Government: Procurement

Baroness Verma Excerpts

Monday 25th June 2012 Lords Chamber

[Lord Haskel]

To ask Her Majesty’s Government what steps they are taking to encourage the use of new technology in the United Kingdom through Government procurement.

[Baroness Verma]

My Lords, the Government are removing procurement barriers facing innovative companies and SMEs and creating an environment in which they can thrive. We are investing more in the small business research initiative, creating a level playing field for open-source solutions and making the procurement process as a whole faster and simpler. In particular, the G-Cloud framework provides a simple, fast and transparent route into government for the suppliers of new technologies.

[Lord Haskel]

My Lords, those aspirations are all very well but are the incentives in place for public-sector buyers to carry them out? The Office of Government Commerce tells me that there are 40,000 points of procurement. Why should it take the risk of an innovation failing? After all, it is more likely to get a pat on the back for saving money in these circumstances than for encouraging innovation. How will the Government change this culture?

[Baroness Verma]

My Lords, I am disappointed at the noble Lord’s cynicism. Since we took office, central government’s direct spend with small companies—particularly the SME sector, which the noble Lord is interested in—has doubled from £3 billion to £6 billion. We are achieving this by publishing tenders and contracts through the contracts finder website which eliminates many of the difficulties that small and medium-sized businesses were facing. The noble Lord should be aware that more people can access information online now than could previously.

[Lord Walton of Detchant]

Is the noble Baroness aware that the Medical Technology Group—which represents the interests of both large companies and SMEs in the medical technology field—is very concerned that many of the most important and vital new developments in medical technology are not being fully exploited within the National Health Service? Will she ensure that the concerns of the Medical Technology Group are brought to the attention of NICE so that these developments can be exploited fully?

[Baroness Verma]

I take the noble Lord’s views on board and will take them back to the department. I also hope I can reassure him that we are working closely with the health service and through the services provided by the online G-Cloud strategies that we have formulated to shorten the gaps he envisages.

[Lord Rennard]

My Lords, will the Minister tell the House the Government’s policies in relation to the development of the computer code or software they pay for and whether it should be made more freely available for others to use and extend? Does she accept that allowing this could sometimes prevent the public sector wasting money by paying more than once to develop the same software and that it would also be incredibly helpful to the private and voluntary sectors?

[Baroness Verma]

The noble Lord is absolutely right to raise that point. As part of the Chancellor’s Autumn Statement last year government departments agreed to release a substantial package of data including material relating to many of the major departments. Most people will also be able to access data rather freely through our Open Data Institute, which we hope to have fully launched by September.

[Lord Howarth of Newport]

My Lords, what proportion of the Government’s expenditure on science and technology is accounted for by Ministry of Defence procurement? Is the Minister satisfied that that allocation of resources is well judged to encourage the most productive take-up of new technology in the United Kingdom?

[Baroness Verma]

The noble Lord raises a specific point which I think I need to take back with me as I would not want to quote a wrong figure on the Floor of the House. I will take it back and come back to him.

[Lord Hughes of Woodside]

My Lords, did the Minister see the horrendous reports at the weekend about health service patients waiting months and months for medication because of procurement difficulties? Will she ask the relevant Minister to come to this House to give a full explanation of something that really should not happen?

--- Later in debate ---

[Baroness Verma]

My Lords, I do not speak on behalf of my noble friends. The question has been noted and I am sure that the relevant Minister will take it up.

[Lord West of Spithead]

My Lords, I do not know whether the Minister is aware that the Royal United Services Institute recently did a study in which it discovered that if things that are designed and built in this country are then purchased, 34% of the money will go straight back to the Treasury. Will the Treasury therefore look at this report? Clearly, if things designed and built in this country are a third cheaper straightaway, and forgetting all the other reasons why one would want to buy high-tech things that are made here, it would be a bit of a nonsense to buy those things off-the-shelf from overseas.

[Baroness Verma]

I think that the noble Lord has answered his own question. I am sure that the Treasury is not aware of all reports but, again, I will raise this one with it.

[The Earl of Erroll]

Is the Minister aware that smaller innovative companies often have great difficulty joining in on some government IT projects because of the stranglehold that the large systems integrators have on them? Many of the regulations make sure that smaller companies cannot join in and bid for these projects, and many of the frameworks even exclude them from doing so.

[Baroness Verma]

Absolutely—the noble Earl identifies a serious problem. We have formulated the G-Cloud strategy so that smaller businesses can contract out as well as tender for contracts alongside the large companies. The PQQ requirement has also been ended where contracts are for less than £100,000. We are asking for much less information from smaller companies so that they do not stumble at the first block.

[Baroness Hayter of Kentish Town]

My Lords, the financial crisis has made the regional imbalance worse because manufacturing has actually suffered more than the financial sector. What are the Government doing, as the nation’s largest purchaser of goods and services, to help rebalance the economy between north and south?

[Baroness Verma]

My Lords, the economy is a major issue whether it is in the north or the south. The Government are making sure that whatever is available is accessible to people either up in the north or down in the south so that nobody misses out on the opportunity to bid for public contracts. As the noble Baroness will be aware, many bids on contracts now come from smaller companies as well as from across the country.