(2 years, 1 month ago)
Grand CommitteeMy Lords, this is quite a large group, led by Amendment 268, and it encompasses a number of issues all of which relate to the structure of contracts and how contracting authorities enter into agreements with their suppliers. I will not attempt to speak to anything other than my five amendments, save to say that the first, Amendment 268, originally went alongside Amendment 269, which has subsequently been withdrawn but was in the name of my noble friend Lady Neville-Rolfe. Were it still there, I would have said that I have some sympathy with what she says, as there can be circumstances in which a contract, in effect, looks for one item of delivery. Therefore, in my view, one quantified key performance indicator may be appropriate and the requirement to have at least three would be unnecessary. The point is that contracts should have key performance indicators.
My point in Amendment 268, which starts this group so I am able to move it, is to replace the reference to “key performance indicators” with “quantifiable measures”. I entirely admit that we know where we are with KPIs, everybody has them and so on. The trouble is that KPIs can be non-quantifiable and qualitative. That is not what we are looking for here. There is a risk that, if we are not precise about it, they will not be quantifiable, and quantifiable is what we are looking for. I do not think key performance indicators should be subjective; they should be objective and demonstrably proven. Suppliers have a significant benefit where that is the case.
That is Amendment 268, and it is more or less probing. Many of my amendments in this group are intended to ask my noble friend and the department whether they will take account of these points in the way they draft the national procurement policy statement in the guidance that follows.
Amendment 270 also relates to key performance indicators and is linked to a point we discussed on Monday, which is that the structure of the relationship and contract entered into with suppliers should relate to the original tender and the specifications in it. The amendment says that the key performance indicators “must relate” to the tender. Likewise, I hope that my noble friend will say that the Government understand that and that that is their intention. Otherwise, we run the risk that people will enter a competitive selection process, win that process and negotiate a contract but, suddenly, the contract asks them to do things that were not in the original specification. That should not be the case.
My third amendment in this group is Amendment 364. As one reads the Bill, one may come across something and think, “How does that work?” This relates to changes in the contract and the definition in Clause 69 of “substantial modification”. The first definition is that the term of the contract is increased or decreased
“by more than 10 per cent”.
Most contracts are expressed in terms of months and years, and 10% is an awkward measure: “10% of an 18-month contract is 1.8 months—let’s work that out in days”. Can we not write this is in a slightly simpler way? One-sixth has the benefit, in my view, of making a substantial modification slightly more than 10%— 16% or thereabouts—but the point is that it is readily transferrable into months and years, particularly months. So, if a contract for 18 months is modified by more than three months, you know where you stand; it is dead simple. The purpose of the amendment is to suggest that it could be done a little more simply.
My final two amendments are Amendments 397 and 400, which relate to the termination of a contract and to Clause 72. The clause states:
“every public contract … can, if a termination ground applies, be terminated by the contracting authority”,
and a list is then given of the termination grounds. I do not know whether this has been left out deliberately, or because it does not appear in the public contract regulations, or because it is intended to be part of general terms and conditions anyway and therefore does not need to be specified in legislation. But force majeure is, I think, a termination ground for a contract, so I am not sure why it is not mentioned. The point is that it should be mentioned—and if it is, there is a problem with it.
I declare an interest, and in doing so revert to what I was saying earlier about the European Commission. This issue arose for us—my wife’s company—during the pandemic. We were contracted to supply a number of events and when the pandemic hit, or shortly thereafter, some of them had to be cancelled. Members will not be surprised to hear that, under those circumstances, a significant amount of expenditure had been incurred, including cash expenditure on locations, suppliers, venues and so on. The term of the force majeure written into the European Commission’s standard contract was that, at the point at which force majeure is notified, payment for the services provided is required. As noble Lords can imagine, initially, they said, “Well, you haven’t provided those services. Those events haven’t happened and we won’t be having them.” I will not bore noble Lords with all the detail, but the net result was that we lost money. We did not lose as much as we had feared because we had a negotiation, but, according to the letter of the contract, they could have said, “You’ve spent tens of thousands of euros on events that will not now take place, but because they are not taking place, you’re at risk and you will meet the cost.” This a very large public authority expecting an SME to take the hit. We did discuss it and they did come round, but I do not think that that arrangement is sensible.
I cannot imagine that our experience is in any sense unusual. During the pandemic, thousands of businesses must have had exactly the same kind of force majeure complication. In public contracts, the force majeure contract should say what I suggest in the amendment: that, under those circumstances, when the termination ground is notified, there should be a requirement to meet the expenditure
“necessarily incurred in relation to the contract”
up to that point.
I will be happy if my noble friend the Minister is able to say, as with the other amendments, that these are interesting points and she will take them away and look at how the guidance or the statement might reflect them for the future. I beg to move Amendment 268.
My Lords, my speech is a good way of following the excellent introduction to this group of amendments by the noble Lord, Lord Lansley. I start by thanking my noble friend Lady Hayman of Ullock for putting her name to Amendment 276A and the noble Baroness, Lady Bennett, and the noble Earl, Lord Devon, for putting their names to both Amendments 269A and 276A.
As the noble Lord, Lord Lansley, said, Amendment 269A is dealing with the key performance indicators, and it adds a line that I hope the Minister will find useful:
“including at least one indicator in relation to social value.”
This would mean that all public sector contracts over £2 million would have to include a key performance indicator on social value. This would ensure that social values are included in all public sector contracts over £2 million and would send a clear signal to the private sector in particular. It would also ensure—similar to Amendment 477A, which we discussed on Monday—that contracts with social value commitments are monitored effectively and transparently.
Amendment 276A concerns transparency and “open book accounting”. It would insert a proposed new clause that I hope the Minister will see as helpful, given that she has spoken already in Committee about transparency and its importance in the spending of public funding. It says:
“All suppliers bidding for public contracts must declare the expected profit and surplus they expect to generate through the contract.”
In childcare, for example, the top 10 providers have made £300 million in profit, despite the standards of care falling and local authority budgets being under such pressure. We know this because the newspapers have reported on the conditions in which we have found cared-for children. During Covid, when we had PPE, a number of companies were making significant profits from these contracts without the need to report to the contract what margin they were prepared to make. I believe that this prevented the state adequately protecting our public money.
