Procurement Bill [HL]

Baroness Brinton Excerpts

2nd reading
Wednesday 25th May 2022 Lords Chamber

[Baroness Brinton (LD) [V]]

My Lords, I declare my interest as a vice-president of the Local Government Association. It is a pleasure to follow the noble Lord, Lord Whitty, especially his comments about social values.

Included in Section 70 of the Health and Care Act was a description of changes to the public procurement rules for health services, but most of which will be in regulation and the details of which are woefully short on the sort of information that we have in this Bill. In its 15th report, the Delegated Powers and Regulatory Reform Committee said on the relevant clauses of the Health and Care Bill that “full analysis” of the proposals,

“has not been completed and there has not been time to produce a more developed proposal.”

We asked on Report why on earth the Government would wish to bring into force legislation that they themselves admit they have not had time to analyse, let alone to produce a more developed proposal, when everyone knew that a Cabinet Office cross-departmental Bill was not just planned but heavily trailed.

Paragraphs 17 and 18 of the DPRRC report said about the Health and Care Bill:

“We do not accept that the inclusion of regulation-making powers should be a cover for inadequately developed policy”


and:

“Ministers would not ordinarily propose clauses in one Bill possibly requiring imminent amendment in a subsequent Bill without expecting to face questions. The House may wish to seek further and better particulars from the Minister concerning the possible effect of any Cabinet Office procurement Bill on the Health and Care Bill, and … to press the Minister on why it was necessary to include provision, based on inadequately developed policy, in the Health and Care Bill when the Government intend to introduce a procurement Bill.”


I have to say that it was no clearer after the passage of the Health and Care Act, and I am even more bemused by the reference in a procurement Bill to only certain health services being excluded, a detail not outlined in the Health and Care Act at all.

May I ask the Minister to write to Peers to explain which elements of NHS contracts are excluded from the Bill and how we can be confident that the protections and transparency that he outlined in his opening speech will also be applied to NHS services excluded from this Bill but covered by the very brief detail in the Health and Care Act? I suspect he might have a problem in doing that, for exactly the reasons that the DPRRC made clear: there is no detail available at all on those health contracts.

Returning to this Bill, paragraphs 19 and 20 of Schedule 2 set out the preferential arrangements for procurement rules of an international organisation or set out in an international agreement. Paragraph 20 says that a contract may be awarded under international obligations even where the award rules would be different from those otherwise set out in the Act. I heard the Minister’s comments in his opening speech, but I would be grateful for confirmation that the arrangements in paragraphs 19 and 20 of Schedule 2 are as strong as those we had under the EU public procurement directive, which made it clear that, unlike non-public services, a public body based in an EU member state can accept a contract that is not the cheapest provided it fulfils the quality, continuity, accessibility and comprehensiveness of services and innovation. In the EU directive there was also no need to publish procurement advertisements cross-border. This goes to the heart of my noble friend Lord Fox’s question to the Minister about the provision of source of supply when an international treaty is in place.

Although I noticed that the Minister was somewhat scathing in his speech about the previous EU directive, it was this directive that provided a guarantee that US companies could not come in and cherry pick our NHS under the terms of the Transatlantic Trade and Investment Partnership. On 18 November 2014, the noble Lord, Lord Livingston of Parkhead, answered my question in your Lordship’s House by quoting an EU Commissioner. He said that

“Commissioner de Gucht has been very clear:

‘Public services are always exempted ... The argument is abused in your country for political reasons’.


That is pretty clear. The US has also made it entirely clear. Its chief negotiator”—


on TTIP—

“said that it was not seeking for public services to be incorporated. No one on either side is seeking to have the NHS treated in a different way ... trade agreements to date have always protected public services.”—[Official Report, 18/11/14; col. 374.]

I also raised these issues in a later debate with the then Minister, the noble Lord, Lord O’Shaughnessy, who responded:

“The noble Baroness, Lady Brinton, and the noble Lord, Lord Brooke, asked about procurement. I can tell them that we have implemented our obligations under the EU directive. The Government are absolutely committed that the NHS is, and always will be, a public service … whether overseas or here. That will be in our gift and we will not put that on the table for trade partners, whatever they say they want.”—[Official Report, 29/3/18; col. 947.]


Can the Minister confirm that it is still the intention, expressed by the noble Lords, Lord O’Shaughnessy and Lord Livingston, in their ministerial roles, that those same protections will exist in the Procurement Bill, not just for the NHS but for other public services, as under the EU directive?

The equality impact assessment for the Bill says at paragraph 6:

“This is a largely technical bill regulating how public procurements are undertaken. The nature of the bill means it has limited equality impacts, whether direct or indirect.”


I echo the points made by the noble Lord, Lord Whitty, that the Royal National Institute of Blind People is very concerned that, in replacing existing regulations, the Bill overwrites requirements of particular significance to the 14 million disabled people in the UK that ensure that publicly procured goods and services are accessible to everyone. It is unclear how the Bill in its present form will replace the regulatory framework for accessibility within public procurement legislation. I ask the Minister: how will the new regime ensure that specifications take into account accessibility criteria and design for all users, including those with disabilities?

I echo the points made by the noble Lord, Lord Alton, on procurement of goods in countries where modern slavery or genocide is believed to happen. I look forward to returning to this during later stages of the Bill. I agree that more needs to be done. I also agree with his key points about surveillance equipment sourced from China.

A number of noble Lords referred to emergency contracts issued during the pandemic. Like the noble Lord, Lord Stevens, I am struggling to see how the arrangements in this Bill would work in practice. The noble Lord made critical but gentle points about the need for an emergency power, but I can be blunter than he was prepared to be. Will the arrangements for special exemptions in emergencies be strong enough to prevent the scandal of the “VIP lane” and some of the other contracts made in relation to the pandemic? Will all emergency contracts be transparent, even if publication has to be delayed for a few contracts because of the nature of whatever the emergency is, whether pandemic or war? It appears that Ministers seemed to believe that many of the pandemic contracts across a number of departments, not just health, would never see the light of day. Emergency should not mean secret, not rule-bound and not checked.

The UK Anti-Corruption Coalition says that, despite the warm words in the Green Paper, the Bill does not create a clear, unambiguous imperative in primary legislation for a single rulebook with full transparency. It also makes the point, which I and others have made, that too much is left for secondary legislation—again. The Minister is now hearing that argument across your Lordships’ House: there is real concern about far too much not being in primary legislation.

Procurement Bill [HL]

Baroness Brinton Excerpts

Committee stage
Wednesday 6th July 2022 Grand Committee

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

My Lords, I understand that the noble Baroness, Lady Brinton—who is contributing remotely to the debates this afternoon—was expecting to speak on this group, but unfortunately, that message did not reach the clerks or the chair. I believe that the noble Baroness is ready to speak now, so with the permission of the Committee, I invite her to speak.

[Baroness Brinton (LD) [V]]

My Lords, I declare my interests as a vice-president of the LGA and as a disabled person. I am speaking to Amendment 141, which would ensure that contracting authorities must follow accessibility principles as defined under the UN Convention on the Rights of Persons with Disabilities, or UNCRPD.

The Public Contract Regulations 2015 set out the rules for technical specifications in Regulation 42, saying that it must include “accessibility for disabled persons” as core to characteristics including quality, environmental and climate change performance levels, whole-life design, performance and safety—indeed, many of the things that this Bill is covering.

So, in theory, Amendment 141 should not be necessary. However, Regulation 42(9), on the technical specifications, says that:

“Where mandatory accessibility requirements are adopted by a legal act of the EU, technical specifications shall, as far as accessibility criteria for disabled persons or design for all users are concerned, be defined by reference thereto.”


There are three other sets of regulations—the Utilities Contracts Regulations 2016, the Concession Contracts Regulations 2016 and the Defence and Security Public Contracts Regulations 2011—which all also confirm the conformity with the EU procurement directive. I spoke at Second Reading about that directive.

The very helpful briefing from the RNIB sets out the technical concerns about how we need to ensure that accessibility rules are embedded in legislation following Brexit. This amendment is needed because we must have clear rules for accessibility criteria for people with disabilities and the principles of universal design, as defined under the UN CRPD.

This Government repeatedly say that they were proud to get Brexit done. They also say, proudly on their website, that they want

“disabled people to fulfil their potential and play a full role in society.”

In 2017, however, the UN published its Concluding Observations on the Initial Report of the United Kingdom of Great Britain and Northern Ireland, which was less than complimentary about the UK Government’s progress in abiding by the CRPD. In paragraphs 6(a), 6(d) and 6(e), the UN refers to:

“The insufficient incorporation and uneven implementation of the Convention across all policy areas and levels within all regions, devolved governments and territories under its jurisdiction and/or control … The existing laws, regulations and practices that discriminate against persons with disabilities … The lack of information on policies, programmes and measures that will be put in place by the State party to protect persons with disabilities from being negatively affected when article 50 of the Treaty on European Union is triggered.”


It goes on to say in paragraph 7(c) that the UK should

“Adopt legally binding instruments to implement the concept of disability, in line with article 1 of the Convention, and ensure that new and existing legislation incorporates the human rights model of disability across all policy areas and all levels and regions of all devolved governments and jurisdictions and/or territories under its control”.


There are 78 paragraphs in this UN report setting out what we must still do to comply with the UN CRPD; the Government are due to report back by 8 July 2023. In other parliamentary debates, Questions, Statements and legislation, Parliament is being told time and again by this Government that they want to meet those requirements because complying with the UN CRPD is an absolute priority.

