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Street Works (Northern Ireland)

Order 1995

5.37 p.m.

The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield) rose to move, That the draft order laid before the House on 16th November be approved.

The noble Baroness said: My Lords, I beg to move the draft Street Works (Northern Ireland) Order 1995.

This order would introduce provisions broadly in line with those already in force in Great Britain by the enactment of the New Roads and Street Works Act 1991.

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The main purpose of the order is to introduce in Northern Ireland new provisions to facilitate the co-ordination and control of street works. It would replace the current, somewhat piecemeal arrangements found in the enabling legislation of the public utilities and in Northern Ireland's roads and road traffic law, with provisions similar to those in Part III of the New Roads and Street Works Act 1991. Modifications have been made to reflect the different legislative and administrative situation in Northern Ireland.

The order would generally apply not only to roads maintainable by the Department of the Environment, the sole roads authority in Northern Ireland, but also to all private streets. Its key aims are to reduce the delays and disruptions to road users caused by street works and to improve the quality of workmanship. It would seek to achieve that by encouraging a more co-operative approach between the undertakers of works, the department and other street authorities, and by clearly defining their respective duties and responsibilities. Like the Act of 1991, the order sets out a broad framework within which matters of detail can be dealt with under regulations and codes of practice, thereby facilitating future amendment to reflect changing circumstances.

Turning to the content of the order, utilities and other undertakers would be fully responsible for their works, including the permanent reinstatement of the street surface. The department and other street authorities would have a duty to co-ordinate their own and undertakers' works in the street. A key instrument in this would be a register showing information on works of all kinds in streets. Many of the requirements in the order would be supported by criminal penalties for failure to comply.

Street works are a major factor in congestion and delays in towns and cities in Northern Ireland and there is a clear need for a flexible system of organising street works to accommodate increasing traffic and increasing activity by utilities. I am delighted that the increase in traffic reflects a growing economy. I am confident that the order, in broadly harmonising the law in Northern Ireland with that in Great Britain, would be to the benefit not only of the utilities, but also of considerable benefit to road users, from improved planning and execution of street works and reduced traffic congestion.

My Lords, I commend the order to the House.

Moved, That the draft order laid before the House on 16th November be approved.--(Baroness Denton of Wakefield.)

Lord Williams of Mostyn: My Lords, I support this matter. I have neither criticism, question nor complaint. If this is the last Northern Ireland business this Session, I wish the Minister a happy Christmas.

Lord Holme of Cheltenham: My Lords, I had not intended to rise to my feet, but I offer from these Benches our best seasonal wishes to the noble Baroness.

Baroness Denton of Wakefield: My Lords, it would be discourteous of me not to return those felicitations. I thank noble Lords for the great support that they have

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shown for Northern Ireland, this year, for which everyone in Northern Ireland is most grateful. I commend the order to your Lordships.

On Question, Motion agreed to.

Contracting Out (Administration of the Teachers' Superannuation Scheme) Order 1995

5.40 p.m.

Lord Henley rose to move, That the draft order laid before the House on 15th November be approved [1st Report from the Joint Committee].

The noble Lord said: My Lords, the draft order will allow my right honourable friend the Secretary of State to authorise a private sector company to administer the teachers' superannuation scheme in England and Wales. The Teachers Pensions Agency administers the scheme at present. It provides a good service to members of the scheme. It has also achieved its key efficiency targets. Administering the scheme, however, is expensive. The TPA's running costs last year were over £15 million. We owe it to the taxpayer to see if we can make savings over and above those that the TPA itself plans to make.

My honourable friend the Parliamentary Under-Secretary of State, Mr. Robin Squire, therefore announced on 1st November that the Government were inviting six private sector companies to tender for a contract to administer the scheme. All six companies judge that they could administer the scheme for less money than it would cost the TPA and to at least as high a standard. Inviting them to submit tenders will allow them to show whether they could indeed do so. We shall let a contract to administer the scheme only if we are satisfied that it would deliver better value for money.

I should like to assure your Lordships of three points. First, there is no question of privatising teachers' pensions. Any contract would be only for the administration of the scheme.

Secondly, letting a contract would not affect the size or safety of teachers' pensions in any way. The scheme does not have a real pension fund. Pension contributions go straight to the Exchequer, and the Exchequer guarantees the payments to which members of the scheme are entitled. Those payments cannot therefore be at risk. Since the contractor would not be managing a pension fund, he could not make a profit from it. We would instead pay the contractor an agreed fee for administering the scheme.

Thirdly, any contract would require a standard of service and performance that was at least as high as that which the TPA would provide. We would ensure that any contractor met that standard. All six companies would intend to do so.

The Government have two goals; first, to ensure that teachers and retired teachers continue to receive a rapid and efficient service of pensions administration, and, secondly, to achieve, if possible, further savings for the taxpayer. Our current work is designed to achieve those goals. I beg to move.

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Moved, That the draft order laid before the House on 15th November be approved [1st Report from the Joint Committee].--(Lord Henley.)

Lord Morris of Castle Morris: My Lords, the House will be grateful to the Minister for the characteristic clarity with which he introduced the order and the issues which lie behind it. It is an enabling order; it is therefore especially important that we should be quite clear about what it will entitle, and enable, the Secretary of State to do.