This amendment would mean that, on all government contracts, the supplier would have to report what profit or surplus they were expected to generate from the contract and then report back each financial year on how much profit or surplus they had generated—although I do not believe that this would solve the problem of people charging the state too much money for goods and services, and there is still a risk that companies could cost-shift artificially to reduce their declared profits. This may well leave the taxpayer in a better position to understand the true costs of contracts and would advantage providers such as social enterprises and SMEs, which are more likely to be investing the money received from contracts back into their businesses than extracting public money as profit. That is an important point because charities and social enterprises are bound by their rules to complete their accounting in two or three ways, which would include the social value of the contracts they are fulfilling.
My Lords, I have tabled Amendment 271 in this group. At the request of my noble friend Lord Moylan, and with the leave of the Committee, I will also speak to Amendment 486 as my noble friend is unable to join us today.
This Bill is of course about the procurement process, rather than contract management, but Clause 50 wisely requires the setting and publication of performance indicators, which are a key element of contract management. I was always taught that what gets measured gets managed. I cannot envisage a situation where contracts could be managed without some form of measurement that could be converted into performance indicators. Amendment 271 in my name leaves out Clause 50(2), because that allows the contracting authority not to set performance indicators if it considers that
“performance under the contract could not appropriately be assessed by reference to key performance indicators.”
Clause 50(2) is fundamentally unsound because it is tantamount to saying that the contracting authority cannot manage its contract.
There are some kinds of contract—for example, the delivery of health and social care services—where measurement may rely on subjective judgments by the service recipient, but they too can be converted into indicators. I disagree with my noble friend Lord Lansley, who seemed not to like subjective performance indicators; I think they are a perfectly good part of any framework of contract management. Light-touch contracts are of course not covered by Clause 50, and that covers quite a lot of the contracts involving health and social care.
(2 years, 1 month ago)
Grand CommitteeMy Lords, I shall speak to Amendments 477A and 486A in my name. I thank my noble friend Lady Hayman, the noble Baroness, Lady Bennett, and the noble Earl, Lord Devon, who is not able to be with us today, for their support.
The amendment addresses procurement investigations. It would add, at the end of line 28 on page 60,
“and the implementation of social value”.
It would require the new procurement investigations authority to be able to investigate the implementation of social value. There are regular reports of public bodies that have secured promised social-value outcomes from contractors—apprenticeships, jobs created, investment in local infrastructure and so on—but these are not delivered. As social value is weighted in tenders, organisations can win tenders to deliver social value but may not always deliver the social value that they have promised.
The amendment would give the new procurement investigations authority the ability to investigate whether public bodies were securing social-value commitments that had been promised and to be able to report on that to Parliament. Currently there is no part of government that is bound to collect information on the implementation of social value. Indeed, the Cabinet Office had started to do this for central government through the social value model, but that is not comprehensive. Social value is just as much value as financial value, and the new procurement investigations authority should take social value seriously. This would have the added benefit of increasing awareness of the importance of social value in the public sector.
Amendment 486A would add a new clause. Because social enterprises and small and medium-sized enterprises often complain about barriers to accessing contracts in the public sector, which this Committee has discussed at some length, the proposed new clause would seek to ensure that the new procurement investigations authority would have expertise from the social enterprise sector and the SME sector so that they could ensure that contracting authorities were carrying out procurement exercises in a way that was fair to the sector.
Despite the Government’s commitment to expanding the role of social enterprises, voluntary organisations and SMEs in winning public sector contracts, that has not taken place. Research by DCMS estimates that only 5% of contracts are being won by voluntary sector or social enterprise organisations. Only one in five pounds of public procurement, 21%, is going to SMEs despite a 33% target. The amendment would give the new procurement investigations authority the expertise to be able to investigate whether contracting authorities were doing what they could to help SMEs and social enterprises to win contracts fairly.
My Lords, I am glad to follow the noble Baroness, Lady Thornton, on the issues that she raises. When the Government and Whitehall look through the prism of public sector procurement, that tends to lead to a very centralist approach that is about value for money, not for the taxpayer but for government departments. Sometimes things are not exactly in line with each other. There are many areas up and down this country where social value could really be added to if the Government, through primary legislation, understood what social value was and therefore ensured that in the Bill, when every single public sector procurement body in the land was awarding and using criteria to judge a contract and a supplier’s tender, that became vital.
The second issue on that refers back to something I think my noble friend Lord Fox said earlier, although I was not in the Committee at the time. The definition of such issues regarding social value are vital, because social value means many things to many different people. It is not to put contractors into a straitjacket. They can still innovate as long as there is a definition and a framework of what social value means. It is vital that the Government understand that it needs to be there as a guide for contractors, not as a straitjacket.
Also based on what the noble Baroness, Lady Thornton, said, the voices of the third sector, or the charity sector, and small to medium-sized enterprises need to be central to how procurement and social value are aligned within the Bill and public sector procurement. I remember being leader of Sheffield City Council. The thing that amazed me was the innovation and what happened if we brought the voice of the charity sector and small to medium-sized enterprises into how we were working. We did not call it social value then; it was to improve our place. It was place-based procurement at the time. They could change the dial completely about how procurement was done. We therefore had a view across the authority about how it was done based on some of the words, concepts and ideas that charities and small to medium-sized enterprises had. Those became a policy driver for procurement. It is therefore vital that the Government think carefully about the concept of social value, and what it means in the framework in the Bill, rather than just being loose words which many people define differently, or this will end up not having the maximum value in communities up and down the land.
Following on from that, if the Secretary of State can give and the Secretary of State can take away, and we have no sense that this panel will endure past the next government reshuffle—which could be any time now—without having it in either primary or secondary legislation, what status does this have at all other than the good will of the then Secretary of State?
I refer again to the Government’s response to the consultation: the role of the PRU was very specific. It was aimed to deliver the same service as the public procurement review service—and perhaps the Minister could tell us whether that is being disbanded and folded into the PRU; will it still exist or what? The response stated that
“the PRU’s main focus will be on addressing systemic or institutional breaches of the procurement regulations”.
The Minister has narrowed that down to debarments and compliance. It seems there really has been a declawing and a removing of this body from any statutory basis. As my noble friend points out, it is not very clear which the appropriate authority would be in those circumstances.
