information to exercise their choice better, but it is better today than it was 15 years ago.

  233. So the provision of information is very important. I would agree with that. Can we look at health for just a second? We have this recurring feature of this Government and the last Government putting in vast sums of money, extra billions, and since 1997 we have had PPP build or commission 35 hospitals, yet health figures show again and again that the number of patients being treated has gone down. If this were in a sense the flagship, and I agree that it is a much more difficult subject, for public/private partnerships in the National Health Service, this would clearly be a very bad start, or at least a very bad advertisement. Is the whole concept right or is the concept wrong or is it just going to take time? Martin Taylor said this was going to be a ten-year job. How can we go on selling this and will the politicians not say this just has not worked?
  (Ms McIntyre) If you look at the PFI projects in Health they have been dealing with decades of under-investment in assets but they have largely addressed that problem. We now have many new hospital buildings coming on stream, good quality buildings delivered to time, to budget and we have them and we would not have had them if it had not been for the PFI. Whether that is a good thing or not, it is just reality. We would not have had them. We have not been tackling the management difficulties within the NHS. The NHS in the past has been managed like a monolith. What you have in reality are some very good, very well managed hospitals, some mid range hospitals and some hospitals where there are clear management difficulties. The PFI has not attempted to tackle those problems and nor should it have because the PFI model would not be the right way to sort out management difficulties in Health. What you are seeing now more recently is a more concerted effort to tackle the management issues, to identify the different performance levels and to start treating each of those situations differently, managing a high flying hospital differently from how you manage a struggling one. That is going to be key and we also do need to think about new models of public/private partnership if we want to get more private sector involvement or different private sector involvement in other areas of health care, not necessarily saying we can PFI a whole hospital and deliver clinical services through the PFI, because that would not work, there is no appetite for it. There are probably other things you can do to help challenge, to get new ideas into the system.
  (Mr Cox) This is a useful and interesting debate because if we look at the numbers of people involved in the provision of and having contact with primary health care compared with secondary health care, we get very focused on 35 hospitals and the number of patients they might treat compared with the total number of employees and patients in the health system in general. This is a microcosmic part of a much larger argument and it plays to the wider debate of whether there are better ways of looking at systemic management of inflows and outflows and referrals and so on and so forth. There s a risk and it is a serious risk and it is a very serious PR risk in this whole debate that we get fixated on horror stories in one hospital which have nothing to do with whether or not the intersection of private and public provision of public health is a good or bad thing. I have to say I am seriously worried, as are members of my committee, that the fallacious, misleading and often factually totally inaccurate PR battles around this are actually taking us away from some serious systemic debate around how best value and best quality care is provided. If I have one wish at the moment, it would be that we were able to take that kind of headline, whether it is just journalism or politics or the intersection of the two, out of the debate about how you actually produce best values for health consumers.
  (Mr Jones) May I bring those two together on three levels? PPP is a dynamic. It does not have a beginning, a middle and an end. It has had a beginning, it is in its middle, but its middle is going to be onward and getting better by the day. That does not mean it is perfect and it does mean the private sector has a lot to learn in the way it comes to that party. Just as we are, I hope, an engine to try to get some change into the public sector, we must not come to it believing we are the answer to every maiden's prayer, nor must we create the impression that we know all the answers. It is a dynamic which will throw up areas where the private sector could have done better and, by the way, where the PPP itself could have done better. That should not be allowed to mean that people think the vast majority where it does work should not be encouraged. I have in mind particularly, the whole question of the way the media look at it, fanned often by socialist dogma which belongs to another age. When you get one problem in a PPP anybody would think the whole of the philosophy is dreadful, all the vested interests come out, the political dogma comes out and it hides the good which can be done. I repeat that does not mean we sit there thinking that we have all the answers, because we do not. One thing would help on that and all of you could help on this. I saw that awful tragedy of nine or ten bodies lying in a cellar of a hospital covered by a tarpaulin. No amount of funding in the Health Service would have stopped that. That was just bad management. Why was it that that evening on the news, I saw Alan Milburn standing up and taking responsibility for it and saying there was going to be an inquiry and saying "Leave it to me. I will sort it out"? My words, not his, but that was the impression I was left with. Politics should have got out of that. That should have been about line management responsibility, chief executive territory and it was not, nor should it be, for politicians. As long as media, consumers, employees, and politicians believe that when something like that happens, which is a real tragedy, but it was a systemic failure of management, as long as everybody believes they have a politician on the hook for it, we will never force the changes through, be it in the public or private, be it PPP or just public sector. We will never force it through because it will always be a political tool. What should have happened in that situation was that the politicians should have got completely out of it and left it to the people who are paid to run the Health Service.

