Apprenticeships and Skills (Public Procurement Contracts) Bill
Debate between Andrew Gwynne and Philip Davies(11 years ago)
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Andrew Gwynne (Denton and Reddish) (Lab)
I beg to move, That the Bill be now read a Second time.
Everyone in the House celebrates the value of apprenticeships in providing opportunities and developing skills, and my private Member’s Bill would help to promote more of that. It is vital that we have more quality apprenticeship opportunities, particularly for young people, especially at a time when nearly 1 million of them are still out of work. Surely it is common sense that the Government and public authorities are uniquely placed to use the leverage of the money they already spend on procurement to help promote skills training and provide new apprenticeship opportunities. This should be part of the procurement process, where appropriate. The Bill is a relatively simple idea: every supplier winning public contracts worth more than £1 million may be asked to offer apprenticeship opportunities in those public contracts, if that is what the public body seeks to promote.
First, I should set out the problems in constituencies such as mine and how my Bill could help. Given the stubborn long-term unemployment and youth unemployment in my constituency and many others like it, there is much more that local and national Government could and should do, including through their agencies and other public bodies. In Denton and Reddish, youth unemployment in September was still at 7.6%, compared with 5.9% nationally, in the 18 to 24 age group. Representing a constituency with such levels of long-term unemployment and youth unemployment, I think it is clear that more has to be done to help. The blunt truth is that many of the jobs in my area are low skilled and low wage, so the challenge in areas such as Denton and Reddish must be to upskill the work force, and to raise ambition, opportunities and life chances with it.
Philip Davies (Shipley) (Con)
I congratulate the hon. Gentleman on bringing the Bill to the House. Will he clarify something he said earlier, because I was a bit confused? If I remember rightly, he said that local authorities “may” do this, if they choose to do so, but at the top of the Bill, it says that the Bill is to
“Require certain public procurement contracts let by public authorities to include a commitment…to provide apprenticeships and skills training”.
It says “require”, not “may”.
Andrew Gwynne
I do indeed. There is much good practice throughout the country that we should be championing. I believe that my Bill will encourage other public bodies to do what my hon. Friend’s council, my council and, probably, the councils of Members in all parts of the House seek to achieve. Notwithstanding all that good work, however, it is a sad state of affairs when fewer than one in 10 employers offer apprenticeships. Far too many young people are being told that they have an apprenticeship after a course lasting 12 weeks or less, and one in five apprentices receive no actual training of any kind. I believe that, between them, Government procurement and my Bill could enable us to change that position.
I am proud of my party’s record in this regard. Under the last Labour Government, the number of apprenticeships more than quadrupled. We launched the official Office of Government Commerce guidance to encourage the growth of apprenticeships, whose principles are also evident in the Bill. I have been informed by both the Public Bill Office and the House of Commons Library that it is still the most relevant guidance for apprentices. The last Labour Government proceeded with major projects such as the kick-start housing scheme and Building Schools for the Future, and their work with the contractors on the Olympic park resulted in the creation of thousands of new apprenticeship opportunities as part of public procurement. That is a legacy of which I think we can be rightly proud.
It was the last Labour Government who ensured that skills and apprenticeships would be an integral part of the Crossrail project that we launched and that, I am pleased to say, the current Government have retained. It was our party that established the Tunnelling and Underground Construction Academy, and constructed the framework for a procurement strategy based on taking apprentices from the local London boroughs. That was crucial to ensuring that young people in some of the most deprived communities in our country have the skills training that will be necessary for the next generation of engineers.
Philip Davies
I am becoming rather puzzled. Having said earlier that the Bill did not require anyone to do anything that they did not want to do, the hon. Gentleman is now producing a catalogue of local authorities and local public procurement bodies that would have done this themselves anyway had they wanted to. If the Bill does not require anyone to do something, and they can already do it if they want to, what on earth is the point of it ?
Andrew Gwynne
That is a fair question. The point of the Bill is that there is still the misconception—as we have heard today—that public bodies cannot do this because of European Union procurement rules. My Bill makes it clear to all that if they want to include apprenticeships in their tendering processes, they can do so. It also aims to drive up standards through the key provision that apprenticeships could be required to be at the higher or advanced level.
Philip Davies (Shipley) (Con)
I congratulate the hon. Member for Denton and Reddish (Andrew Gwynne) on securing the slot at the top of today’s proceedings for his private Member’s Bill. It is common in these times to congratulate somebody on that, but I want to go a step further and congratulate the hon. Gentleman on the passion that he showed in his support for apprenticeships. Nobody who heard him today could doubt how much this subject means to him, or his desire to help as many young people as possible achieve their goals in life and fulfil their potential, which is what apprenticeships are all about. I commend him for the speech he made because that passion and that desire to help those people in his constituency and across the country shone through for everybody to hear. It was an excellent speech.
However, I admit that I am slightly confused by some parts of the hon. Gentleman’s speech, as I alluded to earlier. In some respects the Bill is a typical Friday Bill, in the sense that we are, in effect, being invited to support something that expresses a nice sentiment. I am not aware of anybody in the House who is opposed to apprenticeships or who does not want to see people achieve their potential, reach their goals in life and have the right path tailored for them. That is common ground across politics. I question why anybody involved in politics would want to stand in the way of any of that.
