Infrastructure Procurement

Dave Doogan Excerpts

Monday 19th February 2024 Commons Chamber

[Alan Brown]

I agree with the hon. Member wholeheartedly. The Faroese have to be commended for the work that they have done on transport connectivity. There are certainly some lessons that Transport Scotland can learn from that. Perhaps we need to be bolder going forward in terms of what transport connectivity looks like in Scotland.

I shall briefly return to the ferries. It is quite clear from what I have outlined that there has been well over £100 billion in overspend across a few UK projects. The overspend on the ferries in Scotland suddenly becomes loose change down the back of the couch in comparison. Indeed, the overspend in capital costs of the ferries is equivalent to the money given to PPE Medpro, for which Baroness Mone received a healthy £20 million dividend. Indeed, it was the UK Government who awarded a ferry contract to a company with no ferries for £33 million. That puts a lot of things in perspective.

The reality is that the ferries in Scotland are a microcosm of the failures of so many UK Government major programmes. In Scotland, there was the political intervention to rightly save commercial non-military shipbuilding on the Clyde. However, the actual procurement process seems to have been too rushed. It was inadequately specified by Caledonian Maritime Assets Limited and then all the numerous changes to design increased the costs. That is what happens time and again in major infrastructure projects. We really must look at some of those in more detail, study what went wrong and see what needs to change going forward.

Let us start with HS2. The original business case and proposals were for it to extend to Scotland to help with a modal shift away from flying. This was to improve business productivity, which was based on assumptions that getting to London quicker limited down time, without considering the fact that many people now work on the move anyway.

Through time, the argument was then advanced that HS2 was needed to free up capacity on existing lines, particularly the west coast main line, thereby creating more capacity for both passenger and freight services. That principle is fine, and getting more freight delivered by train is good for decarbonisation, but what the different arguments and analysis mean is that there was never an established rationale for the key outcomes for HS2. That has made it easier, as part of the inherent north-south bias of a London Government, to make phase 1 of the project the London to Birmingham link, and to make that the most important aspect.

[Dave Doogan (Angus) (SNP)]

My hon. Friend touches on HS2. I know that he will speak about many more projects, but this is a gusting £100 billion project that was designed to connect the whole length of Great Britain. We knew that we were getting nothing out of it in Scotland. Manchester is disappointed, because it thought that it was getting something out of it. Birmingham was the best connected city to London anyway; it now has another railway line, but one that does not quite make it to London. My constituents in Angus will be footing £92 million of the £100 billion. We could do with a link to Laurencekirk. We could do with fixing the erosion on the Montrose Links. We could do with getting better flood defences in Brechin. We do not know where that money will come from, but we still have to fund £92 million of HS2. Does my hon. Friend think that that is right?

[Alan Brown]

I wholeheartedly agree with my hon. Friend. It is almost like, when we look back historically, the oil and gas revenues paid for HS1 and the channel tunnel, but at the time we were assured that there would be a spur up the east coast and a spur up the west coast of high-speed rail. Now, all these decades later, we still do not have the promised spine, but as he rightly says London and Birmingham are getting better connectivity, even though there is some ambiguity about where the line will terminate in London.

We were told not to worry, and that the Birmingham upgrades would still mean much quicker journey times from Scotland to London. We were assured several times that trains will run from London to Scotland on day one of HS2 services, even though they will be going from Birmingham. Sure, trains to Edinburgh and Glasgow will run, but they are intended to run as one service stopping and decoupling at Carstairs. That is just deemed a minor inconvenience for those of us travelling to and from Scotland.

When HS2 looked at the purchase of rolling stock, the key decision was made that they had to be the quickest high-speed trains. That means that when that rolling stock accesses the existing tracks on the west coast main line, the trains will go slower than existing Avanti west coast services. Not only will we not get high-speed rail to Scotland, we will get a poorer service from the new high-speed rail once it is running on the west coast main line. How can that be a logical proposal for the most expensive infrastructure project ever undertaken by a UK Government?

--- Later in debate ---

[Dave Doogan]

Is my hon. Friend concerned, as I am, that the UK Government—specifically, the Treasury—seem not to have any concern for nuclear overspends? When it comes to nuclear, regardless of whether it is civil or military, there is no shortage of UK Government funding, yet all across GB there are plans for massive pylon lines going through communities. The pylon lines could be offshored but have to be done at the lowest possible cost, which means overhead lines. There is no parity between nuclear and anything else. Everything else is bargain-basement, Treasury Green Book “let’s screw the contractor down to the very lowest price”, except for nuclear.

