Procurement Bill [HL]

Baroness Bennett of Manor Castle Excerpts

Committee stage
Monday 11th July 2022 Grand Committee

I speak from direct experience of the higher quality of charity-run care homes and the greater dedication and commitment of their staff. We all know of effective social care provision by mutuals, social enterprises and charities under contract to government. This amendment emphasises that there is and should be a significant role for this sector alongside profit-making outsourcing companies and government agencies, particularly in this sensitive area of personal social public services. We support a mixed economy in the provision of public services, not an overwhelming dependence on large outsourcing contractors regardless of the type of service provided. I hope the Minister does too, and that she will recognise that the Bill, in its current position as a skeleton Bill, needs to have more of the principles set out in it.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise to make my first contribution in this Committee, so I declare my position as vice-president of the Local Government Association. I must also, slightly belatedly, thank the Bill team for last Wednesday morning’s briefing, which was very helpful in trying to come to grips with the complexity of the Bill. There are many people with a great deal more experience than me who are also wrestling with the complexity.

I rise to speak chiefly to Amendment 34 in the name of the noble Lord, Lord Wallace of Saltaire, who has just very ably introduced it. I also support Amendment 33. As the noble Lord, Lord Wallace, was speaking, I was thinking of the case study of the Dutch firm Randstad and the disaster of the Covid tutoring. That was a very large and important contract that I think the Government would now acknowledge went horribly wrong and should clearly never have been let overseas in the first place. The noble Lord also referred to care homes. Financialisation and hedge fund or overseas ownership of care homes is something I have been very concerned about since a brilliant report, which is highly relevant, from the Centre for Research on Socio-Cultural Change in 2016. It put that issue on the agenda and it has been focused on since by, for example, the Financial Times.

On Amendment 34, I perhaps come at this from a slightly different philosophical position from the noble Lord, Lord Wallace, in that I would like to get rid of all financialised provision and see it all in non-profit hands. I believe that is what is appropriate for this. This amendment is probing to ensure that organisations such as local social enterprises, not-for-profit companies and charities are able to apply for contracts. I would like to go stronger on that. I would like to see a preference for those organisations having many of these contracts. I think I am going to anonymise this case study because I have not had the chance to check with the people concerned, but a number of years ago I knew an excellent local rape crisis service that had been providing provision in a city for a number of years. Eventually I found out a month or so after a new contract was supposed to have started that it had been handed to a large national organisation. It was a total mess.

We have seen far too many cases like that where excellent local provision, which may not be expert at putting in tender documents but is expert at providing services, is swept aside under our current arrangements. I mentioned the Financial Times. There is very general agreement across the political spectrum that we need to stop that happening and ensure that good local services and social enterprises are able to continue, have stability, surety and certainty and do not need to put so much of their resources into the endless cycle of bidding and bidding again. I am not sure whether this amendment exactly gets to where I want to go, but it is certainly heading in the right direction. That is why I wished to speak in favour of it.

[Lord Coaker (Lab)]

My Lords, good afternoon. When the noble Baroness, Lady Noakes, leads a group of amendments, I often end up agreeing with her; it is a bit of a surprise sometimes. Amendment 30, which the noble Baroness has moved, goes to the heart of it, as do all the amendments, because of the lack of clarity about what Clause 8 really means and what is meant by light-touch contracts. It is a really important job of this Committee to try to tease out a little bit more detail.

As the noble Baroness, Lady Noakes, probes in her amendment, why are they not more narrowly defined? There is also an argument for asking why they are not more widely defined. I think the noble Baroness—she will no doubt correct me if I am wrong—is seeking to understand the Government’s thinking and how they have arrived at their conclusions. I think that is what all the various amendments from the noble Lord, Lord Wallace, the noble Baroness, Lady Bennett, and so on, are about.

