Procurement Bill [HL]

Baroness Brinton Excerpts

Consideration of Commons amendments
Monday 11th September 2023 Lords Chamber

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[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.

--- Later in debate ---

[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.