Procurement Bill [ Lords ] (Fifth sitting)

Chris Evans Excerpts

Committee stage
Tuesday 7th February 2023 Public Bill Committees

[Kirsty Blackman]

I agree and would add to that: how many former treasurers of the Conservative party who have given significant amounts to the party have just happened to end up in the House of Lords? Who knows how that has happened? We know that there are people in this House and in the other place with significant business interests, and the amendment is not a criticism of that; it is not a negative thing, but it is about ensuring transparency.

[Chris Evans (Islwyn) (Lab/Co-op)]

The nub of the issue is that people have been appointed to the House of Lords and, in a particular case—I do not want to mention the name—they are not then taking an active part in proceedings in the other place. We could mention a number of peers who have hardly spoken since they were appointed, or not spoken at all. Rather than using that position to serve the Executive of this country, they have used it to lobby for contracts from the Government. That needs to be stamped out. Does the hon. Member agree that it is now time to look at how we appoint people to the Lords, and perhaps remove appointment to the Lords from the honours system altogether?

[Kirsty Blackman]

I absolutely agree. Each former Prime Minister is able to put forward whoever they want to the House of Lords, so we end up in this situation of having 850 peers and counting. The numbers are increasing drastically because the Government keep putting in more people to balance the politics in that place.

On the amendment, it is important for the Government to be willing to consider how best to improve transparency. So far, they have shown no willingness to improve transparency or to accept that there have been issues and that mistakes have been made. We need to change the system.

The UK has fallen in Transparency International’s corruption index, which has nothing to do with the Financial Action Task Force one. The FATF index is about corruption when it comes to money laundering, but Transparency International’s is about corruption in the public sector. It looks specifically at such issues as breaches of the ministerial code—in particular, ones that have not been investigated—and the scandals we have seen and continue to see.

The Prime Minister cannot keep sacking people who breach the code; we need to change the system so that they never get to that position in the first place—so that they can never commit the egregious breaches of trust we have seen and can never profit as individuals as a result of their position in this place or the other place. If the rules and systems are changed—which they clearly need to be—the Prime Minister will not need to sack people, because they will never be able to breach the rules and will never be able to profit as individuals simply as a result of their links to this place.

I will push amendments 103 and 104 to a vote when we come to that point and am happy to support amendment 111, tabled by the Labour Front-Bench team.

--- Later in debate ---

[Chris Evans]

I beg to move amendment 4, in clause 52, page 35, line 23, leave out “£5 million” and insert “£2 million”.

This amendment would reinstate the threshold for the setting and publication of key performance indicators for major projects at £2m.

[The Chair]

With this it will be convenient to discuss the following:

Government amendments 75, 78 and 80.

Clause stand part.

[Chris Evans]

I outlined the importance of transparency and accountability in a previous debate on procurement. Our amendment 4 is an attempt to strengthen that further and to reinstate at £2 million the threshold for publishing contracts in major projects. I noted previously that the financial threshold was raised in the other place and that the Minister could not explain why £5 million was decided on. If the Bill is an attempt to make procurement more transparent, we have failed at the first hurdle.

On Second Reading, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), the deputy leader of the Labour party, said:

“Being granted taxpayers’ money is a privilege.”—[Official Report, 9 January 2023; Vol. 725, c. 353.]

I remind Government Members that their long-departed leader, Lady Thatcher, once said that it is not the Government’s money, but taxpayers’ money, and that every penny should be accounted for. I am looking at the Minister and hoping that I got that quote absolutely right—I am sure he will correct me if I did not. I believe that is true no matter the sum of money. Every pound represents the work of hard-working people across the country, and we—particularly those of us who serve on the Public Accounts Committee—should be mindful of that.

That is why contracts awarded at £2 million should have the same scrutiny as those worth more. Figures such as £2 million are often bandied about—we hear the value of transfers in sport—but that is still a considerable amount of money. If we are truly committed to reducing waste in procurement, we need more transparency throughout. Introducing key performance indicators at a lower threshold would signal to businesses that the UK requires value for money, and efficiency, from every procurement contract.

While I appreciate that the Government have stated that the changes to the threshold are to reduce any administration requirements, and to address concerns raised by the Local Government Association, the lack of transparency around how the threshold was decided has made me understandably cautious. Transparency and value for money must be priorities when spending taxpayers’ money. Increasing the number of contracts that are scrutinised by requiring key performance indicators would allow for transparency at all stages of a contract’s lifecycle and hold businesses to account on issues of social value.

When we are in the midst of a climate crisis, it is necessary to ensure that suppliers are actively working towards the UK’s net zero commitments. When industries across the country are facing a skills gap, it is necessary to ensure that businesses are committed to apprenticeships and training new generations. And while the country continues to face a cost of living crisis, it is necessary to ensure that jobs across the supply chain are protected.