[Alan Brown]

Again—no surprise—I wholeheartedly agree with my hon. Friend. It is classic “penny wise, pound foolish” all the time, particularly when it comes to nuclear. The Government are kidding themselves about nuclear, because they still estimate that Sizewell C will cost only £20 billion. We already know that Hinkley, which is the model for Sizewell C, is costing nearly £50 billion, so why pretend that it will cost only £20 billion? They are setting their stall out wrongly and have a blinkered approach that suggests we somehow need nuclear, when clearly we do not actually need it. What they should be investing in is renewable energy, storage systems and, as my hon. Friend says, much better grid infrastructure as well.

--- Later in debate ---

[Alan Brown]

I absolutely agree. It goes back to the fact that an independent country making its own decisions would plan strategically and be able to borrow money accordingly. Quite often, borrowing for infrastructure leads to the kind of circular reinvestment in job creation that is a win-win.

If we look at roads, we see that it was the SNP that finally delivered a continuous motorway between Edinburgh and Glasgow. The M74 and the M80 have been completed, as has the Queensferry crossing. Yes, if we listen to the headlines, the A9 has clearly been delayed: a much more realistic programme for the A9 should have been developed before now, and Transport Scotland should also have heeded industry concerns about its bespoke contract models making it difficult for contractors to bid. However, the reality is that the SNP Government have delivered on a limited budget, and while the Tories demand more and more, they are also content with the capital allocation being cut over the next two years.

[Dave Doogan]

I am glad that my hon. Friend has mentioned the A9. Under the Scotland Office, prior to devolution, it came to an abrupt halt at Luncarty, with sporadic dual carriageway between there and Inverness. Like the Borders railway, when the SNP said that we were going to dual it, the Tory Opposition in the Scottish Parliament—having done nothing about it themselves—immediately insisted that we were not doing it quick enough. Does my hon. Friend agree that the problem is that there is such a lack of capital infrastructure investment across these islands that, when it comes to major projects such as the dualling of the A9, it is so difficult to mobilise the expertise, skills, contractors, and plant and machinery? There just is not the culture of investment in the United Kingdom that other European nations demonstrate.

[Alan Brown]

Absolutely. I have long said that when oil was discovered in the north-east of Scotland and the Port of Nigg was developed as a strategic port, any normal country would then have invested in the infrastructure in between. That is when the A9 should have been dualled—when the oil and gas revenues were piling in, and we were using the north-east of Scotland to facilitate that. There should have been a motorway built to Aberdeen, the oil capital of Europe, but the UK Government did not think of upgrading the road or train network to Aberdeen. It is utterly bonkers.

That “bonkers” brings me to the fact that the UK Government are now supposed to be delivering a levelling-up agenda. As we have just heard, that agenda has certainly bypassed Scotland for long enough, but it is another example of political aspirations and a desire to be seen throwing some money about, instead of actually having a coherent strategy based on needs. The UK Government’s levelling-up strategies have imposed strict spending timetables and budget caps that do not allow for inflation, meaning that councils that have been allocated money now have to come up with additional money themselves or cut back on those so-called levelling-up projects, which kind of defeats the purpose of allocating money for those projects.

When we look at projects in the round, it is also critical that the correct funding mechanisms are in place. Labour gave us the private finance initiative model, which proved to be a boon for hedge funds but a complete rip-off for the taxpayer. Again, the SNP Scottish Government learned the lessons from that model and implemented the non-profit distributing public-private partnership model, limiting profits and allowing much greater expenditure on capital projects while not tying hands with revenue budgets.

--- Later in debate ---

[Alex Burghart]

I am extremely sorry that the hon. Gentleman missed every single stage of the Procurement Act 2023. We have created a brand-new regime in consultation with businesses of all sizes, who absolutely welcomed the decisions that we have made that will reduce bureaucracy and make it easier, removing the hurdles to small and medium-sized enterprises. That is why when we did our consultation it was very warmly welcomed, because people could see it would reduce the costs of entering procurement and reduce the barriers to those businesses getting a share of that public money. I have to say it was welcomed on both sides of the House, by both—[Interruption.] The hon. Member for Kilmarnock and Loudoun (Alan Brown) can refer back to Hansard in his own time, but, having explained how it improves—

[Dave Doogan]

Will the Minister give way?

