My Lords, Amendment 17 would make it possible for probation trusts to be able to tender for or commission future probation service contracts. The Government have said that it is open for probation trusts to convert to mutual status and to bid on that basis. I understand that assistance would be provided to trusts that wished to change their status into a mutual organisation in order to bid for the contracts. A mutual organisation would need its own financial backing and therefore any risk would be on the new financial backers of the mutual organisation and not on the Government. The Government argue that probation trusts as public bodies must not take financial risks. However, as we have heard from my noble friend Lord Beecham, there are many examples of government public bodies taking financial risks. In this context, it has been deemed that they must not take them.
If the new mutuals were to bid and win then of course the risk would be on their backers and not on the Government. This begs the question as to why the Government are unwilling to take on the financial risk. Do they believe that the contracts will be too risky for the public purse? It also raises the question of the need for the public probation providers to maintain competition with private providers. We have seen in recent years—I am thinking of the prison service—where the public sector has bid and won contracts back from private providers. My argument is that you need to maintain competence in the public sector in order to keep the private providers honest.
It is surely in the Government’s interest to maintain public sector competence and public sector capacity to ensure proper competition in the future. If there is inadequate interest, as there many well be, among probation trusts to convert to mutual status, what action will the Government take to ensure that this
competition is maintained? It is very difficult—I would argue impossible—to oblige people to take on financial risk. The Government clearly want to offload their own financial risk. The argument and the purpose of this amendment is that is overwhelmingly in the Government’s interest to maintain public sector capacity to provide proper competition for the private sector. I beg to move.
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