In speaking to these amendments, I too am seeking clarity from the Government on what this clause means. I will start with the most obvious point. I have read the Library briefing, which refers to the Government’s own memorandum to the Delegated Powers and Regulatory Reform Committee on light-touch contracts, and will quote a couple of things that I think are relevant to all the amendments in this group, including lead Amendment 30 from the noble Baroness, Lady Noakes:

“The light touch regime is a facet of the existing rules … and has fewer rules regulating how a procurement is conducted for these contracts. This is reflected in the bill by a series of exceptions of obligations under the procurement regime for the relevant contracts.”


I will be frank: what does that actually mean? Which rules are not applied? There was one set of rules before, under the light-touch regime, which at one point the Government were not going to include in the Bill. That then moved to light-touch contracts, but we are told by the Government that there are fewer rules.

It would be helpful to know what the difference is. What are the fewer rules which the Government have explained to the Delegated Powers and Regulatory Reform Committee? The noble Lord, Lord Wallace, made the point that what we are all struggling with is that Clause 8(1) says what “light touch contract” means and then that it will all be done by regulation. In fact, it is a bit like knitting fog to try to understand exactly where we are coming to and what we are doing.

The Government also said in their memorandum to the Delegated Powers and Regulatory Reform Committee, which, again, is relevant to all these amendments:

“Whilst the scope of what is to be included in the power is known, it is not practicable for the bill to include a long list of detailed CPV codes to indicate which categories of contracts may benefit from the light touch regime. In addition, both CPC and CPV codes may evolve over time, which would … require amendment to the bill. The power will be used to ensure that the scope of what is included with the light touch regime does not extend beyond what is permitted for the UK by reference to the GPA and/or other international trade agreements.”


Again, we are trying to understand what that really means for the light-touch regime which the Government are seeking to bring in as a result of Clause 8 and associated regulations. Some clarity on that would help to answer the questions from the noble Baroness, Lady Noakes, about why it is not more narrowly defined and why it is defined in the way it is. That would help us to understand the Government’s thinking behind much of the clause.

The amendment from the noble Baroness, Lady Noakes, gets to the heart of what we are discussing: how the Government have arrived at their position. However, in particular, Amendment 34 from the noble Lord, Lord Wallace, and the noble Baroness, Lady Bennett, raises a very important point about ensuring that light-touch contracts will involve various other services and bodies and that they are properly considered for such contracts.

Time and again, at the heart of previous groups, this group, and no doubt groups of amendments to come is a general debate on what a Procurement Bill should or should not include and how far the Government should or should not interfere with the operation of the market. What the noble Baroness, Lady Noakes, is trying to get at, and what I believe is really important, is some of the ways in which this clause has been put together, so that we understand what exactly a light-touch contract is and the difference between the light-touch regime and the light-touch contracts in this Bill, and the Government’s thinking on what regulations may come forward in due course so that, as a Committee, we can consider whether they have got the balance right and whether this makes sense. The noble Lord, Lord Wallace, made the point that this clause is wishy-washy—one bit says this and another says that—and the Government’s get-out clause all the time is that it will be sorted out by regulation. This really is not the way forward for primary legislation.

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My Amendment 130, which would be the substantive change, may well be technically defective but would require an assurance that the different criteria—price and the objectives set out in Section 11—should have equality of regard. That is what I am looking for in the wording of the Bill, and that is what my amendment seeks to do.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Lord, Lord Davies of Brixton, who I think is seeking to achieve the same goals as two amendments in this group to which I have attached my name: Amendment 43, in the name of the noble Baroness, Lady Hayman of Ullock, and Amendment 57, in the names of the noble Lords, Lord Wallace of Saltaire and Lord Fox. I will focus on those amendments because I have done my best to get round their technical detail.

Having listened to the powerful introductory speeches that were made, I noted that the noble Baroness, Lady Hayman, highlighted the issues with the Australian trade deal. It is a pity, therefore, that this Committee is taking place at the same time as the Australian trade deal is being debated in the Chamber; some joined-up thinking might have ensured that people were able to participate in both debates. However, that is perhaps a very large aspiration that we can all work towards.