I give two extremely brief illustrations of the failings, which are obvious to me as a disabled person but may not be to others. They would be resolved with a clear and legally binding requirement for accessibility criteria. The first is a bus driver on a publicly funded route, contracted by a council, who refuses to accept a wheelchair user because that driver still has the power to ignore the law and does not want to ask people to move out of the wheelchair space. The second is that a large number of DWP offices and those of their subcontractors —which are used for the assessment of individuals for their access to benefits, whether specifically disability benefits, universal credit or any other benefit—often have steps or stairs and no lift. There continue to be regular reports in the press of disabled people being marked as “no shows” at interviews when they could not access the building, which then results in them being penalised and not receiving the benefits. That is shameful. It also presumes that there would be no staff with disabilities who need to access the buildings, which is just unacceptable.

That is why we need Amendment 141. I look forward to the Minister’s explanation of how this Bill will meet the UN CRPD in relation to all matters on public procurement.

[Lord Aberdare (CB)]

My Lords, I have added my name to Amendment 82, in the name of the noble Lord, Lord Hunt of Kings Heath. As at Second Reading, my contributions in Committee will mainly reflect the interests of small businesses, including in the construction sector, and other smaller providers such as charities and social enterprises; of course, one of the Bill’s aims is to increase access to public contracts for such smaller organisations. I am grateful for the briefings that I have received from the engineering services alliance Actuate UK, from the NCVO and from the Lloyds Bank Foundation.

I will try not to repeat the arguments so strongly made by the noble Lord, Lord Hunt, but small businesses and charities often struggle to compete effectively in competitive tendering processes. They do not have teams with specific bid-writing expertise, so it is often chief executives or managers within the businesses who have to prepare proposals on top of their existing full-time and front-line roles. The process of completing pre-qualification questionnaires and invitations to tender is often onerous and complex, requiring considerable time and resources. Tenders are often launched with little or no warning and with tight timescales. Greater lead-in times and awareness of when tenders will be published would better help small businesses and charities to prepare and subsequently compete for relevant contracts.

The existing wording in Clause 14(1) allows for better practice, confirming that contracting authorities are able to publish a planned procurement notice. But your Lordships will know that being able to do something within legislation does not mean that it actually happens. Amendment 82 seeks to beef up the wording by replacing “may publish” with “must consider publishing” to place a greater onus on contracting authorities to publish a planned procurement notice. I feel that even this requirement is rather a low bar, as well as being extremely difficult to monitor or enforce. My preference might be simply to replace “may publish” with “must publish”.

The amendment also states that a planned procurement notice must be considered whenever “no significant barriers exist” and

“no detriment to service recipients would occur”.

Again, I might have preferred a more positive criterion spelling out that such a notice specifically should be published when this would enable a diversity of suppliers, including of course small businesses and charities, to participate in the contract. I hope the Minister will be able to tell us how the Government plan to ensure that small businesses and charities will receive proper notice of tenders that might be suitable for them, preferably through a requirement for planned procurement notices to be published in most circumstances.

This is just one aspect of ensuring that smaller contractors are involved early enough in the process, not just to be aware of and prepared for tenders for which they might be able and suitable to bid, but also when appropriate to bring their own skills and innovation abilities to influence the shape of the overall bid. Early contractor involvement is something I may come back to later. I welcome the amendments from the noble Lord, Lord Lansley, which also seem to point in this direction. Meanwhile, I am happy to support the noble Lord, Lord Hunt, in his Amendment 82.

Procurement Bill [HL]

Baroness Brinton Excerpts

Committee stage
Monday 11th July 2022 Grand Committee

[Baroness Brinton (LD) [V]]

My Lords, I will speak to Amendment 30 but just want to say that I agree with Amendment 33, in which my noble friend Lord Wallace asks why suppliers from outside the UK are likely to want to compete for contracts for the supply of services. Amendments 34 and 35 remind us that there are a wide range of different bodies that need to be able to tender for services, probably mainly local, but they should not be either excluded formally or informally as a result of this Bill.

Returning to Amendment 30, I thank the noble Baroness, Lady Noakes, for her helpful introduction and I want to raise with the Minister matters that we will be returning to in Clauses 41 and 108. As the noble Baroness, Lady Noakes, has laid an amendment that includes health and social care services supplied for the benefit of individuals, there are questions that need to be raised. Had we been debating the second group of government amendments today, I would have covered this topic in the Minister’s Amendment 526 as well.

Clause 108 sets out the disapplication for this Bill in relation to procurement by NHS England, but Section 79 of the Health and Care Act talks about

“health care services for the purposes of the health service in England, and … other goods or services that are procured together with those health care services.”

It goes on to define a relevant authority in healthcare services in subsection (7) as

“(a) a combined authority;


(b) an integrated care board;

(c) a local authority in England;

(d) NHS England;

(e) an NHS foundation trust;

(f) an NHS trust established under section 25”.

The problem is that that definition excludes certain parts of health services. For example, an integrated care board will be commissioning, but not procuring directly, some services to primary and secondary care organisations. However, not all NHS organisations are covered by the relevant authority in the healthcare definition. For example, a GP surgery might be a private partnership or a company employing surgery staff including GPs. This might be UK based or even an overseas company, but not a trust or any of the other definitions. The same definition also exists for dentists’ surgeries. I was wondering if the noble Baroness, Lady Noakes, was thinking that this type of organisation would be covered by her amendment. Most of them are small organisations.

I ask the Minister this question of principle, really as advance warning that we will return to it later in the Bill. Why are health services, clinical and

“other goods or services that are procured together with those health care services”,

going to have a completely different procurement regime entirely delegated to the relevant Secretary of State, who can enact it by SI? That can ignore all the important clauses that we are debating in this Bill—value for money, value for society, transparency and the technical elements critical for anybody wishing to procure goods and services using money from the public purse, except for those parts of the health service that do not fall into that definition in the Health and Care Act, which will have to abide by the Procurement Bill.

Secondly, can the Minister advise on exactly where the dividing line is for those parts of the health service that are commissioned by other parts of it, but do not fall under the definition? It would be perfectly logical to have a contractor team preparing a bid for a contract with a regional consortium that includes a hospital trust and a non-NHS body, perhaps a charity—exactly the sort of small organisation that the noble Baroness, Lady Noakes, referred to—that worked with patients. It would have to remember, if syringes were included in that PFI contract for the new wing, for example, when the NHS procurement system would therefore be used, that there would be an entirely different set of rules, processes, et cetera, compared with a contract for a hospital trust that covered only non-clinical items, and therefore used the terms in this Bill.

This will be horribly messy. It will not just be confusing for contractors, which will need teams fully au fait with where the dividing line is between the completely different rules that will apply, but I suspect it will be total chaos inside the NHS. Can the Minister explain the thinking behind this and where the differences are? If possible, could we have a meeting with him and other noble Lords interested in the interface between this Bill and the Health and Care Act legislation, and in how it will work in practice?

[Lord Wallace of Saltaire (LD)]

My Lords, I will speak to Amendments 33 and 34, but I start by thanking my noble friend Lady Brinton for highlighting the need to make sure that this Bill and the Health and Care Act do not contradict each other. I was struck by a speech by the noble Lord, Lord Willetts, at the Second Reading of the Higher Education (Freedom of Speech) Bill the other week, in which he suggested that the Minister consider whether definitions of freedom of speech in the Online Safety Bill and the higher education Bill were compatible. The noble Lord very much doubted that they were. In spite of the current chaos within the Government, they need to ensure that different Bills going through in the same Session are compatible and do no cut across each other.

Amendments 33 and 34 are concerned with light-touch contracts. Amendment 33 is purely a probing amendment. We wish to understand the circumstances in which suppliers from outside the UK are likely to want to compete for contracts of the sort that the noble Baroness, Lady Noakes, suggested would be covered under the light-touch system—primarily, the provision of personal and social services to be delivered on the ground, in local communities, by people with sufficient local knowledge to be effective.

My concern here was heightened by the outsourcing of the initial test and trace contracts to two large companies, one of which has its headquarters in Miami, Florida, and neither of which has any appropriate expertise in local delivery or geography. Not surprisingly, therefore, testing stations were set up in inconvenient places and local volunteers, who offered to assist in large numbers, were often ignored. My colleague, my noble friend Lord Purvis, would have wished to ask whether the new trade agreements the DIT is negotiating would nevertheless open these contracts to overseas companies, including those from non-English speaking countries. Can the Minister therefore explain and justify the paragraph concerned?

Amendment 34 would put in the Bill the importance of local provision of services and the constructive role that non-profit entities can play in the provision of services in which sympathy, personal relationships and concern for welfare above immediate profit are important parts of the motivation for those who work in them and in which volunteers can also contribute to effective supply. My experience here is mainly from the care home sector, although I believe the argument stretches a good deal more widely than that. Private companies, including offshore-based private equity companies, have made excessive profits out of care home provision in a number of cases. Noble Lords will be familiar with Terra Firma, which the Minister will recall is based in the Channel Islands. That is why I have a later amendment that challenges the question of whether companies based in the Crown dependencies and overseas territories should be considered UK suppliers—but there are other examples.

--- Later in debate ---

[The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)]

My Lords, the noble Baroness, Lady Brinton, is taking part remotely. I invite the noble Baroness to speak.

[Baroness Brinton (LD) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Neville-Rolfe, in championing small and medium-sized enterprises to get access to many contracts, which needs to happen. There are many amendments to the Bill to this effect, and I hope the Minister will take serious account of making sure that they are not excluded by virtue of the complexity of procurement rules.

I wish to speak briefly to Amendment 534 in this group, which sets out the important principle of ensuring that a Minister carries out reviews of the operation of this Act. Proposed new subsection (2) states:

“‘Procurement rules’ means the requirements related to procurement set out in this Act or issued under the authority of this Act, and the health procurement rules referred to in section 108.”


While I was very grateful to the Minister for her explanations to my question at the end of the first group of amendments, I am afraid that I do not think she answered—

[The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)]

Lady Brinton, we believe that you are speaking to the wrong group at the moment. Is that correct? I am not sure. We are just clarifying.

[The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)]

The rules are—I can see the problem—that remote speakers speak before the other amendments. Lady Brinton, it is quite difficult in that the amendment has not yet been spoken to; would you rather proceed, as per the current regulation, or wait and speak at the end of the group?