On a Friday we are invited to support not just a sentiment, but a particular piece of legislation. This is one of the occasions where it seems that if we support apprenticeships and the Bill has “apprenticeships” in the title, we must support it, because if we do not, we must be against apprenticeships. I do not like that approach to passing legislation, where we are invited to vote on a sentiment rather than on a Bill.
The hon. Gentleman’s thesis, if I understood it correctly—I am sure he will correct me if I am wrong—was that there is a lot of confusion out there. The Bill is typical in that we are invited to support a sentiment, but it is untypical in the sense that the hon. Gentleman rather characteristically honestly seemed to suggest that it was not actually necessary—there was no need for a law. Although a law would help in achieving his goals, it was not strictly necessary.
Andrew Gwynne
It would be false to suggest that the Bill is not necessary, because if there is confusion, it is necessary to clear up that confusion beyond any doubt, and the best way to do that is to put the clarification into legislation and on the statute book.
Philip Davies
I appreciate that point of view, which certainly has merit. My concern is that rather than clearing up confusion, as the hon. Gentleman seeks to do, passing the Bill would create even more confusion. The reason I say that with some certainty is that having read the Bill myself, obviously, before today’s proceedings, I am more confused than ever about what its impact would be. It has not cleared up any confusion; it has made me even more confused than I was before.
At the very start of the Bill—I shall read out the words because it is in some respects the most crucial part—it states that this is a Bill to
“Require certain public procurement contracts let by public authorities to include a commitment by the contractor to provide apprenticeships and skills training; and for connected purposes.”
Clearly, the Bill requires certain public procurement contracts to include a commitment to provide apprenticeships. It is not an invitation or a suggestion that certain contracts may be able to do that; it is a requirement that certain contracts must do that.
The hon. Gentleman’s speech seemed to fly in the face of what is written at the head of the Bill. I do not doubt his desire that the Bill should allow local authorities and other public bodies to do that if they so wish. He made it abundantly clear that that was the intention behind his Bill, and I have no reason to doubt that that is the intention, but any public body looking at the legislation that he is seeking to pass in order to clarify the situation could only read the heading of the Bill—the most fundamental part, setting out what the Bill is all about—and believe from reading it that it must do as stated, and that it is not voluntary, but something that it is required to do.
Andrew Gwynne
My Bill is only short so I am sure the hon. Gentleman has had time to read it all. The opening words require
“certain public procurement contracts”.
Were I the borough solicitor for my local authority, I would then look at clause 1(2), which states:
“An authority issuing a contract under subsection (1)(a) may require that a minimum proportion of the apprentices employed by the contractor are higher or advanced apprentices.”
It is pretty clear.
Philip Davies
I hope to have the opportunity to come on to some of the detail in the Bill. Suffice to say at this point that I am not sure that the bit that the hon. Gentleman read out is particularly relevant to the bit that I read out. The bit that I read out is a requirement to provide apprenticeships and skills training generally, whereas the bit that he read out is about a higher level of apprenticeships, so we are talking rather at cross-purposes. I am not entirely sure that his point addresses my point or that my point addresses his. That is why I think we may be left with further confusion.
Philip Davies
My hon. Friend makes a very good point. We heard what I thought was an excellent speech from the hon. Member for Denton and Reddish and it was difficult to disagree with much of what he said. We may have a slight disagreement about the respective merits of each party’s approach and what they did while in government, but it would be churlish to argue the toss on that. I am willing to look above the party political and look at the issue as a whole, and I agreed with virtually everything that the hon. Gentleman said. My concern—I am grateful to my hon. Friend the Member for Bury North (Mr Nuttall) for jumping in at this stage—is that the hon. Gentleman’s view that the Bill was all about people’s choices seemed to fly in the face of the language in the Bill, such as the words “require” and “must”.
Andrew Gwynne
Surely the hon. Gentleman would concede that after “must” the clause continues
“give due consideration to the relevant guidelines issued by the Office of Government Commerce (OGC) or by the Cabinet Office or any related body”.
Surely he is not seeking to allow apprenticeships that fall outside the Government’s own guidance for apprenticeships.
Philip Davies
Again, there is an awful lot on which we agree. It might help if I started with those parts of the Bill and the hon. Gentleman’s speech with which I agree the most, and they relate to his desire, which I share passionately, that apprenticeships must be of a certain quality, which has not always been the case. That is not a party-political point because it has probably been the case under successive Governments. Everyone knows the value that people place upon apprenticeships, and political parties of all persuasions have realised that the public have a great deal of faith in what might be called old-fashioned apprenticeships and have jumped on the apprenticeship bandwagon and tried to suggest that they are bringing them back. What the public have thought of as apprenticeships has not necessarily matched what they delivered. Some apprenticeships became nothing more than the sort of on-the-job training that would take place when someone was recruited to a new job, to which people attached the name “apprenticeship” to make them look good, make them sound good, and make the Government look good with the numbers, when really it was no such thing. What I most welcome in what the hon. Gentleman has said today is his desire to ensure that the quality of apprenticeships remains high.
Andrew Gwynne
I am pleased to hear what the hon. Gentleman has just said, in the light of which I appeal to him to support the Bill today so that we can have clause-by-clause debates in Committee, which is the appropriate place for them. Given what he has said, I take it that he supports clause 1(1), which sets out exactly the argument for having assurances that in public procurement contracts any apprenticeships must meet the Government’s guidance.