[Alex Burghart]

There are few rarer treats than hearing an Opposition Member quote Baroness Thatcher. I am sure the hon. Gentleman will have reflected on, and enjoyed, the fact that she also said, “The problem with socialism is that you quickly run out of other people’s money.”

However, the hon. Member’s probing amendment is fair enough, and it is important that we discuss this issue. Hon. Members will recall that the Bill as introduced had a threshold of £2 million for the publication of KPIs on public contracts, but that the threshold was increased to £5 million in the House of Lords as part of a package of measures designed to reduce the administrative burden placed on contracting authorities, while still providing increased transparency in respect of larger public procurements.

The current financial threshold balances the need for transparency on KPIs with the costs and burdens of implementing the rules at a lower spend value. To reassure the hon. Gentleman, £5 million, which we have now fixed on, aligns with the thresholds that are used by central Government in the playbook for procurement. It is generally seen as the point where things become more complex. We thrashed out the number based on a lot of engagement with industry, and it was felt that that was an appropriate threshold to ensure that we were not including a lot of contracts with lower complexity.

Turning to amendments 75, 78 and 80, there are a number of places in the Bill where we apply financial thresholds that trigger obligations on a contracting authority. The Delegated Powers and Regulatory Reform Committee recommended that the affirmative procedure for secondary legislation should be applied for a number of those, and we made those amendments in the other place. That ensures greater scrutiny where there is a change in transparency requirements. We also indicated in our response to the DPRRC that we considered that the justifications for that applied equally to the amendment of the financial threshold for the setting and publication of key performance indicators. Amendments 75, 78 and 80 achieve this.

Clause 52 describes a requirement for contracting authorities to

“publish at least three key performance indicators”

for public contracts worth more than £5 million. That is a new requirement and it will ensure that we have visibility of how well individual suppliers are delivering in the public sector.

The clause is intended to bring transparency to the management of significant public sector contracts, allowing citizens and others to see how suppliers are performing. It should also ensure that companies that repeatedly fail to deliver do not win additional business—something that is not possible under the present procurement rules. The requirement does not apply if the contracting authority considers that KPIs are not an appropriate measure of contract performance in a given case. The example we give is of a contract for the one-off supply of goods. That is a one-time action and cannot be measured over time or by varying metrics.

The clause does not apply to the establishment of framework contracts—but it will apply to contracts awarded through the framework—utilities contracts awarded by a private utility company, concession contracts or light-touch contracts. A power is given for an appropriate authority to amend the financial threshold above which KPIs must be published. We have tabled an amendment to make the power to change the threshold subject to the affirmative procedure, so that if this Government or future Governments wish to adjust the threshold, they can easily do so, provided that they have Parliament’s consent.

The overall picture is enhanced by the spend data reporting obligation in clause 70. I respectfully request that amendment 4 be withdrawn.

[Chris Evans]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 52 ordered to stand part of the Bill.

Clause 53

Contract details notices and publication of contracts

[Chris Evans]

I beg to move amendment 26, in clause 53, page 36, line 9, leave out “£5 million” and insert “£2 million”.

This amendment would reinstate the threshold for publishing the contracts in major projects at £2m.

As noted in the explanatory statement, the amendment would reinstate the threshold for publishing the contracts in major projects at £2 million. As I have pointed out, the Government seem to have chosen £5 million as an arbitrary figure. I will not repeat the points I have already made. We do not want to place an undue burden on small and medium-sized enterprises to have to employ costly legal advice to redact sensitive company information. However, I believe that, with sums of more than £2 million, it is completely reasonable to expect transparency.

Trust in Government spending is important to overall trust in Government, especially when they are spending sums of public money in the millions. It is not unreasonable for the public to expect transparency about where their money is being spent, and that the information is readily available and easily accessible. Although I understand the need not to make the process too arduous for smaller businesses, the proper balance must be found.

[Alex Burghart]

The revised threshold of £5 million seeks to ensure that a disproportionate administrative burden is not placed on contracting authorities and, as I have said, it reflects what we have in the playbook. The figure came out of a large amount of engagement with industry. There was recognition that it is around the £5 million threshold that we see additional complexity in contracts. That is why we think that the current financial threshold balances the need for transparency in these important matters with the costs and burdens of implementing the rules at a lower spend value.

It is important to stress, however, that contracting authorities will still be bound by a transparency obligation to publish contract detail notices for contracts above the agreement on Government procurement thresholds, which will contain information on which supplier has won the contract and other information about the contract award. I respectfully request that the hon. Gentleman withdraws his amendment.