[Baroness Brinton (LD) [V]]

I am used to speaking in this way, if the Committee will bear with me. These are the rules, and I do not believe that I have the luxury of choosing to change them. What I usually do, but did not do earlier when I first spoke this afternoon, is to apologise to anyone where I might have to speak ahead of them speaking to their own amendment. I assure the Grand Committee that this is not of my making. The rules about remote contributions are extremely clear, mainly, I believe, to help those chairing the proceedings. I am happy to continue.

[The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)]

I think the rules are to help those chairing proceedings—that is, Deputy Speakers—but also to help the people who are coping with having to come in remotely. Having said that, we will proceed within the rules, but I promise that I will take this back to the Lord Speaker’s office again at our meeting on Thursday. Lady Brinton, please continue.

[Baroness Brinton (LD) [V]]

I apologise again to the Committee. I was just quoting the element of Amendment 534 that talks about “procurement rules” as meaning

“the requirements related to procurement set out in this Act or issued under the authority of this Act, and the health procurement rules referred to in section 108.”

While I was very grateful to the Minister for her explanations to my question on the first group of amendments, I am afraid that I do not think she answered the core question about the interface between this Bill and the provisions in Section 79 of the Health and Care Act.

I refer the Minister to his Amendment 528 to Clause 108 of this Bill which, because it was among the government amendments in the second group of amendments, was not moved or debated. It is important, however, because that amendment states

“If the procurement of goods or services by a relevant authority is regulated by health procurement rules, a Minister of the Crown may by regulations make provision for the purpose of disapplying any provision of this Act in relation to such procurement.”


I appreciate that that amendment makes an important link to the Health and Care Act, which both Ministers have pointed out to us that they are trying to do. However, it does not pick up the issues raised by a number of noble Lords, including me, about the problem that provisions in the Health and Care Act do not cover the entire NHS.

I am very grateful to the noble Baroness, Lady Noakes—and I look forward to hearing her introduction to her amendment—for picking up my concerns at the end of the first group. Her Amendment 534 would ensure a review by a Minister, including looking at the procurement provisions in the Health and Care Act. That would at least ensure that any emerging tensions and practical problems could be identified and published.

Having raised this, there are two fundamental questions that were not answered by the Minister’s letter, nor by the Minister earlier. First, why are the rules for NHS public spend—which, in 2018-19, was in excess of £70 billion—to be created by a statutory instrument without the same level of public scrutiny that this Bill is receiving and no guarantee of the same protections that this Bill is affording to public money being spent on public contracts? Secondly, I ask again exactly where is the interface between the Bill and the Act, given the gap in the Health and Care Act legislation that is covered by the Procurement Bill? I ask again whether it might be sensible to have a meeting for noble Lords interested in this particular and perhaps esoteric problem. It is vital that public procurement works across the board.

[Baroness Thornton (Lab)]

My Lords, I find myself being drawn into this Bill in all kinds of ways. I apologise for not speaking at Second Reading, but I was not able to do so. I declare interests as the founding chair and current patron of Social Enterprise UK and as a senior associate of Social Business International, which is an organisation concerned with social enterprises that contract with the public sector. Both of those positions are unpaid.

Over the 20-odd years I have been in your Lordships’ House, I have been involved in putting community interest companies on the statute book and, as a Minister, in the right to request for social enterprises and the Public Services (Social Value) Act. I will speak to Amendment 75B in my name but, because this is the first time I have spoken, I will say that there is a suite of amendments to this Bill that are all about social enterprise. They follow the introduction by the noble Baroness, Lady Neville-Rolfe, very well, because many of the problems are the same, although there are some huge social enterprises providing public services.

This amendment proposes a new clause for the Bill, which addresses market stewardship. The reason is that we are interested in how you give voice to the social value Act in this space; that is at the heart of this amendment. There is a policy background to this that the Government will recognise. The 2015 review of the social value Act carried out by Lord Young of Graffham found that

“where the Act is being used, it has a positive impact and that the variety … of organisations that support the Act is quite striking.”

In 2018, Her Majesty’s Government announced that all central government contracts would be evaluated on the basis of social value. In December 2020, a new social value model was published by the Cabinet Office, which was to cover all procurement by central government departments and bodies under its responsibility. In June 2021, the new national procurement policy statement required contracting authorities to consider how they could maximise social value in creating new businesses jobs and skills, improving supplier diversity and tackling climate change.

Less than seven months ago, in December 2021, in its response to the consultation in the Green Paper Transforming Public Procurement, the Cabinet Office promised that

“A procurement regime that is simple, flexible and takes greater account of social value can play a big role in contributing to the Government’s levelling-up goals.”


Her Majesty’s Government’s flagship levelling-up White Paper calls for greater use of social value yet, despite all this, social value is nowhere to be seen in this Bill. When it was in the Commons, the Minister for Brexit Opportunities and Government Efficiency was directly asked why social value was missing. He refused to even use the phrase “social value”.

That is a considerable disappointment because, over the last decade, a strong cross-party consensus has developed on the need for all public bodies to consider social value when making procurement decisions. Indeed, the social value Act was introduced by a Conservative Member of Parliament, championed in this place by a Liberal Democrat Peer and supported by Labour and the Green Party during its passage.

Procurement Bill [HL]

Baroness Brinton Excerpts

Committee stage
Wednesday 13th July 2022 Grand Committee

[Baroness Brinton (LD) [V]]

My Lords, I start with my usual apology that the rules for remote contributors mean that I will be commenting on amendments that have not yet been spoken to by their authors. I have one amendment in this group, Amendment 528C, which has been signed by my noble friend Lord Scriven, to which I will return.

I support Amendments 101A, 528A and 528B which set out the arrangements for procurement, taking into consideration low-income countries and ask that particularly during a public health emergency, not only a pandemic, they should meet certain criteria that are higher than usual.

The World Health Organization’s report, The COVID-19 Pandemic: Lessons Learned for the WHO European Region, recommends as its fifth area for action:

“Strengthening procurement systems, supply chains, operational support and logistics”.


The reason why that it is one of the key recommendations is, I am afraid, the chaos that happened in the early months of the pandemic and the frankly shameful behaviour of some of the wealthy countries which disregarded the fact that Covid was a worldwide virus and that all countries needed access to key goods and services to deal with it—whether PPE, kit for testing, or vaccines as they came on stream.

This Committee is not the place to go into the detail of that; I suspect that most Members of your Lordships’ House will have it fresh in their memories from the last two years. However, I hope that the UK pandemic inquiry will look at our Government’s behaviour, including the taking of vaccines from the vaccine fund COVAX, which was designed specifically to support countries that could not afford either the development or the cost of vaccines in those early days, and, in particular, the blocking of a TRIPS waiver for intellectual property, which prevented low-income countries manufacturing their own vaccines. These amendments would ensure that any future Government must reflect carefully on their role in helping low-income countries have fair access to the tools that they need to manage any major future health emergency.

Amendment 528C is a probing amendment that seeks to remove the provisions in Sections 79 and 80 of the Health and Care Act for NHS England to have its procurement rules set by the Secretary of State for Health and Social Care using a statutory instrument. On earlier occasions in Committee, I asked Ministers a series of questions to which I really hope we will receive answers today. Prior to this, each response from the Dispatch Box, in essence, laid out the differences between the arrangements under the Bill and those in Sections 79 and 80 of the Health and Care Act, which we know already. I will not repeat the details of the likely problems that this will cause in the complex interface of what is and is not covered by the Health and Care Act; it certainly is not as clear-cut as the sections would imply. Much more fundamentally, the reason I have tabled this amendment is to try to elicit answers to the two following questions.

First, why should a body such as NHS England, which procures contracts for £70 billion a year of taxpayers’ money, have procurement rules that are not consulted on widely or taken through the same scrutiny available under the legislation process that this Bill—for all its failings and problems—must continue to go through? During the passage of the Health and Care Bill, no Minister seemed to be able to explain why, and the same is true for this Bill. The £70 billion was specifically for NHS England. The total NHS departmental spend on health in 2019-20 was in excess of £160 billion, so I suspect that the real clinical and associated spending is significantly higher than the £70 billion I quoted. It is the Government’s largest budget after social protection—that is, benefits and pensions—yet the Health and Care Act sets out a procurement regime that is much less visible and accountable than that proposed by the Government in this Bill.

Secondly, is it appropriate that procurement arrangement processes for such a large amount of taxpayers’ money should be determined by a Secretary of State using Henry VIII powers? Not only is this process much less transparent, and it cannot hold Ministers to account, but the capacity is there for a future Secretary of State to change the procurement process much more quickly than under the processes of this Bill. It was helpful during the passage of the Health and Care Bill that the Government bowed to the strong report of the Delegated Powers and Regulatory Reform Committee, which said that at the very least it must be upgraded to be subject to an affirmative procedure. But frankly, Members’ suspicions were aroused by the original proposals that it should be subject to a negative procedure.

During the passage of the Health and Care Bill, the noble Earl, Lord Howe, said:

“We are grateful for the input of the Delegated Powers and Regulatory Reform Committee in advising us on this. In summary, these regulations will allow the NHS to procure healthcare services in a way that reflects the reality of those services without unnecessary bureaucracy and with the ultimate goal of providing value for patients, taxpayers and the population in the vital health services they need.”—[Official Report, 3/3/22; col.1028.]


For the last three and a half days, we have been debating in detail unnecessary bureaucracy and the ultimate goal of providing value for taxpayers, clients and the population in the vital public services they need. I am still struggling to understand why the second-largest public spender in this country is able to use this unaccountable and untransparent procedure. I hope that the Minister will specifically explain to the Grand Committee why this route was chosen for the NHS. If the Minister cannot answer this, will he meet those of us who are interested— I have already asked him twice for meetings—so that we can discuss this prior to Report?

