Procurement Bill [HL]

Lord Wallace of Saltaire Excerpts

Committee stage
Wednesday 13th July 2022 Grand Committee

[Lord True (Con)]

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—

[Lord Wallace of Saltaire (LD)]

My Lords, I have listened carefully to what the Minister said but I am still puzzled. We are trying to craft a Bill that will have quite a long shelf life over a period when we may have a change of Government or some change in government. The Minister is saying that the catch-all public benefit is the only thing that we should have in the Bill in terms of principles and objectives. I would have thought that the consensus across all our democratic parties on public benefit and social value is a little wider than that and that it would help to provide guidance if that were spelled out rather more in the Bill. Otherwise, the principles and objectives will simply swing from one side to the other when different Governments come.

Everything cannot be left to each changing Minister to define. Surely the concept of public benefit is one that we share, as is the concept of social value. We also share the view that £300 billion-worth of public procurement sets a culture, the core of which I hope that all Conservatives, Labour, Liberal Democrats and Greens share, because that is what we are attempting to get. The Minister is saying that we cannot agree on that. I am aware of some people—the Chicago school of economists and those who follow them—who deny the concept of public benefit altogether and believe that private benefit is the only thing that drives the economy, prosperity and society. I hope that we are not there and are not starting from there.

[Lord True (Con)]

The noble Lord always slightly loses me when he rides off in his speeches. I have a vision of him lying awake, trying to get to sleep, thinking of these terrible right-wing Conservatives whom he always cites and seeing the worst in everything. I thought that the great tradition of the Liberal party and liberal values, which I was brought up with and adhere to, is to give space to variety and not uniformity; there should be flexibility, with opportunities for local judgments and for contracting authorities to make them. The concept of public benefit is wide and flexible and should be so to give contracting authorities a degree of discretion to consider whether their specific contracts can deliver greater benefits than they otherwise would.

For example, contracting authorities are already able to make it clear in their technical specifications that fair trade options can be included in the products provided to meet the requirements of the contracts, provided that they do not discriminate against other products of other suppliers. The noble Lord objected to the mention of the terrible word “money”, but public procurement needs to have a focus on achieving value for money. The two things are not contradistinctions.

While I would expect contracting authorities to consider these matters where appropriate, it would not be helpful to elaborate them in the Bill, for the reasons that the Government have submitted, as they would not apply to all contracts. The course that the other side is proposing will lead to a uniformity imposed on a diversity, which is the antithesis of local values. I respectfully request that these amendments be withdrawn.

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[Lord True (Con)]

A considerable number of amendments mandate that contracting authorities must have regard to certain items. Others add to the objectives in Clause 11. It is a difference of interpretation. The Government are in one place. On reflection, I think that perhaps people outside government circles will think that that is not as unwise as it now seems. I again respectfully suggest that the amendment be withdrawn.

[Lord Wallace of Saltaire (LD)]

I beg leave to withdraw the amendment.

Amendment 45 withdrawn.

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[The Earl of Devon (CB)]

My Lords, I apologise; this is my first appearance on this Bill as I missed Second Reading. I rise to support the noble Baroness, Lady Thornton. I have put my name to her Amendment 75A; I equally put my name to her Amendments 47A and 52A, which also go to the issues of social value and social enterprise.

I should note that I am a member of the APPG for Social Enterprise. Last year, I chaired an inquiry into the performance of social enterprise during the pandemic; we reported at Christmas last year. The outcome of that was to highlight the remarkable performance of social enterprise during the chronic conditions of the pandemic. However, it also highlighted how little understanding of social enterprise there was in government, particularly in Westminster but also in local government. We discovered that this was not as common Wales or Scotland, because social enterprise and social value are built into the fabric of their public procurement, which is so much better than what we have in England. I just wanted to make that point briefly. Amendment 75A is a means of addressing this issue and ensuring that local government is familiar with the role of social value and the purpose of social enterprise.

Before I sit down, I will just endorse and support Amendment 66 from the noble Baroness, Lady Boycott. I do a lot of work with the South West Food Hub on the absolutely critical need for the procurement of good, healthy, locally sourced food, so I give this amendment my solid support.

