Procurement Bill [ Lords ] (Second sitting)

(Limited Text - Ministerial Extracts only)

Committee stage
Tuesday 31st January 2023 Public Bill Committees

Question proposed, That the clause stand part of the Bill.

[The Parliamentary Secretary, Cabinet Office (Alex Burghart)]

Colleagues will be sad to hear that we have only 117 clauses to go as we enter this second sitting. Clause 8 defines the concept of a concession contract. It is a type of public contract, and its award is regulated by the Bill. Subsection (1) sets out the key concepts specific to a concession contract. There are two main features. First, under a concession contract, at least part of the consideration received must lie in the right to exploit the works or services. A good example might be a concession contract to operate a canteen where the supplier receives income from customers.

Secondly, in exploiting that right, the supplier or concessionaire must be exposed to a real operating risk. Subsection (2) defines an operating risk, which is a risk that the supplier will be unable to recover its costs through the concession—for example, the risk of fluctuating vehicle numbers and income under a contract for the construction and operation of a toll bridge where the supplier has the right to receive the toll income.

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

Apologies for my lateness, Mr Efford. Clause 8 refers to concessionary contracts—contracts through which the authority contracts out work on the basis that the contracted company may be able to exploit or charge for extracted resources. Examples include the channel tunnel, which was paid for by private finance, with the financiers picking up the benefits. We support these contracts in principle—they can help us to build things without much cost to the taxpayer, and can help to expand the state—but there needs to be a balance. There needs to be guidance on what the right cost is. We could lose millions if the cost is wrong and the concession is given away too cheaply. Also, when deals regarding important infrastructure are signed, there needs to be caution to ensure that the long-term running of the system is up to standard. It is important that performance-based targets are included, as well as provisions for infrastructure building.

The Green Paper highlights that proposals for integrating the regulations for concession contracts into the core regime will be taken forward. However, there will be specific provisions covering the definition of a concession, how a concession contract is to be valued, and the duration of that concession. Those specific provisions address the key points raised by stakeholders in the consultation. The Government also propose to retain the higher financial threshold for concession contracts, greater discretion with regard to the method of calculating the estimated value of a concession contract, and an exemption for lottery-operating services, as well as other exemptions that come under the current regime; in all other respects, procurements for concession contracts will be subject to the new regime. We support the clause.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.

Clause 9

Light touch contracts

Question proposed, That the clause stand part of the Bill.

[Alex Burghart]

Light-touch provisions reflect the fact that certain public contracts, including those for social, healthcare and legal services, can warrant special treatment and greater flexibility. Flexibility is permitted by the scope of our international agreements. Clause 9 introduces the term “light-touch contract”, and provides for regulations to define which exact services should be subject to the lighter rules. As in the existing regime, common procurement vocabulary codes will be used to specify services.

The special features of the contracts are identified in subsection (4), which helps to prevent any inappropriate use of the power, as does compliance with our international agreements, which would prevent us from expanding the scope of what is included in the light-touch regime.

Light-touch contracts will be openly advertised unless a direct award ground applies. Contracting authorities will have to apply the exclusions and consider conflicts of interest. Transparency will be maintained through publication requirements, including requirements for an award notice, a contract detail notice and, when the contract is over £5 million, publication of the contract. By integrating these light-touch contracts into the broader regime, and having carve-outs where greater flexibility is justified, we have made it much clearer how such procurement should be run, and have ensured that probity and transparency are built into the process, while respecting these contracts’ unique characteristics.

[Florence Eshalomi]

I understand the need for a light-touch contracts regime, but I share the concerns expressed in the other place about the scale of the changes. Lady Noakes tabled a probing amendment that pressed the Government on why such contracts are not more narrowly or widely defined. Her amendment 30 sought to confine light-touch contracts to those concerning health or social care services provided to individuals, on the basis that that is how they are used at the moment—that is my understanding. However, if the Government believe that the definition should be wider, they should put that in the Bill. Open-ended regulation-making powers should not be necessary and are not desirable.

As the Minister is aware, the Cabinet Office delegated powers memorandum justifies the power by saying:

“While the scope of what is to be included in regulations made under this power is known, it is not practical for the Bill to include a long list of detailed…CPV codes to indicate which categories of contracts may benefit”

from the light-touch regime. It goes on to say that

“CPV codes may evolve over time, which would…require amendment to the Bill.”

However, the report of the Delegated Powers and Regulatory Reform Committee found that explanation to be inadequate, as

“it does not explain why it is considered appropriate for the power to be so broad that the issue of which kinds of contracts are to be subject to the ‘light touch contract’ regime is left entirely to regulations. There is nothing of substance on the face of the Bill to limit the discretion afforded to Ministers to allow less rigorous regulation for contracts of a kind that they choose to specify in regulations. Clause 8(4) lists three factors which Ministers must consider but without saying what effect these factors are to have. The Memorandum suggests that the provision made in exercise of the power will simply be a list of CPV codes but the power need not be exercised in that way.”