[Lord Aberdare (CB)]

My Lords, I have Amendments 120 and 129A in this group. I will also speak to Amendment 119 in the name of the noble Lord, Lord Mendelsohn, and my noble friend Lord Best’s Amendment 131. Perhaps Amendments 119 and 120 should have come up on Monday, when we were discussing SMEs.

Amendment 120 seeks to address the barriers faced by smaller providers and charities through specifications that disqualify or discourage them from bidding. These typically stem from process taking precedent over purpose, or from narrow or mistaken interpretations of procurement rules. Lloyds Bank Foundation research has found numerous examples of disproportionate thresholds being imposed—some of which we heard about on Monday—including requiring suppliers to demonstrate income unrelated to the size of the contract being tendered for, requiring evidence of having previously delivered contracts much larger than the one tendered for, or unreasonable insurance requirements.

Excessive requirements at the pre-qualification questionnaire—PQQ—and invitation to tender—ITT—stages can also act as significant barriers. To cite one example: a youth association applying to be added to a framework of suppliers linked to the troubled families initiative had to complete a 49-page PQQ and 99-page full tender. Greater clarity is needed about what a proportionate approach looks like.

My Amendment 120, which the noble Lord, Lord Mendelsohn, has also signed, seeks to add a requirement for contracting authorities to include consideration of the impact of conditions on the ability of a broad range of suppliers, including smaller businesses and charities, to access public contracts as part of their assessment of proportionality. Without this, there is a danger that smaller providers will continue to be disqualified on technicalities or by arbitrary barriers, even where they are well placed to deliver the service or are already doing so.

I have also added my name to Amendment 119 from the noble Lord, Lord Mendelsohn, which would allow for conditions requiring suppliers who seek to participate in a contract to be

“signatories of good standing on the Prompt Payment Code”.

All too often, we hear from small businesses of the Prompt Payment Code being honoured more in the breach than the observance, even by businesses that have signed up to it. Making adherence to the code allowable as a condition of participation seems an eminently sensible way of giving it stronger teeth and I hope that the Minister, who has been so responsive in his willingness to look seriously at many of the good ideas proposed by members of this Committee, will look at this one as well.

Amendment 129A to Clause 22, which is in my name, seeks to ensure that the advantages of flexibility in setting award criteria are not undermined by post-award negotiations or other price and cost uncertainties which could affect, or even invalidate, value-for-money considerations used in awarding contracts. To avoid this, the amendment requires the contract to include

“an objective mechanism for determining price and cost after contract award and before the goods, services or works are supplied.”

Only through such a mechanism for confirming value for money being put in place at the time of a contract’s award is it possible to secure maximum supplier contributions to improving value and reducing risks, including through the early appointment of specialists. This is an aspect of early supply chain involvement and having an objective post-award process to achieve the benefits associated with it.

To give an example, those benefits were illustrated by the innovations, cost savings, reduced carbon emissions and local business opportunities agreed by the Ministry of Justice with the supplier and specialists engaged on its Five Wells prison construction project after their appointment and before commencement of work on site; this project featured as a case study in the Construction Playbook. So I hope that the Minister will consider this amendment carefully as a way of ensuring that value for money commitments are met in the procurement of any goods, services or works.

Procurement Bill [HL]

Baroness Brinton Excerpts

Committee stage
Wednesday 26th October 2022 Grand Committee

[Lord Scriven (LD)]

My Lords, I have never heard such a reception before speaking. I congratulate the Deputy Chairman of Committees on the professionalism with which she handled that. Many noble Lords will know that we sometimes get through less business in a dinner hour, so well done. On a serious note, when we canter through a Bill in that way on the seventh day in Committee, it shows the lack of scrutiny it is getting.

I speak on behalf of my noble friend Lord Wallace on Amendment 404, and in moving that amendment I will also speak to Amendments 407, 409, 410, 412, 413, 421, 422 and 423. This group deals with conflicts of interest in public procurement, and getting the process and the management of those conflicts correct is absolutely vital to upholding the public’s trust in the use of their taxes when contracts are being laid. It has to be said that the new conflicts of interest provisions in Part 5 are a step forward. They impose some positive obligations on authorities to identify conflicts and give them a duty to mitigate them, including by conducting a conflict assessment. The provisions also ensure that conflicts can pertain to Ministers, not just officials taking procurement decisions. This is especially important given the issues with the VIP lane during the Covid procurement.

However, these new provisions do not go anywhere near as far as did the review by Sir Nigel Boardman, which the Government asked for and which was published in May 2021, in that they do not require a centralised register of conflicts that authorities can consult. Nor does the Bill contain sanctions for non-compliance with these measures. A central plank of the Boardman proposals, that suppliers should also be required to make conflict of interest declarations themselves, is also not included in the Bill. Boardman recommended that when there are direct awards with no competition, additional disclosure of conflicts at a more senior level should be required. Again, that is missing from the Bill.

The Boardman review gave 12 recommendations on conflicts of interest and bias. The amendments I referred to earlier try to put in the Bill the recommendations that the Boardman review gave. What is the point of doing the most detailed review asked for by government about conflicts of interest, based on recent history, if it is totally ignored when a Bill on procurement is written and when Part 5, on conflicts of interest, seems to ignore them altogether?

I will not go through all 12 recommendations, but some of them are quite important. Recommendation 18 says:

“Cabinet Office should strengthen its model for the management of actual and perceived conflicts of interest in procurements, following the ‘identify, prevent, rectify’ sequence.”


That is completely missing from the Bill. The Minister may say that some guidance will come out on that from the Cabinet Office. The difference is that this is primary legislation. If an expert has recommended that this should be the prescribed way that the Government do things on procurement to improve it around conflicts of interest, why is the “identify, prevent, rectify” sequence not identified in the Bill?

Recommendation 20 indicates:

“Declarations of interests should be recorded and logged alongside the departmental gift register and, where appropriate, this and other, relevant information should be made available to those responsible for procurement and contract management.”


I ask the Minister where, or if, a central register of conflicts of interest will be made available so that all public sector bodies that are procuring can have access to it. Remember, it is not just government departments at Whitehall that we are talking about: the Bill relates to all public sector bodies apart from the NHS which, even if it is procuring outside this, should have access to conflicts of interest on a central register.

The Boardman review also goes on to suggest the types of people who should be required to declare conflicts of interest; it goes much wider than the Bill. Recommendation 23 says:

“All guidance should make it clear that the requirement to declare and record actual or perceived conflicts of interest applies to all officials or those working on behalf of Cabinet Office equally, including civil servants, contractors, consultants, special advisers, and other political appointees.”


Where do they sit in the Bill? It is not just individuals whose job it is to procure; there are others who will have potential conflicts of interest that need to be made public, and people need to be aware of them.

Recommendation 24 says:

“There should be a clear process for managing risk regarding conflicts of interest.”


Where in the Bill are the process for managing conflicts of interest and the sanctions? What are the sanctions? Will they be left to each individual contracting body, or is there a central view of what the sanctions for dealing with conflicts of interest should be?

Recommendation 28 of the Boardman review says:

“Suppliers should be required to follow similar processes regarding declarations of actual or perceived conflicts of interest at the outset of a procurement, with appropriate sanctions for non-compliance.”


Where in the Bill is such provision? How will the conflicts, or potential conflicts, of interest of those looking to supply be dealt with?

I wish to speak to other amendments in this group that talk about not just direct employees. For example, Amendment 423 says that people who have left public service but are then employed or subcontracted by or give paid advice to a company should not be allowed to do so for a period of six months. That is not just for government but for all public sector bodies. If that is not in the Bill, it will be left to individual councils or individual procurement bodies to make their own rules and there will not be a uniform approach across the public sector. Is it the Government’s view that there should not be a uniform approach across the public sector for conflicts of interest for people who leave the public sector and are going to be employed, subcontracted or paid to give advice, or should it be down to each individual contracting authority outside of government departments to make up their own view? If so, how will suppliers be able to understand that individuals are complying, based on the complexity that will require?

Amendment 422 is a probing amendment to understand how the Government anticipate managing conflicts of interest and to make sure, again, that that is standardised across the public sector, not just what happens under the procurement rules for government departments.

There are a number of issues here, and I know that my noble friend Lady Brinton will raise the NHS and Palantir, where senior officials who were working on a multimillion-pound procurement for IT left the Department of Health and subsequently went to work for a company that was bidding for that particular contract.

These are serious amendments, which, as the new Prime Minister said on the steps of Downing Street yesterday, seek to rebuild trust. Rebuilding trust to ensure that taxpayers’ money is used appropriately and no one is getting an unfair advantage means that we have to have a standardised system to deal with conflicts of interest across the public sector, for all bodies, and a system of managing those in a way that is appropriate. I hope that the Minister will be able to answer those questions. I beg to move Amendment 404.

[Baroness Brinton (LD)]

My Lords, it is a pleasure to follow my noble friend Lord Scriven. I have signed Amendment 423, but I support all his amendments and those of my noble friend Lord Wallace of Saltaire in this group.

My noble friend Lord Scriven has set the scene for the reason why these amendments are needed, with the background of the Boardman recommendations. I want to give one example of how the culture has allowed one particular firm to get its feet very firmly under the NHS desk over the last three years—it is now a bit more than three years—and why, had stronger conflict of interest arrangements been in place that did not permit very senior staff to go and work for someone who is about to bid for NHS contracts, in line with these amendments, we would have benefited.

In April 2020, the United States tech firm Palantir was awarded a contract for an NHS Covid datastore under the Crown Commercial Services G-Cloud 11 Framework. This meant that it did not need to be publicly tendered or the results published. During 2020, campaigning organisations Foxglove and openDemocracy, as well as a number of parliamentarians in both Houses, including my noble friend Lord Scriven and me in the Lords, raised repeated concerns about the contract. It then emerged that part of the cost-effectiveness of this contract was that Palantir bid very low in return for access to every patient’s medical and personal data held on the Covid datastore. No permission had been asked for or given by any individual about this highly confidential data, and of course it breached GDPR—that is not formally within the scope of this Bill.

