Procurement Bill [HL]

Debate between Lord Aberdare and Baroness Neville-Rolfe

Committee stage
Monday 24th October 2022 Grand Committee

[Baroness Neville-Rolfe (Con)]

My Lords, I thank the noble Lords, Lord Aberdare and Lord Scriven, and my noble friend Lord Lansley, for their kind words.

I will start with the government amendments, because even though this will not be in strict order, it will help to answer the other points that have been raised. Frameworks are a well-established commercial purchasing tool, used widely across the public sector. Having looked at some of the public responses, that percentage figure that was quoted is not worrying. Key is whether this is a sensible provision and whether we are reforming them in the correct way. The Bill makes a number of improvements to the effectiveness of frameworks, to increase flexibility, provide value for money, et cetera.

I am glad that the noble Lord referred to government Amendment 246 because it is quite a substantial and important amendment among the hundreds that I apologise for having tabled in Committee. It allows contracting authorities to set conditions of participation in a competitive selection process for the award of a contract under a framework. New subsections (3A) to (3F) impose restrictions on the use of such conditions to those which apply to conditions of participation in a competitive tendering procedure under Clause 21. These include limiting the conditions in various ways, for example, to those which are a proportionate means of ensuring that suppliers have the relevant qualifications, experience and technical ability to perform the contract, of ensuring that the conditions do not break the rules on technical specifications, and of requiring that equivalents must be allowed where particular qualifications are required. The question on proportionality is a good one. I do not have as good an answer for the noble Lord as I would like, so I will write to him on that point.

My noble friend Lord Lansley commended new subsection (3G). This restricts the basis on which proposals received as part of a competitive selection process under a framework can be assessed to all or some of the award criteria against which tenders the frameworks were assessed. This is to ensure that suppliers that have already been admitted to a framework do not have to meet entirely different criteria later. New subsection (3H) allows for the award criteria to be refined.

Government Amendments 251 to 255, and 258 to 260, relate to rules for frameworks for the future award of contracts. The remaining government amendments in this group deal variously with light-touch contracts, ensuring open frameworks work as intended, and with minor tidying-up changes.

Turning to the noble Lord, Lord Aberdare, the thing that we worked on together when I was last a Minister is still unresolved, so I feel a sense of guilt.

[Lord Aberdare (CB)]

The Minister did make some progress though.

[Baroness Neville-Rolfe (Con)]

I agree with the objective behind the noble Lord’s Amendment 245A. There is a need for this Bill to ensure that multiple contracting authorities may join to award a framework. Frameworks can result in significant savings, financially and in time, and they say that time is money. This is particularly the case where they are put in place for the benefit of more than one contracting authority, for example by centralised procurement authorities.

To that end, Clause 10 provides for contracting authorities to carry out procurements jointly and for centralised procurement authorities to put in place arrangements for the benefit of other contracting authorities. This enables them to delegate their obligations to run lawful procurements to centralised procurement authorities, in their capacity as specialists, or to jointly procure with them and remain responsible, together with their procurement partners, for the award of any resulting contract. The noble Lord will wish to look carefully at that, but I do not think that his amendment is necessary.

Amendments 247 and 248, tabled by my noble friend Lord Lansley, seek to add additional requirements for the award of contracts under frameworks, without a further competitive process. The first of these, a system based on the suppliers’ ranking in the competition for the award of the framework—the noble Lord talked of a cascade; we have talked of ranking—is certainly one mechanism by which contracts can be awarded under a framework without a competition. However, this is only one selection mechanism, and there are others. They might include a “taxi rank” system, where the next supplier on the list gets the work, or the supplier chosen could simply be the cheapest for that good or service, which contracting authorities might consider to be more appropriate for their requirements on that occasion. There is nothing in the Bill preventing contracting authorities from including rankings in a framework, but there is no need to require this for all frameworks.

The second requirement is to allow for the provision of additional information by suppliers in order to make an award without a competition. In this connection, I draw noble Lords’ attention to Clause 44(6), which allows contracting authorities to ask for additional information to ensure that call off competitions are effective. Sorry, that is a bit repetitive. This seems preferable to receiving large amounts of potentially unnecessary or irrelevant information and adding burdens to the award process, which we are all keen to avoid.

Skills and Post-16 Education Bill [HL]

Debate between Lord Aberdare and Baroness Neville-Rolfe

Committee stage
Thursday 15th July 2021 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, it is an unexpected pleasure to follow the noble Lord, Lord Addington, with his straight talking. I rise to support the noble Lord, Lord Storey, in introducing a greater degree of flexibility in the use of employers apprenticeship levy funds.