In its conclusion, the Committee said that

“the reasons given by the Government for leaving entirely to regulations the question of which contracts should be subject only to the ‘light touch’ regulatory regime are inadequate”,

and recommended that

“unless the Government can fully justify doing otherwise, the Bill should include criteria for determining which contracts should be subject to that regime.”

I understand the Government’s response to the consultation—that it might be tricky to tie down a definition and put it in the Bill—and Labour therefore does not seek to amend clause 9 today. However, I share the concerns aired in the other place about the scope of this part of the Bill. I am also concerned that the Government have not justified their stance beyond pointing to the existence of the common procurement vocabulary codes. Many feel that that does not answer the question posed by the Delegated Powers and Regulatory Reform Committee. I would like clarity from the Government on whether they are working closely with the likes of Lady Noakes to put their minds at rest. In particular, I would welcome a clear definition of what the powers in clause 8 mean in practice and how the Government intend to use them.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.

Clause 10

Mixed procurement: special regime contracts

Question proposed, That the clause stand part of the Bill.

[Alex Burghart]

Clause 10 concerns mixed contracts that involve an element to be procured under the general rules regime and an element to be procured under one of the special rules regimes. We discussed the objective of clause 5, which is in a similar vein. It is important to provide for such mixed contracts—a need for them will inevitability arise—while safeguarding against exploitation of exemptions and the lighter-touch rules. That will be achieved through the introduction of a test of separability, a safeguard similar to that in clause 5.

If separation of the general rules regime and special rules regime elements are possible, but a contracting authority chooses not to separate out the contract, then that mixed contract must be awarded in accordance with the general rules. It will not qualify for the special rules regime if the elements could reasonably be procured separately, having regard to the practical and financial consequences of splitting the requirement out.

[Florence Eshalomi]

As the Minister outlined, clause 10 is similar to clause 5. It is uncontroversial, as we see it, and it closes a loophole where one part of a contract could come under the special rules regime.

Question put and agreed to.

Clause 10 accordingly ordered to stand part of the Bill.

Clause 11

Covered procurement only in accordance with this Act

Question proposed, That the clause stand part of the Bill.

[Alex Burghart]

Clause 11 requires contracting authorities to carry out covered procurement solely in accordance with the Bill. Specifically, they must use the procedures in the Bill for competitive award, direct award and framework agreements. That will ensure that contracting authorities properly engage with the market and achieve value for money.

The duty that clause 11 creates will allow a supplier to hold a contracting authority to account. Remedies are available under part 9 when it can be demonstrated that a contracting authority has materially failed to have regard to one or more of the requirements in the Bill— for example, where there is direct award without proper justification, or discriminatory technical specifications —and the supplier consequently suffers, or is at risk of suffering, loss or damage.

[Florence Eshalomi]

We support this uncontroversial clause. It underpins many parts of the Bill, and mandates that procurement must be carried out under the terms of the Bill. The clause also points to different parts of the Bill for different forms of procurement—to clause 19 on competitive award, clause 41 on direct award in special cases, clause 43 on direct award after switching procedures, and clause 45 on award under frameworks.

Question put and agreed to.

Clause 11 accordingly ordered to stand part of the Bill.

Clause 12

Covered procurement: objectives

--- Later in debate ---

Procurement should be used to grow our economy locally, to build our country up and to provide greater resilience for future generations. I am pleased that the hon. Member for Aberdeen North mentioned the fantastic work of the Labour Welsh Government on the Wellbeing of Future Generations Bill, and that is what needs to be in procurement—that is the aim. The aim is not a quick buck and just to procure everything out. I shall rise to speak to other clauses looking at in-sourcing—something else that would be allowed more easily if social value was on the face of the Bill. I urge support for all the amendments in the group.

[Alex Burghart]

I will try to treat all the amendments in this large group in order. Amendment 9 seeks to replace the well-understood concept of value for money with a new duty, by importing into the procurement objectives the meaning of “social value” under the Public Services (Social Value) Act 2012. There are difficulties with that approach, I am afraid, in particular that there is no definition of “social value” in that Act. Contracting authorities are also likely to struggle to understand the concept of equity in the context of procurement.

Amendment 10 is unnecessary, as “public benefit” already allows for “public value” and for contributing to socioeconomic development to be considered where appropriate and relevant. This amendment also undermines the concept of what is in the public benefit by overlaying a similar but different concept of public value. That suggests that benefit and value are different things, and narrows the former term in a way that is not legally helpful.

Amendments 9 and 10 are also not necessary to ensure that social value is considered in the procurement objectives. The public benefit objective in subsection (1)(b) requires contracting authorities to think about the extent to which public money spent on their contracts can deliver greater benefit than it otherwise would—for example, broader social value or equitable outcomes for groups such as armed forces veterans, local employment and such like.

