Procurement Bill [Lords]

Caroline Lucas Excerpts

2nd reading
Monday 9th January 2023 Commons Chamber

[Jeremy Quin]

I would welcome the opportunity to speak to my hon. Friend about any amendment he might table, and we would, of course, look at it seriously. I recognise the general point that this country has realised, as have all our friends, through covid and subsequently that it is incredibly important to understand our supply chains and to understand where our procurement comes from. The Bill will help us do that by enabling us to look through the entire supply chain—not just the top level, but deep inside—to make certain that we are able to stop suppliers that are effectively in misconduct, and to make certain that resilience is part of our thought process in procurement. I believe all those valuable assets are incorporated in this Bill, but I am more than happy to have further discussions with my hon. Friend.

I hope the House will forgive me if I make a little progress. Running through this Bill is a theme of greater transparency. Through the Bill, we will deliver world-leading standards of transparency in public procurement. It covers contracts awarded across the public sector, including by central and local government, arm’s length bodies, education authorities and health authorities. It also covers contracts awarded by publicly funded housing associations and by companies in the water, energy and transport sectors.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The Minister is being generous in giving way. Can he indicate whether the Government will accept the amendments made in the other place requiring contracting authorities to maximise environmental benefits when awarding contracts, and particularly to ensure compliance with the Climate Change Act 2008 and the Environment Acts? Does he accept that that should not be optional, as the climate emergency is so urgent that it ought to be required by this Bill?

[Jeremy Quin]

That urgency is why we have published procurement policy notes on our commitment to net zero, just as we have published them on social value. We are keen for the Bill’s wording not to be very prescriptive, because the Government will have to announce procurement policies from time to time. I totally accept that there is a case for ensuring that our net zero commitments are met, but putting them in the Bill, which would create a big, laborious process for SMEs and procurers, be they local councils or central Government, is not the right way forward.

This Bill sets out a strong framework that gives us far more powers, but it is then open to the Government to set out, through a national procurement policy statement, the focus on social value or environmental concerns. I hope the hon. Lady accepts that the procurement policy notes we have already published show our commitment to doing just that.

--- Later in debate ---

[Angela Rayner]

I say to the right hon. Member that we do not have a system that works. That is pretty clear to me because we can see the disastrous waste that currently happens in the system, and because companies that should be rewarded with contracts are not, while others get around the system.

I think we should go further still by finally shedding light on the amount of taxpayers’ money being shelled out to tax havens. Labour will push for the Bill to introduce full transparency about whether suppliers pay UK taxes, as well as public country-by-country reporting by multinational corporations. A Labour Government would go further by using public procurement to drive up standards of responsible tax, including by asking big corporations and businesses publicly to shun avoidance and artificial presence in tax havens.

Transparency is not just a nice thing to have; it actually saves money. A lack of transparency in the procurement system reduces competition and increases costs, leaving the taxpayer to shoulder the burden, so the adoption of open transparent contracting makes good financial sense. It leads to a more competitive procurement process and, ultimately, to cost savings.

As I said earlier, being granted public money is a privilege, and suppliers should in turn uphold the highest standards in the workplace. The Bill is an opportunity to drive up standards across the economy and ensure that public procurement is used as a means to promote decent work throughout supply chains and to reward businesses that treat their workers right. We must back the workers and the employers who create Britain’s wealth by using procurement to raise the floor on working conditions for all. I hope that the Minister will engage openly in Committee with proposals to include good work and the promotion of quality employment as strategic priorities.

That brings me to outsourcing. This Government have become too dependent on handing away our public services on the cheap, and we are all paying the price. It is ideological and not based on sound service delivery. The Bill presents an opportunity to introduce measures to end the knee-jerk outsourcing trend and to ensure that, before any service is contracted out, public bodies consider whether work could not be better done in house. When I worked in local government, we coined the phrase “not outsourcing but rightsourcing”. That is what a Procurement Bill should facilitate.

The pandemic showed us that a decade of Tory Government had shattered the resilience of British businesses and services and of our local economies. Instead of handing out billions to British firms to deliver services, jobs and a better future, big contracts were given to Tory cronies and unqualified providers. The Tories eroded standards at work, encouraging a race to the bottom.