Philip Davies
The hon. Gentleman seeks to take me down a route on which I am not entirely sure that I am anxious to follow him, which is that if there is one clause, paragraph or line in a Bill with which one agrees, one must support the entire Bill even if one disagrees with the rest of it.
Philip Davies
I intend to come to that point later, but the point I will make briefly in response to the hon. Lady now is that we are all in favour of apprenticeships, as I have made clear, but hopefully we are not all equally in favour of apprenticeships at any price or at any standard. It is no good just saying that we want more apprenticeships; we want more proper apprenticeships that lead to proper jobs and train people in a proper skill so that they can become an expert. One of my concerns about the Bill is that some local authorities might go through the motion and go back to where we were before, with apprenticeships that are not of the level we would all like to see just in order to tick some boxes. I know that that is not the intention behind the Bill, but sometimes I worry that that will be the unintended consequence.
Andrew Gwynne
The hon. Gentleman is making a perfect case for supporting my Bill, because clause 1(2) states:
“An authority issuing a contract under subsection (1)(a) may require that a minimum proportion of the apprentices employed by the contractor are higher or advanced apprentices.”
The Bill would offer the opportunity for the upskilling that the hon. Gentleman wants.
Philip Davies
I totally agree with the sentiment behind what the hon. Gentleman is saying, but in many respects he has “may” and “must” the wrong way around. If the Bill stated that local authorities “may” do this if they want to—rather than that they “must” and that it is a requirement—but if they do the apprenticeships “must” be of a very high standard, I would have a lot more sympathy with it. It seems to me that he is saying that public bodies must—I know that he disagrees, but this is how I read the Bill—do this, but that the quality is an option rather than a requirement. I therefore think that the bits that public bodies could choose to do are the wrong way around, and there is no guarantee that the apprenticeships would be of a high quality. He might like to encourage them to be of a high quality, but his Bill does not require that.
Andrew Gwynne
I am genuinely pleased that the hon. Gentleman wants there to be upskilling and wants the requirement to be strengthened. May I urge him to support the Bill and, in Committee, table an amendment to clause 1(2)? In that way, he could replace “may” with “must”.
Philip Davies
If I hear the hon. Gentleman correctly, and I may not have done, this sounds like a red letter day for me. It appears that he has agreed to change the wording of his Bill to suit my views. This is the first time an amendment of mine has been agreed in advance; they are not usually agreed even when tabled at the appropriate time. If I am right, it has been a successful day at the office for me and my time has not been wasted.
I say to the hon. Gentleman that the Government are already doing a good job in introducing greater rigour into the apprenticeship scheme. I would not want to do anything that inadvertently led to that being weakened, so I am not convinced that the Bill is the way to go. I shall come to what local authorities and public bodies should focus on when deciding on procurement, which does not always go well.
Trying to have a top-down approach, which is what the Bill encourages, is not necessarily the way forward. A bottom-up approach is far better. It is better to leave businesses to ensure that apprenticeships are tailored to their needs. The problem with the Bill’s approach is that we will end up losing the idea that apprenticeships should be set by businesses to suit their approach; the issue will become a tick-box exercise for companies to achieve a contract.
Companies will not necessarily introduce an apprenticeship because there is a job at the end of it and they really need the skill; the danger is that the whole thing will become a form-filling exercise: “Oh, if it will help us get a contract, let’s just say that we’ll take on an apprentice. There won’t be a job for them at the end, but the costs of putting the person through an apprenticeship is x and we’ll get a contract worth y. We have done the calculations, and it’s worth our while taking on an apprentice—five, if we have to.” That company would know full well that at the end of the period there would not be a full-time job for the apprentice, who would have spent time on a false prospectus, hoping that something would happen.
Philip Davies
I understand the point, but local authorities would have to undergo an awfully long learning process. If somebody takes on an apprenticeship lasting a year, two years or three years, as the hon. Member for Denton and Reddish envisages, only to find out that a job was never going to be available at the end, it will take at least three years for the lesson to be learned. There is no telling how many contracts could have been awarded in that time. The situation would just roll forward.
Andrew Gwynne
The hon. Gentleman is partly right. Having an apprenticeship that leads to a job is superb and should be the ambition. Surely, however, we should also support apprenticeships that lead to a degree-level qualification. Although they might not lead to a job with the particular company, they would widen the opportunities for future employment by giving the apprentices work experience, skills training and a decent high-level qualification for the future.
Philip Davies
That may be true. My problem with the sentiment behind the Bill—this has been a problem in the past—is that apprenticeships have been seen to be an end in themselves: what is seen to be important is the fact of an apprenticeship. With the best will in the world, it is not the apprenticeship that is the end in itself, but what it does for a person’s career prospects. My concern is that we focus too much on the word “apprentice”, without focusing on what it will deliver for the long-term career aspirations of the people concerned.
Andrew Gwynne
The only end I want to see is an end to youth unemployment, an end to long-term unemployment and an end to the low-skill, low-wage economy.
Philip Davies
We all want those things; I am not aware of anybody who has come into politics to extend youth unemployment, stop people from fulfilling their potential, deny people opportunities or prevent the best people from getting jobs through their own effort and characteristics. We all want that—it is a statement of the obvious. We all want the same outcome.
What goes to the heart of much of this debate is not the ends we want to achieve—no doubt we all want the same ones—but how we best achieve those ends. I am not convinced that the hon. Gentleman’s approach, no matter how good the sentiment behind it, will deliver what he and I wish to see. It may take people off the unemployment list for a short period, but I am not interested in that. I want them to be off that list for ever and to go down a path that will mean that they are never unemployed again. I am not entirely sure that, with the best will in the world, the Bill will deliver that.
