Deregulation Bill

Debate between Lord Wallace of Saltaire and Lord Young of Norwood Green

Thursday 6th November 2014 Grand Committee

[Lord Wallace of Saltaire]

The thought had not crossed the minds of any of us on this side of the Room that we might possibly be waiting for the noble Baroness, Lady Thornton; we, too, are very glad to see her here.

I do not think we are very far apart on this matter. I think we are all strongly in favour of good-quality teaching. We all recognise that in many of these practical areas people with practical experience also have a lot to offer, but that, as part of their development and encouraging them to become good teachers, it is quite useful these days to give them some teacher training—in spite of the fact that many of them may not want any.

May I declare a slightly embarrassed interest? I taught for 15 years in three successive universities without a single half-hour of training on how to be a teacher—which was the way one behaved in those days. What is more, I gained a prize at one stage for the quality of my teaching. I was rather relieved when, having spent 12 years in a think tank, I came back to universities and found that, although the University of Oxford did not think about training me to teach, the London School of Economics did. Since IT had become an important element in teaching, there were things that we really needed to know about how one handled a different student generation. No qualification was required, but there were some very good short courses on how to use teaching aids.

Thinking about my own university experience, I recall that the most popular course in my department at the London School of Economics was taught not by somebody who had come via the traditional route through universities or research and so on but by a former ambassador. He taught a course in economic diplomacy. The weight of his practical experience, as well his ability to organise an argument, made a huge difference for students, most of whom would not themselves become university teachers but many of whom were indeed hoping to become diplomats or businessmen and thus picked up that practical experience.

In introducing his amendment, the noble Lord, Lord Young of Norwood Green, citing the City & Guilds institute, said that the majority of FE teachers are either qualified or on their way to being qualified. That is fine; we do not disagree too much—that is where we are and we merely wish to push things a little more in that direction. The noble Lord also said that what we need is both experience and skills.

We recognise that people in these practical disciplines will come from a range of different backgrounds. They will not all have to have extensive professional qualifications but it may be desirable for them to pick up the sort of skills I have been talking about now that we have all these different ways of using teaching aids. The purpose of this amendment is very much to allow colleges to make their own decisions and not to impose too many strong controls from the top. We intend to free colleges from central government control and place responsibility on them to address their various needs.

The Education and Training Foundation has a core responsibility for ensuring the development of a well qualified, effective and up-to-date professional workforce. It is responsible for the standards of FE leaders and teachers and has now taken on responsibility for the membership of the Institute for Learning. The foundation will be looking at what more it can do to help increase the professionalism of teachers in this field. It has recently issued guidance and new professional standards for these teachers.

I hope that suggests that we are not far apart on this. It is really a question of how far we should impose detailed regulations from the top. We are encouraging colleges to work with the Education and Training Foundation to make sure that people who often come from a practical background, as the noble Lord said, are given the chance to acquire the professional skills that they need alongside the inspirational qualities which they may have gained from their practical experience. This is about deregulation, not deprofessionalisation. We have removed the requirement to have a qualification, which as the noble Lord points out, does not apply to a number of people teaching in FE colleges at the moment. However, the expectation is that the large majority of teachers will be qualified. We do not see regulation from the top as the best way to achieve this. Teachers need to play a part in developing their own professionalism, with the Education and Training Foundation providing common standards which will underpin that. On that basis, I hope that I have reassured the noble Lord and that he will feel able to withdraw this probing amendment.

[Lord Young of Norwood Green]

The Minister’s contribution was worth while. I will read Hansard and look at what the Institute of Education is saying because that is important. I think the only difference between us here concerns what we would regard as minimum standards in maths and English. On the basis of what we have heard, we will reconsider the issue. I beg leave to withdraw the amendment.

Government Procurement Policy

Debate between Lord Wallace of Saltaire and Lord Young of Norwood Green

Thursday 24th November 2011 Lords Chamber

[Lord Wallace of Saltaire]

My Lords, this debate has ranged widely. I thank the noble Lord, Lord Sugar, for drawing the House’s attention to such an important issue. Procurement is central to the Government’s programme for reform and efficiency in public services and, as the Autumn Statement will make clear, to the growth agenda. I thank all noble Lords who have spoken in the debate and will do my best to address many of the points that have been raised.

In October 2010, in a debate on Sir Philip Green’s report, the noble Lord, Lord Sugar, argued that,

“it is time to centralise buying and to bring in some kind of head honcho from the private sector who knows what they are doing and pay them the right amount of money, which they would be paid in a large organisation”.—[Official Report, 14/10/10; col. 593.]