[Lord Wallace of Saltaire (LD)]

My Lords, public and parliamentary debate on the national procurement policy statement is a very important aspect of this Bill. So is the relationship between Clauses 11 and 12. The Minister will have noted the consensus view across this Committee that clear principles and objectives should be included in the Bill—that is, primarily in Clause 11. We still hope that we will return on Report with appropriate language to enshrine

“in law the principles of public procurement”;

I have taken that from paragraph 27 of the Government’s response to the Transforming Public Procurement consultation, which they now seem to have forgotten. That document also states that 92% of those consulted were in favour of the proposed legal principles; it is therefore unacceptable that they have disappeared from the Bill as presented to this House. I cannot understand why the Government have abandoned their response, having undertaken an extensive consultation of that nature.

At present, the Bill leaves articulation of the principles of public procurement almost entirely to the Minister in post at the time, with the completed document to be laid before Parliament and subject to the negative procedure if time is found within the 40-day period to debate it. That is clearly inadequate. It stems from a resistance to parliamentary scrutiny and accountability that has been characteristic of the Johnson Government and, in particular, of Jacob Rees-Mogg in his various ministerial roles. However, it is not compatible with the principles of parliamentary sovereignty or the conventions of our unwritten constitution. I will do the Minister the compliment of assuming that he has always been unhappy with this approach to executive sovereignty and will be happier if the next Prime Minister returns to proper constitutional practice.

I have Amendment 75 in this large group, which seeks to ensure that a review of compliance with the national procurement policy statement takes place within three years, noting in particular how far it has in practice protected and promoted the interests of small suppliers, social enterprises and voluntary organisations in that period—a matter that concerns noble Lords across all parties in this Committee. I support the intentions of many of the other amendments in this group, from the insistence of the noble Lord, Lord Lansley, that such a policy statement must be published on a regular basis to those that insist that it should cover a specific range of issues including social objectives, concern for the environment and measures to combat climate change.

Many of us would consider including climate change and sustainable development concerns as particularly important when some candidates for the leadership of the Conservative Party are playing to climate change deniers on their party’s right. The Minister’s dogged resistance to putting any closer definition of the principles and objectives in the Bill makes the quality and regularity of this statement all the more important.

Good government requires a degree of continuity, not rapid switches of emphasis and guidance every time Ministers or Prime Ministers change. I remind the Minister that under our single-party Conservative Government since 2015 we are now about to embark on the fourth Prime Minister—four Prime Ministers in seven years under the same party. Some major departments of state are now on their eighth or ninth Minister. That is not continuity. Continuity and a degree of consensus are what contractors to government want, and that is more likely to emerge from cross-party debate in Parliament informed by wider public attention and contributions from stakeholders in the sector. That would promote greater stability and continuity both when Governments are in power for extended periods and when Governments change. Stability and a degree of continuity are what contractors want to see in their relations with government.

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As I said at the outset, many amendments relate to the process for publishing and scrutinising a national procurement policy statement. I must say with all humility that I understand the legitimate questions that your Lordships are asking in this area, and I will very carefully read the comments made in Hansard. Amendments 62, 63, 64, 68 and 74 request a change to the process by generally requiring publication of a draft statement and providing longer timescales. I assure noble Lords that the Government are committed to ensuring that any NPPS is published with the approval of Parliament. The Procurement Bill provides the process to safeguard this. The noble Baroness, Lady Parminter, criticised this. It is correct that a Minister of the Crown has accountability for the establishment of procurement policy priorities. This will be done in a process of consultation with all stakeholders. We will aim to share the draft with relevant stakeholders prior to publication. We already do this with most procurement policy notes and obviously we will go through the usual processes of consultation. The usual legal rules on consultation will apply. Ultimately, if Parliament does not agree with the statement as published, it has available to it the mechanism set out in Clause 12 to stop it, although it has been put to me that it is insufficient.

