Procurement Bill [HL]

Baroness Bennett of Manor Castle Excerpts

2nd reading
Wednesday 25th May 2022 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Best. As always, he was extremely incisive and clear about our all too often tragically awful housing and general building sector. I very much wish to associate myself with his remarks about transparency. We need to ensure and extend that, and not allow commercial confidentiality to overcome it. This extends far beyond the housing sector.

I declare my position as a vice-president of the Local Government Association. As second-last of the Back-Bench speakers, it is a great challenge not to repeat anything. I will seek not to do that, so I begin by associating myself entirely with the comments of the noble Baronesses, Lady Young of Old Scone and Lady Parminter, who covered many of the issues that your Lordships’ House might expect me, as a Green, to cover. Perhaps it is fortunate that I land at this particular spot on the list, because mine might be described, in chunks at least, as a balancing speech to that of the noble Lord, Lord Moylan.

As we look at the Bill we have to start by looking at the disastrous history of the outsourcing of government services over the past decades. I am not being specifically party-political or looking at only one side of your Lordships’ House here. There was some acknowledgement of this in a government press release on 6 December 2021, which said that the Government would seek to exclude

“companies with a track record of poor delivery, fraud or corruption”

from winning public contracts.

To pick a few of the worst offenders more or less at random—if you want a wider selection, pick up any Private Eye and you will find many more—let us start with Serco, which was fined £22.9 million in a settlement with the Serious Fraud Office over its electronic tagging contract. That was a deal through which it dodged criminal charges. Capita, with a £1.3 billion contract for Army recruitment, missed every target for recruiting both regulars and reserves, in some years by 45% and never in a decade by less than 21%.

Arguably the worst offender of all is G4S, which advertises itself as

“the leading global, integrated security company”,

with more than half a million mostly low-paid employees around the world and a human rights record to rival a failed state. It was profiting from running Birmingham jail until it spectacularly lost control—due, the independent monitoring board suggested, to insufficient staffing levels and quality. One job ad put out by G4S said that

“no specific previous qualifications or experience”

were required to be a prison custody officer. The state’s highly trained officers had to come to the rescue when G4S lost control. It also had the contract for Medway Secure Training Centre, which houses some of the most vulnerable children in the country, as well as for Rainsbrook Secure Training Centre. Both contracts had to be taken off it in consequence of its absolute failure.

So it is very clear that this Bill is to be welcomed. Indeed, we have heard welcomes for the Bill from all around the House—except perhaps from the noble Lord, Lord Moylan. However, it is worth going back to something that lots of people said. In his introduction, the Minister claimed that this was part of the famed and much-celebrated Brexit dividend, although of course, as I will come back to, many other members of the European Union seem to have managed without the continual stream of outsourcing disasters involving multinational companies that we have had under exactly the same set of EU rules.

However, let us start from where we are now and make the Bill as good as possible. For that, we really need some clarity. It is really important to stress that Clause 18, which talks about the “most advantageous tender” in a competitive tendering process, is not actually new. It is already possible under current regulations and guidance. Bringing in something that already exists will not change culture and practice. Many noble Lords have expressed the concern that value for money equals lowest unit cost. There has to be focus on social, environmental and economic value, particularly in our disadvantaged communities.

There has to be an opening up to small and medium-sized enterprises—which the Government say they wish to achieve—and away from these disastrous failed multinationals, which are great at being cash cows and terrible at delivering services. On that point, I associate myself in particular with the comments of the noble Lord, Lord Mendelsohn, and the noble and learned Lord, Lord Thomas of Cwmgiedd, that the idea that a small or medium-sized enterprise, in dealing with a big organisation on a contract that has gone wrong, can use civil remedies and take it to court is clearly utterly impractical. We need something else. We also need to look very closely at the way the 30-day payment regime is expressed in the Bill and whether it is strong enough.

I note the useful briefing from the Local Government Association, which notes, as the Green Party often does, that so many apparently cheap things have been costing us dear in this low-wage economy, such as the lack of investment in training and skills and the environmental damage. However, I think I would acknowledge as a Green that there is something of a philosophical problem here in that this is trying to set some rules from Westminster that apply around England and Wales, at least. Green philosophy shows a way forward here. In this Bill we need to have a foundation of basic standards while allowing freedom for councils and other commissioning bodies to choose higher employment, environmental and service standards. I note the call from the Local Government Association for national funding for the upskilling of council procurement officers. We all know how stretched local government is, so I have a specific question for the Minister. Do the Government intend to provide resources to local councils to ensure that they are able to work with the significant change that the Government outline in the Bill?

I note also in passing a number of useful briefings that have stressed very much the importance of getting away from the multinationals. They are from Social Enterprise UK, Coadec—the Coalition for a Digital Economy—the National Council for Voluntary Organisations and the National Association for Voluntary and Community Action. I note also a very useful briefing from UNISON, which says that what we need are inclusive, high-quality sustainable public services. Those are not just about procurement; they are also, of course, about decent funding.

I should like to make a couple of specific points about the detail. I suggest that Schedules 6 and 7 need to be combined. Schedule 6 has the mandatory exclusion grounds, which include conviction for corporate manslaughter or corporate homicide, fraud, bribery, slavery and human trafficking, organised crime and tax offences. I am glad they are regarded as exclusions. That is a good place to start, but I think we have to look at some of the contracts set over recent years to see that that does not seem to have been applied.

Schedule 7 lists the discretionary exclusion grounds. These include labour market misconduct, environmental misconduct, competition infringements and professional misconduct. Surely these grounds should also exclude bidders. If that means that all the bidders are excluded—perhaps not unlikely, given the tale of woe with which I started—maybe we need to get to a contract specification that caters for a different sort of bidder, such as a social enterprise or indeed a public body constituted for the purpose of delivering that service or goods.

Here, I cycle back to where I started and warn noble Lords that this is where I get to my most controversial bit. I note that all my case studies—perhaps they were not entirely randomly selected—are about the exercise of the coercive power of the state. I would say that whether in prisons, courts, policing or the military, the exercise of those grave responsibilities—the literal power, in the worst cases, over life and death, and certainly the power over individual liberty—should not come from contracts for which the Government hand over responsibility. It should remain in government hands. I will be talking to the Public Bill Office to see whether there is a way to bring that into the Bill.

I have been mostly negative but I always like to be hopeful so I shall circle back to the points raised by the noble Baronesses, Lady Young and Lady Parminter, and indeed the noble Lord, Lord Maude, who said: can we get the heart racing about public procurement? Absolutely I can and I can point to the fact that, back in October 2019, the first Written Questions I put down in your Lordships’ House as a new baby Peer—of a few days, I think—were about public procurement. I asked the Government how much organic and local food was being bought for schools, hospitals and prisons. I think noble Lords who have been round a lot longer than I will probably know the answer I got to each of those Questions. Exactly right—the Government do not know.

I come to a point on which, for the second day in a row, the noble Baroness, Lady Noakes, and I can perhaps agree: impact assessment. Reading all the pages of this long and complex Bill, I cannot see—I am not a legal expert—where we have an impact assessment of what the Bill does in, say, two years’ time. How will it have changed public procurement to improve public health, the economic situation of disadvantaged areas and the state of our environment and natural world by cutting carbon emissions? I leave your Lordships’ House with this question: how will we see the Bill’s impacts?