---

Railways: Public Procurement

My Lords, I have already spoken about the need for the Government to be clear and honest about their objectives in any procurement exercise, and I have stressed the need for a workable and realistic alternative to give strength to the Government’s hand. I cannot stress strongly enough the need for a proper risk allocation. Next is the Government’s ability to enforce the contract properly. It is essential that all contracts should incorporate an adequately sized bond, to be forfeited if the contractor or franchisee walks away from the contract. That should also be accompanied by predefined penalties to be levied for non-delivery at the end of, or dare I suggest during, the contract. If the contractor is a wholly-owned subsidiary, these should also be guaranteed by the parent company. Finally, whatever mechanisms are used, it is absolutely essential that they are made subject to independent and credible audit. Past arrangements have proved to be deficient in this respect and there is considerable scope for improvement. These are just some of the lessons that this group of experts drew from the history of rail privatisation. For anyone who may be interested, I would be happy to arrange to send them a copy of the report. May I ask the Minister—this long preamble does not change the fact that this is a Question for Short Debate—what he has learnt from past privatisation? What lessons have the Government learnt? Above all, can we have an assurance that these lessons will be properly reflected in any future public procurements? I am sure the Minister will understand that this debate is not just about the railways and that he will answer with that in mind. I intend to broaden my work on procurement with the help of experts in their field to look at education, the Prison Service, healthcare and housing to see how we can all learn from these lessons and ensure better procurement in the future. I am grateful to your Lordships for hearing me this afternoon. As someone who has spent most of my life working in the voluntary sector, often interacting with the private sector, it is not surprising that I have strong feelings about the procurement of services through these sectors. I know only too well how well, and sometimes sadly how badly, they can deliver services. The lunacy whereby we recently learnt that it would cost more money to cancel the building of two aircraft carriers than to have them completed must not be allowed to continue. It sometimes seems that the inmates have truly taken over the asylum. They say that hindsight gives 20:20 vision. Let us at the very least resolve to learn from the pains and tribulations of the past. I hope the Minister can assure me that Her Majesty’s Government will do just that in the future.