I am particularly glad to see the involvement of the noble Lord, Lord Aberdare, who brings practical experience of what works from running a training business and of the red tape—my words, not his—of complying with regulatory conditions, which I fear this Bill increases too much. The backdrop to all this is a dramatic fall in apprenticeship numbers in recent years—exactly the opposite of what we wanted and promised to achieve. A great deal of effort has been put into improving the quality and level of apprenticeships but I fear that, perversely, this has excluded many who would have benefited from the discipline and recognition of a successful apprenticeship, for example in my old industry of retail. However, my noble friend the Minister may have a better explanation for the decline and be able to reassure us that the fall has come to an end.

I was at the birth of the apprenticeship levy as the Minister who took the legislation, the child of Nick Boles, through our House. As noble Lords may have sensed earlier, I am passionate about apprenticeships, which were beginning to be a lost art, but I did have some carefully disguised doubts about the design of the arrangements for administering the levy. The system is a bureaucratic one and was led by education, rather than employers, so bigger employers paid a substantial levy. This often came off their existing training budgets; they were then unable to fix their training into the mould laid down by the Civil Service, so the levy ended up as a tax.

Perhaps my noble friend the Minister can explain why things are better now. In particular, where a company has surplus levy credits, can these be allocated to their supply chain or pledged to other companies without the levy payer having to become responsible in any way for the training in that other firm? That requirement was a real barrier to good practice and spreading the levy into the supply chain. What is the current cap on the new arrangements in percentage or other terms? Has the inevitable move to digital made the system more efficient, with fewer requirements to keep unnecessary records for inspection and more trust in employers to lead and train their apprentices? Or have more requirements been laid down in the digital world because, in theory, it is so very easy?

Amendment 39 seems to suggest that the levy funds could be diverted in other ways, which I might be more concerned about if it led to pressure for a rise in the levy. Companies can ill afford a levy increase at present, especially those whose training budgets have been hit hard by Covid. Before we reach Report, I would like to understand better what is planned for apprenticeships. Apprenticeships provide a passport to mobility from one job to a better one. They provide a route to advancement to people who do not need or want to go to university and incur debt doing so. If we could massively increase their numbers and their status on the German model, that would contribute to happiness and to growth.

[Lord Aberdare (CB)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Neville-Rolfe. I suspect that her knowledge of apprenticeships is far greater than mine and I appreciate her remarks. I also strongly agree with everything that the noble Lord, Lord Addington, said at the beginning of this debate.

I have added my name to this important amendment because apprenticeships need to be an integral part of the new skills and education system which the Government are rightly seeking to create. They are employer-led and job-focused, and they cover all levels, from GCSEs up to degree level. Through the levy, they provide a mechanism whereby employers contribute to the cost of skills training—where, at times, they have been less than forthcoming.

However, as we have heard, there is a widespread recognition that the levy is not working as well as it should. Relatively few employers are able to use more than a small proportion of their levy funds. Even for major employers in the energy and utilities sector, it is only just over 50%. So, to maximise the funding they can recoup, they tend to use a high proportion of the funds for apprenticeships that are about upskilling or reskilling existing employees, rather than taking on or training new, young apprentices. This is perfectly understandable and, of course, reskilling and upskilling are good things to do—but the result is that the number of 16 to 25 year-old apprentices has not grown nearly as much as the number of over-25s. Although there are mechanisms for employers to transfer up to 25% of their levy funds to other employers who can use them, the process seems overcomplicated and take-up has been pretty low.

At the same time as levy payers are unable to use all their levy funds—with much of the unused funding going back to the Treasury—there appears to be a shortage of apprenticeship funding for non-levy payers. So the impact of the levy on the total funding available for skills training has been rather less than might have been hoped. It is not even clear whether the total amount of funding going into apprenticeships is significantly greater than before the levy was introduced.

The word that crops up most often in discussions with employers about the levy is “inflexible”. As I have said, apprenticeships will surely be a significant element of LSIPs and they need to be properly integrated. I have felt for some time that it would make sense to recast the apprenticeship levy as a wider skills levy—perhaps with a lower payment threshold to bring more employers into the net of contributing towards training. But, at least, if employers in an LSIP area are not able to use all their levy funds, why should it not be possible for those funds to be used for other, defined LSIP training priorities? In any case, what is needed is a review of the apprenticeship levy system in the light of experience to date. It must be clear how it relates to the wider post-16 education and skills system, as set out in the White Paper and now in this Bill.

Amendment 39 does no more than encourage the Secretary of State to conduct such a review. In my view, that is the answer to the argument that it does not belong in this Bill. Well, it does belong in this Bill—it is fundamental to it—and the review is to ensure that levy funds are used in a way that is integrated with the priorities of local skills plans and properly reflects employers’ needs. Of course, such a review must not reduce the amount of funding available for the apprenticeships that are so badly needed. It should seek to maximise the funding available from the levy and to optimise its use in pursuing local and national skills priorities. I look forward to the Minister telling us how this will be achieved—but the review proposed by the amendment in the name of the noble Lord, Lord Storey, would be a very good place to start.