The first contract, from April 2020, was for three months, and the value of that contract in return for the data was £1—not £1 million but £1. A further continuation contract for a further four months was for £1 million, and in December 2020, a two-year contract was issued, again under the same arrangements, for £23 million. As details started to emerge, and after the public outcry, the contract was ceased in April 2021—not least because Foxglove and openDemocracy had initiated a court case against the Department of Health and Social Care.

What has emerged is that, in 2019, a number of private meetings were held between senior NHS managers and senior managers of Palantir, described by the NHS managers as very positive—I bet they were. A November 2021 National Audit Office report on government contracts during the Covid pandemic found that a lack of transparency and adequate documentation was very evident.

During 2020, Palantir did not just have contracts with the NHS, it had contracts worth £46 million with UK government or public bodies. Palantir, which in conjunction with Cambridge Analytica provided data support for Donald Trump’s 2016 presidential election campaign and for the Vote Leave campaign, is known for working below the radar. I am very mindful of the comments that the noble Lord, Lord Mendelsohn, made earlier about people gaming the system.

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

My Lords, we come to Part 5 of the Bill on conflicts of interest, where the Government have sought to give greater clarity on these obligations, partly in the light of the difficult experience during Covid-19.

On the one hand, it is critical that the public and businesses trust our approach in procurement. They must trust that we are acting with integrity—an important word today—spending public money responsibly and that suppliers will be treated fairly. The Bill is a step forward, as the noble Lord, Lord Coaker, has been kind enough to acknowledge. On the other hand, we must not have a process which overall has a chilling effect because good honest suppliers who do not understand the arrangements are needlessly put off participating in procurement.

I turn to the various amendments tabled by the noble Lord, Lord Wallace, and spoken to with great passion by the noble Lord, Lord Scriven: Amendments 404, 407, 409, 410, 412, 413, 421, 422 and 423.

The Cabinet Office commissioned Sir Nigel Boardman to review communications procurement in the department. His first report was published in December 2020 and focused on Covid-19 and the difficulties then. A major public inquiry is now on the way, and of course we need to learn the lessons of that. However, his recommendations in that report have been substantially implemented by the department. For example, Procurement Policy Note 04/21 includes comprehensive guidance for authorities on how to ensure that conflicts are managed appropriately.

Before I comment on the individual amendments, I will try to reply to the comments made by the noble Lord, Lord Scriven. I emphasise that the Boardman recommendations have not been ignored. The Cabinet Office has implemented them in its commercial operations. It is not appropriate to put every recommendation into legislation, which of course applies for many different types of contracting authority and procurement —large and small. Our provisions allow for a framework in which authorities can implement best practice in accordance with their governance structures.

The noble Lord raised the subject of sanctions. Boardman’s recommendation 26 highlighted that there needed to be sanctions and that these should be made clear in policy and guidance. The Procurement Bill is not the place to detail every possible sanction for every breach. Disciplinary action should be for each authority to enforce as well. If a supplier believes there to be a breach, the Bill provides appropriate remedies in Part 9.

The noble Lord, Lord Scriven, also questioned the recommendations on direct award. As mentioned on Monday, we have introduced a new requirement that contracting authorities must now publish a transparency note before they award a direct award contract. This obviously did not happen during Covid and is a major safeguard.

Amendment 404 would require contracting authorities to take all steps to identify conflicts. This risks creating an impossible threshold for authorities to meet. It could always be argued that more steps should have been taken.

On Amendments 407 and 409, we agree that the Bill’s current scope of those “acting in relation” to the procurement is the right one. We have set out more detail on different groups of individuals involved in commercial guidance, as obviously there are broader groups now involved, in the Procurement Policy Note 04/21, which is the right place for that information. Amendment 410 would add obligations on suppliers relating to conflicts. Suppliers of course also have a role in mitigating conflicts, and this can be seen in Clause 75(2).

The Bill has generally sought to avoid regulatory obligations on suppliers, and such prescriptions are better placed in guidance than in legislation. This ensures that a proportionate approach can be applied by both smaller local councils and large central government departments. The purpose of Amendment 412 is to broaden the evaluation of conflicts. We do not think that this is needed, as the Bill already includes the principle of integrity, in Clause 11.

Amendment 413 requires that suppliers declare, during the procurement process, whether they have given a donation or loan of more than £7,500 to a political party in a calendar year. This was mentioned by the noble Baroness, Lady Bennett. UK electoral law already sets out a stringent regime of donation controls, which I am very familiar with. Donations from the same source that amount to over £7,500 in one calendar year are included. Donation reports are published online by the Electoral Commission for public scrutiny, providing an appropriate level of transparency. We do not see the need to add this to the Bill.

Amendments 421 and 423 concern former Ministers and civil servants. We certainly want to avoid the risks of individuals leaving the public sector and exploiting privileged access to contacts in government or sensitive information. To mitigate these risks, the Civil Service Management Code includes business appointment rules, which apply to all civil servants who intend to take up an appointment after leaving the Civil Service. They replace requirements on former civil servants which include standing aside from involvement in certain activities: for example, commercial dealings with their former department or involvement in particular areas of their new employer’s business.

[Baroness Brinton (LD)]

I am grateful to the Minister for allowing me to intervene. I absolutely accept the point about the change to civil servants’ arrangements. The example that I gave is outside the Civil Service, as would be many other contracts issued through this Bill when it becomes an Act. Can she assure me that every member of staff in any body or agency would be covered in the same way?

[Lord Scriven (LD)]

Before the Minister answers that, a number of times in my intervention I highlighted that there must be a standardisation not only for the Civil Service. Billions of pounds of procurement is carried out by non-central government departments. The rules need to be clear and uniform across the procurement process for the whole public sector, not just for government departments. That is a key issue and why many of these provisions need to be in the Bill, so that they are applicable to all public sector procurement bodies.

--- Later in debate ---

[Baroness Noakes (Con)]

Could my noble friend help me on the legal effect of the Civil Service management rules? It is my understanding that they cannot actually be enforced in a court of law because it would act as a restraint on the individual’s ability to earn a living. So the rules might exist and there might be advisory bodies et cetera, but it has always been my understanding that they cannot actually be enforced in a court of law. I am not trying to speak for the amendment, but the advantage of it is that it creates a statutory basis for it to have legal effect.

[Baroness Brinton (LD)]

My Lords, if I might try to assist, employment tribunals in the private sector have taken the view that you can have fairly tight, limited terms. I am sure that one of the reasons my noble friends Lord Wallace and Lord Scriven chose six months was that that is the sort of term that is acceptable.

[Baroness Neville-Rolfe (Con)]

I will look into the point about the Civil Service, but certainly people are very careful about the Civil Service rules when they leave. I say that as someone who left many years ago. The rules are observed by civil servants on the whole and we try to emphasise that. As has been said, what we are trying to do here is have a regime that covers not only the Civil Service but elsewhere. However, as always, my noble friend Lady Noakes has bowled a good ball, so I will look into that.

I turn now to Amendment 422, which proposes to introduce a power specifying how conflicts of interest are to be managed on a day-to-day basis. The Bill covers the plethora of organisations which make up the public sector and gives clear obligations on all contracting authorities to identify and mitigate their conflicts. It would not be wise to start dictating the implementation of such a process for each and every authority, so we do not think the power is right.

My noble friend Lady Noakes has spoken to Amendments 415 and 419 on the definition of a conflict of interest, and the noble Baroness, Lady Bennett, came in helpfully too. I recognise that Clause 74 does not explicitly define “conflict of interest” as it does “Minister”, for example. However, Clause 74(2), combined with the definitions, does give conflict of interest a meaning, so it is correct to say elsewhere, as in Clause 75(5), that conflict of interest has the meaning given by Clause 74.

By inference, then, a conflict of interest is where a personal, professional or financial interest of a relevant person, as set out in Clause 74, could conflict with the integrity of the procurement. Essentially, this is where there is a risk that someone from the contracting authority, who is involved in the procurement, could benefit from taking a decision that might not be in the best interests of the contracting authority itself.

Finally, there is Amendment 417, which would remove Clause 76(4). I reassure my noble friend that the purpose of Clause 76(4) is to help, not hinder, contracting authorities. A perceived conflict, as provided for in Clause 76(4), is where a person might wrongly believe there to be a conflict when in fact no actual or potential conflict arises. We must obviously make sure that the public and suppliers are confident that the public sector is conducting its procurements in a fair and open way. We therefore need to consider what others may perceive about the procurement process. I have asked officials to look at the precise wording in Clause 76(4) to ensure that this is properly expressed and is not misleading. I hope that at this late hour my contributions have helped noble Lords to understand the balance that we are trying to draw and what we are trying to achieve. I respectfully request that the amendment be withdrawn.

--- Later in debate ---

[Baroness Bennett of Manor Castle (GP)]

My Lords, being aware of the hour, I will be extremely brief, but I just want to express support particularly for Amendment 441, in the name of the noble Lord, Lord Purvis. I think we have to look at this in the context of, as the Committee may be aware, the current movement in relation to the Energy Charter Treaty and the way in which increasing numbers of states—most recently France but also the Netherlands, Spain, Poland and Italy—have found that this treaty that they entered into years ago has really restricted their ability to act on the kind of environmental, social and labour matters identified here. It is really important that we do not bring in new laws that create further restrictions.

On the amendment from the noble Lord, Lord Lansley, there has been lots of criticism of the CRaG process and that it was essentially designed for long ago when trade treaties were something very different from what they are today. Just to illustrate that point, this morning I was with the Commonwealth Parliamentary Association for a visit of Canadian lawmakers. We learnt then, very interestingly, that Canada had wanted to include the issue of frozen pensions—the fact that the UK does not uprate its pensions for people in Canada while it does so for people in the United States. That is the kind of way in which trade deals can become far more complicated today. Unfortunately, on the account we heard this morning, the UK Government refused to countenance this being included in the trade deal, but it is really important that we see how broad trade deals can be today and that they have the maximum democratic scrutiny. That is what I think this amendment seeks to achieve.