Amendment 101, tabled by the hon. Member for Aberdeen North, seeks to add transparency and anti-corruption efforts to the list of procurement objectives in the Bill. The Bill, however, will establish a world-leading transparency regime. It will see more commercial information published in three nations of the UK than ever before, including information on upcoming procurements prior to opportunities being advertised, and data against key performance indicators on major contracts, so that taxpayers can see how well contracts are being performed. Transparency is therefore already a mandatory requirement.

[Florence Eshalomi]

Is the Minister aware that the Government’s own “transparency ambition” document outlines a failure to provide for transparency in our procurement system? Some of the measures he has outlined are a step forward, but they still lack substantiveness to give providers and the public access to the full transparency that we need. Should we not look to follow in the steps of Ukraine in publishing an accessible digital dashboard, which would help the Government?

[Alex Burghart]

As the hon. Lady knows, transparency sits throughout the Bill. As I have just said, there are far greater requirements to publish than ever before, on an online platform that the Government will provide. She gave the important example of Ukraine. She will remember that we talked about this on Second Reading: the Ukrainians were advisers to the UK Government when we were putting our ideas together, so we are very much building on what they did in Ukraine. This will be an extraordinary step forward for transparency in the nations that are taking it up.

The Bill also requires contracting authorities to have regard to acting, and being seen to act, with integrity. That will oblige them to consider how to prevent fraud and corruption through good management, prevention of misconduct, and control. Failure to take anti-corruption steps or measures will be an indication that the contracting authority did not have a regard to the importance of acting and being seen to act with integrity.

Contracting authorities will also be required to comply with the provisions in the Bill on conflicts of interests and the exclusion of suppliers, preventing contracts from being awarded to inappropriate suppliers. That provides further opportunities to directly address transparency and anti-corruption issues within the context of a procurement. I hope that we all agree that it is essential that the procurement regime commands the trust of suppliers, the public and our international trading partners. In our view, the Bill already provides for those matters as it stands.

Amendment 89 seeks to define value for money. Clause 12 specifically does not define value for money to leave a degree of flexibility for different types of contracting authorities to adapt the concept for their own procurements. Contracting authorities should be able to select the most advantageous tender that prioritises things that deliver value for money for them. There are many precedents on the statute book where the term is left undefined, and that allows for a degree of flexibility. I could point to the Communications Act 2003, the Energy Act 2004, the Defence Reform Act 2014, the Bus Services Act 2017, and so on.

[Kirsty Blackman]

The Minister has answered the question in relation to value for money not being defined in this Bill because it is mentioned in other measures without that kind of definition. Regarding the term “public benefit”, is it also the case that it is widely used in other legislation without being defined? If the Minister does not have an answer now, I would be happy to hear something afterwards.

[Alex Burghart]

No, I am happy to say that it is already set out in the social value Act, I think, which I mentioned at the start of my remarks. Similarly to amendment 9, we feel that amendment 89 is unnecessary, as “public benefit” already allows for those factors to be considered, where appropriate and relevant to the contract being awarded.

New clause 2, also tabled by the hon. Member for Vauxhall, seeks to oblige contracting authorities to follow the six principles that the Government consulted on in the Green Paper. Now, the Green Paper was just that; it was a Green Paper and it formed the basis of what came subsequently. The six principles in the Green Paper were subsequently refined and then translated into the objectives and specific obligations that now exist in the Bill in the light of the responses to the Green Paper.

The language of a Green Paper is not the language of legislation, and one of the main lessons from the Green Paper and the consultation was the need to reflect the principles in a way that helps contracting authorities understand how they will implement them. That is what we have done. However, I assure the Committee that each of those principles remains within the Bill in an appropriate form. “Value for money” remains a fundamental tenet of the procurement regime. It is well understood by contracting authorities so does not need to be elaborated on.

“Public good” was focused on the delivery of strategic national priorities, so we revised it to the objective of “public benefit” to address the concerns raised in the public response to the Green Paper that it was solely about national, and not local, priorities. The revised principle supports wider consideration of social value benefits.

As we have discussed, “transparency” remains as an objective to encourage information sharing with suppliers, and “integrity” also remains an objective. The public response to the Green Paper indicated that “fair treatment” was too subjective for contracting authorities to determine by objective standards, so we introduced the concept of “treating suppliers the same”, which hon. Members will find in clause 12(2). Finally, “non-discrimination” has been converted from an objective to a hard-edged obligation in clauses 88 to 90.

The combination of the objectives and specific legal obligations in the Bill deals with procurement principles more effectively than the broad principles that the Government consulted on in the Green Paper. I therefore respectfully request that the amendments be withdrawn.

