Procurement Bill [HL]

Baroness Neville-Rolfe Excerpts

Committee stage
Monday 11th July 2022 Grand Committee

[Lord Hope of Craighead (CB)]

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

“except in accordance with this Act”,

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

I wonder whether the words

“in accordance with this Act”

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

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

the four matters set out there.

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

“except in accordance with this”

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

“in accordance with this Act”

go further than they need to.

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

[Baroness Neville-Rolfe (Con)]

My Lords, it is always a great pleasure to follow the noble and learned Lord, Lord Hope of Craighead, who is always so brief and makes such constructive suggestions. The more I listen, the more I feel that this Bill in many respects strikes the wrong note. It is overregulatory and calls for a rethink, which I hope the Government will be thinking about.

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[Lord Moylan (Con)]

My Lords, my noble friend the Minister has a difficulty with his throat, and I commiserate with him on that. He also has a difficulty with the Bill. He wants to have a Bill which is highly prescriptive, but his answer to those who wish to amend it is that that would make it too prescriptive. The question is: what are the bounds of prescription, and has he given an adequate defence of them? It may be the heat, but I suspect we are condemned this afternoon to receiving a series of responses from Ministers which are not as adequate and embracing of our original ideas as one might hope.

It has been a very important debate because it is about the principles underlying the Bill. My noble friend said that there was a degree of confusion and contradiction in the debate. There is often confusion in debate when you have a broad range and number of topics to discuss, but I do not think there was any contradiction if one understands that the debate on principles has been taking place on two levels. The first is about what the principles should be—whether they should involve what the noble Baroness, Lady Hayman of Ullock, has suggested should be incorporated and whether they should involve a certain interpretation of value for money. We all agree that has to be an element of it, but what does that actually mean? That has been the tenor of part of the debate. I have said that I intend to remain neutral in a sense on that question.

The second level on which we have been debating the principles is: on the assumption that we can agree what the principles are, what role do they then play? What purchase or leverage do they give in the procurement process? In particular, should they be a basis on which disappointed contractors should be able to nitpick through this procedural Bill in order to bring complaints when, in my view, it would be better if they were limited to doing that only if the broad principles of the Bill—which we might have agreed on—had been breached? The noble and learned Lord, Lord Hope of Craighead, clearly grasped that point, and the noble Baroness, Lady Hayman of Ullock, heartily agreed that we should ensure that there is a degree of flexibility in the tendering process so that unforeseen circumstances that lead to idiotic outcomes can be handled in a sensible way.

My noble friend Lady Neville-Rolfe made a similar point, but I am going to quibble with her very slightly, because she used the word “frequent” in reference to frequent legal challenges to procurement processes. In my experience, they are not very frequent, because what happens is that precise attention to the detail of the process is often prioritised over sensible outcomes in order to avoid those legal challenges in the first place. The structure of the approach that we are taking often leads to poor outcomes in procurement terms precisely to avoid legal challenges, but we congratulate ourselves on having gone through a successful procurement even though we have a suit with a pair of trousers with one leg shorter than the other, or something like that.

[Baroness Neville-Rolfe (Con)]

On the business of frequent challenge, I think it would be quite useful to have some information before we discuss this again. My experience—I have worked in the industry, although admittedly not as an executive—is that there are quite a lot of challenges, and they absorb a lot of resources. However, if they are rare, that is important as well.

[Lord Moylan (Con)]

I heartily second that call for information.

To conclude, my noble friend the Minister said that he thought that flexibility in response to the sort of circumstance that I am describing is desirable. To that extent, he agreed in principle with me and with my noble friend Lady Neville-Rolfe, and it is for him, as we go forward, to show how he intends to instantiate that in his own amendments, so as to give us that sensible, practical outcome. In the meantime, I beg leave to withdraw the amendment.