[Baroness Brinton (LD)]

My Lords, I will speak to Amendment 436, from the noble Lord, Lord Lansley, and to my noble friend’s Amendment 441. It is a pleasure to follow both of them.

I want to talk a bit about some of the problems that we face inside our own government structures and Parliament. The noble Lord, Lord Lansley, and I spent quite a bit of time earlier this year on the Health and Care Act. Indeed, there was a section in there about healthcare arrangements with other countries. But that was the end of a story, and at each stage from 2014 onwards we kept finding people trying to relax the EU directive on procurement rules, which we had to abide by then, in order to enlarge the gift that we could give under a treaty. For health, this is an extremely important matter.

The EU procurement directive, which governs all public sector procurement in member states, defines fair process and standards to ensure that all businesses, including the NHS, have fair competition for contracts. It also, incidentally, prevents conflicts of interest through robust exclusion rounds and protects against creeping privatisation. It is that latter point that is really important in particular for the NHS, but there are other sectors of the public realm where that matters too.

On 18 November 2014, I asked the noble Lord, Lord Livingston of Parkhead, whether the EU procurement directive protected the NHS. He replied:

“Commissioner de Gucht has been very clear:

‘Public services are always exempted ... The argument is abused in your country for political reasons.’”

The noble Lord, Lord Livingston, went on to say:

“That is pretty clear. The US has also made it entirely clear. Its chief negotiator—

this was in relation to TTIP—

said that it was not seeking for public services to be incorporated. No one on either side is seeking to have the NHS treated in a different way … trade agreements to date have always protected public services.”—[Official Report, 18/11/14; col. 374.]

Again in 2018, I raised these points with the noble Lord, Lord O’Shaughnessy, in a debate and he said:

“I can tell them that we have implemented our obligations under the EU directive. The Government are absolutely committed that the NHS is, and always will be, a public service, free at the point of need”—


and the current Government repeat that point.

“It is not for sale to the private sector, whether overseas or here. That will be in our gift and we will not put that on the table for trade partners, whatever they say they want.”—[Official Report, 29/3/18; col. 947.]

That was very helpful because it came in advance of President Trump’s attempt to broaden what could be in a possible trade agreement, which would definitely have included health. Those of us who are concerned about these matters therefore relaxed a bit, until the Healthcare (International Arrangements) Bill came before your Lordships’ House, which was intended to replicate the reciprocal healthcare arrangements that we used to have under EHIC. The problem was that it had a clause that also gave rights under international trade agreements for health services to be part of those trade agreements, with no reference back to Parliament. It was an expedited process but, during the passage of that Bill, we managed to revert to it being just about reciprocal healthcare arrangements in the European Economic Area and Switzerland.

However, this year, we went through exactly the same process again when the Health and Care Bill was introduced, as it contained a much looser series of clauses that would have allowed health to become part of trade agreements. During the Bill’s passage, a cross-party group of Peers fought very hard and were really grateful that the Government recognised the risk that they were putting the NHS under and conceded. Now, the provisions under the Health and Care Act are the equivalent of EHIC but for other countries.

I wanted to raise these points because it seems to me that we must have Parliament’s involvement before things are signed and sealed. We also need to let those people who are negotiating our trade agreements understand where some of the clear red lines remain across Parliament—and certainly across this nation—for certain public services, including the NHS.

[Baroness Hayman of Ullock (Lab)]

My Lords, I shall be very brief, as time is ticking away. I start by saying that we completely support Amendment 436 in the name of the noble Lord, Lord Lansley. It is really important to get proper reassurance and clarification in this area, and I hope that the Minister will be able to give that to us today.

We also absolutely support what Amendment 441, in the name of the noble Lord, Lord Purvis, is trying to do. Environmental, social and labour conditions are incredibly important when looking at who you are procuring with. The noble Lord introduced it very thoroughly, so I will not go into any further detail, but he is absolutely right that we need clarification on this.

One thing I have found with this Bill is that different bits are cross-referenced all the way through and, on occasion, I have got somewhat confused, to say the least. This might not be important at all but I ask for some clarification. Schedule 9 is on the various parties with which we have trade agreements, and we have been talking about trafficking, slavery, exploitation and so on, which are all mentioned in Schedule 7. We welcome the fact that Schedule 7 covers all these areas, but paragraph 2 of that schedule says that engaging in conduct overseas that would result in an order specified in paragraph 1—trafficking, exploitation, modern slavery and so on—if it occurred in the UK constitutes a discretionary ground for exclusion from procurement. Does that conduct overseas, as referred to in Schedule 7, cover anything that happens with procurement coming out of a trade agreement? That is what I do not understand. If it does, it alters what we have just been talking about. If it does, how does that operate and how is it enforced? Who manages it? If it does not, how do we address that when we are negotiating trade agreements in order to achieve the outcomes that we would all like to see? It may be that the Minister does not know and needs to talk to officials, but that is something on which I would like clarification.

Procurement Bill [HL]

Baroness Brinton Excerpts

Report stage
Monday 28th November 2022 Lords Chamber

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

My Lords, as we begin Report, I start by thanking noble Lords for their contributions in Committee, and for the lively debate there. For those in the House coming to it fresh today, I say that this is an important Bill which follows two years of hard work and preparation, which I have the honour of taking over from my noble friend Lord True, who now leads this House.

Each year, £300 billion is spent on public procurement and we seek to make it quicker, simpler, more transparent and better able to meet the UK’s needs than the current patchwork of former EU rules, while remaining compliant with our international obligations. There will be a central Cabinet Office online platform to bring in new players, to improve value for money and to accelerate spending with SMEs. There will also be a comprehensive training programme for those involved in all the new rules and conventions—for example, on managing conflicts of interest. It is, however, a very technical Bill, and I am sorry that we had to withdraw a number of government amendments tabled in Committee to allow further discussion. This was largely successful, so we will come first to a number of amendments in my name, most of which were withdrawn on day one in Committee. As we go through, there will be further technical amendments and other amendments to respond to points made in Committee, notably to stimulate economic growth and to reduce burdens on SMEs. I thank noble Lords for their patience with the sheer number of amendments.

Amendment 1 and the amendments consequential on it introduce new technical definitions of “procurement” and “covered procurement”. I know these concepts caused some concern in Committee, so I will try to clarify matters. “Covered procurement” means those procurements that are covered by the vast majority of the provisions in the Bill. They are mostly procurements by contracting authorities, above the relevant thresholds for goods, services and works, which are not exempted from the Bill. These are the procurements which most of us will have had in mind during our deliberations in Committee.

However, the Bill also covers some aspects of procurements which go beyond this, which is why we have a wider definition of “procurement”, meaning any procurement. That allows the Bill to make some limited provision in relation to matters such as below-threshold procurements—for example, in Part 6—and notably to comply with international rules or certain treaties. I understand that the term “covered procurement” may seem unusual, but it is one included in our international procurement agreements, including the GPA—the WTO agreement on government procurement—and familiar to the procurement community.

Amendment 1, and a number of other government amendments, streamline fundamental concepts that are relied on throughout the Bill and will improve the readability and consistency of the legislation. Amendments 2, 5 and 6 recast the definition of “contracting authorities” to ensure that the right bodies are covered. We are committed to a definition that is broadly consistent in effect with both the existing regulatory scheme and with our international commitments under free trade agreements. Feedback from our ongoing dialogue with stakeholders has indicated that the effect of certain wording differences could lead to some bodies being incorrectly brought within, or excluded from, the scope of the rules. I am grateful for these views, particularly those from the Local Government Association, as they will help to ensure correct application. I am also grateful for its constructive approach to the Bill, which represents a big change for its members, and we appreciated its input.

The amended definition removes the reference to

“functions of a public nature”,

as this does not align with the existing definition. It makes clear that the notion of contracting authority oversight can include oversight by more than one authority. Lastly, it ensures that certain bodies that are publicly owned but operate commercially can operate outside the procurement regime.

Amendment 187 ensures that educational establishments are fully and appropriately excluded from the rules on below-threshold contracts, as well as those relating to implied payment terms in public contracts, payment compliance notices and reporting on payments made under public contracts. This mirrors the approach taken in the current procurement rules and ensures that burdens on low-value contracts in the education area are applied in a proportionate fashion. Amendments 98 to 102, 117, 119, 191, 193, 197, 201 and 202 are consequential.

Amendments 24, 25, 26, 27 and 28 provide direction to contracting authorities when a mixed contract involves two or more different elements which could each classify it as a “special regime” contract. We expect that such situations will be rare, but could arise occasionally. Our amendments clarify which regime will apply to their mixed contracts in such circumstances by discouraging unrelated requirements being combined in one procurement. I hope that sentence is clear. More importantly, we must also ensure that the rules concerning mixed contracts are compliant with our international trade agreement obligations.

This group also includes other minor changes, including Amendment 7, which ensures that thresholds are applied properly to frameworks, and Amendment 8, which ensures that frameworks for the future award of exempted contracts only are also exempt. Frameworks involving a mixture of elements covered by both the Bill and the forthcoming healthcare procurement regulations will be subject to the same basic tests as set out in Clauses 4 and 9 on mixed contracts, which determine which rules will apply. This is important to prevent abuse of the exemption provisions; it also includes Amendment 185, which corrects a mistaken reference to a power for Northern Ireland departments, which unfortunately does not exist.

Amendment 170 is a technical adjustment to Clause 111 to make it clear that any regulations made to disapply the Bill to procurements in scope of the forthcoming healthcare procurement regulations can be made whether or not the procurement regulations are yet in force. Finally, Amendments 194, 195 and 196 amend the index of defined expressions in Clause 115.