[Alex Burghart]

I am still answering the previous intervention so the hon. Gentleman will have to wait. [Interruption.] I have got all night; I have had my supper and I can talk about this. The hon. Member for Kilmarnock and Loudoun would like us to rehearse everything we went through in the Procurement Act; if he wants to go back and look at it, he will discover that the Act makes it possible for—[Interruption.] The Act makes it possible for—

[Alex Burghart]

That is because I have been interrupted many times, but I am happy to repeat the first clause of my sentence over and over again until the good gentlemen are ready to put a sock in it, but if they are not, I am not hungry and I am not tired and I am happy to fill up column inch after column inch of Hansard with this rubbish.

If the hon. Member for Kilmarnock and Loudoun wants to go back and look at the debates that we had in Committee and on Report he will understand that it is possible for both contracting authorities and suppliers to work through pipelines and framework arrangements that make it easier for suppliers to see what business is coming forward and make it easier for them to prepare, with the result that the conversations that he alluded to between contracting authorities and suppliers happen earlier and contracts are more appropriate and less likely to break down. That is one reason why the legislation we brought through the House was so widely welcomed by businesses and by contracting authorities.

I am very pleased to say that we are making great progress towards introducing this new regime in October. We have a huge plan of learning and development that will be going on across the country. We have a new digital online platform for procurement which is being built and which is eagerly anticipated. We are also constructing the new national security unit for procurement, which will make sure that it is much harder for hostile actors to enter sensitive parts of our supply chain. It is a really great achievement.

In addition to this fantastic new legislation that was brought in following wide-ranging public consultation and stakeholder engagement, we have brought forward legislative proposals to establish the new regime. These measures and the training we will roll out to support them will deliver greater value for the public purse not just in infrastructure, with huge road and rail construction projects, but across public procurement from IT software by the NHS to services by local councils.

[Dave Doogan]

Will the Minister give way?

[Alex Burghart]

In a moment.

On value for money, the Procurement Act 2023 provides greater flexibility to contracting authorities to design efficient, commercial and market-focused competitions, and removes overly prescriptive rules contained in the existing regulations in a way that simply could not have been done while we were in the EU. The 2023 Act also embeds transparency throughout the commercial lifecycle, and we will ensure that the spending of taxpayers’ money can be properly scrutinised. With more consistent commercial data, we will see increased competition, collaboration and accountability.

The 2023 Act confirms that value for money remains paramount during contracting, while also encouraging buyers to take account of relevant wider social and environmental considerations that the supplier may bring. That goes alongside the construction playbook, which is one of four sector-specific commercial playbooks produced by the Government and designed to improve how we assess, procure and manage Government contracts to maximise value for money and deliver better outcomes. Those playbooks are systematically changing how we approach risk, sustainability and innovation across portfolios, projects and programmes, with the goal of creating productive, profitable, sustainable and resilient sectors.

The construction sector faces unique challenges, and the Government are committed to updating the construction playbook annually in collaboration with Departments, arm’s length bodies and, critically, industry. The Infrastructure and Projects Authority also applies oversight, scrutiny and support to the most important major projects being delivered by Government. As well as tracking performance data on projects on the Government’s major projects portfolio, it provides independent gateway assurance reviews, expert advice and support on the project delivery, commercial, financial and sector-specific aspects of major projects.

The IPA’s standards, tools and training for the Government’s projects help ensure that projects are set up for success, including delivering to cost. The IPA’s expert advice, cost estimation guidance, transforming infrastructure programme and the development of the benchmarking hub are already helping to reduce the costs of projects.

You would think, Mr Deputy Speaker, that hon. Gentlemen on the Opposition Benches who profess to care about procurement, value for money and timeliness would be chomping at the bit to be involved in this work. Alas, no. When the moment came, when they were given the opportunity to sign up to the new procurement regime that delivers all those things, what did they do? They slunk away. They snuck back to their dark corners. They were frit of change and frit of opportunity. Instead, they stuck with the old ways—the bad ways that have led previous Governments into failure. They did not want success; they wanted to stick with failure. That is to the loss of the Scottish people. The good people of Northern Ireland joined our regime. The great people of Wales did the same, and the poor small and medium-sized enterprises in Scotland will be deprived of access to our brand-new regime. That is why we know that the hon. Gentlemen do not take this issue seriously.