I might as well intervene now too, because the question I would really like to ask the Minister—and it is very nice to see her back in her place, as she was the Minister responsible for putting equal pay on the statute book, and I hope her progressive instincts there might be followed through in this piece of legislation—is about social value. How do we deliver social value if there is absolutely no way of examining it, monitoring it and enforcing where it is not being delivered?
Following on from what the noble Baroness, Lady Thornton, has said, and from what the Minister said about how this could not be in the Bill because it is a policy initiative, the procurement objective in Clause 11(1)(b) is “maximising public benefit”, which is a policy issue. All the noble Baroness is trying to do is ensure that social value is looked at by the appropriate authorities. Actually, it is more defined and specific in law, because there is a social value Act but no public benefit Act. The Minister’s answer that it is just a policy issue really does not stack up.
(2 years, 2 months ago)
Lords ChamberTo ask His Majesty’s Government what the responsibilities of the Minister for Equalities will be, and whether they will update the gov.uk website to list those responsibilities.
The Minister for Equalities’ role represents all aspects of the women and equalities portfolio in Cabinet. The portfolio has not changed and includes all areas of his predecessor’s portfolio. This was confirmed by the Prime Minister’s spokesperson shortly after the appointment of the Minister for Equalities and has been reflected on GOV.UK. The Cabinet role will be supported by the newly appointed Minister for Women in the other place and by me here in the House of Lords.
I thank the Minister for that Answer, but I am still curious as to why Minister Zahawi is nervous of having women and equalities in his job title; you would think he would be proud to carry a title showing concern for over half the population. Even more puzzling—maybe it shows the priority this Government are giving to equalities issues—is that it took six weeks and my questions for the responsibilities to be put on GOV.UK. Well, better late than never. When can we expect an equalities impact assessment of the mini-Budget and how it will affect women, black and minority ethnic communities, disabled people and others with protected characteristics?
I do not know when an impact assessment will be available, but I am sure one will be. On the whole question of having “women” in the title, the designation of job titles is way above my pay grade. I cover all aspects of the portfolio in the Lords, and I would rather be defined by what we do and not what we are called.
My Lords, there is nervousness about using the word “woman”. Last night at the PinkNews Awards, Keir Starmer declared that he would make it a crime to misgender. That means people might use the word “woman”, but nobody will define what a woman is. Maybe that nervousness is because people are frightened of misgendering and getting dragged into the gender wars. Can the Minister assure us that “equalities” means that biological women will not have their rights sidelined by an equalities agenda based on gender identity?
One at a time, please. As far as I am concerned, I agree completely with the noble Baroness and will try to ensure that that happens.
(2 years, 2 months ago)
Lords ChamberMy Lords, I think the Minister has probably got the idea now that an old persons’ commissioner might be popular. I would have thought that the Government might be looking for popular things at the moment. Will the noble Baroness meet representatives of the WASPI women—the 3.6 million women whose pension age unexpectedly rose? I would also like the Minister to take this opportunity to clarify for the House whether the triple lock is to be kept or abandoned.
On the request to meet the WASPI ladies, the noble Baroness will understand that I will need to go back and talk to our new Minister for Pensions. I will put that request in and come back to the noble Baroness; I will write and put a copy in the Library. In 2019, the Government were elected and committed to the triple lock. As our Prime Minister has confirmed today, we will honour that triple lock for 2023-24 and the remainder of the Parliament.
(2 years, 5 months ago)
Grand CommitteeCan the Minister please explain why the term social value is not in the Bill?
My Lords, as I have just said, we believe that the additional objective of maximising social value would be a duplicate, as it is embraced in “public benefit”.
I am sorry, but the Minister has said that there is no definition of public benefit, and that is quite right. However, there is a legal definition of social value. It exists and is on the statute book, so why are the Government not using “social value” in the Bill?
My Lords, again, I have set out the argument. The noble Baroness disagrees but I am not going to repeat a third time the reason why we think maximising social value is unnecessary and would be a duplicative addition. Each procurement is different and what is appropriate, for example, for a large-scale infrastructure project is not for smaller transactional procurements.
Furthermore, procurement policy should be aligned with wider government policy and, as such, the publication of a national procurement policy statement is based on the strategic policy priorities relevant at the time. It would not be appropriate, in our submission, to include in the Bill priorities which can and probably will change —we have heard that they will—based on an Administration’s objectives. It is always important that policy priorities are included in individual procurements only where they are relevant to the subject of the contract.
On Monday, for example, noble Lords on all sides gave those of us on the Front Bench, I freely confess, a hard time in discussing the importance of minimising bureaucracy to facilitate SME participation in procurement. I took that away as a powerful call, which I have said we will discuss. As I think I have already indicated outside the Chamber, the Government are keen to meet and consider these points.
The paradox is that seeking to include extraneous requirements, which this and other amendments in the group risk, could make it harder for small businesses to bid for public contracts. One cannot talk the small business game, which noble Lords did strongly and fairly, while adding compliance requirements that make things harder for small businesses and help larger organisations to corner the market.
We think that Amendments 48 and 52 in the names of the noble Lords, Lord Hunt and Lord Coaker, and the noble Baroness, Lady Hayman, are unnecessary and potentially unhelpful to contracting authorities in attempting to impose on them an obligation to have regard to improving the economic, social, environmental and cultural well-being of the relevant area in and throughout all their procurement activities. In particular, they would place unnecessary burdens on them in relation to areas where this is of limited relevance and, again, open them up unnecessarily to the risk of legal challenge.
I wonder whether we would all agree—in fact, I do not have to wonder; I know that we would not all agree—on what carrying out procurement in a “socially responsible way” means. In a sense, that is implicit in the challenge from the noble Baroness opposite. We all might have rather different understandings of what that requires. Imposing a legal obligation of such potential breadth on contracting authorities is, we submit, exposing contracting authorities to unnecessary risk and complexity. Contracting authorities will be able to take account of measures that improve the economic, social and environmental well-being of the relevant area—this may differ from local authority to local authority, for example—where it is relevant to the subject matter of the contract. The Bill already allows this, which is absolutely in line with the Government’s levelling-up agenda.