  234. Irrespective of how long it takes, when will we have a successful Health Service when people feel that they can genuinely make choices in it? At the moment, despite what various governments have done, people do feel that it is still essentially a rationed system and broadly speaking they accept what they get.
  (Mr Jones) Yes, because they believe that free-at-point-of-delivery means they have not paid for it. Once they believe and it gets through that they have paid for it, although it is free at the point of delivery, then they will feel more confident about exercising choice.

  235. Do you think the private sector has an important point in making the expectations of the public more grown-up as to what to expect?
  (Mr Jones) I certainly do and by the way so do the public sector and politicians and media, because everybody confuses the difference between free and who pays for it. People understand choice when they feel they have paid for something. When they think they have not paid for it, they put up with a lot.

Mr Heyes

  236. There has been criticism of trade union leaders giving priority to the needs of the members over the needs of the consumers of services. I do not find that surprising because my personal experience as a local authority councillor for many years before I became a Member of Parliament was that the reality has been in the past that when the private sector move in, wage rates, labour costs, are reduced by driving down wage rates and reducing employment conditions and so on. Those are not fallacious or misleading allegations based on outdated socialist dogma, those are real experiences that I personally have been involved in. It seems to me not surprising that trade union leaders and workers are suspicious when the private sector appears to be moving in on their work. You probably recognise that issue and it is talked about at some length in your paper, for example the need to improve the handling of staff issues in PPPs, but I cannot see how you propose to achieve that because you do not favour legislation to address issues about the two-tier workforce, you are not keen on the idea of seconding staff from the public sector to the private sector and so on. I am finding it hard to see how you would address what I submit to you are real problems based on a very unpleasant history.
  (Mr Jones) I want both my colleagues to answer you specifically, but two general points. One is that the unions represent 19 per cent of the private sector, so 80 per cent of employees in the private sector are not spoken for by the unions at all. It is only two thirds of the public sector. If they wish to stand up and say they are fighting for their members, absolutely fine. That is what a lobby group does and that is what they are and that is what I do for my members and that is why we live in a free world. If they are actually going to start saying, no, we are also custodians of something greater and wider and bigger than this, then they are fixed with a conflict of interests because they are rightly fighting for their members, but they cannot say at the same time that they are fighting for the consumer, the taxpaying user of the service, because those two interests will conflict. Secondly, I would be the first to acknowledge that the original compulsory competitive tendering regime, the original way when PPP started that it did go for the lowest cost, it did take cuts in wages, did three things: it scarred people and made them against it philosophically. Secondly, it actually did not deliver and the private sector learned from this; it was a mistake, it did not deliver best value. They might actually have won the contract, but it did not at the end of the day deliver the better value which could come from it. Thirdly, the ongoing problem of a two-tier system is going to be that if you protect it with legislation, which TUPE is by and large doing, how do you deal with the fact that you need the flexibility, you need the management culture change? If you are going to bring the added value which the private sector can do, if actually what you are going to say is "By the way nothing has changed chaps. Everything is just the same", if you do that, all you will do is transfer a culture to a different paymaster. That is not what PPP should be about.
  (Ms McIntyre) If we analyse the problem you experienced in local government, CCT was bargain basement shopping at the expense of service quality and at the expense of terms and conditions of employees. The fundamental problem here was bad procurement and we believe the fundamental answer is good procurement. That is not a shallow answer, it is not a do-nothing answer, it is not an easy answer, it is actually very, very challenging. What we need to do in this agenda is make sure that public sector clients are really driving for best value for money and quality, that what they are looking for is a quality service, they are willing and able to pay for a quality service, they have a contract which holds the private sector partner to account for delivering that service, so there is very high performance management in the contract and they are skilled at choosing the provider who can deliver that quality service. That will then motivate that provider like nothing else to make sure that the provider has the terms and conditions that recruit, retain and motivate the staff of the right calibre to do the work. Since 1997 CBI has worked extremely closely with the unions and the Local Government Association and the Cabinet Office to improve the handling of workforce issues. Years ago we never used to talk to each other about this. Since then we have got together and we have done a huge amount of work to make sure that best value and other regimes are a win-win, better quality services and a better deal for staff. We have not finished the job but we have made a lot of progress.
  (Mr Cox) Just a specific, you have answered the general very well. I employ thousands of ex public servants day in day out; it is what most of my employees are. We recognise unions and collectively bargain for those people who are members annually. We allow people to choose if and when they want to move from their protected terms and conditions across to our standard ordinary terms and conditions. There is a steady flow across. It is always led from the top quartile of performers going first because they can recognise that they can grow and do things in a business where actually the core business we do is the one they do, whereas they were ancillary workers of some form in their previous employment. The whole environment when you get only a few months past the point of transfer is one where you actually on a day to day basis, looking at a team providing a service, cannot tell. I can walk round whole facilities which I am responsible for and unless I go and pull personnel records, I have no idea whether people were brought in or not. That is an environment where people enjoy working, succeed and provide a service within the public service that they are proud of.