Andrew Gwynne
Surely the hon. Gentleman agrees that one of the best ways to get people off the unemployment register for ever is to ensure that they are highly skilled and relevant to the needs of a modern work force and a dynamic economy. Backing the Bill is one way of helping to achieve that.
Philip Davies
Of course we agree on that, but I am not convinced that the Bill delivers that; if I were, I would agree with it. It could deliver false expectations and enable companies bidding for a contract to go through the motions of offering something that will not do the apprentice any good and benefit only those companies.
I am sure that the hon. Gentleman does not want a false prospectus to be put before young people to help a big company win a lucrative contract. A lot depends on how the initiatives are described. He describes them as he does, but if I describe them as I do, people might come to a different conclusion about whether we should support them.
Andrew Gwynne
I am trying to tease the hon. Gentleman into supporting the Bill. Perhaps, again, he could do that by supporting it on Second Reading and tabling an amendment in Committee for a sunset clause. If, after a period, it turns out that he is right and I am wrong, and the Bill has not succeeded, the Act of Parliament would cease to exist.
Philip Davies
The hon. Gentleman has inadvertently, I think, hit on a touchy subject. He is probably not aware that I proposed a sunset clause for a previous private Member’s Bill—an expiry date, in fact—to which the promoter and the Government agreed, but the Government reneged on their promise when it went to the other place. He will therefore forgive me if I am rather nervous about agreeing to sunset clauses, which sometimes are not delivered.
Andrew Gwynne
I shudder to think that the Government might renege on a promise. May I give the hon. Gentleman an example? My previous private Member’s Bill in the 2009-10 Session—the Debt Relief (Developing Countries) Bill, which became the Debt Relief (Developing Countries) Act 2010—had a 12-month sunset clause inserted in Committee. In fact, it was his Government who, after 12 months of enactment of that very laudable Act, decided that it had indeed worked in the way I always believed it would, and made that Act of Parliament permanent.
Philip Davies
The hon. Gentleman has clearly had more success with my Government than I have, and I commend him for that, although, on reflection, that probably would not be too difficult. Once scarred, one becomes very shy of agreeing to sunset clauses. His offer was no doubt generous, and I will bear it in mind, but I am sure he will forgive me if I remain rather cynical about agreeing to something that might not be delivered.
I am big supporter of small businesses, not just in my constituency but across the country. They generate much of the wealth in this country and will generate much of the future growth in the UK economy. One of my concerns regarding small businesses is that there is already an awful lot of red tape and rules surrounding public procurement contracts. I genuinely worry that the Bill would not help small businesses to get some of these public procurement contracts but might in fact hinder their chances of doing so. Let me give the House a flavour of this. In preparation for the debate, I had a look at the procurement rules and standard conditions of contracts and supply of services of my local authority, which is Bradford council—unfortunately, but there it is. The first thing I came across was a 30-page document about how somebody goes about applying for a contract at Bradford council and what is expected of them. It is a combination of the blindingly obvious and other things I cannot really see the point of, but it is all set out in great detail for everybody to go through exactly what they have to do.
Once businesses have navigated their way through the 30-page document and got their lawyers and solicitors to pore over exactly what some of the conditions mean, they then have to go through the obligatory equality and diversity document, which runs to another 13 pages, whereby they have to set out all sorts of information about any complaints they have had, any findings against them in the past three years, and whether they have been the subject of formal investigation by the Equality and Human Rights Commission. That seems a bizarre requirement, because it does not ask whether it has been found in breach of anything by the Equality and Human Rights Commission but whether it has been investigated by it. If it has been investigated and found to have a clean bill of health, it seems a bit rough that it still has to declare something that may rule it out of getting a contract. There are also forms to fill in and nine parts of a thing that people have to answer.
The hon. Gentleman probably thinks that that is great and we should be encouraging local authorities to go through it all. In fact, he clearly thinks it is so great that he wants to add further things to the public procurement rules and regulations. No doubt when all these businesses are bidding for their contracts they will have to say how many apprentices they are going to take on and what the standard is going to be. All this is just to bid for a contract; there is no guarantee that they are going to get it. Any small business would have to take on the costs of going through all this preparation. The more we pile on to these contracts in the application process, the more we ensure that no small business will ever get any of them.
I am sure that that would be an unintended consequence, because I do not think that the hon. Gentleman would want to do anything to disadvantage small businesses in bidding for public procurement contracts. I know him—I have followed his career closely—and I have never heard him say anything to suggest that he would want to do that. As far as I recall, he has been a champion of small businesses, including those in his constituency. However, I worry that this would be an additional burden.
Andrew Gwynne
Clause 4, on interpretation, makes it clear that
“‘relevant contract’ means a contract which…exceeds a total value of £1 million”.
That has to be read alongside clause 1(2), which says:
“An authority issuing a contract…may require…a minimum proportion of apprentices”.
It is up to the discretion of the public body whether it wants that requirement for a particular contract. I hope that the hon. Gentleman’s local authority in Bradford would not want to create a set-up that precluded local businesses from winning these contracts. However, I certainly want to see a commitment to skills and training as part of bigger contracts such as the Denton community college project that I mentioned in my opening speech.