Our head honcho—the government chief procurement officer, as we prefer to call him—is John Collington. John is a highly respected procurement professional who joined the Civil Service five years ago after having spent 25 years in the private sector in a number of senior commercial and supply chain roles, operating on a global basis. He is well paid. He is not paid on the scale of the CEO of one of our major banks, but then the Government are not entirely happy with the scale on which our major banks are paying their current CEOs.

Since then the Government have embarked on a new procurement strategy to reform the way in which they buy those goods and services which they need to fulfil their responsibilities. The strategy focuses on having a centralised approach to the purchasing of common goods and services, appointing Crown representatives—of which there are now nine—to work with the Government’s largest suppliers, removing the red tape that stops SMEs competing for government contracts, improving our procurement technology and, above all, investing in our staff to improve our procurement capability. The noble Lord, Lord Kestenbaum, called for a procurement revolution. This is under way.

The scale of government procurement should be set out. Central government procures some £62 billion of supplies a year. The wider public sector, including local government, procures some £168 billion and the total public sector procurement, including that of arm’s-length bodies, is some £230 billion. Some of that is accounted for by commodities and some by services. Then there are the major long-term contracts for infrastructure construction, manufactured systems and trains, armoured vehicles and aircraft carriers. These do not, of course, require entirely the same approach. There are unavoidable tensions between central control and local diversity and—as the noble Lord, Lord Anderson, pointed out—between the squeeze on costs and the political requirement to achieve regional balance where that is possible. I should say that the Olympic Delivery Authority has done extremely well in delivering on time and within cost. I regret that the regional balance has not been as good as it should be but on other criteria it has been a remarkable success.

Much of the criticism in this debate has been about the practice of the previous Government regarding, for example, the ETS and the other enormous IT contracts, and the vast expenditure on consultants. The Government are setting out to be a lean Government in procurement. If I may say so, it is a lean Government in every single aspect through and through. As noble Lords will know, the Government Car Service has been considerably pruned. Ministers are now walking twice as much. I have not yet assessed how much weight they have lost but we are a leaner Government, I think, than our predecessor was in that respect.

Eighteen months ago the Government promised to drive out inefficiency and unjustifiable costs from all parts of central government, including procurement. As part of that drive, in just 10 months we have saved £3 billion from reduced discretionary spend and smarter procurement that has allowed departments to protect essential front-line services and jobs. This has included more than £870 million saved by cutting departmental spend on consultants; nearly £500 million saved by reducing spend on temporary agency staff; some £400 million saved by taking stronger control of our marketing spend; some £360 million saved by centralising spend on common goods and services; and £800 million saved from renegotiating deals with some of the largest suppliers to government. Last March, for example, we announced that nine different commodities would be jointly purchased by October: energy, office supplies, professional services, travel, fleet, telecoms, IT commodities, print, and advertising in the media. I am very happy, as a Yorkshire resident, to say that the domestic travel component was awarded to a small enterprise based in Bradford—so it is not merely a matter of large suppliers. A month later John Collington announced that, over the next four years, this new procurement model is estimated to cut 25 per cent from the £13 billion spend on common goods and services in central government.

This is a very good start, but we also need to do away with the unnecessary bureaucracy that adds wasteful time and costs to the procurement process. Following a lean review of the procurement process, we are adopting a new approach to sourcing that focuses on those practices that add value to the way that government procures goods and services.

Another major step forward has been the transformation of the Buying Solutions trading fund into the Government Procurement Service. This organisation is now established as the delivery arm of the centralised procurement strategy, delivering expert sourcing and category management for common goods and services. It is focused on delivering savings to the taxpayer and increasing the proportion of spend that is centralised. For major projects we have established the Major Projects Authority, which, with the pre-existing Major Projects Review Board, takes particular account of defence procurement, major infrastructure procurement and IT.

The noble Lord, Lord Davies of Stamford, made a characteristically robust speech. I look forward now to his speeches in the way that I used to look forward to those of the noble Lord, Lord Gilbert, who would always robustly tell us how well defence procurement had taken place while he was a Minister and how appallingly it had deteriorated since he left. The only problem, I say to the noble Lord, Lord Davies of Stamford, is that he left the MoD 10 years after the noble Lord, Lord Gilbert. Perhaps he should consult the noble Lord, Lord Gilbert, on how they could better reconcile their narrative next time round.