I thank noble Lords for their patience, and will turn to the amendments tabled by other noble Lords when I have heard from them. I beg to move.

[Baroness Brinton (LD)]

My Lords, I shall speak to my Amendments 3 and 173. I thank the Minister and the noble Lord, Lord True, for responding to my questions, in private meetings but also at previous stages of the Bill, about why the NHS is treated differently from every other part of the public procurement sector covered by the Bill. The problem is that I have not yet heard a clear answer to that; nor, indeed, did those noble Lords who took part in the Health and Care Act during its time here get a clear answer from the Health Minister as to why this was proposed. More recently, in Committee, the Minister said that it was because only clinical services would be covered by these special arrangements for the NHS. I will come in a minute to the reasons for my concerns that that is not the case, but I start by saying very simply that Amendment 3 puts the NHS in the Bill, in the definition of a public body that has to observe the details of regulation under the Bill.

Moving on to the practical problems, the key issue is what is said in the National Health Service Act 2006 and the Health and Care Act 2022, which attempts to amend it. The specific amendment has not been enacted yet, but we can all assume, with the permission of the House, that it is this Bill that is holding that up. The Health and Care Act adds new Section 12ZB to the National Health Service Act, which says:

“Regulations may make provision in relation to the processes to be followed and objectives to be pursued … in the procurement of (a) health care services … and (b) other goods or services”.


The problem is that the new section goes on to say:

“Regulations under subsection (1) must, in relation to the procurement of all health care services … make provision for the purposes of ensuring transparency; ensuring fairness; ensuring that compliance can be verified; managing conflicts of interest”.


That is a very different bar of compliance than the Government want to see for every other part of the public sector covered by the Bill. At the strategic level, it will be enormously helpful to understand why the Government feel it is appropriate for the NHS not to be included, but my practical problem is that we have relied somewhat on the assurances of Ministers at the Dispatch Box that only clinical services would be caught by the new SIs under the Health and Care Act and the NHS Act 2006. I have just read out the parts that show that is absolutely not the case. In fact, there is a catch-all in “other goods or services”. So, while we spent a little time in Committee trying to discuss where the boundaries are, it seems to me that there are no such boundaries, and that leaves me very greatly concerned about how this will work in practice.

I have tabled Amendment 173 because if Amendment 3 is carried, Clause 111 is not needed. There is also an argument that if, for any reason, Amendment 3 is not carried, Amendment 173 will stand in its own right, but the two are inextricably linked. These two amendments are saying that the NHS should be covered in the Bill. I end by saying to the Minister that, despite the many amendments from noble Lords all around the House, I think everyone agrees that the Bill is better than the procurement arrangements we have had in the past, particularly in attempting to get transparency and accountability. The problem is that the arrangements for the NHS are not visible; they are SIs at the discretion of any Secretary of State for Health, and we have not even seen those in draft yet. I hope the Minister can give me some very clear reassurances or explanations, otherwise I may have to test the opinion of the House later.

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[Baroness Neville-Rolfe (Con)]

That is a point, but I did try to explain in my introduction that there was concern during the passage of the Health and Care Act, to which I was not party, that the NHS arrangements—I see that the noble Baroness, Lady Brinton, is nodding her head. Perhaps she is nodding it negatively.

[Baroness Brinton (LD)]

The important thing the House needs to hear is that during the passage of the Health and Care Act, Members from all sides of your Lordships’ House asked repeatedly why special arrangements were being made for NHS procurement when we knew that there was a Procurement Bill coming down the line and had not seen any detail of it. That is the question we are all waiting to hear the answer to.

[Baroness Neville-Rolfe (Con)]

I think I have been clear on the background to why it is different. I have also promised that regulations and guidance are being put together and will make very clear the differences: where the NHS rules need to apply and where the Procurement Bill needs to apply. That is the way in which these Bills have been constructed together. There are reasons. Especially on small NHS contracts involving social care, clinical services and so on, it clearly makes a great deal of sense to have a separate regime.

I am sure we will come back to that at the end, but out of courtesy I turn to the other amendments. Amendment 4, tabled by my noble friend Lady Noakes, proposes to rework the notion of control in the definition of a contracting authority in amended Clause 1(3)(b), to be consistent with the notion of a controlled person in Schedule 2. We have looked at this again in dialogue with the concerned stakeholders, notably the Local Government Association.

The meaning of control in Clause 1 is different from that in Schedule 2, and they need to be kept separate. The use of “control” in Clause 1, which sets out the contracting authority definition, is intended to ensure that contracting authorities that have a board where public authorities appoint more than half the members are themselves considered to be contracting authorities. This might include, for example, some centralised procurement authorities.

By contrast, the “controlled person” for the purposes of Schedule 2 is much narrower and intentionally very limited as it is intended to capture only a narrow group of entities, closely owned and controlled by contracting authorities. It requires that the controlling contracting authority is a “parent”, within the meaning of the Companies Act 2006. Although this might cover some of the same ground as majority board appointments, the concept used in Clause 1, it is not the same thing, and the text of the amendment can be satisfied in other ways. There is also a secondary activity threshold, which means that 80% of the activities carried out by the controlled person must be on behalf of its controlling authority. I am afraid that neither factor is appropriate to the contracting authority definition and their inclusion would have the effect of taking many organisations outside the scope of the contracting authority definition.

I recognise that, as my noble friend said, consistency is often desirable, but these terms achieve different aims. It is important that the Procurement Bill covers, as closely as possible, the same scope of bodies as in the existing procurement regulations, both for certainty and continuity for our authorities and to ensure compliance with the definition of a contracting authority in our free trade agreements.

I should, in passing, thank my noble friend Lady Noakes for her Amendment 190, which reflects discussion in Committee and which the Government are glad to support.

Moving on, I come to some of the very wide points made by the noble Lord, Lord Alton, although it is possible that some of these will come up again later on Report. It may be disappointing to the noble Lord, but we cannot go into the detail of individual contracts. Where a contract has been found to have underperformed or the PPE provided was not up to standard, the Department of Health and Social Care is working to reach a successful outcome—this includes mediation—for the taxpayer.

Offers for the supply of PPE came from a wide range of people from within government and outside. No matter where they came from, offers went through a robust process of checks and controls led by officials. This included price and quality checks as well as due diligence and credibility. As for Medpro, this is a live issue; we are currently engaged in a mediation process with PPE Medpro and I am therefore unable to comment on the specifics of this contract.

More positively, however, the Covid inquiry will cover procurement and the distribution of key equipment and supplies, including PPE and ventilators. In my view, that is quite right. It will also identify the lessons to be learned from all this and inform preparation for future pandemics across the UK.

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Moved by

[Baroness Brinton]

3: Clause 1, in subsection (2), in the definition of “public authority”, in paragraph (a), after “funds” insert “including the NHS”
Member’s explanatory statement
This amendment includes the NHS in the definition of a public authority for the purposes of this Act.

[Baroness Brinton (LD)]

My Lords, I am very grateful for the Minister’s response, and I thank my noble friend Lord Scriven for signing my amendment, and the noble Baroness, Lady Bennett, for intending to do so. I also thank the noble Lords, Lord Alton and Lord Coaker, the noble Baroness, Lady Noakes, and others who have spoken in support of it.

I am really grateful to the Minister for trying to explain why there would be less confusion if we had the arrangements currently being proposed under the Health and Care Act in relation to the National Health Service Act 2006 and those in the Procurement Bill. She said that Parliament had debated this only very recently, but I have covered that by saying that, when the then Health and Care Bill went through, we did not know what was being proposed in the Procurement Bill. The details of the Procurement Bill are so much more detailed than was intended or understood during the debate on the Health and Care Bill, so that is a problem.

I am astonished at the idea that accepting my Amendment 3 would create undue bureaucracy; the exact converse is true on all the points the Minister made. When you actually look at Section 12ZB, which will be inserted into the National Health Service Act 2006 after the passage of this Bill, you see that it does not make this clear in its reference to clinical services, which is not legally defined. It not only talks about “health care services” without defining what a healthcare service is, but goes on to say,

“and other goods or services that are procured together with”

them. The mini-debate we had a few minutes about how that would be decided and managed between the Cabinet Office and the Department of Health seems as though it would create a phenomenal amount of bureaucracy and the chance for people to abuse the system.

The Minister said that the arrangement would mean that the Department of Health could ensure that the provision in the Health and Care Act would not be used by the NHS to avoid the more stringent terms in this Bill. However, that seems to be exact reason why the NHS should abide by those stringent terms. For that reason, I would like to test the opinion of the House.

Procurement Bill [HL]

Baroness Brinton Excerpts

Report stage
Wednesday 30th November 2022 Lords Chamber

[Lord Moylan (Con)]

My Lords, I rise to strike a jarring note, although I do not intend to wander into the potentially treacherous waters of the divisibility or otherwise of the Crown. I think the Government have rather got it right on these amendments and noble Lords are barking up the wrong tree.

As I said in Committee and at Second Reading, noble Lords in some cases appeared to have misconceived this Bill throughout as if it were an enforcement measure against criminal or quasi-criminal activity, but it is not and it has never been intended as such; nor does it have that effect.

We come to an amendment that says explicitly that no preferential treatment may be conferred on

“suppliers connected to or recommended by members of the House of Commons or members of the House of Lords”.

To the extent that that is already a criminal act, and corruption is involved, criminal proceedings would be the right thing to undertake and not proceedings under this Bill, which is essentially administrative in character and carries no punitive clauses. The remedy for breaches under this Bill in most cases is for a supplier to sue for damages and the fact that they have been treated badly or unfairly. This is not a Bill intended to combat corruption.

If noble Lords feel it is required to explicitly exclude Members of this House and of another place, why is it not required to explicitly exclude giving preferential treatment to your first cousins, or your family in a broader sense, or your best friends, or people you were at school with, or all sorts of other persons who perhaps should be listed on the face of the Bill?