On Amendments 53 and 58 in the names of my noble friend Lord Lansley and the noble Baroness, Lady Worthington, as I said in our debate on an earlier group, the term “public benefit” is deliberately undefined; consequently, it is intended to be a flexible concept that gives contracting authorities a degree of discretion. Again, local authorities may have different views from place to place on what the most urgent benefit in their area is. Although all the proposed economic, environmental and social additions, including creating new businesses, jobs and skills, and reducing geographic disparities in the United Kingdom, might be facets of public benefit in different circumstances—I do not challenge that—we do not believe that it would be helpful to elaborate them in the Bill.
It might also be unfair to small contracting authorities to impose an obligation to consider the reduction of geographic disparities in the United Kingdom; they might be more concerned about disparities up the road. Doing so risks excluding other matters that might be more valid in specific circumstances. The Government consider that contracting authorities are better placed to make that decision in the individual circumstances at hand. We want contracting authorities to think about the extent to which public money spent on their specific contracts can deliver greater benefit than it otherwise would. I think that there is agreement in the Committee on that point. As I have said, each procurement is different; for example, what is appropriate in delivering a giant infrastructure project is not appropriate for smaller procurements.
I turn to Amendments 59 and 59A from the noble Lord, Lord Wallace—
My Lords, I will speak very briefly to Amendment 75A in my name. I thank the noble Baroness, Lady Bennett, my noble friend Lady Hayman and the noble Earl, Lord Devon, for putting their names to this amendment.
This amendment is consistent with the remarks I have already made in Committee: that there should be specific reference to “social value” as being part of public benefit in order to provide clarity to public bodies, companies and social enterprises; and that social value should be embedded in the procurement process through the appropriate guidance and reporting requirements for public bodies, which this amendment concerns.
This new clause would be added to the Bill mandating the Government to provide “guidance” to the public sector about “how to implement social value”. The Committee is aware that this is of great concern, given that the public policy—the legislative framework—is there for social value, and yet there is no mention of it in the Bill and no mention of how it might be implemented or how it might work with the procurement regime. I hope that we can resolve this matter between now and Report.
My Lords, I have Amendment 71 in this group, which is a simple probing amendment seeking to understand why the Bill exempts contracting authorities from having regard to the national procurement policy statement for contracts involving frameworks or dynamic markets. I can find no explanation, in the Bill’s Explanatory Notes or elsewhere, why such arrangements should not be covered by the terms of the national policy statement, but perhaps the Minister will be able to give a simple answer.
A large number of construction-related public projects will be procured through frameworks and dynamic market contracts. A framework is an agreement with suppliers to establish terms governing contracts that may be awarded during the life of the agreement. The Government themselves acknowledge in the Cabinet Office’s Construction Playbook that framework agreements, as a means of longer-term strategic collaboration in construction, can provide the best medium through which procurement and contracting can deliver transformational improvements.
Last December, the Cabinet Office also published Constructing the Gold Standard: An Independent Review of Public Sector Construction Frameworks, based on an independent and objective review commissioned from Professor David Mosey of King’s College London. To quote the then Cabinet Office Minister:
“This review recognises the potential of frameworks as a powerful engine-room for implementing Construction Playbook policies that include strategic planning, integrated teams, continuous improvement and the delivery of better, safer, faster and greener project outcomes.”
The review states that the Civil Engineering Contractors Association
“identifies over 1,660 public sector construction frameworks procured between 2015 and 2019 with an aggregate value of up to £220 billion.”
Given that the national procurement policy statement will seek to define strategic priorities and set the parameters for better public procurement in line, I hope, with the gold standard prescribed by the review, why should contracting authorities be exempt from having regard to it in agreeing the terms of frameworks?
A similar question arises in relation to dynamic markets. At Second Reading, the Minister stated:
“The new concept of dynamic markets … is intended to provide greater opportunity for SMEs to join and win work in the course of a contracting period.”—[Official Report, 25/5/22; col. 929.]
Again, it is not clear to me why the terms of the national procurement policy statement should not also apply to dynamic markets—although I am quite prepared to believe that I may be missing something.
I have three sentences on my very tiny Amendment 122A. It asks the Minister to explain to the Committee why, on this important clause on award criteria, there is nothing to commit the Government to create additional public value, in line with their specific priorities—whether on P&O or school meals. It genuinely asks the Minister to explain that to the Committee.
My Lords, my noble friend Lord Lansley has three amendments in this rather diverse group. The first is Amendment 118, which adds another requirement for tender notices under Clause 20. It would require the tender notice to provide a period during which potential suppliers can ask questions and get answers, which would then be shared with all potential suppliers. This procedure is often used in practice and it has advantages for both contracting authorities and potential tenderers, in clearing up any misunderstandings. For potential suppliers, it can clarify whether it is worth the time and effort of tendering. It allows suppliers that are not already familiar with a contracting authority to get up to speed. This would be particularly helpful for SMEs, as it would provide a relatively low-cost way to establish whether bidding for a contract is right for their business.
I have a slight concern that the amendment’s requirement to share answers with “all potential suppliers” might be onerous, but this is a probing amendment and I hope that the Minister responds positively to the idea behind it.
My noble friend’s second amendment is Amendment 123, which amends the provisions of award criteria in Clause 22. Under this amendment, the award criteria must enable innovative solutions to be offered in meeting the purposes of the tender. This returns us to one of my noble friend’s themes for this Bill—namely, that public procurement must foster innovation. It is much easier for a public procurement to specify the detail of what is to be delivered than the objectives or purpose of a contract, but good procurement would positively encourage innovative solutions, because innovation is the key to unlocking value for money for the public sector. I hope the Minister agrees with the aims of this amendment, as well.
Lastly, my noble friend Lord Lansley’s Amendment 149 seeks to amend Clause 26 by creating another reason for excluding suppliers, where no good reason is offered for a low tender price. The “most advantageous tender” rule in Clause 18 does not require the acceptance of the lowest-priced tender, but that will often be the outcome. This amendment is designed to provide encouragement to contracting authorities to understand why a tender price is abnormally low and to eliminate those that are lowballing on the basis that they gain a contract and then, later, find some way to negotiate up the price. This unfortunately happens in real life, sometimes.
(2 years, 5 months ago)
Grand CommitteeI apologise again to the Committee. I was just quoting the element of Amendment 534 that talks about “procurement rules” as meaning
“the requirements related to procurement set out in this Act or issued under the authority of this Act, and the health procurement rules referred to in section 108.”
