Local Government: Ethical Procurement

Chloe Smith Excerpts

Tuesday 15th March 2016 Westminster Hall

[Richard Burden]

I am afraid that my hon. Friend’s experience rather mirrors mine and that of a number of other hon. Members.

[Chloe Smith (Norwich North) (Con)]

This point is merely about the mechanics of parliamentary time. I simply wonder whether the hon. Gentleman knows how many procurement policy notes there have been in 2014, 2015 and 2016, and how many of those have merited parliamentary scrutiny in their own right.

--- Later in debate ---

[Chloe Smith (Norwich North) (Con)]

Thank you, Mr Speaker—I mean Mr Streeter—for calling me to speak. Aside from promoting you, I congratulate the hon. Member for Birmingham, Northfield (Richard Burden) on having secured this debate.

I will take as my starting point the wisdom that regularly emerges from the mouth of the hon. Member for Ealing North (Stephen Pound), for whom I have great respect. He said that the issue was not about any one country’s policies but about local government powers. I believe that it is wrong for councils to attempt to use local government pension funds and procurement practices to make their own foreign policy.

First, it is wrong because foreign policy is reserved to Westminster as a matter for national Government. Having policy made in town halls can damage foreign relations, to the detriment of Britain’s national and international security.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

Will the hon. Lady give way?

[Chloe Smith]

Perhaps the hon. Gentleman will be quick because I have only four minutes.

[Tristram Hunt]

Does that principle extend to banning city councils, for example, from giving the freedom of their cities to notable figures from abroad? Would that fall within her ban on a foreign policy for local government?

[Chloe Smith]

If the hon. Gentleman will wait for the rest of my speech, he will hear that I intend my contribution to be about council expenditure of taxpayers’ money. I know that Labour Members are not so hot on the expenditure of taxpayers’ money, but perhaps he will allow me to make the rest of my comments.

[Mr Andrew Turner (Isle of Wight) (Con)]

Will my hon. Friend give way?

[Chloe Smith]

I am sorry, but I must continue because there is so little time left.

My second reason for believing that it is wrong for local government to make their own foreign policy is that local boycotts in and of themselves can damage integration and community cohesion. That is highly unfortunate.

Thirdly, to attempt to hold an item of foreign policy locally is likely to be unlawful. I do not know whether the hon. Gentleman found it impossible to read procurement policy note 01/16, but I took from it very clearly that EU and UK procurement legislation, backed up by the World Trade Organisation, can result in severe penalties against the contracting authority and the Government. That takes me on to my answer to the hon. Member for Stoke-on-Trent Central (Tristram Hunt). It is at the heart of this debate that we should not seek to put taxpayers’ business rates or council tax at risk of substantial fines that could arise from unlawful treatment of suppliers. The Government are very clear in the note that they will always involve the relevant contracting authority in these proceedings, so there is nowhere to hide.

Finally, the other reason why such a policy is wrong is that it does not provide taxpayers with value for money. Procurement is quite simply for purposes other than political. It is the act of buying something because taxpayers need it, not because the council leader wants to wear a particular political pin badge that week. I want local taxpayers’ money to be used for the goods and services that they need, and only for what they need.

I do not know whether the Labour party really thinks there is any money to spare after they left the cupboard bare, but until public finances are back in order, the job in hand is to get the best deal for taxpayers. What I want in local procurement is the best possible value for money from the total spend, which may amount to tens of billions of pounds; a strategic approach to procurement rather than political whim, which may be ultra vires; reduced procurement bureaucracy, such as the welcome removal of pre-qualification questionnaires for low-value contracts and standardisation for high-value procurements; sound commercial and contract management of that spend; accountability for the services or goods bought; wherever possible, local SMEs benefiting from spending decisions because that value stays in the community and can often provide huge innovation; and prompt payment to contractors. Why do I want those simple goals? Because when budgets are squeezed, local taxpayers should come first. Every public body should do better for the British economy and not be distracted elsewhere.