Philip Davies
The hon. Gentleman has only confirmed what I already knew about what he thinks this Bill will achieve, but I am not convinced that it would. I think it would be an extra layer of bureaucracy for people who are bidding for these contracts. Perhaps, as I am on a roll, he might think about increasing the size of contract to which the Bill would apply. Many small businesses would very much like to get their hands on £1 million contracts from public bodies. If he has big contracts in mind, perhaps the £1 million figure should be considerably higher.
Andrew Gwynne
I am happy to have this debate in Committee. If the hon. Gentleman believes that all the red tape that he has listed appertaining to his local authority is the problem, then perhaps he could do more to convince his Front Benchers that if they accept my Bill, then under their one in, one out rule they could look at other measures that he has cited as being a problem in his local authority. I have to say that these issues are not a problem in my two local authorities, one of which is Labour-controlled and one of which is Liberal Democrat-controlled.
Philip Davies
The hon. Gentleman is very lucky, then, but his Bill applies not only to his local authorities but to all of them, including mine, which is also run by the Labour party. I cannot say that I necessarily have the same faith in my local authority as he does in his.
The problem is that all the existing requirements are not only leading to lots of burdens for small businesses in getting their hands on some of these lucrative contracts but causing lots of confusion for the local authorities themselves. Adding further requirements on to local authorities regarding public procurement would cause even more confusion. I am concerned about this because of what happened in Bradford council. A report was produced that showed a major lack of skills and expertise among council staff in Bradford tasked with getting the best deals for its suppliers. Bradford council spends about £350 million a year with outside suppliers and holds more than 1,500 contracts. The council’s corporate overview and scrutiny committee revealed a major skills shortage not among the people who were doing the contracts but among the staff who buy the goods and services and commission the works from the suppliers. It seems to me that, occasionally, the staff, who are already trying to juggle all these documents in order to get the best deal, are just not up to the job. I do not see how asking them to consider something else as part of the public procurement process would help them in their efforts to get the best deal for the council taxpayer.
Philip Davies
I take the hon. Lady’s point and I will come on later to the view of the Federation of Small Businesses on the Bill and whether it thinks it would be to its advantage. For the moment, I want to stick to the point about the capability of the people in public bodies who are giving out contracts.
The report on the contract procurement process at Bradford council found that, of 170 council employees doing procurement work, none—not one—was actually trained in it, and that staff lacked a
“widespread understanding of both UK law and European directives related to procurement and commissioning”.
The report brings into doubt the argument advanced by the hon. Member for Denton and Reddish that passing an extra Act would clear up any confusion, because Bradford council staff did not have any understanding of UK and European law anyway. Adding another law would not help; it would probably make them even less likely to understand the law.
The report goes on to say that, among a 20-strong dedicated procurement team, there was a
“shortage of procurement skills and expertise”,
that the team was
“often asked to conduct tenders at short notice and are unable to maximise value improvement”,
and that officers were
“often restrained and inflexible in their approach to procurement and were becoming very compliant and rules orientated”.
That goes to the heart of one of the dangers of this Bill. Procurement should be a relatively straightforward process. It is about trying to get the best possible service or product at the best possible price, thereby generating the best value for money for the purchaser—in this case, the taxpayer. That is what people should focus on when doing procurement.
The problem is that there are so many rules, regulations, documents and policies that the basics of what procurement should be about are getting lost in myriad other factors. The Bill does not help address that problem, which has left Bradford council taxpayers out of pocket because they are paying more than they should for contracts. As the report states, officers were
“inflexible in their approach to procurement and were becoming very compliant and rules orientated”.
I fear that the Bill would make what has already been identified as a problem in local authorities such as Bradford—I do not have a great deal of faith in Bradford council, but I am sure it is not alone in this—even worse. People would focus on the wrong things—nice-to-have things—and forget about the big picture and what they were supposed to be doing.
Andrew Gwynne
I am grateful to the hon. Gentleman for giving way; he is being generous with interventions. Surely one of the important things for Bradford is to get Bradford people back to work, highly skilled and highly qualified. That is a core function, I think, of Bradford council in its procurement policy.
Philip Davies
A good starting point for its procurement policy would be to get more qualification among the people doing the procurement in the first place. It should also get the best deal for the taxpayer. That is what the focus of any procurement should be: getting the best deal for the taxpayer. The problem is that more things are being added on as a result of thinking, “Wouldn’t it be nice to have this and that? Let’s make this and that a requirement of a contract and encourage them to go down that route.” All that does is divert the attention of people involved in public sector procurement from what their main focus should be, which is to get the best value for money and the best price for the taxpayer.
Andrew Gwynne
Is having young people not in education, employment or training of best value to the taxpayers of Bradford?
Philip Davies
The hon. Gentleman seems to be arguing that procurement policy will solve every ill in the country. I do not see that. He will be telling me next that public procurement contracts could eliminate illegal immigration. It just does not work like that. Let us focus on how we can make effective progress on individual areas.
As I have said, I think that the Government are doing a very good job at increasing the number of apprenticeships and at making sure that they are proper apprenticeships and that they lead to worthwhile jobs. The Government are already making good progress. We should encourage, celebrate and enhance that work.