While I was very grateful to the Minister for her explanations to my question on the first group of amendments, I am afraid that I do not think she answered the core question about the interface between this Bill and the provisions in Section 79 of the Health and Care Act.
I refer the Minister to his Amendment 528 to Clause 108 of this Bill which, because it was among the government amendments in the second group of amendments, was not moved or debated. It is important, however, because that amendment states
“If the procurement of goods or services by a relevant authority is regulated by health procurement rules, a Minister of the Crown may by regulations make provision for the purpose of disapplying any provision of this Act in relation to such procurement.”
I appreciate that that amendment makes an important link to the Health and Care Act, which both Ministers have pointed out to us that they are trying to do. However, it does not pick up the issues raised by a number of noble Lords, including me, about the problem that provisions in the Health and Care Act do not cover the entire NHS.
I am very grateful to the noble Baroness, Lady Noakes—and I look forward to hearing her introduction to her amendment—for picking up my concerns at the end of the first group. Her Amendment 534 would ensure a review by a Minister, including looking at the procurement provisions in the Health and Care Act. That would at least ensure that any emerging tensions and practical problems could be identified and published.
Having raised this, there are two fundamental questions that were not answered by the Minister’s letter, nor by the Minister earlier. First, why are the rules for NHS public spend—which, in 2018-19, was in excess of £70 billion—to be created by a statutory instrument without the same level of public scrutiny that this Bill is receiving and no guarantee of the same protections that this Bill is affording to public money being spent on public contracts? Secondly, I ask again exactly where is the interface between the Bill and the Act, given the gap in the Health and Care Act legislation that is covered by the Procurement Bill? I ask again whether it might be sensible to have a meeting for noble Lords interested in this particular and perhaps esoteric problem. It is vital that public procurement works across the board.
My Lords, I find myself being drawn into this Bill in all kinds of ways. I apologise for not speaking at Second Reading, but I was not able to do so. I declare interests as the founding chair and current patron of Social Enterprise UK and as a senior associate of Social Business International, which is an organisation concerned with social enterprises that contract with the public sector. Both of those positions are unpaid.
Over the 20-odd years I have been in your Lordships’ House, I have been involved in putting community interest companies on the statute book and, as a Minister, in the right to request for social enterprises and the Public Services (Social Value) Act. I will speak to Amendment 75B in my name but, because this is the first time I have spoken, I will say that there is a suite of amendments to this Bill that are all about social enterprise. They follow the introduction by the noble Baroness, Lady Neville-Rolfe, very well, because many of the problems are the same, although there are some huge social enterprises providing public services.
This amendment proposes a new clause for the Bill, which addresses market stewardship. The reason is that we are interested in how you give voice to the social value Act in this space; that is at the heart of this amendment. There is a policy background to this that the Government will recognise. The 2015 review of the social value Act carried out by Lord Young of Graffham found that
“where the Act is being used, it has a positive impact and that the variety … of organisations that support the Act is quite striking.”
In 2018, Her Majesty’s Government announced that all central government contracts would be evaluated on the basis of social value. In December 2020, a new social value model was published by the Cabinet Office, which was to cover all procurement by central government departments and bodies under its responsibility. In June 2021, the new national procurement policy statement required contracting authorities to consider how they could maximise social value in creating new businesses jobs and skills, improving supplier diversity and tackling climate change.
Less than seven months ago, in December 2021, in its response to the consultation in the Green Paper Transforming Public Procurement, the Cabinet Office promised that
“A procurement regime that is simple, flexible and takes greater account of social value can play a big role in contributing to the Government’s levelling-up goals.”
Her Majesty’s Government’s flagship levelling-up White Paper calls for greater use of social value yet, despite all this, social value is nowhere to be seen in this Bill. When it was in the Commons, the Minister for Brexit Opportunities and Government Efficiency was directly asked why social value was missing. He refused to even use the phrase “social value”.
That is a considerable disappointment because, over the last decade, a strong cross-party consensus has developed on the need for all public bodies to consider social value when making procurement decisions. Indeed, the social value Act was introduced by a Conservative Member of Parliament, championed in this place by a Liberal Democrat Peer and supported by Labour and the Green Party during its passage.
I am sorry to interrupt, but I am struggling a little as to which amendment the noble Baroness is speaking to. Amendment 75B, which deals with market stewardship, is in this group, but Amendment 75A, which is about social value, is not.
I beg your pardon. I was trying to give the basis as to why this amendment is down and then the other amendments that will be in the groups following this one, but I take the noble Baroness’s point and will just address this amendment.
Social enterprises report higher levels of staff engagement. The Bill does not place any duty on contracting authorities to consider the impact of their decisions on the range of providers, such as social enterprises or SMEs, but there is a risk in ignoring these organisations. There may not be the providers that the public sector needs for the future and this may reduce innovation in our supply chains. That is what this amendment addresses.
My Lords, I have added my name to Amendments 38, 50, 97 and 100 in the name of my noble friend Lady Neville-Rolfe and, as she has already said, she has added her name to Amendment 534.
I will come to that in a moment, but I start with Amendment 86 in the name of my noble friend Lord Lansley. This returns to the question of preliminary market engagement and fostering the involvement of SMEs about which my noble friend spoke on our last Committee day in relation to his Amendment 88. Clause 15(1)(f) makes building capacity among suppliers a permitted purpose for preliminary market engagement. My noble friend’s amendment adds some words of emphasis so that capacity building should be particularly for small and medium-sized enterprises.
I know that noble Lords need no reminding of the importance of SMEs to the UK economy. They account for around 60% of employment and over half of turnover in the UK. Not all small businesses achieve scale and not all want to, but most large and successful businesses were small businesses once. We have a responsibility to ensure that SMEs are given every opportunity to thrive and grow. That is why we should be looking at this Bill on the important area of public procurement and its role in the economy and considering the way that can be used to foster SMEs.
SMEs find engaging with public procurement daunting. They simply do not have the time and resources to get involved in complex tenders, let alone things like dynamic markets. It has to be in the interests of both the individual contracting authorities and the economy as a whole to foster as much competition as possible and to assist SMEs in growing their businesses. Building capacity among SMEs is a good thing to do and this Bill should recognise that. It may occasionally be important to build capacity among larger businesses and my noble friend’s amendment does not preclude this. But large businesses have the kind of resources that make participating in public procurements pretty straightforward. SMEs, not large businesses, should be the focus of policy in this area.