[Florence Eshalomi]

I heard the Minister’s response, and I think, again, that it is disappointing that there is a total shift between what was introduced by the Government in the Green Paper and what we now see in front of us. That was also noted in the other place.

I welcome the aim of the amendments tabled by the hon. Member for Aberdeen North. That is something that we do support, and I know that she highlighted it in a Westminster Hall debate just last week. Climate change is something that we are very much concerned about.

On ensuring that we think about the next generation, we can only do that if we protect the environment and the Earth that we are on now. We only have one opportunity. We cannot do it later, because there will be nothing left. That is a key issue that our young people are concerned about, and it must be front and centre in this Bill.

The climate elements of the Bill are really important. They touch on social value and on public value. There is an interwoven link showing why that is important, and that should receive due consideration, so it is a shame to hear the Minister not wanting to take those measures forward.

--- Later in debate ---

Division 1

Ayes: 6

Noes: 9

Amendment proposed: 10, in clause 12, page 9, line 25, after “benefit” insert

--- Later in debate ---

Division 2

Ayes: 6

Noes: 9

Amendment proposed: 100, in clause 12, page 9, line 28, at end insert—

--- Later in debate ---

Division 3

Ayes: 6

Noes: 9

Amendment proposed: 89, in clause 12, page 9, line 28, at end insert—

--- Later in debate ---

Division 4

Ayes: 6

Noes: 9

[Florence Eshalomi]

I beg to move amendment 1, in clause 12, page 9, line 36, after “enterprises” insert “and co-operative societies”.

This amendment, together with Amendments 2 and 3, would ensure that the barriers to cooperative societies are considered by contracting authorities during the procurement process.

--- Later in debate ---

We know that there are potential benefits for our local communities from enabling companies to keep IP and manufacturing at home, where it belongs. This is a small but important way in which the Government could make it clear that this is a realistic, sensible and reasonable way for a company to choose to go forward if it wants to. That would help jobs and organisations in our local communities. As I said, I support the amendments.

[Alex Burghart]

Amendments 90 and 91, tabled by the hon. Member for Vauxhall, seek to amend clauses 12 and 16 so that contracting authorities have to have regard to potential barriers to the participation of charities, particularly when carrying out pre-market engagement.

Charities provide important services and may well offer the best value for money in a procurement, particularly in the social and education services. That was in the forefront of our minds when allowing greater flexibility for light-touch contracts, which means that those procurements often facilitate the participation of charitable and not-for-profit organisations.

Before I go on, I must correct my remarks to the hon. Member for Aberdeen North at the end of our debate on the previous group of amendments. I foolishly leapt to my feet and said that it was the social value Act that was relevant. It is actually section 4 of the Charities Act 2011. I am grateful to have officials who do not err.

There are a broad range of charities involved in public procurement, including some very large, well-established organisations capable of effectively competing in a public procurement market. Charities that need extra support for public procurement will often meet the definition of SME in clause 119, and will therefore already benefit from the duty in clause 12(4) to support SMEs, which applies to pre-market engagement and the whole procurement lifecycle. I say as someone who has worked with and for both large and small charities that asking for charities of all sizes to be treated the same way is perhaps not appropriate. In addition, the provisions on reserving contracts for certain suppliers in clauses 32 and 33 will help those charities that qualify as a supported employment provider or public sector mutuals.

The Government are fully committed to supporting charities, hence the sector will often be the beneficiary of grants that sit outside the public procurement regime. However, the Bill already functions to give appropriate support to charities’ participation in public procurement. It is undesirable to include other types of organisations in clause 12(4) and risk diluting the separate requirement for contracting authorities to have particular regard to barriers that smaller suppliers face because of their size. I respectfully request that the Committee does not support amendments 90 and 91.

In the other place, my colleague Baroness Neville-Rolfe admirably championed small and medium-sized enterprises, and tabled amendments to complement the Bill’s existing provisions that support smaller businesses. Those include explicit duties to have regard to the participation of SMEs. Amendments 1 to 3, tabled by the hon. Member for Vauxhall, would amend those duties to include a specific reference to co-operative societies. I share her deep admiration for co-operative societies. They play a very important role in our economy and our society as a whole. I am happy to confirm to the Committee that the SME obligation will include co-operative organisations where they meet the tests for being an SME.

Many co-operatives will meet our definition of SME in clause 119. Where they do not, for example because they employ more than 250 staff, they should not benefit from the duty to support SMEs. We think it would be wrong to treat a large co-operative bank, for example, in the same way that we are proposing to treat SMEs. If we included other types of organisations, we would risk diluting the Bill’s particular regard to the barriers that SMEs face—the clauses would lose their impact, which would be a shame for the SMEs that the Bill seeks to support. I therefore respectfully urge the hon. Lady to withdraw her amendments.

Question put, That the amendment be made.

