There are a number of difficulties and risks associated with the government’s proposals on price-competitive tendering. I am sure that the representative bodies will do an effective job of highlighting many of these flaws. I wish to highlight a major operational risk.
In the late 1990s, the Legal Aid Board piloted price-competitive tendering with crime firms in London. I was a manager at the board overseeing the pilot. We used the same sealed envelope method proposed in the consultation paper and all firms were paid at different rates. Around 25 firms participated in the London pilot. Shortly after the pilot started, the firms involved naturally identified each other and started to meet. One of the major conclusions drawn was that the board would never wish to contract with a small number of firms in each procurement area because this would hand a significant amount of power and influence to a small number of providers.
The government proposes to contract (for instance) with as few as five providers for the procurement area of Leicestershire and as few as four for Kent. Under this proposed model, industrial action has a strong prospect of being effective. For instance, if there was an increase in the number of arrests, the government will be obliged to provide additional funding to the remaining contractors to comply with its access to justice obligations. The government would not be in a strong negotiating position given that it had contracted with so few firms.
The risk to the taxpayer of restricting competition in the way proposed in the consultation is too high. For that reason alone the proposals should be significantly amended or abolished.
David Gilmore, DG Legal, Old Dalby, Leicestershire