My noble friend Lady Neville-Rolfe’s Amendments 97 and 100 also recognise that getting involved in public sector procurement is hard for SMEs. The complexity of procurement processes makes it quite likely that an SME might not satisfy all the participation criteria and even more likely that they will mess up on an aspect of the procedural requirements. They need to be cut some slack, which is what my noble friend’s amendments would do.
I am, as my noble friend knows, less convinced by her Amendments 290 and 295 because there are some serious issues in Schedules 6 and 7 which rightly debar businesses from public tenders. On the other hand, Schedules 6 and 7 are very heavy-handed and there may well be a case for further discretion to allow some of the matters in those schedules to be disregarded in the case of SMEs.
I now come to Amendment 534 to which the noble Baroness, Lady Brinton, spoke so eloquently earlier. It is rather different from the other amendments in this group because it requires a report every year. It is relevant to SMEs because the first area of the report is about how procurement rules have impacted the award of contracts to SMEs. I think we are agreed that we want to see awards of contracts to SMEs growing, and that means making it easier to include SMEs in the process and helping them to win.
There have been some changes to the previous EU rules on which this Bill is largely based which could make it easier for SMEs, but I suspect that the overwhelming effect of the procurement rules as we have them in this complex Bill and the secondary legislation that will follow will continue to deter SMEs from participating fully in public procurement. We really ought to be keeping this matter under review. The noble Baroness, Lady Brinton, raised the issue of whether the health procurement rules are covered. I drafted the amendment with the intention that it should cover health, but I recognise that this is a very complex area and will need to be teased out later in Committee.
A second area covered by my suggested report is whether there is scope to simplify the rules while remaining consistent with the procurement objectives set out in Clause 11. This will also be relevant to SMEs because I believe the complexity of the public procurement code is a major barrier to entry for small and medium-sized businesses. I am sure that large businesses, large tenderers, are quite comfortable with having barriers to entry for small and medium-sized entities, but government and Parliament should not be comfortable with that, and we should at least be striving for greater simplicity and keeping it under regular review.
My Lords, all the amendments in this group—which, the Minister will note, come from all the various groups and tendencies in the Lords, including the Conservatives—are concerned to spell out in the Bill in rather more detail the social and economic objectives that public procurement should promote. My name is on Amendments 45 and 59, but there is language in other amendments that I support and which I hope the Minister will accept. The concepts of “public benefit” and “social value” are broad and non-specific. We are asking for rather more spelling out of the kinds of benefit and value that are intended, in order to guide contractors and suppliers as well as Ministers and officials.
All of us on the Committee are conscious of the significant impact that the principles of public procurement can have on the broader UK economy and society. I am struck by the degree of consensus in the Committee around a number of issues. If I may say so, I have never before been so painfully aware of how much I am agreeing with the noble Baroness, Lady Noakes, and perhaps I shall ask to sign one of her amendments on Report. That shows a sense of what we are trying to do constructively with the Bill, and let us hope that we continue. I hope the Minister is indeed in a receptive and co-operative mood and will be willing to consult members of this Committee before Report and to return with agreed language that responds to these concerns.
I appreciate that there are some on the hard right of the Conservative Party who do not believe in moving towards net zero or in the concept of social value. Conservative Ministers and Liberal Democrat Ministers co-operated in producing the social value Act of 2012, which remains in force and is highly relevant to the Bill. With respect, there are a minority within the Minister’s own party and a smaller minority within the wider public who resist this. The Minister himself is a self-declared one-nation Tory committed to conserving the nation’s shared values and long-term interests, so let us put some of these shared principles and objectives in the Bill.
Amendment 45 would insert the target of reducing the UK’s net carbon amount. The Minister will note the modesty of that objective since it does not even mention net zero, and indeed the noble Baroness, Lady Bennett, will probably disapprove of my modesty. The ethical and human rights record of suppliers is a live public issue across the parties that will not go away, as the Minister must be aware.
Amendment 59 spells out what is a definition of public benefit that, again, I hope the Minister will agree with and shares. Will he now accept that such a definition ought to be in the Bill?
My Lords, I shall speak to Amendment 47A in my name and Amendment 52. Basically, we believe that Clause 11 should include specific references to maximising social value as something that a contracting authority must have regard to in line with the social value Act and the national procurement policy strategy. The question to which I would appreciate an answer from the Minister is: why is that not included? In my previous contribution, I went through all the different policy streams—including levelling up—that lead us to the conclusion that social value and support for social enterprises and social businesses are a good, and they are good in procurement. It is therefore a mystery why this has been left out of the Bill. I hope the Minister will agree with that and, if not, explain to me why it is not the case. I hope he will support these amendments and add them in. They are modest amendments, really.
My Lords, I have Amendment 48, but I very much endorse my noble friend Lady Thornton’s remarks on this subject. In the group before last, it was interesting to hear the Minister talk about what I thought was a hierarchy in terms of the balance to be drawn in making judgments about procurement. He put value for money at the highest level. My major problem with that is that my experience in the public sector, mainly in the health service but in other worlds too, is that that is translated into the lowest price.
(3 years ago)
Lords ChamberI strongly agree with my noble friend. Already, of course, in a striking gesture, Her Majesty the Queen awarded the George Cross to the National Health Service across all parts of the United Kingdom. However, as my noble friend asked, the commission will also consider how we can remember the courage of countless working people and volunteers, not just in the NHS but the Armed Forces, delivery drivers, transport staff, pharmacists and teachers—it is invidious to name just some of them; they are legion —who have put themselves out to serve this nation.
My Lords, on these Benches we fully support preserving the Covid-19 national memorial wall across the river. It is a people’s memorial and every heart there represents a beloved person lost to their family and friends. So I ask the Government to work with the stakeholders involved to preserve that wall because, whatever and however the formal memorial is planned—quite rightly, it must be a national memorial that covers everybody affected by the pandemic —does the Minister agree that this is not a choice between one or the other?