I want to focus on perhaps the most crucial provision, which is subsection (1)(a) in the new clause proposed in Amendment 43, which refers to,

“promoting the public good, by having regard to the delivery of strategic national priorities including economic, social, environmental and public safety priorities”—

although I think I might prefer the wording “public health”, which is perhaps broader than “public safety”, for reasons that I will come to in a second. That is something that we might consider in future. However, the Government are already signed up to those principles, at least theoretically, in everything that they do because, like the rest of the world, they are signed up to the sustainable development goals. I cite the paper from the Cabinet Office and the FCDO Implementing the Sustainable Development Goals, dated 15 July 2021, which says:

“The UK is committed to the delivery of the sustainable development goals. The most effective way we have to do this is by ensuring that the Goals are fully embedded in planned activity of each Government department”.


Now one might think that making legislation is a planned activity of a government department. However, that is a very centralised view because it refers only to central government spending and is not focused on other spending. Surely, if we are going to deliver the sustainable development goals, they have to be embedded right across the broad breadth of spending. Essentially, Amendment 43 broadens out and attempts to deliver something that the Government are fundamentally, nationally and internationally, signed up to do.

I note further that the Cabinet Office report states that “all signatories” are

“expected to … deliver them domestically.”

However, NGO studies demonstrate that the UK is not on track to deliver a single sustainable development goal. Surely this Procurement Bill is a crucial mechanism for delivering those sustainable development goals of economic, social and environmental advance, meeting people’s basic needs while looking after our natural world and ensuring that we have a natural world for the future. I suggest that Amendment 43, in the name of the noble Baroness, Lady Hayman—and Amendment 57, in the name of the noble Lord, Lord Wallace of Saltaire, comes at this in a different way—is absolutely crucial, as it would put the principles of the sustainable development goals, to which the Government are signed up, on the face of the Bill.

Let me also address subsection (2) of the new clause proposed by Amendment 43, which states:

“If a contracting authority considers that it is unable to act in accordance with any of these principles in a particular case, it must—”


essentially, publish a report and take reasonable steps to ensure that it is not discriminating. When I considered signing the amendment, I worried about this because I thought that, surely, these are principles we should be delivering on. However, of course, we all know the practical reality is that many organisations procuring essential services simply do not have enough money to do what they need to do.

This is where we come to the value for money point of Amendment 57. I was thinking of putting this in practical terms, because much of what we are talking about here is technical and abstract. Think of the very common fable in which a poor person, who has only £10 in their pocket, is forced to buy a cheap pair of shoes. Then every three months, he is forced to buy a new cheap pair of shoes. A wealthy person, who has £100 in their pocket, can buy a pair of shoes that lasts for 10 years. So of course, in the end, the poor person ends up spending vastly more on shoes than the wealthy person, because they had no choice. So, given our current situation, maybe we need Part 2, but we have to look at whether this is a bigger, broader problem, beyond even the realms of this Bill. None the less, this group of amendments demonstrates that the Bill is fairly deficient in its current form. This cannot be an area for a framework Bill.

I will briefly mention another issue that is important and I commend the noble Lord, Lord Clement-Jones, for his amendment. We are seeing increasing levels of automation in many aspects of judgments—the human judgment being taken out and AI and algorithms being put in its place. There is a great deal of evidence demonstrating that the way they are being developed and the data on which they are based often fit the old adage of “garbage in, garbage out”. We need to make sure that any automation of these processes is not discriminatory. The noble Baroness, Lady Hayman of Ullock, pointed out that anti-discrimination elements are entirely lacking from any provisions in the Bill at the moment; proposed new subsection (1)(f) provides these as well.

[Lord Hope of Craighead (CB)]

My Lords, I return to Amendment 37 in the name of the noble Lord, Lord Moylan. He made the point that the words at the end of Clause 10(1),

“except in accordance with this Act”,

are a hostage to fortune. The words range right across the whole of this complicated Bill and of course a disaffected client will invite his lawyer to search through all the provisions to find some flaw in the way in which the procurement exercise was carried out, which he can then attack.