Over the past six months the Government Procurement Service has already made significant progress. It has developed centralised strategies for energy, office solutions, professional services covering consultancy, contingent labour, legal services, and so on. It has driven much-improved data and significantly increased the transparency of operations and performance through a procurement executive board. It has moved central government customers on to the first centrally let commercial arrangement—the government office supplies contract. The Government Procurement Service has established a process for using surplus income to fund Government Procurement Service and government procurement improvements, with four key investments made to date. The procurement service has managed procurements, extensions and renegotiations of contracts worth approximately £3.6 billion in annual value.

We are conscious that Britain does not compare well with Germany, France and the Netherlands in the relationship with suppliers. Perhaps I may quote the speech made by my colleague Francis Maude on Monday. He said that,

“the British public sector has taken a speed dating approach”

compared with those countries’ mutually beneficial long-term relationships. We are aware of that and looking at it, and we very much hope to improve the relationship. I say to the noble Lords, Lord Broers and Lord Hunt of Chesterton, that we are also well aware of the role that this long-term relationship can play in encouraging innovation and, in particular, new innovative companies.

The noble Lord, Lord Sugar, made a number of remarks about not sending contracts to foreign companies that pay little tax in this country. I say to him that it is not only foreign companies that, in some cases, do not pay very much tax in this country; some of our major domestic media companies do not either. One has to remember that Siemens employs a large number of people in manufacturing plants in this country, and therefore the question of what is and what is not a British company has become a little more complicated. We are also well aware of the French, German, Dutch and other examples. What the noble Lord, Lord Puttnam, called the procurement game is, therefore, something that we intend to learn.

Moreover, we are working not just with the biggest companies. In February this year, the Prime Minister outlined measures to open up the way that government does business in order to ensure that small and medium companies, charities and voluntary organisations are in the best possible position to bid for contracts. Since February we have delivered the following building blocks aimed at supporting SMEs. We have eliminated the use of pre-qualification questionnaires in 15 departments for procurements below the EU threshold of approximately £100,000. Evidence suggested that the length of those pre-qualification questionnaires was one of the biggest inhibitions to small companies in applying for government contracts. The two departments still using pre-qualification questionnaires are doing so only for security reasons. We are also now publishing all central government tenders and contracts through the Contracts Finder website. More than 2,000 tenders have been published, of which 50 per cent were flagged as suitable for SMEs, and more than 30 per cent of contracts listed were flagged as awarded to SMEs. We are also piloting a new e-sourcing solution, the Dynamic Marketplace. Nine departments have signed up and more than 500 suppliers have registered, providing themselves with free and easy access to opportunities below the EU threshold. We have even introduced a “mystery shopper” scheme to allow suppliers to report bad procurement practice by government purchasers. More than 100 cases so far have been received and dealt with under the scheme.

I say to the noble Lord, Lord Sugar, that there is no 25 per cent rule regarding the turnover of SMEs in bidding for public procurement contracts. Consideration is given purely to the financial viability of SMEs bidding for contracts, and we are aware of the need to encourage SMEs in all ways. In July 2011 we published the first SME progress report and departmental action plans outlining how departments are supporting SMEs. We ran an Innovation Launch Pad, which received 351 proposals from SMEs. Two of the best companies have since won new business with government, and we hope that others will do so as well. To help with suppliers’ cash flow—a point raised by the noble Lord, Lord O’Neill—the Government aim to pay 80 percent of undisputed invoices within five days. That is not on the same model as supermarkets. In all new contracts we require main contractors to pay their subcontractors —which are more often SMEs—promptly.

We have also taken steps to raise the competency and professionalism of public sector procurement staff. We are building a training programme that will increase the skills of the Government’s key procurement professionals in line with the use of lean techniques. This will become a prerequisite for procurers who lead on major procurements for government. We have also implemented a two-way commercial interchange pilot programme with industry to bring private sector expertise into government and interchange with our procurers who will benefit from experience of private sector best practices.

I therefore respectfully suggest that in the 13 months since the debate on the Green report, this Government have done far more to transform public procurement than the previous Administration managed to do in 13 years. However, we are not resting on our laurels. We recognise that there is still more to be done, and we have a clear programme to do it.

