Examination of Witnesses (Questions 40-46)
CAROLINE FLINT
MP AND MR
ADAM SHARPLES
23 JULY 2007
Q40 Chairman: Forgive me for being
cynical, but I will believe it when I see it. We have been round
this circle too many times and I hope you are very vigilant on
this because frankly I do not believe that flow chart will work.
We shall see. I appreciate you are not responsible for the Leitch
Green Paper but, tellingly, there was an annex setting out various
actions, who is responsible for them and a timetable for delivering
them. That is absent from the Department's Green Paper. Do you
think it would have been useful to have? We talk a lot about rights
and responsibilities but the rights and responsibilities of Government
tend to get left to one side.
Mr Sharples: The difference is
that our paper is very much a Green Paper for consultation and
we will obviously formulate an action plan in the light of that
consultation. The skills paper is the Government's formal response
to Lord Leitch's report and is therefore setting out the action.
Q41 Chairman: But the Green Paper
is your informal response to Freud.
Mr Sharples: That is right, but
it has a greener tinge to it.
Q42 Chairman: It was said to be the
Government's response to Freud, but I think that is overstating
it.
Caroline Flint: It was probably
overstating it. In the Green Paper we have put some specific dates
and timelines and some of the work which is going on in contracting
at the moment is underway to improve that. We are also asking
some particular questions about some of the proposals and the
timelines we have. At the end of this process we will have a better
idea of where that is happening. I am happy to look to see, if
that would be helpful, whether some timelines about some things
which are currently going to happen run alongside some of our
proposals to give all of us a better idea about how this is going
to look over the next year to 18 months.
Q43 Chairman: I want to try a couple
of questions where hopefully a yes or no answer might suffice.
Is it fair to say that the Government have ruled out this concept
Freud had of regional monopolies on providers?
Caroline Flint: Certainly we were
not predisposed in the Green Paper to the idea of one per region.
Q44 Chairman: That is nearly a yes.
I will accept that. Are we still pro the prime contractor model,
not a monopoly but just the prime contractor model?
Caroline Flint: Yes. I think I
would say yes to that in the sense that what I am interested in
here is how we can get capacity but also how we can ensure, where
there is sub-contracting, that the need particularly of small
organisations can be helped by the prime contractor. I met with
some of our contracting people the other week and one of the questions
I raised with them was that there are some small organisations
which, in terms of their particular output and what they do, are
very good. However, because they are small organisations they
do not necessarily have the overarching IT or human resource capability
to do a lot of the bureaucracy which is around contracting. One
of the things I was interested in was how a prime contractor could
assist those working within the area by providing services to
do with that as part of the work we are trying to do across Government
to recognise both the strengths of the third sector but sometimes
the weaknesses when compared with bigger organisations. I still
think there is a role in that, in terms of capacity and support,
which a prime contractor could play. Likewise on that, I am interested
in where the period of a contract might be enhanced by a longer
period for the contract to run but also how you would build into
that break points where, if delivery were not happening, the contract
would not continue. Those are some of the discussions I am having
in the Department to try to develop the capacity, but at the same
time safeguard some very good services provided by small organisations
and also giving time for a contract to develop whilst at the same
time not allowing it to run on regardless of whether they are
actually delivering. I am having a discussion around that. I hope
the Green Paper reflects some of the things we are dealing with
and we would welcome people's views on that.
Q45 Chairman: As you may know, the
Cabinet Office are consulting widely with the third sector—horrible
phrase—and the message which always comes back is that there
are warm words going out but when it comes to pen-to-paper contracting
it has become very price sensitive. That sector cannot cope with
excessive financial risk; it cannot cope with constantly having
to devote precious staff time to bidding. I know it is something
of a different project, but on the Terminal Five project, written
into the contract was effectively a code of conduct for dealing
with sub-contractors. I am sure, with the skills which are in
the Department, something could be done around that for the prime
contractor model.
Caroline Flint: I am happy to
look at that. There are some opportunities here for prime contractors
to have some responsibility about where it is possible for them
to relieve some of the burdens on some of the organisations which
are relatively small; they produce a very good outcome in terms
of their delivery, but they do not have the organisation and infrastructure
to do some of the things which often come very easily to large
organisations. I am happy to take that away and have a look at
that.
Mr Sharples: We do have some experience
of working with the prime contractor/sub-contractor model on New
Deals. We went to that model last year. Interestingly, a high
proportion of both the prime contracts and the sub-contracts are
held by third sector organisations. Of the 94 prime contracts
29% are held by third sector organisations and of the 527 sub-contracts
36% are held by third sector organisations. We do feel we are
getting quite a good mix of not-for-profit involvement in employment
service provision in the existing New Deal contracts. We would
certainly want to continue that in the future contracting arrangements.
Q46 Chairman: I understand what you
are saying and I take your point. It is probably not for a public
arena but some really interesting things have been happening on
the contracts for the roll-out of Pathways to Work. There are
potentially some serious consequences around some of that.
Caroline Flint: I will have a
look at that.
Chairman: I am interested that you are
looking at it, you are concerned and you share the Committee's
concern. May I thank you very much for today? It was very good
of you to do this at short notice. I realise this is an ongoing
agenda and I look forward to us exchanging views again.
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