But it does not have to be this way. From the Welsh Government and London’s Labour Mayor to local governments in Manchester, Southwark and Preston, Labour in power is showing that things can be done better. What we need is a public procurement policy that the public can trust and that will make winning contracts a force for our country’s good. Not more sticking-plaster solutions but a Bill that will restore trust in the way public money is spent.

[Caroline Lucas]

I was trying to time my intervention for just as the right hon. Lady was finishing her remarks. Before she finishes, does she agree that one of the reasons why procurement is so brilliant is that it has a vital role to play in greening our economy? Again, the Bill does not go far enough on that. In particular, it does not include scope 3 emissions in supply chains, and the Government will not meet their own net zero targets unless they start accounting for those emissions. Does she agree that that is a big hole in the Bill?

[Angela Rayner]

Absolutely. I listened to the Minister’s response to the hon. Member’s question earlier, and it showed a lack of ambition. Those of us concerned about environmental factors, as we all should be, are also concerned that the Minister is not putting the necessary gusto into the Bill to ensure that those issues, including meeting the net zero targets, are really factored in. I hear a lot of words, but when it comes to the legislation that will enable us to do that, I do not see the practice being delivered. The next generation will hold the Government to account for the disaster they will be given if we do not act now. We know what the science says and what needs to be done, but this Bill does not do enough to ensure that it happens.

I want a Bill that will restore trust in how public money is spent, will have social and environmental factors in it, and will make British industry the best it can be so that workers in this country get the best they can get. I urge the Minister to use this opportunity to plough taxpayers’ money back into local communities so that we can make, buy and sell more in Britain, claw back our money when it is wasted, and outlaw VIP lanes once and for all.

Procurement Bill [Lords]

Caroline Lucas Excerpts

Report stage
Tuesday 13th June 2023 Commons Chamber

[Danny Kruger]

My right hon. Friend makes important points, and I recognise the difficulty of comparing our productivity figures with those of other countries. The comparison I am making is with our own recent history, but he is absolutely right in what he says. Indeed, the point about what is measured matters enormously. In our debates, we often make the mistake of thinking that the only things that matter are those that can be easily quantified. That is a great challenge we face, particularly in the social sector.

The Government are rightly committed to improving the efficiency and productivity of the public services—I absolutely support them on that—but we face another great challenge that does not get enough of a mention: the need to reduce demand on the system as a whole. We are spending so much not just because we are inefficient, but because the demand on the system is so high. I do not need to run through all the details of the enormous budgets we spend on social breakdowns and the consequences of social problems that we should have averted, in criminal justice, in the health budget, in what is called “social protection”. Some £150 billion is categorised under “social protection” in the public finances—not pensions, but paying for people who have tough lives. We should be seeking to reduce the cost of those budgets, because each one of those costs represents, in a sense, people in trouble. Both for financial and social reasons, we should be trying to reduce that expenditure.

How do we do that? We need social reform. I am not going to bore the House with long thoughts on that, but we need public sector reform, as has been mentioned a bit today, and that includes procurement reform. I acknowledge what Labour is suggesting in some of its amendments and in some of the speeches we have heard: an objection to the whole model of outsourcing. I recognise the objections to some of the failures of public service management—new public management—over the past generation, and some of the challenges of outsourcing and of competition in the public sector or for public services. However, I do not think insourcing everything is the answer. Reverting to a pre-1990 model of everything being delivered by the central state, as one of the amendments and Unison are championing, is not the right model. We need a better model of outsourcing that relies much more on civil society and, in particular, on the local, community-based services in which the UK is so rich and which do such a great job. We need to be able to measure their value properly and commission their services effectively. That is what this Bill aims to do.

I declare an interest, in that I set up and ran for many years projects working in prisons and with youth services. I have personal acquaintance with the challenge of EU procurement, not only social fund commissioning, but central and local government contracts. None of this is easy and I am familiar with all of that. I am familiar with the frustrations of getting on the frameworks; expressing interest; bidding through tenders; and being treated as bid candy on a long contract. I am also familiar with going through a pointless competition process where there is only one obvious provider—the one that helped to design the service—which still has to jump through loads of competitive hoops only for some other random provider to come in and swipe the contract; I speak bitterly from experience. The challenges that small social enterprises face are significant.