I wonder whether the words

“in accordance with this Act”

are wider than they need to be. First, Clause 10 contains a prohibition, but Clause 10(2) contains a definition of procurement and Clause 10(3) tells you that

“a contracting authority may only award a public contract in accordance with”

the four matters set out there.

In my mind, that raises the question of whether the words at the end of Clause 10(1) should really be

“except in accordance with this”

section, the purpose of which is to describe the framework or scope of the power, before Clause 11 tells you that that power must be exercised in accordance with the procurement objectives set out there. It would make sense if Clause 10 simply said what may be done in accordance with that section. If I am wrong about that, the Minister might like to reflect on whether the words

“in accordance with this Act”

go further than they need to.

Choice of words, as I say from time to time, is always very important and the noble Lord, Lord Moylan, raises an important point. What he wishes to put in place at the end of Clause 10(1) is already in Clause 11 and will have to be complied with. I understand that the Minister may be reluctant to go as far as the noble Lord, Lord Moylan, has invited him to go, but he has raised an important point. That is why I suggest that the word “section” might be a more sensible and less dangerous word to use than “Act”, at the end of Clause 10(1).

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[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise not solely to demonstrate that there is broad ideological support for small and medium-sized enterprises being given a larger share of the kind of procurement that we are talking about; I do so also because I have attached my name to Amendment 75B in the name of the noble Baronesses, Lady Thornton and Lady Hayman.

I am going to attempt not to repeat everything that has been said but I want to pick up something said by the noble Lord, Lord Wigley. No one else has drawn attention to the fact that the previous group and this one are related. They have aspects acknowledging that SMEs bring different qualities—particularly quality. The noble Lord suggested that, if we do not put in specific provisions about SMEs, it is inevitable that the big companies will dominate. I say that if we do not put in provisions about social value and quality of services—as the noble Baroness, Lady Thornton, said, that is delivered under the Public Services (Social Value) Act—and do not account for those things, it will possibly be even more telling against SMEs than the rules and the points addressed by the amendments.

I am not particularly picking on the noble Lord, Lord Aberdare, here as I was going to say this before he spoke, but I have seen from all sides of the Committee a huge focus on productivity improvement and innovation, but we need to be careful about that terminology. Again, this point comes back to the previous group: a lot of what we are talking about here is the provision of care and the caring services, the type of provision that really does not lend itself to the same kind of measurement as how productively you are producing widgets. If a nurse is caring for a dying person, maybe it would be more “productive” if they were caring for two dying people at the same time instead. We really have to ask ourselves about that. I can see some head-shaking happening but a lot of our measures of productivity have been that gross and raw, and have failed to acknowledge issues of quality and service.

We need to acknowledge that there are many elements of our service economy where those measurements would be inappropriate. If you are providing a rape crisis service to people in rape crisis, how do you make that more efficient? What does that actually mean? What does innovation mean in that context? I think we sometimes fall into a narrow, widget-based, economistic way of looking at these issues, and we need to look at them much more broadly.

I am going to finish with something on which I think the noble Baronesses opposite will agree, picking up on the point by the noble Baroness, Lady Neville-Rolfe, about 30-day payment terms. Speaking as someone who many years ago used to work for a small independent business that supplied supermarkets on 120 days, which usually meant 150-day payment terms, I think that is crucial. I say to the Minister, if he is responding to this group, that perhaps this is an issue that we could look at in future in the form of a letter. It is crucial for SMEs that it is acknowledged when 30 days or less being part of the procurement process needs to be written into the contract to enable them to bid. That could be an important factor.

[Lord Scriven (LD)]

My Lords, this has been a fascinating as well as nearly unanimous debate about the importance of small to medium-sized enterprises and the role they can play in innovating, stimulating, changing and helping local economies grow. Part of that will be—I have to say to the noble Baroness, Lady Bennett—through productivity. Productivity and quality in themselves are not too separate things; they can go hand in hand in caring services. I speak as a former health service manager. Productivity is not just about how you apply people; it is how you apply all the resources to get better outcomes for those you serve. Therefore, sometimes there are contradictions and it is hard, but they are not always separate.