I briefly come to the procurement review unit—

[Baroness Brinton (LD)]

Does the noble Lord not agree that Clause 40 allows the Government to set up such a preferential channel?

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Moved by

[Baroness Brinton]

173: Clause 111, leave out Clause 111 and insert—
“Application of this Act to procurement by NHS England
(1) Omit sections 79 and 80 of the Health and Care Act 2022.(2) For the avoidance of doubt, the provisions of this Act apply to procurement by NHS England.”Member’s explanatory statement
This amendment is to probe the difference between procurement under this Act and procurement by NHS England under the Health and Care Act 2022.

Procurement Bill [HL]

Baroness Brinton Excerpts

Consideration of Commons amendments
Monday 11th September 2023 Lords Chamber

Moved by

[Baroness Brinton]

Leave out “agree” and insert “disagree”.

[Baroness Brinton (LD)]

My Lords, I start by thanking the Minister for our meeting last week. I have listened carefully to what she has said today and during that meeting; I am afraid that she has not convinced me that the procurement rules for the NHS would be as strong, clear, transparent and accountable as we find in this Procurement Bill. My Amendments 1A and 81A would ensure that the NHS is included.

During the passage of the Health and Care Act 2022, the very short Clauses 79 and 80 gave the NHS exemption from this Bill, with procurement rules to be introduced in secondary legislation by the Health Secretary. Seventeen months on, this still has not happened. When she spoke just now, the Minister relied on government Amendment 82. However, in the consultation—it is, I believe, still open—the NHS provider selection scheme that she referred to sets out some general principles only. During an earlier stage of this Bill, in response to my earlier amendments, the noble Lord, Lord True, referred to clinical contracts being exempt. However, that is not so; in fact, I note that, today, the Minister has been referring to healthcare. Every single time I ask a Minister a question, the definition changes.

In the NHS provider selection scheme, the flexibility rests with NHS bodies to make their own decisions about which scheme they use. The consultation document says:

“This is intended to remove unnecessary levels of competitive tendering … the Provider Selection Regime is intended to make it straightforward to continue with existing arrangements for service provision where those arrangements are working well and there is no value for the patients, taxpayers, and population in seeking an alternative provider”.


Those phrases—“remove unnecessary levels of competitive tendering”, “working well” and “no value in seeking an alternative provider”—are worrying, frankly. The problem, as we have discussed at length in our debates on this Bill, is that poor practice creeps into a culture where people believe that things are working well. The rules that this Bill sets out are there to ensure that every public body putting out a tender has carefully thought through what is appropriate, not just working well.

There is evidence that the current practice in NHS procurement has a mixed record, whether at the highest level or right down at the level of local trusts and CCGs, which is often covered by the specialist press. Despite a blunt National Audit Office report in 2011 on value for money in NHS procurement, the experience during the pandemic showed that some of the deep-seated culture of things not being value for money and not being completely open and transparent continues. The NAO has commented on this and the NHS recognised it in its response paper, Raising Our Game, in which it said:

“Recent reports suggest NHS procurement is lagging behind industry procurement performance”.


Unlike Ministers, the Civil Service and staff at many other public bodies, who are constrained by conflict of interest rules, it is possible for NHS staff, including directors, to use a revolving door to move from the NHS and join a company that contracts with the NHS without a gap. Last year, a deputy director and the head of AI at NHS Digital both left and immediately joined the technology firm Palantir just as it was bidding for further contracts, some without open tendering; Palantir is known to be bidding currently for the federated digital platform contract, which is worth an estimated £360 million and is due to be awarded imminently. Only 10 days ago, the chief operating officer of the NHS left on a Friday and joined Doccla, the virtual ward company that is bidding for substantial NHS contracts, the following Monday. It was also reported in July this year that NHS Digital had spent £7 million on “irregular” payments to external contractors while, last year, the Treasury flagged “irregular” spending by the Department of Health and Social Care and the NHS worth £1.3 billion. Let me say that again: £1.3 billion. Last year, the Technology and Construction Court found that staff from three CCGs in the south-west had manipulated a £2 million contract knowing it to be improper.

Many of these incidents are not reported widely. I thank in particular the Health Service Journal and other technology and health reporters for shining a light on this poor practice, even if it is not regular, wherever it has happened. This is not about those individuals nor the contracting companies. It is about the culture of procurement in the NHS. My amendment would ensure that by including the NHS in this Procurement Bill it would share robust regulations with other bodies and would be accountable and transparent even if there is a need for some subsequent special arrangements for complex clinical contracts. Not doing this will not change the culture of NHS procurement but including it in this Bill will. I beg to move.

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[Baroness Neville-Rolfe (Con)]

My Lords, I begin by sharing my appreciation for the number of incisive contributions we have heard in the course of this short debate. It is always a pleasure to debate these things here. Of course, they have now been reviewed in the other place, as my noble friend Lady Noakes said, and there was a long discussion, including a long Committee stage attended by my friend in the other place Alex Burghart. I particularly thank noble Lords for all the work that has gone into this across the House, including these important provisions.

My noble friend Lord Lansley is correct that the objective in Clause 12 applies to cover procurement. The NPPS clause allows an NPPS to cover all procurement, but in practice its scope will be determined by the contents of the statement. In my opening remarks I explained at some length the position on the coverage of the NHS. I will come back to one or two of the questions from the noble Baroness, Lady Brinton.

I particularly thank the noble Baroness, Lady Hayman, for all that she said. Concerning principles that need to be considered by Ministers in preparing the NPPS, these principles are already covered through other commitments and legislation, as I have already set out. The amendment is therefore not necessary, as my noble friend Lady Noakes said. In addition, our fundamental view is that the Government of the day should not be constrained by the Bill in their ability to prescribe something more specific. They are free to do so—and I think this is the charm of the Bill—through the NPPS rather than through primary legislation. The Bill is about clarity and simplicity, not layering rules on rules.

To understand how it works in practice, I refer my noble friend Lord Lansley—I think I have already discussed this with him—to the current non-statutory NPPS, which covers innovation and social value. Attempting to drive innovation, which I am as keen on as he is, in every single procurement will not always be relevant or proportionate. Our Bill drives innovation through, for example, our new competitive flexible procedure, pre-market engagement and our duty for contracting authorities to have regard to reducing barriers for SMEs—which will also benefit social enterprises, as the noble Earl, Lord Devon, referred to. Future NPPSs will also be subject to parliamentary scrutiny and consulted on as appropriate.

The consideration of environmental targets and objectives relating to social value in preparing the NPPS, and the other principles set out in this amendment, are duplicative and would render the Bill more complex and confusing for contracting authorities and suppliers. Singling out specific objectives for Ministers to consider will create the impression that they trump others, which could unduly constrain flexibility for a Government to set priorities in future, which they will do through the NPPS. This is a principle seen in other legislation, where you have framing legislation and then statutory guidance.

Finally, regarding environmental considerations—as highlighted in discussions during the REUL Bill debates, although perhaps I should not remind noble Lords of those as they took a long time—Ministers will now be under a legal duty to have due regard to the environmental principles policy statement when making policy, including the development of policies in accordance with the Bill.

On the NHS amendments championed by the noble Baroness, Lady Brinton, I am grateful for the meetings that we have had but I believe that they stem from a confusion. NHS bodies are contracting authorities and therefore already covered by the Bill; we had a good conversation about mixed contracts and so on, which I think was helpful to us both. It would be inappropriate to remove the power to make the provider selection regime regulations, especially given the benefits that they will bring to patients.

In response to a question about the definition of healthcare services, the scope of services in the PSR has been consulted on and will be further supported by reference to a list of common procurement vocabulary codes, set out clearly in the PSR regulations. An indicative list of those codes was included in DHSC’s recent consultation on the PSR.

The noble Baroness made a point about conflicts of interest. Our Bill strengthens existing legal duties on conflicts of interest and embeds greater transparency throughout the commercial life cycle. This has been welcomed and, I think, is important. Furthermore, the provider selection regime regulations will clearly set out provisions for the effective management of conflicts of interest. The PSR is designed to ensure transparency across all procurement decisions to which it applies, including how the decisions were made. This transparency will help ensure that there is proper scrutiny and accountability of decisions to award contracts for healthcare services.

Finally, an independently chaired panel will provide expert review and advice concerning decisions made under the PSR, helping to ensure that procurement processes are transparent, fair and proportionate. I very much hope that that additional information about our plans for the PSR will enable this debate about just how these two regimes, both of which have been discussed constructively and at length in this House, fit together, and that noble Lords feel able to support the government amendments and withdraw the amendments that they have put forward.

[Baroness Brinton (LD)]

My Lords, I thank everybody who has spoken in this brief debate. I particularly thank the noble Baroness, Lady Noakes, for at least agreeing with the principle, even if she cannot support me in the Division Lobby, because it is really important.

For all the reasons that the Minister outlined, we are where we are. When we were working on the Health and Care Bill, it was absolutely evident that the secondary legislation changes would be outlined quickly thereafter—I am looking at others who were in the Chamber at the same time—and agreed by last autumn. We are now 17 months on and there is no sight of them at all.

The Minister outlined the NHS provider selection scheme and all its arrangements. That it is not looking for a culture change worries me most. In my earlier speech I gave examples of the behaviour of three senior managers at three CCGs, which the public would not have known about if the losing company had not gone to the Technology and Construction Court. This revealed that it is all too easy, where the culture is poor, for people to believe that the rules are being followed when they are not.

I appreciate that we have a point of difference on this, but on our Benches we believe that there is much benefit in this Procurement Bill and do not understand why the NHS is excluded. It is perfectly possible to include some special arrangements for it, but nothing has happened since the Health and Care Act was enacted. At the moment, nothing we are hearing from the NHS is about that culture change. On that basis, I wish to test the opinion of the House.