`Insider dealing' alert on DSS computer contracts

Peter Lilley, the Secretary of State for Social Security, has been asked to consider whether two computer companies bidding for a £1.8bn DSS contract should be allowed to as they employ former civil servants from his department's IT division.

Labour MP, Stephen Byers, wrote last night to Mr Lilley after it was confirmed two officials from the DSS's computer agency had joined ICL and Siemens-Nixdorf in the past five years.

"I would have thought Mr Lilley would want to ensure there was no possibility of those companies ... benefiting from potential misuse of inside information," he said. The contract, the largest ever in the public sector, will be awarded in May.

The agency employs 4,000 people. In the last five years, seven officials have been given permission to join IT companies in the private sector. A spokesman insisted last night that Mr Byers had no cause for concern. "There is absolutely no conflict of interest," he said.

Senior civil servants are required to seek permission before joining private sector companies with whom they have previously had contact. There is no suggestion that in these cases the rules were not observed.

ICL and Siemens-Nixdorf both deny any conflict of interest. An ICL spokesman said: "We can categorically state that nobody from the DSS is working on our bid."