My Lords, we all need to find ways to remember. My aunt died in the Spanish flu pandemic, which was a lifelong sadness to my mother, 70 years after her death. Memories of this pandemic will last equally long and bite equally deep, as the noble Baroness said, in many personal ways. We are aware of the call for the memorial wall to become a permanent national memorial and we welcome the discussions being led by Lambeth Council on this.
(3 years, 2 months ago)
Lords ChamberMy Lords, I first thank all noble Lords for their contributions. After 23 years in your Lordships House, this is the first time I have been on the Front Bench during a money Bill. I am used to, of course, at Second Reading, thinking about the legislation that might be amended and how we might amend it and put it under greater scrutiny—so more is the pity today.
During the 2019 general election, Boris Johnson said,
“Read my lips, we will not be raising taxes on income or VAT or national insurance”.
The Chancellor of the Exchequer has gone further and solemnly said,
“Our plans are to cut taxes for the lowest paid through cutting national insurance”.
After the general election, on the steps of Downing Street in December 2019 and on his return from Buckingham Palace, the new Prime Minister said,
“and so I am announcing now—on the steps of Downing Street—that we will fix the crisis in social care once and for all with a clear plan we have prepared to give every older person the dignity and security they deserve”.
Almost two years later we can see that there was no plan prepared or even in existence, and that it was an untruth when Boris Johnson promised that national insurance would not be raised. These two facts cannot be excused by the intervention of Covid-19. As my honourable friend Rachel Reeves, the Shadow Chancellor, said,
“There are two tests for the package announced yesterday. First, does it fix social care? Secondly, is it funded fairly? The answer to both those questions is no. It is a broken promise, it is unfair, and it is a tax on jobs”.—[Official Report, Commons, 8/9/2021; col. 327.]
After the devastating critique of the Bill and its effects by my noble friend Lord Eatwell at the opening of the debate, combined with the Adam Smith Institute condemning the Prime Minister’s speech to his own conference as “vacuous and economically illiterate”, I think it is safe to say that we are all in trouble.
At the end of the remarkable debate today, I take a moment to pay tribute to the extraordinary work and commitment of social care staff over the last year, in the independent sector and local authorities. They have been on the front line of this pandemic, going beyond the call of duty in helping hundreds of thousands of people through an extremely difficult time. I want to recognise that the vast majority of care and love provided to our vulnerable fellow citizens is from their families—unpaid and unsupported carers—and who in this Chamber has not been fulfilling that role in some way or other over the last year or so? I pay tribute to the volunteers and community activists who stepped up during the pandemic to ensure the well-being of millions of the most vulnerable in our communities.
Throughout the pandemic we saw that social care was still not funded or treated as equally important as the NHS: front-line care workers are chronically undervalued and underpaid; families, who provide the vast majority of care, get too little support in return; and an already fragile care market has been made even more susceptible to failure, with all the human consequences that that will bring.
At least we now know the Government’s underlying philosophy on social care. Sajid Javid, in his Conservative Party conference speech, said that health and social care “begins at home” and that people should turn to:
“Family first, then community, then the state.”
That tells us a great deal. Not only is it disrespectful to the millions of unpaid family carers, whom this levy does nothing to help or support—4 million of whom are children—but it is deeply ignorant to imply that people
“always go first to the state”
when family and friends do so much, increasingly during the pandemic, and so many have been pushed into poverty, even having to give up work to care for relatives in many cases.
The truth is that many people are unable to cope with their relatives’ caring demands because of other caring commitments; perhaps they do not live near enough, or are elderly, disabled and have care needs themselves; or they simply cannot cope with complex needs. It is also worth noting that unpaid social care falls disproportionately on women—72% of carer’s allowance recipients are women—so it also perpetuates gender inequality. The levy we are debating also does not address how to meet unmet care needs, which highlights the wider issue and need for reform. The Secretary of State’s “family first” line exposes the Government’s lack of policy and ambition for reform, in sharp contrast to Labour’s policy of “home first”—enabling people to receive the care they need, with dignity, in their own home.
I have come to the conclusion, sad and frightening as it is, that this Government do not understand who the cared for are and who does the caring in our society. Is the Minister aware that one-third of the users of social care—and half the social care budget goes to them—are working-age adults with disabilities? Build Back Better hardly mentions them at all; it just assumes and addresses our ageing population. Is he aware that more people get care and support in their own home than in care homes? Is he aware that one in three unpaid family carers has to give up work or reduce their hours because they cannot get the help they need to look after their loved ones? They lose their income, employers lose their skills and the Government lose their taxes.
Yet, despite social care being vital to so many people, over the last decade the Government have repeatedly failed to tackle the underlying problems in the system—a fact brutally exposed by Covid-19. It is quite reasonable for the noble Lord, Lord Forsyth, to ask what Labour would do instead. Our goal is to transform the situation for older and disabled people, as part of a much wider ambition to make Britain the best country in which to grow old. In this century of ageing, we understand that social care is as much a part of our infrastructure as our roads and railways. If you neglect your country’s physical infrastructure, you get roads full of potholes and buckling bridges, which prevent your economy functioning properly. The same is true if you fail to invest in your social infrastructure. Without a properly paid and trained care workforce, vacancy and turnover rates soar, fewer people get the support they need and families end up taking the strain.
We have been calling for a 10-year plan of investment and reform, empowering users and families to live the life they choose, ensuring their views and experiences drive change throughout the system, with a guiding principle of “home first”. We will always need residential and nursing homes, but the vast majority of people want to stay in their own home for as long as possible. Yet too many struggle to get even the basic support or home adaptations that make this possible. Greater use of technology can also help people live independently for longer, as can expanding the housing options between care at home and a care home.
Delivering on the “home first” principles requires a fundamental shift in the focus of support towards prevention and early intervention. Some 1.5 million older people need help with the basics of getting up, washed, dressed and fed but do not get any support at all. That is not good for them, or for taxpayers if they end up needing more expensive care or end up in hospital as a result.
None of these improvements will be possible without transforming the pay and conditions of the workforce. This pandemic has shown, more than ever, that front-line carers are essential to a properly functioning society and economy, yet two-thirds do not earn the real living wage and a quarter are on zero-hours contracts. So it is time for a new deal for care workers to back the aspirations of staff, tackle high vacancy rates and deliver at least 500,000 extra staff, whom we will need over the next decade just to meet growing demand.