[Lord Wallace of Saltaire (LD)]

I have just one more question. It is about periodicity. From the point of view of a contractor, it would be unwelcome to have too frequent changes in the public policy statement or too long periods in which the statement is not revisited. If I were a contractor, I would want to know when a new statement might be coming.

We have a relatively strong convention that strategic reviews of foreign policy and defence take place every two to four years or at the beginning of each Parliament. Would the Minister consider whether there needs to be something in the Bill to prevent new Ministers, when they come into their department, nine months after their predecessor took office, having their statement instead, which would be quite chaotic; or a Minister who had been there for seven years deciding that he did not want to have anything to do with it? Some encouragement for a regular period of ministerial statements might be a positive aspect for the Bill.

[Lord True (Con)]

As so often, the noble Lord makes an important point. I was charmed by one aspect of his arguments on continuity, when he complained that the Conservative Party kept changing Prime Ministers. I thought he was one of the main cheerleaders for a change in Prime Minister, so he cannot, in the immortal phrase, have his cake and eat it.

There is a duty in the Bill as drafted for a Minister of the Crown to keep the national procurement policy statement under review. It is not in the Bill—noble Lords have not been particularly receptive to the argument I put forward, although the noble Lord, Lord Coaker, has shown his eagerness to get his hands on the levers of power and use them—but the Government’s intention, with great generosity, is that it should be possible for a review of the NPPS to be undertaken in each Parliament. If one made a period of eight years or whatever statutory, then a new or different Government coming in would have to task primary legislation to make that change. That is the kind of structure we have been trying to operate in. Part of the reason the Bill has been framed in the way it has is to leave flexibilities, some of which your Lordships do not like and some of which at least one of your Lordships does.

I turn to Amendment—

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[Lord Davies of Brixton (Lab)]

My Lords, I want to make a point about proportionality. It arises under the amendment in the name of the noble Lord, Lord Aberdare, and runs through much of the Bill. In a sense, I am asking a general question but hanging it on the hook of Amendment 120. It is a point of some concern to small organisations; we are talking here about small charities and local voluntary organisations. In much of the debate, people have referred to businesses and enterprises, but this will also apply to local voluntary organisations and charities, which clearly do not have the resources or staffing to deal with the scale in the way that an organisation such as Oxfam, for example, could. They have their local job to do; to a certain extent, spending a lot of time drawing up a bid to provide a service will be a diversion from their work. Proportionality must have a role in assessing a contract. I am intrigued and ask the Minister to give some indication of an overall perspective on proportionality as it affects local organisations, charities and voluntary organisations.

[Lord Wallace of Saltaire (LD)]

My Lords, with apologies for missing some of this debate, I will speak briefly to my Amendment 129, which relates to Clause 22 and the incompatibility of subsections (2) and (5). Clause 22(2) states:

“In setting award criteria, a contracting authority must be satisfied that they … are sufficiently clear, measurable and specific”.


Clause 22(5) then sets out those “clear, measurable and specific” elements. In paragraphs (a), (b) and (c), it is indeed specific: they deal with

“the qualifications, experience, ability, management or organisation of staff”

et cetera. However, over the page, Clause 22(5)(d) sounds as if the drafter was late, tired, exhausted and gave up. It refers to

“price, other costs or value for money in all the circumstances.”

I am sorry that the noble and learned Lord, Lord Hope, is not here to tell us how one might legally interpret “in all the circumstances”.

What we have drafted as an amendment is one that is as specific as paragraphs (a), (b) and (c) on what those circumstances might be. It sets out the standard phrases that have been used in the Government’s previous documents and draft statement. I merely suggest to the Minister and those behind him that paragraph (d) simply is not fit for purpose as it stands. The phrase “in all the circumstances” should not be in a Bill of this sort. It either needs to be cut or to be expanded to the sort of specificity that (a), (b) and (c) include. My amendment suggests what that might be.

[Baroness Hayman of Ullock (Lab)]

My Lords—oh, I have just thrown all my papers on the ground. Actually, I do not need them. I am holding my list of government amendments, which I used to follow the Minister carefully as he went through them all so that I did not miss anything he said.