The problem with procurement is that public bodies often do not get the best value for money for the taxpayer, so that is what we should focus on. Once we have done that and local authorities and public bodies have iron discipline in getting the best deal for the taxpayer, perhaps then we could look at how they could use procurement to advance some of the public policy areas mentioned by the hon. Gentleman. My point is that we—particularly Bradford council—are a long way from that. Let us get back to basics to start with and start negotiating some good deals for the taxpayer.
Philip Davies
In many cases, public bodies are already co-operating with businesses, and further intervention could have a negative effect. The Minister for cities, the Minister of State, Cabinet Office, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), has confirmed a second wave of city deals, and that strategy goes a long way towards achieving what the hon. Member for Denton and Reddish wants. I am, therefore, not entirely sure that the Bill is needed in that respect.
My right hon. Friend has issued a written statement about the Greater Ipswich city deal, which is about addressing youth unemployment, increasing the skills level of the local work force and making sure that local businesses, local authorities, colleges and the Government co-operate in order to provide opportunities, ensure that
“dedicated support is available to match young people with jobs through a youth jobs centre…Expand the number of jobs and apprenticeships in local businesses”,
and increase
“local investment in skills training”.—[Official Report, 30 October 2013; Vol. 569, c. 49WS.]
It is not that anyone disagrees with the agenda of the hon. Member for Denton and Reddish, but the Government, through their city deals, are already doing an awful lot to address it. They should be allowed to flourish and continue their work, and I hope they will be successful. The Bill will not necessarily help; it may get in the way of, or even repeat, that work.
I think we would all agree that the Federation of Small Businesses is a leading business organisation of small businesses and the self-employed. It was formed in 1974 and has about 200,000 members, so we should listen to what it has to say. The Federation of Small Businesses is very supportive of apprenticeships:
“We believe apprenticeships can transform a young person’s life and give them access to bespoke training and often a highly skilled job as a result. Apprenticeships should be recognised as vital introductions to careers that can take individuals all the way to the top in the business. We need to see reforms continue to strengthen and protect the image of apprenticeships which, over the years, has been damaged by constant change.”
The Federation of Small Businesses shares the opinion with me and the hon. Member for Denton and Reddish that apprenticeships are valuable, but that they must be high quality. I agree with the FSB that that has not always been the case., but it also welcomes the Government’s “commitment to quality apprenticeships”.
The FSB supports the
“intention behind the Bill, which is to drive up apprenticeship numbers.”
As I have said, it would be difficult to oppose the sentiment behind the Bill. However, it also says that it is concerned that the Bill
“might hamper the progress being made and unintentionally harm the image of apprenticeships by reinforcing the perception that apprenticeships are a government driven work scheme of limited value. It is for this reason that we oppose the use of procurement to boost apprenticeship numbers.”
Andrew Gwynne
I have seen the letter from the Federation of Small Businesses. I take issue with its view because although we are using the power of public procurement to increase the number and improve the quality of apprenticeships, it is the private sector—whether that is being done by big or small businesses—that will be delivering the apprenticeships. It is therefore not seen as a Government initiative because the requirement is on the private sector to deliver them.
Philip Davies
That is where the hon. Gentleman and I part company. If a public body insists that a certain number of apprenticeships must be provided for a business to win a contract, that is not apprenticeships being delivered through the private sector, because it is being insisted upon by the Government. I am with the Federation of Small Businesses in thinking that an unintended consequence of that is that apprenticeships would go back to being a Government-driven scheme.
Andrew Gwynne
Is the hon. Gentleman seriously saying that a local authority such as Tameside, which has problems such as youth unemployment, long-term unemployment, low skills and low wages, cannot be ambitious and say to the private sector organisations that want to win contracts in the area that they must play their part in boosting the local economy?
Philip Davies
Of course the local authority can say that. I take it from what the hon. Gentleman said earlier that it is saying that. The Bill has not been enacted, but there seems to have been no impediment that has stopped his local authority from doing that. It can do what he wants already. It does not need this piece of legislation.
Andrew Gwynne
To take the argument further, the hon. Gentleman will recognise that that is not being done in many parts of the country because local authorities misunderstand the rules, and that many Government Departments are not doing it. I have used the Department for Work and Pensions as an example. Surely it would be a good thing to make it clear in statute that this is an option for local authorities.
Philip Davies
Perhaps this is another difference between our philosophies. The hon. Gentleman seems to think that if we pass a piece of legislation, everybody will do what he wants them to do. I do not see it like that, particularly if there is no requirement to do anything. I do not agree that passing the Bill would lead to the step change that he wants. I fear that the Bill would not remove confusion, but that it would create confusion over whether local authorities have to do what it says and over how much importance they should put on it. It would lead to the unintended consequences that the Federation of Small Businesses has identified.
The federation went on to say:
“We need to ensure that apprenticeships become a quality ‘product’ for all sectors and sizes of business. They need to be highly skilled training programmes which many employers want to use as a way of growing their business.”
The key is that employers must use apprenticeships because they want to and because it is right for their business and for the people concerned, not because they have been told to do so as part of a public procurement exercise.
The federation added:
“By concentrating on quality in the long-term we believe numbers will follow.”
I agree with that. If we want to ensure that as many people as possible take up apprenticeships, we must focus on making them of a high quality so that people can see that they mean something, that they deliver something worth while and that people who have done them go on to fulfil their potential. If that is delivered, the numbers will follow, because businesses and young people will see the benefit. We do not need to force apprenticeships on them or provide harsh encouragement, or however the hon. Member for Denton and Reddish wants to describe it. In the long run, I am not sure that that is the way to get many more successful, genuine apprenticeships. I agree with the concerns expressed by the Federation of Small Businesses.