  237. There is an obvious point to be made there. If thousands of ex-public servants are flowing into private sector employment, the real location of the management skills that we need in order to have successful public services is actually within the public sector now.
  (Mr Cox) Some of my best managers are ex public sector employees, whether they came across with the skills they have today is a different issue; some of them probably did. As a generality, they have been working in a system where their motivations have been different, where their measurements have been different and they have not all worked to their full potential. This is why the top quartile tends to come across more quickly than others and why they have been very successful and are now the senior management of what is a private sector enterprise because they had the potential to perform.

Mr Wright

  238. You mentioned in an article in The Guardian that the first thing to be recognised is that "Joe Public no longer cares about who delivers public services as long as they are of real quality". Is it not a fact that the general public do not know who is delivering that public service, and in many instances it is a private company, rather than that they do not care?
  (Mr Jones) It is both. Today they probably think "they" empty their bins and "they" push the hospital trolleys and "they" educate their children. This wonderful word "they" is the provider, so I agree with you. At the same time, I think the consumer has had enough of political dogma and the consumer is just saying if their mum is lying on a hospital trolley at two in the morning and she has waited two years for this operation, she does not really care whether it is a public sector employee or a private sector employee who is pushing the trolley. She does not care who is paid to build the hospital, she cares that she gets it free at the point of delivery, safely delivered, efficiently delivered and, by deduction, that the quality is giving her value for money.

  239. I accept that, but is not the point that invariably if it is a problem in a hospital, whether it is through the cleanliness of the hospital which may be looked after by private contractors, the fact is that it is the public service which gets the blame. I can liken this to the problems with Railtrack. If I am on the Anglian railways and the train happens to stop, and I am delayed for an hour, that may well be because of the points or something to do with the track. I will write to Anglian Railways and not to Railtrack. It is a perception of the point of delivery.
  (Mr Jones) If the baggage handlers let you down at Heathrow you write to British Airways. I do and you do, but you write to complain to and you identify with the point of sale to you and the point of service delivery to you. When you say the public service gets the blame it is not always the case; very wrongly the private sector sometimes gets the blame. One of the ways to improve that is the quality of procurement. I have an example where I was speaking somewhere and a lady said I had told her the private sector could sort this out but the loos in her hospital at three in the afternoon when she goes into outpatients are disgusting and she sees on the wall that this service is provided by a private company. I bothered to look into it and I investigated and I found that the contract was put out for cleaning the loos once a day at nine o'clock. So if you went in at nine thirty they were pristine but if 600 people are using them a day by three o'clock they are going to be pretty awful. That is the quality of procurement and the quality of contracting and by the way I should think not so clever in the private sector not to say "Just a minute. You are asking for the wrong product here".


 
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