--- Later in debate ---

Division 5

Ayes: 6

Noes: 9

Amendment proposed: 90, in clause 12, page 9, line 36, after “enterprises” insert “and charities”.—(Florence Eshalomi.)

--- Later in debate ---

Division 6

Ayes: 6

Noes: 9

Question proposed, That the clause stand part of the Bill.

[Alex Burghart]

Clause 12 sets out the procurement principles that establish what the Bill is designed to achieve, and how its success will be judged. The clause splits the procurement principles into objectives and other rules to help contracting authorities to understand what they are obliged to do.

The objectives in clause 12(1) set out the values of public procurement, the furthering of which contracting authorities must give proper consideration to in the course of making procurement decisions. Public procurement needs to be focused on achieving value for money, which is rightly at the top of the list of objectives set out in clause 12(1). However, each of those objectives has its own merit, and each must be considered independently. It is not the intention of the Bill that value for money, however important, disapplies or overrides the obligation on contracting authorities to have due regard for the objectives of public benefit, information sharing and integrity.

The rules on equal treatment in subsections (2) and (3) are obligations that set minimum standards that contracting authorities must follow. The Bill will also accelerate spending with SMEs through the creation of new duties that will require contracting authorities to have regard to SME participation. We want to level the playing field for smaller businesses and for buyers, not only to avoid putting up, but to remove barriers to their participation.

Question put and agreed to.

Clause 12 accordingly ordered to stand part of the Bill.

Clause 13

The national procurement policy statement

[Florence Eshalomi]

I beg to move amendment 22, in clause 13, page 10, line 2, leave out “may” and insert “must”.

This amendment would require a Minister to publish a National Procurement Policy Statement.

The amendment seeks to mandate that the Government “must” publish a national procurement policy statement, instead of just “may”. I am sure the Minister will tell me that the amendment is unnecessary as, of course, the Government will seek to publish a national procurement policy statement. However, as has been stated, the change that we have seen in the Bill from the Green Paper to today means that we can take nothing for granted when it comes to the Government’s word on procurement.

The amendment is identical to the one tabled in the other place by Lord Lansley. When Baroness Noakes introduced it, she said that the clause’s current wording leaves the door open for a statement not to be published. Given the importance of the policy statement in setting rules for covered procurement, it would be deeply damaging for it not to be published. I urge the Minister to ensure that that cannot happen by supporting our amendment.

[Kirsty Blackman]

It seems to me that this is probably the easiest amendment for the Government to accept. They have made it clear how important the national procurement policy statement will be, and how a significant proportion of the decision-making processes in the Bill will flow from that statement.

I support the amendment, and I would suggest going even further in saying that every Government should publish a national procurement policy statement. We have had quite a lot of Governments recently, but after every general election and every first King’s Speech of a new parliamentary Session, the Government should be clear in a number of areas. They should set out their policy direction of travel, not just in procurement but in general. That is a key moment when the Government could refresh their national procurement policy statement.

I do not have a significant issue with the Government updating the statement based on priorities. We have seen what has happened in the last few years with covid, and in the past decade or so, we have developed a better public understanding of the impacts of climate change. Science has changed, and not only have priorities changed, but the social system has changed as a result of covid. It therefore seems that updating the statement would be a sensible thing to do. If the Minister is not willing to accept the amendment, I urge him to make it clear that the Government intend to publish the national procurement policy statement, no matter whether the clause says “may” or not.

We will come to the clause stand part debate, but the clause states that there is an intention to keep the statement “under review”. Does the Minister expect that if Government priorities were to change significantly, a new or a tweaked statement would be published? For example, if something major happened, as with covid or the war in Ukraine, priorities may change as a result. Does he expect Government Ministers to at least consider updating the national procurement policy statement in the light of drastic changes that may or may not come to us in future?

[Alex Burghart]

Amendment 22 would require the Government to publish a national procurement policy statement rather than just allowing them to do so. We have had a lot of debate about the nature of procurement policy and the associated important elements of procurement, such as driving social change.

As has been demonstrated by the sheer number of topics that we have touched on, procurement is often used to transact wider policies. That is correct, but we have to be realistic about the fact that those policies shift over time. The hon. Member for Aberdeen North gave a couple of examples of that. Indeed, the Government demonstrated how quickly we can change our procurement policies in the light of Russia’s illegal invasion of Ukraine. It is therefore both preferable and necessary that procurement policy is aligned with wider Government objectives. As such, the publication of an NPPS is a decision based on the strategic policy priorities relevant to the Government at that time. It needs to be as flexible as possible, and mandating a Minister to publish one takes away some of that possibility.

