waldegrave claims major CCT savings

MORE than £1.1b of the Government's market testing programme had been completed by the end of 1993, delegates at a Financial Times conference on resource management in the public sector heard last week.

William Waldegrave, Chancellor of the Duchy of Lancaster, who oversees the Office of Public Service and Science, told delegates that on average market testing had brought savings of 25-30% on public sector contracts. In local government, however, that figure was closer to 7%. Full details of the savings made will be published in the Citizen's Charter Second Report, due out in the spring.

But not all speakers were enthusiastic about market testing, which in local government takes the form of compulsory competitive tendering (CCT). Tony Allen, former chief executive of Berkshire County Council, described CCT as a "missed opportunity".

He said authorities such as Berkshire, which had already embarked upon a programme of voluntary tendering when CCT was brought in, had been constrained by its overly prescriptive regulations. On the other hand, those authorities resisting tendering, whom CCT was designed to bring into line, found ways round it by sharpening up the costs of their direct labour organisations.

Mr Allen pointed out that, had the Government instead rewarded authorities which had embarked on full competitive testing programmes, the private sector would have met with a more inviting business arena. "There would have been a more creative environment in which to develop new public/private partnerships," he said.

lTHE Association of Metropolitan Authorities has warned its members to take legal advice on employee pension rights when contracts are being transferred.

The position on pensions has been left unclear since bodies such as the British Hospitality Association and Business Services Association asked the Government to review new contractors' obligations.