I wonder how the apprenticeship requirements would be enforced by local authorities. If a local authority requires a business to take on a certain number of apprentices, that could lead to unintended consequences. The contractor might be unable to fulfil the commitment because of unforeseen circumstances. The local area might not have the calibre of people they are looking for or there might not be enough people who want to go down the right avenue. Somebody might start an apprenticeship and then drop out. Where would we go from there? Would the contract be scrapped mid-flow because the person was no longer taking the apprenticeship? Would other companies sue the council because they lost the contract not on the basis of cost, but on the basis of apprenticeships and the apprentices have dropped out midway through the contract? There could be all sorts of legal ramifications if local authorities make this something that companies must consider.
Philip Davies
I very much agree with my hon. Friend. Another danger is that if apprenticeships become an important focus for a public body in its procurement, it will become the focus of the bids. A company will increase the price that it is charging in order to take on x number of apprentices and will get the contract on that basis. The price that is charged to the taxpayer will therefore be higher than it otherwise would have been. The problem of overpaying for contracts in the public sector that has been identified would be made worse by this proposal.
Andrew Gwynne
Doe the hon. Gentleman have any evidence to suggest that that is happening now?
Philip Davies
I cannot give him evidence of what would happen under a Bill that has not come into effect. He does not know what effect the Bill would have and neither do I. I am merely expressing some concerns about the effect that it might have.
Andrew Gwynne
I will try to help the hon. Gentleman. When Tameside procured new schools under Building Schools for the Future, it ensured that there was a commitment to take on local apprentices. Was the contract price inflated as a result? Does he have any evidence to suggest that? Is not the reality that all it meant was that the contractors provided adequate skills training as part of the bid?
Philip Davies
You chastised me earlier, Mr Deputy Speaker, for concentrating too much on Bradford. The hon. Gentleman might have his blinkers on, and he may not have seen beyond the world of Tameside, great place though it is. I used to work at Asda’s Stockport store, and I am sure he used to travel through his constituency regularly to go there. I am sure many of his constituents have shopped there, too. However, we cannot really make a decision on national legislation based on the impact that he thinks it will have on Tameside or how successful the measures have been there. Perhaps he might want to introduce a private Bill that applies only to his local authority, but unfortunately the Bill before us today would not apply only to Tameside.
Andrew Gwynne
I do not wish to draw your anger, Mr Deputy Speaker, but I would point out that I want the best practice of Tameside and Stockport to be spread out across the whole country, which is the purpose of the Bill. Let us make it happen in Bradford, too.
Philip Davies
I am touched by the hon. Gentleman’s desire to help Bradford. The local authority probably needs some assistance, and I am sure it will be ringing him up as we speak to learn about best practice. Perhaps we ought to say that Chorley is a great place, too, so that you do not feel left out of this local authority love-in, Mr Deputy Speaker.
I have a helpful suggestion for the hon. Gentleman, to ensure that the FSB’s concerns are addressed and that it is not inadvertently excluded from the process. If he wants to pursue his agenda, although I do not necessarily believe it is the right way to go, he should make it clear that small businesses would be excluded from the Bill’s requirements and that they would apply only to businesses with a certain turnover. That might overcome the FSB’s problems with the Bill.
Andrew Gwynne
The hon. Gentleman is genuinely coming up with some pertinent ideas. Again, I urge him to support the Bill and table amendments in Committee so that we can have a thorough discussion about the merits of the case that he is making on behalf of the FSB.
Philip Davies
I am not entirely sure that a further discussion is what I am asking for. We are having a good discussion today, and we can have a further discussion in the Tea Room if the hon. Gentleman wants one. I am looking for solutions to the problems that I have mentioned.
I promised that I would mention EU procurement law, as my hon. Friend the Member for North East Somerset did. I am not a great fan of the EU, it has to be said. In fact, the sooner we are out of the wretched organisation the better, but unfortunately, while we are in it we are governed by it. The hon. Member for Denton and Reddish said he was adamant that the Bill would not fall foul of EU procurement law. I might have missed this, but I am not entirely sure of the basis on which he has decided that. Has he taken legal advice, or is he just working on the basis that as his local authority is already doing this and has not been pulled up by the EU, it must be fine?
Andrew Gwynne
I would helpfully point out that the Government, in the form of the Department for Work and Pensions, are doing it as well. Let us take a stand on this.
Philip Davies
That is helpful. I thought the hon. Gentleman said earlier that the DWP was poor at it, but obviously I misunderstood him and it is doing well. However, public procurement has to comply with a number of EU directives and regulations. According to EU legislation, all tenders from the public sector that are valued above a certain financial threshold must be published in the Official Journal of the European Union, which is published every day in 22 languages.
There have been cases in the European Court about public procurement, particularly one in Italy in which there was a requirement to procure at least 30% of supplies from undertakings established in southern Italy. That was taken to court because it was seen as discriminating against suppliers in other parts of the EU. The conclusion of the case was that nothing can be introduced in a public procurement contract that may discriminate against a potential supplier in other parts of the EU. If the hon. Gentleman is saying that a public body granting a contract should ensure that there are a certain number of apprentices, I am not entirely sure of the basis on which he can be confident that that does not fall foul of those EU procurement rules.
