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.