I turn to the question of EU rules, which clearly need to be substantially reformed. We welcome the European Commission’s intent to publish proposals to simplify the procurement directives by early 2012, and in our response to the Commission’s Green Paper on the modernisation of EU public procurement policy we have called for significant simplification to free up public procurement markets and enable a light-touch, modern regulatory framework. We have been in active dialogue with the Commission on these proposals. This is a once-in-a-decade opportunity to simplify the procedures, cut red tape, embed transparency, and increase cross-border competition to the benefit of citizens, business and public authorities across the European Union. As a priority, we must ensure that these reforms catalyse and drive growth.

Alongside this work, in July the Government stated that we would consider whether the UK was best applying the EU procurement rules and managing our procurements in order to meet our strategic needs, cost effectively, in the long term. We will be publishing more details as part of the growth review on 29 November.

Three days ago, at the Cabinet Office conference on 21 November, my honourable friend the Minister for the Cabinet Office unveiled a radical package of measures that will change how our Government buy from the private sector in a way that supports business and promotes growth. The Government will provide an open door for current and future suppliers to discuss forthcoming procurement opportunities, cutting the time taken in the procurement process. We will work with industry to identify and address any key capabilities needed to meet future demand. We have published a pipeline of £50 billion of potential business opportunities across government, giving an unprecedented view into the Government’s expected future requirements and helping business to build the confidence to invest long term in plant, machinery and people.

We aim to make it 40 per cent faster to do business with government—another issue which matters enormously to smaller companies. All but the most complex procurement processes will be completed within 120 working days from January, compared with the average of 200 days now. By engaging earlier and more openly with business and the wider supply chain, government will be able to reduce the time taken during the procurement process and provide the greater certainty and visibility of this forward pipeline to unlock investment. We will require all civil servants responsible for running major procurements to be trained in the Government’s new approach.

The noble Lord, Lord St John, talked about the advantages of payment by results and procuring for outcomes. As he will know, a number of experiments on this are going on in different sectors. It is something that we are well aware of. We intend to experiment with it further and we hope to benefit from it more in the future. As Francis Maude said on Monday, we will follow the example of our EU neighbours and, indeed, of best practice in the private sector by making it easier for our suppliers to do business with us.

The Government Procurement Service, now based within the Efficiency and Reform Group in the Cabinet Office, will continue to implement the category strategies and deliver centralised contracts in the core category areas. Only last week, we awarded the central government travel management services contract—that is, the domestic and international contract—which is projected to save the Government some £20 million, equating to a saving of approximately 30 per cent against the existing arrangement. I shall not mention which airline I flew with the last time I went on government business, but that is part of the saving.

The Government are committed to continuing the work that we have started, to promoting growth, to increasing savings and reducing bureaucracy, to making public procurement a slick and efficient process, and to making government a reasonable and straightforward customer for businesses to work with.

[Lord Young of Norwood Green]

The one question that the noble Lord has not addressed on which I should welcome some comment is why in public procurement contracts we do not stipulate, as the previous Government did, that it is a perfectly reasonable quid pro quo to indicate how many apprentices there are and what training they will be undertaking. I thought it disgraceful when I discovered a very large government contract with a company that did not have a single apprentice on its books. I would welcome the Minister’s response to that.

[Lord Wallace of Saltaire]

As the noble Lord will know, the number of apprentices has increased considerably in the past year, and this is something to which we are paying a great deal of attention. However, on his specific question, I shall investigate and write to him.

Universities: Funding

Debate between Lord Wallace of Saltaire and Lord Young of Norwood Green

Monday 7th June 2010 Lords Chamber

[Lord Wallace of Saltaire]

As the noble Baroness will be aware, this Government are less committed to targets for everything than their predecessor and are much concerned about improving the quality of technical education, apprenticeships and the like. We are not so worried about the target of 40 per cent. However, since the number of people reaching the age of 18 will fall in the next 10 years, without further expansion of university education the proportion of 18 year-olds going to university may increase.

[Lord Young of Norwood Green]

My Lords, there has been a 16 per cent increase in demand for university places. The previous Government pledged an additional 20,000 places. The Conservative manifesto promised 10,000 extra. But now we see a cut of 10,000. Does that make sense, given the previous Minister’s response about the need for high-tech manufacturing? As another speaker has said, we need more people with more high qualifications in a knowledge economy.

[Lord Wallace of Saltaire]

The noble Lord’s use of statistics reminds me of the use made by the Daily Mail. Looking at the cuts and proposals, it appears that last December the previous Government proposed a cut of 6,000 places, and then later an increase of 20,000. The new Government have come up with an increase of 10,000. I make that a net increase of 4,000 places on the original proposed cut of 6,000, not a reduction.