As a starting point, Labour has called on the Government to guarantee that all care workers are paid at least a real living wage of £10 an hour in their plans for social care reform. Alongside this, families need decent support to help care for their loved ones, so that they do not put their own health and livelihoods at risk. We back a new partnership with unpaid carers, so that they get proper information, advice, breaks, and more flexibility in the workplace to help them balance their work and caring responsibilities. Our vision is for social care services to be fully joined up with, but not run by, the NHS. We have learned from the media that, as many noble Lords have said, there is likely to be a comprehensive plan for a new national care service, under which health and social care could be delivered by the same organisation, and that it is being actively considered for inclusion in a White Paper next month. Well, we have been waiting for a White Paper for two or three years, so who can say when that will happen?
I hope that the noble Lord, Lord Bethell, is enjoying his non-governmental role. At no point over the past two years have he or the Government attempted to have cross-party discussions about the future of social care—not once. I am totally puzzled as to why he did not take up the good ideas in the paper led by the noble Lord, Lord Forsyth, for instance.
So we have a half-baked Bill before us today which says that national insurance contributions will rise by 1.25 percentage points from next April, to raise £12 billion a year for the NHS and social care, but social care will not get any of the funding for two or three years, if at all. The Minister must have picked up the scepticism across the House about how that will roll out. At the same time, launching the Bill before us today, Downing Street remained unclear about how an integrated system would work best. In addition, we have a huge NHS Bill in play in the Commons which says that its aim is to create integrated care systems—well, who would have thought?—for providers and commissioners of NHS services, together with local authorities and other local partners to collectively plan health and social care services. Can the Minister describe what the final outcome of all this might be, and in what kind of timetable?
My noble friend Lord Eatwell posed many questions that the Minister must address in his closing speech. My noble friends Lord Hunt, Lord Lipsey, Lord Whitty, Lord Hain, Lord Griffiths and Lord Sikka have added many important and pertinent questions, and I have added one or two of my own. The Minister now has an opportunity to persuade the House that this Bill solves at least some of the problems that face social care.
I cannot give the noble Baroness a clear answer on that now. More detail will be available in the Budget and the spending review. If it does not transpire in those documents in the next couple of weeks, the noble Baroness can write to me and I will investigate further.
On the adult social care workforce, our investment is at least £500 million across the three years to deliver new qualifications, progression pathways and mental health support. This workforce package is unprecedented investment: it is something like a fivefold increase in public spending on skills and training for this sector.
The noble Lord, Lord Griffiths, asked about vaccines for NHS staff. He is correct that at the moment there is no requirement for NHS staff to be vaccinated. However, we have a consultation under way to try to find the best way through on that sensitive issue.
I have probably answered the noble Baroness, Lady Kramer, as much as I can on the compensating of NICs. Just to confirm, I say that the Government will compensate public sector bodies such as the NHS for the increased cost of employer NICs. If they did not, they would simply reduce the amount available. The Chancellor will set out more details in his spending review.
My noble friend Lord Bethell asked about NHSX funding. We remain absolutely committed to all aspects of technological improvement. Again, I am more optimistic over the long term because I believe we will find new ways of treating this sector more efficiently, and NHSX will play a part in that.
My noble friend Lord Naseby made a point about the structure of GPs’ surgeries. We will have to see some dramatic changes in that area. In my view, we cannot sustain surgeries in which five-sixths of the doctors are working only part-time, but again I think this will throw up opportunities. The two sectors will have to work much more closely together—
The Minister is straying into territory that I think is probably unwise. The noble Lord, Lord Naseby, made various assertions, but there is no proof that part-time doctors and GPs are less efficient or that this is a less efficient way of working. We know that this absolutely is not the case in lots of other places, and there is no proof that it is in this case. The Minister might be wise not to go there.
I respectfully disagree with the noble Baroness on that. Your Lordships are having a much more detailed debate on health reform very shortly, so I am sure that will be teased out in those discussions.
The noble Lord, Lord Lipsey, asked about the White Paper. As I said, we certainly hope to see that out in the next few weeks.
The noble Lord, Lord Desai, asked about the taxation of carried interest and private equity firms, but I suspect he was being slightly disingenuous as he knows we are not extending this to capital gains tax, only to dividends. No doubt there is a separate debate to be had on that, but at the moment it is a capital gain.
The essence of this debate is the fairness of the way the tax is being structured—
(3 years, 7 months ago)
Lords ChamberIn the typical fashion of this Government, the Transport Secretary claimed that the prospects for foreign holidays in May looked good. First, can the Minister say whether that will be the case in two days’ time? It seems that was probably a bit previous. Can he tell us whether the Government are having discussions with IATA about the creation of an internationally recognised travel passport? Can he also assure the House that we will not see a repeat of the chaotic experience of the test and trace app at the beginning and that the Government have learned the lessons of the benefits of working internationally and co-operatively, rather than going it alone?
My Lords, I think nobody pretends that everything that has happened in the last year has been done perfectly in every case. The Government maintain that we have made enormous progress. I think people are gladdened and heartened to see the progress being made, in both the statistics and delivery. So far as international travel is concerned, I will not add to speculation. The Government will set out their position on international travel in advance of 17 May, as set out in the road map.
(3 years, 9 months ago)
Lords ChamberMy Lords, obviously I am not the lead Minister on vaccines, but what I do know, and I think the public know, is that our standards in this country in terms of assessing vaccines are among the highest in the world, if not the highest. The Government would never in any circumstances do anything that would jeopardise the safety of the public.
On Monday the European Union announced plans for a digital green pass that will provide proof that a person has been vaccinated against Covid-19, as well as details of tests, and will “facilitate Europeans’ lives”. Are Her Majesty’s Government in discussion with the Commission about this—about working together—and will it be part of the proposed consultation?
My Lords, as I say, there is a parallel strand here. The review that was announced is of the potential domestic application of Covid certification; the review of international travel is a separate strand. I can repeat what I have said before at this Dispatch Box: the Government are talking to all partners internationally about the work of trying to facilitate international travel when it is safe to do so. Obviously, we have to respond to the fact that other countries may decide that people need to show vaccinated status as a requirement for entry, but the Government are not currently looking to make it a requirement to have a vaccination certificate to come into this country.