However, I assure the hon. Lady that the Government absolutely intend to publish an NPPS. They are working on it at the moment, and I look forward to bringing it to the House and discussing it when the time comes. She is right that it will be possible for Administrations to update their national procurement policy statement, but it will also be possible for them to withdraw it. One reason for not mandating is that there may be times when the Government are working on a new one, and there is a hiatus between the two. I therefore do not see that changing the drafting of the clause and mandating the statement is necessary. I respectfully request that the hon. Member for Vauxhall withdraw her amendment.

--- Later in debate ---

Division 7

Ayes: 6

Noes: 9

[Alex Burghart]

I beg to move amendment 28, in clause 13, page 10, line 9, leave out paragraph (b).

This amendment would remove the requirement for a Minister of the Crown to give due regard to certain principles before publishing the national procurement policy statement.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 7, in clause 13, page 10, line 12, after “environmental” insert “, cyber security”.

This amendment would make cyber security one of the strategic national priorities for procurement.

Amendment 11, in clause 13, page 10, line 12, after “environmental” insert “, national security”.

This amendment would add national security as part of procurement principles.

Amendment 107, in clause 13, page 10, line 25, at end insert—

“(vii) fair treatment of workers, by ensuring fair pay and conditions, workplace wellbeing, development of skills and progression and diversity in recruitment.”

This amendment would add a procurement principle based on the fair treatment of workers.

Government amendment 29.

Amendment 105, in clause 13, page 10, line 36, at end insert—

“(4A) The national procurement policy statement must include measures to ensure that no supplier may be granted a procurement contract with a contracting authority where the Secretary of State is satisfied there is established evidence that a provider has been involved in—

(a) modern slavery,

(b) genocide, or

(c) crimes against humanity.”

[Alex Burghart]

The purpose of amendments 28 and 29 is to overturn amendments added to the Bill in the other place, which require that prior to publishing a national procurement policy statement, the Minister must give due regard to a number of specified principles and mandate the inclusion of a number of priorities in the NPPS.

I reiterate that the Government recognise that those principles are important to procurement, which is why most of them are already core elements of the procurement regime and are reflected throughout the Bill. That is evident in the Bill’s drafting overall. For example, value for money, integrity and maximising public benefit are set out in clause 12 as procurement objectives that contracting authorities must have regard to directly when carrying out procurements. As discussed, transparency is also a requirement running through the Bill. Furthermore, specific requirements in the Bill place obligations on contracting authorities regarding fair treatment of suppliers and non-discrimination in decision making—for example, the conflicts of interest provisions in part 5. Therefore, although the principles are important, to incorporate them as part of the national procurement policy statement process when they are already applicable to procurements on the face of the Bill is unnecessary.

Similarly, the other place added a subsection that requires the inclusion of specific priorities in the national procurement policy statement. Those relate to achieving targets set under the Climate Change Act 2008, the Environment Act 2021 and the Public Services (Social Value) Act 2012, as well as to promoting innovation among potential suppliers and minimising the incidence of fraud.

We carefully considered which policy priorities should and should not be included within the regime, in order to maximise productivity and ensure that the Bill is as streamlined as it can be to deliver for all contracting authorities and maximise the benefits from all procurements. It is, I believe, more than adequate that the Public Services (Social Value) Act requires contracting authorities to consider the economic, social and environmental wellbeing of an area when undertaking specified procurement. Restating that in a policy statement would be unnecessary, as that Act is already binding on contracting authorities.

The amendment introduced in the other place looks to increase innovation and minimise fraud, but that is already at the core of the Bill. With our new approach to small businesses, we are unleashing innovation in the supply chain, and by embedding transparency throughout the procurement lifecycle, alongside our plans for oversight, tackling fraud will be easier than ever before. It would be counterproductive to restrict the flexibility of the national procurement policy statement by placing specific priorities in primary legislation.

We have made it clear that the NPPS will be used to set out strategic policy priorities, over and above those enshrined in the Bill, that are relevant at the time that the NPPS is to take effect.

[Florence Eshalomi]

I oppose amendment 28; it would remove Lords amendment 46, which was added on Report. Clause 13 currently mandates the Government to give due regard to a number of important principles before publication of their national procurement policy statement. Those principles follow on from the procurement principles promised in the Bill— namely, promoting the public good, value for money, transparency, integrity, fair treatment of suppliers and non-discrimination.

Those principles are important. We know that public good allows us to put what we believe is best for the country at the heart of procurement. When we also consider the huge amount of money spent on procurement —ultimately, it is the public’s money going towards delivering goods and services—it is right that the Government expect the money to be spent in the public’s interest. Procurement must always have that idea in mind, and it cannot be driven by any other aim of individuals in Government or other private individuals.

--- Later in debate ---

The Government could start by following the Scottish Government’s lead in getting rid of Hikvision cameras. That is what is happening in Scotland; they are leaving our public authorities. As far as I am aware, the UK Government have unfortunately not yet made a statement that they will be doing the same, and it would be good if they were to do so. It would be good if they ensured that we started from the principle that no supplier involved in any of these atrocious crimes can be given a contract or public money that they can use to continue to commit such crimes.