I would like to speak to a number of amendments in this suite. I thank the noble Baroness, Lady Neville-Rolfe, for doing this in a previous life because—I am sure she will understand what I am about to say—every little does help, particularly with small to medium-sized enterprises. A number of the noble Baroness’s amendments are probing for one reason, I think. I am sure that the Minister will come up with specifics in the Bill which will help small to medium-sized enterprises, but I think the general view is that it does not do it. It does not go in depth and give the clarity which I and other noble Lords have said will help to give a level playing field for small to medium-sized enterprises, which is what is required.

In particular, an important amendment spoken to by the noble Baroness, Lady Noakes, on behalf of the noble Lord, Lord Lansley, was on capacity building. In my life of working in local economies, I have seen that the big thing that helps is capacity building for small to medium-sized enterprises. If anything should be on the face of the Bill, capacity building for small to medium-sized enterprises and not-for-profits should be, because they can—with help from the public sector in terms of capacity building—achieve quite a lot.

I have seen that in a number of areas including my own area of Sheffield when I was leader. We had something called “Buy for Sheffield”. It was not an issue of giving special treatment to small to medium-sized enterprises; it actually got ahead and gave a lot of capacity building. Through that capacity building and then through their own innovation, they could go to larger organisations and get part of the supply chain on their own volition rather than what normally happens, which is that the large organisations look for small to medium-sized enterprises down the supply chain because it gets them ticks. It actually meant that innovation came. There is something particularly in Amendment 86.

I am not quite sure why the noble Baroness, Lady Neville-Rolfe, chose £5 million because the average turnover of a small to medium-sized enterprise at present is about £756,000. I think because it is a probing amendment there has to be a cut-off point which says that for companies below a certain turnover there should be a special emphasis within this Bill. I hope that the Minister goes away and reflects on what has been said because it does not seem deep enough, and I am sure we will be coming back to this on Report as an important part of the Bill.

I agree with the noble Baroness, Lady Noakes. We have been diametrically opposed on many Bills, but on Amendments 290 and 295 there are elements I would want to see apply to small and medium-sized enterprises. I understand why the noble Baroness, Lady Neville-Rolfe, has done that, but there are some really important issues about the probity and capacity of small to medium-sized enterprises as to whether they get the procurement.

Finally, I want to re-emphasise what my noble friend Lady Brinton said. There is a huge contradiction between having a Bill for public procurement and then saying that, by statutory instrument, the Minister can take away that right for the health and social care provision. I was explaining this over dinner on Saturday to a number of friends who were asking me what I was working on in Parliament at the moment. When you explain the Procurement Bill, people glaze over, but when you explain that there is a provision for £70 billion-worth of their taxes to be excluded at the signing of the Minister’s pen, suddenly they become very excited—the glaze stops.

The Minister tried to explain this to my noble friend Lady Brinton; I was more confused after the explanation than before it. She needs to try harder to explain where the contradictions are and how they will be dealt with as a unified Procurement Bill. On the whole, like most noble Lords, I agree with the thrust of these amendments, but Ministers need to go away between now and Report and think carefully. It is clearly not strong enough to give a level playing field to small to medium-sized enterprises.

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[Baroness Parminter (LD)]

My Lords, I have added my name to the two amendments tabled by the noble Baroness, Lady Worthington, which she so ably introduced. I am also speaking to Amendment 59A by my noble friend Lord Purvis of Tweed, who, because of the scheduling announced today, cannot be here.

I support all the amendments in this group, which takes us on to the issue of whether the Bill should bring forward public benefit. If we are to be put into camps then I am certainly in the camp that wants public procurement to be developing social values. Clearly the Minister will argue with us on that, but what I do not think he can argue with is that on some of the issues that we have been talking about in relation to public benefit—I cite specifically net zero and biodiversity loss, which the amendments refer to—are not just issues of social value; they are the Government’s stated objectives. They have legislative targets to meet for both net zero and biodiversity. So the Minister can argue with us if he does not want to use public procurement to deliver social value, which I firmly believe it should, but he cannot argue with the fact that, if his Government have targets, they need to deliver, and they should use every means at their disposal to do so.