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Moved by

[Baroness Neville-Rolfe]

38: Clause 10, page 8, line 5, at end insert “, unless tenders will only be considered from suppliers with an annual turnover of less than £5 million.”
Member’s explanatory statement
This amendment seeks to reduce the burden on business of the Bill’s provisions.

[Baroness Neville-Rolfe (Con)]

My Lords, Amendment 38, on helping small business, would free up procurement for those businesses with a turnover of under £5 million. I am particularly grateful for the support of my noble friend Lady Noakes, and I am glad of the opportunity to endorse her review amendment, Amendment 534, which she will introduce later.

I shall also speak to my Amendment 50, which aims to keep the bureaucratic burdens on small businesses as low as possible, and to Amendments 97 and 100, which seek to exclude small businesses from complex competitive procedures. Finally, I will also speak to Amendments 290 and 295, which seek to exclude SMEs from the bureaucratic burden of cross-compliance in Schedules 6 and 7, which give long lists of reasons for excluding suppliers from bidding.

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Overall, I hope that I have assured noble Lords that this Bill is a good deal for SMEs and that there is good reason why we cannot go as far as noble Lords would like. As I have said, the Government support SMEs, the third sector and the voluntary and community sector. This is something on which we will have a number of meetings between now and Report to discuss what we can do further, if we can. I respectfully ask that these amendments be withdrawn or not moved.

[Baroness Neville-Rolfe (Con)]

My Lords, I start by thanking everyone in this Room for taking part and for the widespread support for my amendment and for doing something in the Bill for small business.

I was sorry to get such a disappointing reply from the Minister. She repeated the positives that I had already identified and given the Government due credit for, but she did not offer a lot else. She said all bidders must be treated in the same way; I think that is at the heart of the problem. We have to find some way to help SMEs. The Minister mentioned the billions going to SMEs, but that is compared to the £300 billion opportunity. There is a huge opportunity to grow the SME and social enterprise sector in the procurement area and to do it in a way that represents value for money—I am coming from that angle as well.

I also thank my noble friend Lady Noakes, who made a very strong case for a regular, five-yearly review of procurement to be written into the Bill. I remember that we did this in the intellectual property area and it has worked well. She rightly fears that SMEs will be discouraged by the new laws and SIs—there are so many SIs coming through—and that that might heighten the barriers to entry that deter small business from bidding. This was reinforced very strongly by the noble Lords, Lord Wigley, Lord Aberdare and Lord Coaker. The killer line from my noble friend Lady Noakes—I am going to embarrass her—was like something from Oscar Wilde: “SMEs find engaging with public procurement daunting.” It is wonderfully understated, but it summarises the issue beautifully.

My noble friend also persuasively presented the capacity building amendment from the noble Lord, Lord Lansley, and attracted support for that from across the Committee, both in relation to SMEs and social enterprise. I strongly agree that capacity building is the way to improve productivity in the economy, so it would be great if we could encourage it in some way or another.

We also heard about social value from the noble Baronesses, Lady Thornton and Lady Bennett. The noble Baroness, Lady Bennett, reminded us that care is covered by this Bill, but I do not agree that you cannot have improved productivity in care. I have noticed how, as in Bupa homes, the distribution of medicines to old people is much improved as a result of private sector innovation in trying to make sure that they are not taking the wrong pills and that the nurses are giving them the right ones. There have been other improvements in the care area, with wheelchairs and so on, as well as the use of internet-enabled things, which can be really helpful. It was great that the noble Baroness reminded us of care even though, as usual, we come at this from slightly different angles. As the noble Lord, Lord Scriven, said, productivity and quality actually go hand in hand with good procurement in care.

It is clear that we need to do more for SMEs and social enterprise, and—not or—we need to put a review clause into the Bill or be assured that there will be a review of it, given its novelty. I very much appreciate the offer of a meeting with those of us who are interested in moving this forward with the Government during the Recess, before we come back to look at this gargantuan Bill again, presumably in October. With the leave of the Committee, I would like to withdraw my amendment.

Amendment 38 withdrawn.