[Alex Burghart]

Amendment 7 would require “cyber security” to be added to the list of principles to which Ministers should have regard when drafting a national procurement policy statement, and amendment 107 would require fair treatment of workers. Similarly, amendment 11 seeks to broaden the list of principles to which Ministers should have regard when drafting a national procurement policy statement by adding “national security”.

National security is, of course, of paramount importance. The Bill makes substantial provision for the protection of the UK’s national security through the national security exemption in schedule 2(21) and the discretionary exclusion grounds for suppliers in schedule 7(14). Where national security considerations are relevant, the Government have established policy and guidance that procurers must take strict account of.

Amendment 105 seeks to prevent the award of contracts to suppliers involved in modern slavery, genocide or crimes against humanity through measures to be included in the national procurement policy statement. The hon. Member for Aberdeen North mentioned her enjoyment of reading Bills. As she will see later on, the Bill already contains a robust regime for the exclusion of suppliers that are unfit to hold public contracts.

Schedules 6 and 7 set out a wide range of exclusion grounds that target the most serious risks to public procurement, and that explicitly includes modern slavery. We have also taken action to strengthen the way that modern slavery is defined, so that suppliers may be excluded where there is sufficient evidence that they are responsible for modern slavery anywhere in the world, whether or not they have been convicted of an offence.

I also draw the hon. Member’s attention to the debarment regime in clauses 59 to 64, which allows for Ministers to consider whether any supplier meets one of the grounds for exclusion and whether the issues in question are likely to reoccur. Suppliers on the debarment list face exclusion across the public sector at all levels. That is a significant step forward in our approach to supplier misconduct.

As I made clear in my initial remarks, the principles in clause 13(3)(b) are duplicative and do not serve a strong purpose. I therefore still propose to overturn them.

The hon. Lady remarked on failures in the existing regime. I gently extend the invitation to her, once again, to leave the existing regime behind and join the new regime; but alas, Scotland has declined to do so and will be stuck with the existing regime.

Question put, That the amendment be made.

--- Later in debate ---

Division 8

Ayes: 9

Noes: 6

Amendment 28 agreed to.

--- Later in debate ---

Division 9

Ayes: 9

Noes: 6

Amendment 29 agreed to.

--- Later in debate ---

Division 10

Ayes: 4

Noes: 11

Question proposed, That the clause, as amended, stand part of the Bill.

[The Chair]

With this it will be convenient to consider clause 14 stand part.

[Alex Burghart]

I hope the clauses can stand part of the Bill.

[Chris Evans (Islwyn) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Efford. The clause states that Welsh Ministers may publish a statement setting out

“the Welsh Government’s strategic priorities in relation to procurement.”

I am pleased that the Welsh Government are adopting the Bill, subject to the legislative consent of the Senedd, of course. To put it simply, the clause comes down to respect. Devolution was originally introduced in the UK in 1998 through the Scotland Act 1998, the Government of Wales Act 1998 and the Northern Ireland Act 1998. It has since become embedded in our society and our national identities; a whole generation has not known anything different, which is a good thing. Protecting the voices of our devolved nations in UK legislation is crucial not only for maintaining the relationships between the UK Government and the devolved nations, but for our democracy as a whole. The Wales procurement policy statement is the voice of the Welsh Government on procurement and, by extension, the voice of the Welsh people, and that deserves a place in the Bill.

The Bill has arisen from our exit from the European Union. Our exit has given us opportunities to ensure that our legislation works best for the UK and the devolved powers. We need a procurement system that works for all communities across the UK and all the devolved nations.

Clause 14 also outlines the steps that Welsh Ministers will need to take before publishing the policy statement. They include carrying out a consultation and, after receiving the responses, making any necessary changes to the statement, which must then be laid before the Senedd. The Bill is a good example of how the two Governments can work together in consultation on legislation in a devolved setting.

I note the views of the Welsh Government on fair value and social partnership, which they have outlined in their Social Partnership and Public Procurement (Wales) Bill. It focuses on the wellbeing of Wales and a “prosperous Wales” as an outcome of procurement, and provides a framework for improving socially responsible public procurement. Ensuring that our public procurement system supports the whole UK’s prosperity is vital.

The social partnership between Government, employers and workers is also a strong focus of the Welsh Government’s Bill. It is valuable to include everyone who is at the table. A major component of the legislation is the requirement on certain public bodies to take into account socially responsible procurement by establishing wellbeing goals that they must meet when procuring, and to publish a procurement strategy. Under the Welsh Government’s framework, those public bodies will be required to seek to improve economic, environmental, social, and cultural wellbeing when carrying out procurement.