Andrew Gwynne
I know that the hon. Gentleman seeks a European bogeyman behind every piece of legislation, but may I commend a bit of reading to him? That is the European Commission’s guidance note “Buying Social—A Guide to Taking Account of Social Considerations in Public Procurement”. It suggests that promoting employment, decent work and access to training can be taken into account in public procurement contracts.
Philip Davies
I am grateful to the hon. Gentleman, but unfortunately it is not for him, or even necessarily for the European Commission, to decide on EU law. It is for the European Court to decide whether something falls foul of that law. I do not doubt the intentions behind what some people would like to happen, but I am not sure that he can be totally confident on that point.
The hon. Gentleman made it clear earlier that some public bodies are already getting on with it and doing what he wants them to, and that nobody is kicking up a big fuss about it. As he has told us on many occasions, it is working well for his local authority. One unintended consequence of passing the Bill could be to encourage somebody to take a complaint to the European Court, which would force it to make a judgment, and it might rule that the idea is illegal. At the moment, it is just happening, everybody is quite happy about it and nobody is kicking up a fuss. I am sure he agrees that that unintended consequence would be a tragedy.
I will not go into any more detail about numbers of apprentices, because I do not think that would be necessary or particularly relevant. However, I wish to mention some statistics on the national apprenticeships website, because I believe that the Bill might damage some of the great figures that it gives. One is that 96% of employers who take on an apprentice report benefits to their business, which is absolutely fantastic. One reason why that figure is so high is that employers take on apprentices for all the right reasons. They get the right person and can see what the benefit to their business will be. My fear is that if the Bill were passed, they would take on apprentices for the wrong reason—simply to win a contract rather than to bring genuine benefit to their business.
Another statistic on the website is that 72% of businesses report improved productivity as a result of employing an apprentice. Again, that is absolutely fantastic. I hope that, if nothing else, this debate will stimulate people to think about taking on an apprentice and seeing the benefits that will flow to their organisation. However, there has to be a bottom-up approach, and the top-down approach encouraged by the Bill would not help those fantastic statistics. It is surely better that employers take on an apprentice because they want one rather than take one on grudgingly because they feel they have to.
You will be pleased to know, Mr Deputy Speaker, that I am drawing my remarks to a close—I am trying to race through them as fast as I can. However, I have a few points to raise that the hon. Gentleman may want to reflect on. How does he intend to ensure that the quality of apprenticeships being offered is maintained? Who in a public body that was giving a contract would be responsible for ensuring that the company concerned had taken apprentices on, that they were doing something worth while and that the apprentices had not dropped out halfway through? It cannot be down to the national apprenticeship scheme alone. Presumably, the public body that is giving the contract must monitor what is happening. Who will do that and how much will it cost?
Does the hon. Gentleman envisage a situation in which the number of apprenticeships that need to be taken on is pro rata to the size of the contract? For example, if there is a £1 million contract, the expectation might be that the contractor takes on at least one apprentice; if there is a £2 million contract, the expectation is of two apprenticeships; and if it is £5 million, there will be five apprentices; and so on. Perhaps the contract will be worth £10 billion—it could be the contract for high-speed rail. Is he saying that it is fine if that contractor takes on only one apprentice because it ticks the box, or does he believe that the value of the contract should be reflected in the number of apprentices taken on? I would be interested to know his views on that.
How big a factor should apprentices be when deciding whether to give somebody a contract? How much should other value to the taxpayer, such as the price, be taken into account? Somebody might bid £1 million for a contract and offer to take on three apprentices, but somebody else who offers no apprentices bids £500,000 for the contract. What weight is given to the apprentices in that situation? Who does the public body give the contract to in that situation? How important is taking on the apprenticeships the hon. Gentleman wants to deliver in the overall contract? I would rather the public body gave the contract to the £500,000 bidder, because that gives the best value to the taxpayer, but he might have a different solution. I wonder where his Bill fits in.
The hon. Gentleman has a definition of public authority in the Bill, but I am not entirely sure how far that goes. For example, is the BBC covered by his Bill? If it is, how does he envisage the scheme working? If it is not covered, why not? Why is the Bill not part of the BBC’s deal given that it is a publicly owned, public service broadcaster?
What protection does the hon. Gentleman envisage in contracts for existing staff? What if somebody bids for a contract and offers to take on so many apprentices, and pays for it by getting rid of existing staff? Surely we do not want a situation in which somebody gets rid of existing staff to ensure that they hit the target. I am sure that that would not go down well with the trade unions, which he mentioned. What protection does he envisage for existing staff to ensure that they are not elbowed out of the way to provide an apprentice?
How would the hon. Gentleman know that an apprentice had been taken on a result of a contract? Suppose a massive company bids for a contract that is only a small bit of its pie—it might take on 100 apprentices in the course of its business, irrespective of the contract. When it bids for the contract, it might say, “We’ll bid £1 million for the contract and, by the way, take on 100 apprentices.” Who is to say whether the taking on of those apprentices is linked to the contract? How would the hon. Gentleman ensure that the apprentice who is taken on is linked to the contract? I do not see how that is possible. That is another way in which the measure discriminates against smaller businesses, which cannot cross-subsidise apprentices from other parts of their business in that way. I am not entirely sure how that will work or who will monitor it, or how much such monitoring will cost.
What will the hon. Gentleman do to improve the skills of the people who are procuring? As I have said, that is one of the problems. How will any subcontracting be monitored?