[Chris Evans]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Alex Burghart]

Clause 53 requires contracting authorities that enter into a public contract to publish a contract details notice. This is a significant extension of transparency, which will allow interested parties to see details of public sector contracts. The contract must be published within 90 days of the contract being entered into or, in the case of a light-touch contract, within 180 days. The contract details notice will contain information on the goods and services procured, the value of the successful tender and the procurement method used.

The Welsh Government and the Northern Ireland Executive have decided to include a derogation from publication of a contract, which is their right.

[Chris Evans]

Clause 53 sets out the need for the publication of contract details for all contracts over £5 million. According to the Government’s own figures, one in every three pounds of public money—some £300 billion a year—is spent on public procurement. Ultimately, the taxpayer deserves to know that money from the public purse is being well spent.

I know from my time on the Public Accounts Committee—sooner or later, we will start doing PAC bingo, as every time I stand up I seem to mention how long I was on that Committee. I was there for five years. I promise that I am not going to speak for five years, Mr Efford—

[Lloyd Russell-Moyle]

Go on.

[Chris Evans]

Fidel Castro was the master—I think 18 hours was his minimum. If you want me to do that, Mr Efford, I can. With lunch coming up, I think I would be the most popular member of the Committee.

I know from my time on the Public Accounts Committee that transparency leads to improved Government spending. There should be no place to hide poor contract decisions or, in the worst cases, possible cronyism. Unfortunately, there have been several scandals relating to procurement and Government spending. We have already heard this morning about the questions surrounding the procurement of PPE during the pandemic, which led, unfortunately, to the huge sum of £10 billion of public funds being spent on unusable, overpriced and even undelivered PPE.

At a time when so many families are struggling with the cost of living crisis, we cannot allow the public to feel that their hard-earned tax money is not being spent properly, and we all must work to restore public trust in Government procurement. The Government’s own “transparency ambition” document outlines a concerning failure to provide transparency in our procurement system. These reforms are long overdue and I am pleased that we are able to talk about them today. I think we can all agree that it is important that we increase trust in Government, and one of the key ways we can do that is through transparency. Labour would go further in government than the present Conservative Government. We would introduce a Ukraine-style publicly accessible dashboard of Government contracts tracking delivery and performance.

I am pleased that the Government have made some commitments to increasing transparency on large projects. The reforms—particularly the introduction of a number of new procurement notices covering the entire procurement lifecycle from planning through to contract expiry—are a welcome step forward. However, there are a few areas where we need clarity on implementation.

For example, at clause 53(2), the Bill states:

“A ‘contract details notice’ means a notice setting out—

(a) that the contracting authority has entered into a contract, and

(b) any other information specified in regulations under section 93.”

The Minister said on Second Reading that the Government

“will deliver world-leading standards of transparency in public procurement”—[Official Report, 9 January 2023; Vol. 725, c. 343.]

and that there is a

“statutory obligation on the Government to deliver a single digital platform to host this data.”—[Official Report, 9 January 2023; Vol. 725, c. 348.]

However, it is unclear what a contract details notice will look like in practice, and how much detail will be required—in other words, how much transparency will actually be provided. It seems strange that there is no outline of how much data will be provided and what form it will take. I worry that will allow for only the very basic details of public contracts to be provided. Could the Minister explain his understanding of what transparency notices will look like and what information they will be required to contain?

A concern raised by the Local Government Association is that the clause risks contradicting other pieces of legislation, which, in turn, risks the ability to achieve one single digital platform for procurement. The LGA has suggested that the Transport Act 1985, the Service Subsidy Agreements (Tendering) (England) Regulations 2002 and the best value transparency code may have an impact on the implementation of the Bill. Could the Minister tell us whether that has been resolved, or what plans the Government have to ensure that other legislation does not interfere with the implementation of the single digital platform?

Overall, I welcome the goals of the clause, but I feel that it requires closer attention to ensure that it is properly implemented.

11 am

[Alex Burghart]

I am happy to play bingo with the hon. Gentleman any time. One particular game that we might play is to call “Bingo!” every time the Ukrainian digital platform is mentioned, because it has been mentioned several times. And well might it be mentioned, because it is a model of good practice. The hon. Gentleman will have heard me say on several occasions that we were grateful to the Ukrainian Government for coming and advising us on the creation of our own digital platform, which he will also have heard me mention. That platform will be the harbour of transparency, enabling suppliers, contracting authorities, central Government, voters and the press to see what is going on and to hold people to account. It will be a great asset.

The precise details of what needs to be published are not fit to be put in the Bill and the requirements may change over time. However, we will set those details out in due course, and what will drive our considerations when we do so is the ability to hold suppliers and contracting authorities to account.

Question put and agreed to.

Clause 53 accordingly ordered to stand part of the Bill.

Clause 54

Time limits