--- Later in debate ---

The Welsh Minister also noted that it would not be appropriate to recommend consent until this matter of concern had been resolved. To reinforce my earlier point, devolution is embedded in our society, and respect for the Welsh Government should be best practice. Until those concerns are resolved, I am worried about the potential impact on the foundation of devolution; this may affect the relationship between the two Governments. I hope that the Bill is used as an opportunity to retain a Welsh voice in procurement, and to ensure continued co-operation between the UK and Welsh Governments.

[Alex Burghart]

I am delighted to follow the hon. Gentleman’s comments about Wales. I must say that work on this Bill has been an absolute model of co-operation between us in Westminster and colleagues in Cardiff. The Bill is very much a result of joint working, and it is stronger for it, and for the support it enjoys from colleagues from Northern Ireland, from Belfast. We hope that one day colleagues in Holyrood will see fit to join us in creating a new procurement landscape that takes advantage of the opportunities that leaving the EU has made available to us. I praise the joint working that we have seen so far, and look forward to joint working in the future.

Question put and agreed to.

Clause 13, as amended, accordingly ordered to stand part of the Bill.

Clause 14 ordered to stand part of the Bill.

Clause 15

Planned procurement notices

Question proposed, That the clause stand part of the Bill.

[Alex Burghart]

Clause 15 concerns the planned procurement notice. It is designed to give as much advance information to the market as possible, so that interested suppliers can determine whether they wish to bid in the procurement covered by the notice, and so that they have the maximum time for preparation. It also gives contracting authorities the option of reducing tendering periods by publishing a planned procurement notice. Publication of that notice may take place at any time before publication of the tender notice, but if its publication occurs at least 40 days and no longer than one year before publication of the notice, the contracting authority may, if it wishes, benefit from reduced tender periods of a minimum of 10 days.

[Florence Eshalomi]

As the Minister has outlined, clause 15 relates to planned procurement notices. When used well, such notices allow for significant benefits, both for the contracting authority and for the companies wanting to bid. For the contracting authority, they reduce the time limits associated with procurement notices by significant amounts; in many cases, that reduction may be from 25 days to 10 days, which represents a significant decrease in the time limit and reduces bureaucracy for contracting authorities. The clause will mean that suppliers get 40 days to plan for a bid before the official bidding time limit opens. We welcome that; it is a sensible mechanism that will benefit a number of SMEs, which often do not have legions of administrative staff. They will welcome that extra notice to prepare a bid for a contract.

As the Minister may be aware, Lord Hunt of Kings Heath and Lord Aberdare supported an amendment in the other place that attempted to make those notices mandatory. Lord Aberdare said:

“The existing wording in Clause 14(1) allows for better practice, confirming that contracting authorities are able to publish a planned procurement notice. But your Lordships will know that being able to do something within legislation does not mean that it actually happens…My preference might be simply to replace ‘may publish’ with ‘must publish’.”—[Official Report, House of Lords, 6 July 2022; Vol. 823, c. GC279.]

I do not think I need to push that point particularly hard with the Minister, but I hope that as we progress, he will explore in more detail what support can be given through the Bill to help SMEs.

How does the Minister expect the notices to be used by contracting authorities? When it comes to small contracts, the amendment tabled in the Lords may be too onerous on contracting authorities, but I think we can all agree that the notices are used by contracting authorities. As Lord True said in response to the amendments in the name of Lord Hunt of Kings Heath and Lord Aberdare,

“I agree that it is vital that the market—particularly certain aspects of it to which the noble Lord and others referred—is given sufficiently early warning of what contracting authorities intend to buy so that suppliers can gear up to deliver. This is particularly important for SMEs and charities, which were referred to by the noble Lord and others.”—[Official Report, House of Lords, 6 July 2022; Vol. 823, c. GC290.]

Will the Minister outline to contracting authorities how often they should use those notices, and will he take a proactive approach to investigating how they are used by contracting authorities, and whether their use can be expanded?

Also, how can groups such as SMEs and charities find out about the notices? Perhaps the Minister is leaving much of this to the Government’s planned digital platform, but I hope he can confirm that the notices will be on the platform, and that SMEs will be able to find them efficiently.

[Alex Burghart]

Absolutely. This is all part of our enhanced transparency regime, which will make it much easier for everyone—authorities, suppliers, the public, the press, and hon. Members of this House—to see what is going on in public procurement. Planned procurement notices are a very good thing; they give authorities the option of making clear what they are about to do, thereby giving themselves the chance to speed up that process slightly later on. We have every expectation and hope that they will be widely used, and as the hon. Member for Vauxhall has said, it is often small and medium-sized enterprises that will particularly benefit. When this initiative is considered alongside our plans to encourage authorities to publish their pipelines, we can really start to see the benefits of enhanced transparency in this area.

Question put and agreed to.

Clause 15 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Julie Marson.)