The difference between procurement and commissioning is not often acknowledged. We often have procurement departments doing work that is too complicated for them on their own. We need to have proper commissioning where people who are paying for a service work collaboratively with providers, stakeholders, service users and other parts of the system. Everybody needs to bring their assets, resources, skills and experience to co-design the service that is needed locally. The Bill brings us much closer to that model. I greatly welcome the measures that have been included, especially around the simplification of tendering. The single portal is an important development and it is good for transparency as well. The Tell Us Once registration is essential, as is the help that will be given to SMEs and social enterprises, including the active reduction in the barriers to tendering, lower reporting requirements and so on.

Most of all there is the shift from the most economically advantageous regime to the most advantageous regime. That small excision of the word “economically” is an important recognition of the point that my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) was just making about the need to go beyond a purely commercial estimation of the value of social projects. I would go further. In 2020, I wrote a report for the Government who were trying to maximise and sustain the enormous contributions that communities were making during the first lockdown. I suggested that we recognise and declare that the whole of Government commissioning—the whole of public service spending—is to deliver social value for the public. Essentially, that is what we all believe and it should be stated much more explicitly in my view. I just bring the House’s attention back to the Conservative Government’s Social Value Act 2012, which gets those principles right.

I recognise that we need to take enormous steps forward. I honour what the Government have been doing around national security. I also honour the steps that have been taken to ensure greater opportunities for SMEs and social enterprises, and I commend the Bill to the House.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I wish to associate myself with the remarks made by hon. and right hon. Members across the House about the dangers of sourcing from high-risk countries and parts of countries and those implicated in serious human rights abuses. The appalling persecution of the Uyghurs in Xinjiang is a very powerful case in point that has been echoed by many Members around the House, and I agree very strongly with that.

I rise to speak to amendment 60 and new clause 17. I welcome the provisions in the Bill that aim to help small and medium-sized enterprises to access public contracts. SMEs are often best placed to meet the needs of the communities in which they operate, providing numerous social and economic benefits. Those benefits, often referred to as a social value, cannot simply be reduced to a tick-box exercise. Nor can we allow social value to amount only to crumbs of compensation from corporate giants, while they extract wealth from our communities. Wider economic, social and environmental priorities need to be built in from the start of every procurement process.

The UK spends about £300 billion a year on public procurement. We could question whether that is a good thing. That has already been hinted at—whether some of these services at least would be better off delivered in-house by public bodies themselves rather than via contracts. However, this is probably not the place to go into that debate. I want to focus on the need to use that procurement spend as a force for good—to keep wealth in local economies, to ensure that public money goes to responsible companies and not those that exploit people and nature, and to help us meet our climate goals and to preserve a liveable future for all of us. I want to see values, not just value, at the heart of the public procurement process in public life.

That brings me to amendment 60 on the national procurement policy statement, which sets out the strategic objectives that the Government want public procurement to achieve. The amendment would require the Government to assess and report on the impact of the national procurement policy statement on meeting environmental and climate targets and to set out any steps that they intend to take to meet them.

Thanks to the efforts of climate campaigners across the country, we are now seeing the net zero goal and the need for climate action acknowledged in strategies and policy statements across the public sector. But these acknowledgements remain meaningless unless we assess the real world impact of those statements. Are our plans to reduce emissions actually being implemented and are they working? The amendment would signal to contracting authorities and businesses that the Government are serious about aligning procurement with climate and environmental goals. It would also enable Government to see where policy might need to be strengthened if it is not having the intended impact.

New clause 17 would require public contracts that include the supply of food to be aligned with nutritional guidelines and to specify options suitable for a plant-based diet. We know that animal agriculture is one of the largest contributors to global heating and biodiversity loss, representing around 15% of all greenhouse gas emissions according to the United Nations Food and Agriculture Organisation. More and more people are choosing to move to more plant-based eating and almost one quarter of people in Britain now follow a mainly or entirely meat-free diet.