I sincerely thank the officials, who have spent a long time bearing with me and my noble friend Lord Coaker, going through the government amendments carefully so that we properly understood the implications and which ones were tied together, if you like. Many of the amendments provide helpful clarification, so I put on record my sincere thanks for the officials’ time and patience. It has been very important.

I have a few amendments in this group. The first, Amendment 101A, looks to ensure that contracting authorities consider potential health contractors’ records of ensuring

“affordable access to their products in low and middle-income countries and to the NHS”.

Of course, this is in the light of the pandemic, because it covers consideration being taken in public health emergencies of the international concern around this and the impact on countries that are less well off than us. With these amendments, we want to increase access to vaccines, medicines and diagnostics by attaching conditions to health products and research and development contracts in order to facilitate global manufacturing, because that was clearly a problem recently during the Covid pandemic.

It is also about having assurances that taxpayers’ money is being spent according to socially responsible principles in circumstances like that. If you can attach conditions to public spending on health procurement and R&D to have greater access to health technologies globally, this can help to bring the health crisis to an end sooner. We know that many of the Covid variants came about in countries that have very low vaccination rates. So it is about looking out and upwards for the future.

There is already some precedent for attaching conditions to pandemic tools to improve access. Paragraph 84 of the Government’s 100 Days Mission report says:

“We recommend that governments should build in conditions into their DTV funding arrangements to ensure … access to DTVs at not for profit and scale, which is to be enacted if a PHEIC is declared.”


So we can do this if we want to. The pricing and timing of delivery are important for gaining more equitable distribution.

Many low-income and middle-income countries have been calling for more meaningful control over their pandemic responses. Of course, they cannot really do that if they do not have access and are not then able to manufacture their own vaccines, which is what many of them were calling for. Again, if you remove intellectual property barriers, you can do this, but we need to look carefully at how we would manage that. Perhaps the Procurement Bill is not the right place for this, but it is certainly the right place to have a discussion and debate about it and to look at how we can move things forward.

My other amendments are Amendments 528A and 528B. I am slightly confused about why we are debating these and Amendment 528C of the noble Baroness, Lady Brinton, at this stage, when the government Amendment 528, to which they relate, does not come up for debate until group 14. It strikes me that we are likely to end up having exactly the same debate all over again. The Minister may not have an explanation for that, but I apologise in advance that we will revisit this.

I will be brief because we will come back to this. As I say, Amendment 528A is again about affordable access for middle-income and low-income countries, and Amendment 528B is about requiring contracting authorities to consider a potential health contractor’s record of ensuring affordable access to its products. I thank the noble Baroness, Lady Brinton, and the noble Lord, Lord Scriven, for supporting our amendments. We support Amendment 528C of the noble Baroness, Lady Brinton, but I am sure that we will have another debate on group 14, as I said.

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Amendment 129, proposed by the noble Lord, Lord Wallace, would include a list of very specific factors to be considered in determining value for money. It is an important question. However, this amendment would place limits on what can be taken into account when assessing the subject matter of the contract, rather than allowing authorities to consider “all the circumstances”, as currently provided in the Bill—perhaps by, as the noble Lord suggested, a sleepy draftsman or draftswoman. We believe that if we made it too precise, we would force contracting authorities to design their procurements around, in some cases, irrelevant factors and potentially not allow them to consider other, relevant factors, all of which could increase cost. I will take advice on “all the circumstances”, given the challenge that the noble Lord put to your Lordships’ Committee.

[Lord Wallace of Saltaire (LD)]

Perhaps he would care to consider whether paragraph (c) should be reduced in length, because if my suggestion would be too specific, then paragraph (c) is already much too specific, and we had better cut it down.

[Baroness Worthington (CB)]

Sorry to interrupt, but just to clarify, it seems to me that the reference to “maximising public benefit” in the Bill is completely and utterly superfluous and has no meaning. The Minister’s response has further confirmed that the only criteria that can really be taken into account are value for money and cost. We will need to return to this at Report, because it now seems very clear that this is not an accident or some kind of desire for flexibility; it is really saying that there is only one thing that counts, and that is cost—and in the short term.