I shall give an example of why I say that. The Environment and Climate Change Committee has been holding evidence sessions over the last three months on mobilising behaviour change. We have received evidence from academics, companies, schoolchildren and indeed everyone about how to change behaviour. The Climate Change Committee has said that about 60% of his Government’s targets are going to need people to change their behaviour. We have learned that you can make people change by giving them a bit more money through fiscal incentives or disincentives, and you can change regulations so that companies can or cannot produce certain products, but a critical factor is that we are social animals that want to see what the social norms are. We do not just live our lives in our own little house; we live our lives in schools and hospitals, and if we see menus in those places that may not reflect net-zero values, or we go into council buildings and see that they are not dealing with energy efficiency, that encourages us to think: “Why should I bother changing my lifestyle?”

Unless the Government use every opportunity at their disposal, one of which is procurement, they are not going to meet their own targets. So I argue that even if the Minister differs—as I think he would—from those of us who believe that procurement should deliver social values, it is still the case that the Government cannot meet their own targets unless they use the Bill to maximum effect, and that means putting in it the commitments referred to in this group of amendments. As the noble Baroness, Lady Worthington, said, no one is precious about the wording; it is about the intent.

I was asked by the noble Baroness, Lady Verma, who had to leave early, to express her support for these amendments and to remind the Minister that he mentioned that there would be an opportunity for discussions with colleagues on these matters before Report.

As I said, I will introduce on his behalf—although nowhere near as ably as he would—my noble friend Lord Purvis’s probing amendment to pick up the issue of the use of Fairtrade products in procurement contracts. Here, to be fair, there has been progress in recent years: many central government departments use Fairtrade products, we see many local authorities using Fairtrade products, especially in catering, and indeed even here on the parliamentary estate we use Fairtrade products. So I am not saying there has not been progress in the absence of Bills such as this, but there is much more that can be done. My noble friend’s probing amendment aims to highlight the importance of fair trade in this arena and make sure that the Bill does all that it can to further that important agenda.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise in a very pleasing position for a Green: in a group of amendments addressing climate, biodiversity, social justice and indeed fair trade, to say that almost everything has been said, just not by me.

I am acutely aware of the hour so I am going to be very brief; I seek to add only a couple of points. Amendment 49 in the name of the noble Baroness, Lady Worthington, and addressed by the noble Baroness, Lady Parminter, has full cross-party support; I would have attached my name to it had there been space. It is clearly a crucial amendment.

We have to contrast this Bill with the UK Infrastructure Bank Bill, which I was recently in, half of which is entirely directed at something that is missing in this Bill. I was thinking of the tireless work of the other noble Baroness, Lady Hayman, the one who is not in the Room today, who has worked so hard. I can go back to my first ever time in Committee in this Room almost three years ago now, when we were fighting to get a climate provision into the Pensions Bill. We thought, “One day we’ll get to the stage where we won’t have to fight to get these into every Bill when they should clearly be there.” Sadly, it is clear that, despite the UK Infrastructure Bank Bill, we are not there yet.

The points made by the noble Lord, Lord Hunt of Kings Heath, about the most recent report from the Climate Change Committee were hugely powerful. We have targets but not policies. How are we going to get those policies unless we have them written explicitly into Bills such as this? I commend the noble Lord’s Amendment 48, which I would have signed had I not missed it, which contains important wording about “cultural well-being”, something that is far too often missed out. The noble Baroness, Lady Parminter, made a point about culture in the broadest sense. We need to give people a rich life, one that may have less physical stuff in it but is of far better quality. The cultural point really starts to address that, as well as addressing public health and consumption issues.

I am aware of the time so I am going to be really restrained, and I hope I get some brownie points for that. I shall sit down.

Committee adjourned at 7.39 pm.