The 2022 progress report to Parliament by the Climate Change Committee urges the Government not to ignore the role of diet and notes:

“Government can influence diet shifts, through mandating plant-based options in public settings”.

My amendment would require public contracts for the supply of food to be in line with the Eatwell Guide, which drew inspiration from the nutritional guidance of what was then Public Health England, developed in conjunction with the devolved nations. Analysis by the Carbon Trust found that, thanks to lower consumption of meat, dairy and sugary foods, the environmental footprint of the Eatwell diet is around one third lower than the current national diet.

In settings such as hospitals and schools, where good nutrition can make all the difference, our public sector should lead the way by offering nutritious and sustainable food. That is too often overridden by a narrow notion of value for money, resulting in vulnerable people being given food that does not meet nutritional guidelines. As we all remember, during the pandemic the Government were forced to U-turn on school meal vouchers after widespread outrage at the poor quality and quantity of food being distributed to families. That was not just one isolated failure; it was symptomatic of a political culture that thinks we can package up children’s nutrition, health or any public service and hand it over to whichever corporate giant says it will do it most cheaply. That is the culture that has to change.

Last year the all-party parliamentary group on the green new deal, which I co-chair, produced a report setting out how local community-based solutions are key to climate action. As part of that inquiry we heard from the Sustainable Food Places network, as well as from community farms and kitchens. A key recommendation that came up again and again was to use the procurement system to support more local food and plant-based diets.

The Government’s own food strategy proposes a target of at least 50% of food spend to be on food produced locally or to high environmental standards, a move I certainly applaud. However, nine months on from the Department for Environment, Food and Rural Affairs consultation, we are still awaiting the Government’s response.

Pioneering local authorities and public bodies are leading the way, and my constituency has had some notable successes. In 2020, Brighton received the first-ever Sustainable Food Places gold award. It has brought in improved standards for procurement as part of a wider campaign to get more people eating more vegetables and its school food supplier meets the Food for Life gold standard for championing healthy, local, climate-friendly food.

A more joined-up approach to food, climate and nature and a real commitment to supporting local businesses and community organisations would have huge benefits for our health and our local economies. In addition to the provisions in this new clause, I would therefore hope to see much more support for public bodies that want to put social value at the heart of procurement, to help them to find out how best to get sustainable food from local producers into public sector canteens.

[John Penrose (Weston-super-Mare) (Con)]

I rise to speak to my amendment 68, which was tabled with not just my signature on it, but those of the Chairman and the deputy Chairman of the Public Accounts Committee.

The amendment is about value for money and evaluation. We have heard during the course of this debate that this excellent Bill, which covers an enormous amount of much-needed reform in this area, deals with about £300 billion-worth of taxpayers’ money every year. That is a vast amount of cash and it is vital that we spend it as effectively as we possibly can. It matters not just for the value for money that taxpayers get, but for the efficiency and effectiveness with which our public services are delivered. That ought to be a compelling dyad if there ever was one.

The aim of amendment 68 is to achieve that evaluation, which we have already heard about from the Chairman of the Public Accounts Committee. I stress that this is not just a cross-party amendment, with support from both Labour and Conservative Members and from the cross-party Public Accounts Committee. It also has a very unusual political coalition behind it, which includes not only the Centre for Policy Studies, the TaxPayers’ Alliance and the Adam Smith Institute—all good, solid free-market, centre-right think-tanks—but Transparency International, Spotlight on Corruption, the Campaign for Freedom of Information and the Centre for Public Data. In other words, it is a very unusual political coalition, backing something because it is right in principle and because it yields better value for taxpayers’ money.

I urge Ministers to give the amendment much closer attention. I appreciate that it is different from the equally important questions that we have also addressed during the course of this debate, about exploitation of workers, exploitation of Uyghurs and human rights abuses around the world. However, domestically, in the middle of a cost of living crisis, it really matters to everybody in our constituencies, the man and woman in the street and hard-working families up and down the country and it can make a prompt difference.