Thursday, 7 June 2007

Scrutiny or Micromanagement?

A balance needs to be struck between effective scrutiny and unnecessary micromanagement. There is a danger of inappropriate interference (the 'Committee on the Conduct of the War' during the American Civil War is a blantant example of this - when a joint committee of Congress, dominated by a handful of radicals tried to micro-manage the military conduct of the union forces in the civil war).

An amendment was proposed to the Offender Management Bill which would have required the Secretary of State to

(a) ... by order specify factors, relating to the quality and value for money offered by the other person, by reference to which such decisions shall be made;
(b) ...
(2) ... after making each arrangement under section 3(2), publish a report explaining the basis on which the decision to select the relevant person was made by reference to the factors specified in the order made under section 5(1)(a).”

Lord Warner's remarks in the debate are worth noting

"It is an unnecessarily bureaucratic way of dealing with what is essentially a contracting issue. I hear what the noble Baroness, Lady Stern, says about shortcomings in particular providers outside the public sector in other areas of public policy. We could all trade examples of failures of public, voluntary and private providers of public services. That is what regulators and inspectors are there to help deal with. That is not the issue here; it is whether we should, as the amendment proposes, tie up a Secretary of State over the detail of a contracting process for alternative ways of providing services to the traditional probation service. Telling a Government how to draw up a contract in primary legislation, as the amendment would, seems absurd; then requiring them to publish a report on a set of individual decisions on these contracts is going over the top.

I should like to detain the Committee a moment by talking about some personal experiences I have had as a Minister letting contracts in the public sector. I authorised contracts for elective surgery, diagnostic equipment and clinical assessments worth hundreds of millions of pounds. There was no requirement in primary legislation to go through the process set out in the amendment because there are umpteen safeguards in common law and European contract law for the process by which contracts are let. You have to go through a very diligent process of specifying what you require and making that information available to all potential providers. As a public body, you are under an obligation to seek value for money in your contracts. There is often a testing process supervised by the Office of Government Commerce and the Treasury.

We do not need to lay this down in primary legislation. We are still accountable to Parliament as Ministers when we make those decisions. We can still be hauled before a Select Committee such as the PAC and we still have to answer to Parliament, day in and day out, in questions and parliamentary debates, for our behaviour and conduct in letting those contracts. This is not how to handle this issue. Micromanaging ministerial actions in the area of contracts through primary legislation, as this amendment does, is not how to govern an advanced country."

YOUR comments on Lord Warner's observations; the merits of making such requirements; and how to get the balance right are appreciated.