The Minister will have read, marked, learnt and inwardly digested, to his equal profit and pleasure, the 23 columns of Hansard in which this order was debated in another place. And so it will come as no surprise to him to learn that we on these Benches are not entirely happy with the order. We wish the proposal had never been made and believe that no good will come of it. However, the order was voted upon in another place and it is the convention of your Lordships' House not to dispute such a decision.

We are unhappy with the order for a number of reasons. I shall mention just three. First, the debate in another place exposed the enormous power that any Minister may arrogate to himself under the Deregulation and Contracting Out Act 1994, since it would allow total freedom to vary a scheme which has some 1.25 million participants and running costs of the order of £15 million per annum. The Minister may do that without primary legislation and with remarkably little debate.

Secondly, the order has not been the subject of a comprehensive review. The scheme is presently administered by the TPA and was formerly run by the predecessor of the DFEE. In the only consultation which the Government undertook the claims of neither the TPA nor the DFEE to administer the scheme were considered. The only option was how the scheme could best be privatised or--a hideous word which has now crept into our language--"contractorised". Somebody in America said recently that there is no noun that cannot be "verbed".

A fair and just review would have examined all possibilities and not prejudged the vital issue. As I understand it, the original consultation involved 131 organisations and 128 of those refused to endorse the proposal. Only three positive endorsements were recorded. But the Government ignored that result and went ahead in spite of it with the privatisation option, dismissing those who were consulted on the grounds that,

    "their objections to contractorisation are not well founded".

Thirdly, we oppose the order because the proposal will undoubtedly lead to job losses among the TPA staff in Darlington. There can surely be no other way in which significant savings could be made, since everyone seems to agree that the TPA provides an excellent service to members of the scheme, has achieved or exceeded all its key efficiency targets and runs the proverbial "very tight ship".

We feel it necessary to try to clarify some of the issues which did not emerge clearly when the order was debated elsewhere. The Minister will be aware that it

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was a time-limited debate and that his honourable friend had only seven minutes in which to try to answer the host of questions he had been asked--and he had a few interruptions in the course of that. Perhaps I may therefore ask seven questions, all of which were raised in the other place and which his honourable friend did not have time to answer, even though he will by now no doubt have written to those who asked them. I gave the Minister notice of the questions because I feel it is necessary to have the Government's position on the order on the record and clearly stated for the avoidance of confusion.

Why were KPMG asked to advise on only one option for the future of the scheme? Given its terms of reference it seems to have been precluded from advising that the administration would be best left exactly as it is, or from considering any other possibility. Does not that fact, together with the Government's almost contemptuous dismissal of the clear result of its consultation exercise, suggest that the whole thing was cut and dried, decided in advance and ideologically controlled?

Secondly, why is the proposal being made at this particular moment? Was there not a Next Steps feasibility study in 1990 which created the agency, which has given complete satisfaction to everyone concerned? What has happened since 1990 to make it so urgent that the administration of the scheme be privatised?.

Thirdly, in the debate in the other place the Minister was unable to define what was meant by "core administration" in respect of the staff employed by the TPA at Darlington. He said that,

    "logic suggests to me that a significant proportion, if not the entirety of the operations, would be based in Darlington".--[Official Report, Commons, 27/11/95; col. 1005.]
It is widely believed that all six firms which have been invited to bid have said that they will retain their core administration in that town, but, my Lords, what else would they be expected to say, especially at this stage in a bidding process? Can the Minister give a closer definition of what is meant by a "core administration" and offer some better assurance of job security to the dedicated and successful staff of the TPA?

Next, the consultants, in their report, suggest that in a five to seven-year period something of the order of 20 per cent. savings could be made in the administration of the scheme. But, as I read the report, there is no evidence whatever to support such a claim. The TPA expects to cut its own costs by 7.5 per cent. for each year for the next three years, and we would like to know how this compares with the putative 20 per cent. estimated by KPMG.

Then, few people reading the Official Report of the debate in another place will understand the significance of the Hoskyns project which was apparently introduced to provide new information technology into the TPA. I certainly did not understand it. Hoskyns, whoever they are, apparently sub-contracted to an organisation known as UPSI. But UPSI went "downsi" and the scheme was

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a failure. Can the Minister tell us how another private sector company would be able to make similar provision which will not similarly collapse?

I would also be grateful if the Minister could explain where ultimate responsibility for the administration of the scheme lies. In so far as I understand the proposals, the tendering companies will know that, in the event of their failure, somebody else--and I suppose it will be the Government and the taxpayer--will find the money. If he will excuse the cliche, "If a private company's scheme fails, who picks up the tab?".

Finally, the question was asked in another place whether the Minister is prepared to publish the comments made by the six tendering companies, which will allow others to judge the effect of those comments upon any consequent contract. This seems to us a good idea and a "necessary transparency", as they say, and, so far as I know, no such assurance has been given.

I am grateful to noble Lords for their patience and forbearance while I have examined the minutiae of what is a complex and controversial proposal, on the ideology of which Government and Opposition are clearly and inescapably divided. But with a population which will be increasingly made up of pensioners, the matter is not one we can take lightly. Pensions are an extremely sensitive issue. And the memory of Mr. Robert Maxwell, though not fragrant, is still green.

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