Private sector will deliver 'value for money' Npss

John Hutton, Secretary of State for Work and Pensions has dismissed fears the private sector is not the “natural area of society or the economy” to run personal accounts.

Answering questions in the House of Commons yesterday Hutton says the government wants a “value for money solution” adding in his view the private sector has "the expertise and experience" to deliver this along with a good service to consumers.

The government has included in the current Pensions Bill legislation to establish a Personal Accounts Delivery Authority (PADA) which will get the new system up and running, although its initial role will be simply to advise the government.

However David Taylor, the joint Labour and Co-operative MP for North West Leicestershire, says while the idea of delivering personal accounts through a modern organisation within a framework set out by government is fine, he says the idea of it being delivered by the private sector will make people nervous.

And he warned given the track record of the private sector, he does not feel it is the “natural area of society or the economy” to give responsibility for delivering such an important system.

However Hutton pointed out the government simply doesn’t have the expertise to deliver such a system, and instead he confirmed the government will “at some point tender this out and will make judgements in due course”.

In addition the Secretary of State agreed with Adrian Bailey, Labour and Co-operative MP for West Bromwich, that a low annual management charge (amc) has to be a “principle objective” of the PADA.

However he admits the exact level of costs “has to be a matter of detailed consideration for PADA”, although he pointed out the government intends to work very closely with the independent authority to make sure “this important aspect is brought to fruition”.

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