Infrastructure (South-West)

Debate between David Simpson and Lisa Nandy

Tuesday 24th February 2015 Westminster Hall

[Lisa Nandy (Wigan) (Lab)]

I am grateful to you for chairing this debate, Dr McCrea, and I particularly want to put on record my gratitude to the hon. Member for South West Devon (Mr Streeter) for securing the debate. Although in recent weeks we have debated in this place and the other place the contracting out of services, he has put firmly on the agenda the contracting out of infrastructure, which is becoming much more important. That is especially true at the moment, because as he rightly says, new funding is being brought forward to replace the funding that was lost under Building Schools for the Future, in the education area in particular.

Listening to the hon. Gentleman’s speech, I could feel his frustration at the way the outcome of this process has shut out some of the outstanding construction companies in his region. I think that that frustration is shared in many other parts of the country, particularly by companies that have a strong track record of providing goods, services and contracts in the public sphere and which feel, understandably, that this sends a very strong message to them that their work has not been valued. Although I would not suggest for a moment that the Government have intended to produce that outcome, he is right to put this very firmly not just on the Minister’s agenda, but on my agenda, as the spokesperson for the Opposition.

That frustration is particularly felt in areas of the country where local authorities have pushed ahead with a local procurement agenda that has sought to build on local and regional expertise to ensure that the benefits of those contracts are felt fully in the areas in which they are granted. However, when they look to national Government to do the same, they find that many of those contracts have been awarded to overseas companies, or companies out of the area.

[David Simpson]

The hon. Member for South West Devon (Mr Streeter) made the point that the idea of someone from the United Kingdom getting a contract in France was laughable. That is one of the major problems; other countries practise protectionism. We are not very good at that, and I do not think we should do it, but other countries in the European Union certainly do, and that has a detrimental, knock-on effect on the rest of the United Kingdom.

[Lisa Nandy]

Yes, and in a moment, I will come on to things that the Government might consider doing to strike the balance better in this country, to ensure that we do not shut out some of our best companies with a really strong track record of delivery.

First, I say to the Minister that when commissioning goods, services and big capital projects of the sort that the hon. Member for South West Devon described, we accept that there is a balance to be struck between trying to guarantee value for money and trying to ensure the maximum social and local good. As the hon. Gentleman illustrated well during his speech, those things are often complementary and are not in contrast to one another. That is particularly the case when we look at what has happened to the economy, and particularly regional and local economies, over recent years. It makes a significant difference when services are procured locally and regionally, because that money remains in the region, as he said. Jobs are created and salaries are boosted. Every pound that goes into the pockets of working people in regions such as the north-west or south-west, where he is based, is then spent again in local shops and local businesses, and that cycle of growth continues.

However, in recent years we have seen the opposite. Although I accept that this Government have no huge plans to invest in our regions in the next few years, they have significant spending power; £187 billion was spent by national Government on public procurement in 2012, and I think there may be some more recent figures. That can have a significant impact if it is spent in local areas.

As the hon. Gentleman said, big national contracts are not always value for money. He made the point that many of the construction companies he was talking about have proven track records in his region. We have seen what happens when big national contracts are handed out without a real understanding of local areas. The Work programme was probably the most stark example, but that applies to infrastructure as well. As he said, one of the critical things that the Government could do is think about the impact that procuring services from outside the region has on supply chains, because often companies that come in from outside local areas bring their own supply chains with them.

The Government also need to recognise strongly that at the moment, in the way in which we contract and procure services and goods, there is a power imbalance between the prime contractor and any subcontractors or those providing services as well. A recent example of that was Capita and the civil service training scheme, which the Minister will be well aware of. That £250 million contract was supposed to be about opening up the best deal to the taxpayer, but subcontractors suffered a great deal because of the way in which the terms of that contract were drawn. Even where we decide that we will award contracts to big multinational firms, often based and operating overseas, we need to think much more clearly about how we balance that power relationship and ensure that those further down the supply chain are protected. One way in which we ought to do that is by getting a grip on how payment is made to providers. Quite often, in the procurement that we carry out, that is simply not thought about at the very beginning.

Another way in which the Government could help to move the agenda forward is by concentrating strongly on the expertise within the Government—of which there is a great deal, but it is patchy across different Departments—and on the staffing levels needed. An example of that was the west coast main line franchise, which was a £50 billion contract that was managed in the original instance by just three civil servants.

We think that the Government could do more to think about the wider impact of commissioning and procurement on the public. One way in which they could do that—we would strongly encourage them to do this—is by introducing a public interest test when they are going through the procurement process. We have committed to ring-fencing some contracts for companies in pursuit of a public service mission—that recently became one of the tools in the Government’s armoury. I would be interested to know whether this Government have thought about doing the same.

We are also committed to a community right to challenge where major projects have been announced that do not seem to be of enormous benefit to local areas or regions. It would be interesting to apply that community right to challenge in this case, because I suspect that the hon. Member for South West Devon speaks for many people in his constituency and across south-west England when he expresses anger about the fact that many organisations or firms that could have delivered the projects have not made it on to the list.

One way in which local providers can be of particular help is through their understanding of the local work force. That is one reason why we have given the committed that any national contract or major infrastructure project that is worth more than £1 million will specify that apprenticeships have to be provided as part of the deal. There is a particular benefit from procuring services locally and regionally, because quite often those firms—the sorts of firms that the hon. Gentleman talked about in his speech—will have knowledge of the local work force. They will already be working with education providers and other local businesses to help to provide opportunities for young people. The Minister recently visited the Youth Zone in Wigan, in my constituency, which has a very good record of working with local employers and local education providers to ensure that those links are made. In the case of High Speed 2, that policy would provide 33,000 apprenticeships. We think that the Government could commit to doing that.

It is also important, when commissioning projects and services, to think about the impact on the staff. In recent years, we have seen appalling examples of companies that have been commissioned from outside a local area to provide services. There was an example during the Olympics of a company in the Wigan borough that was commissioned to steward parts of the Olympics. The treatment of the staff in that company was found, when it was investigated, to be absolutely appalling. It was undercutting the minimum wage. There was no regard whatever for people’s terms and conditions, to the extent that staff were made to sleep under a bridge overnight in order to carry out their duties. That case hit the headlines nationally.

There is a particular impact from taking into account the strong and existing ties that local firms have to their own work force. I am thinking of the need to preserve their integrity and reputation. The hon. Gentleman talked about that. When we think about spending very large sums of public money, we should think about the impact on the people who end up delivering the services.

One of the very welcome things that the Government have done is introduce the Public Services (Social Value) Act 2012, of which the Minister’s predecessor but one, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), was a very strong supporter. Recently, the Government published the review of the social value Act to see what impact it has had. The review, by Lord Young of Graffham, unfortunately concluded that it has had a fairly limited impact, but ruled out extending the Act to goods and services, which could have made a huge difference to the sort of commissioning approach that we have heard about today. Surely the ethos of the Act should go beyond the limited scope that it has at present.

I would be interested to know what the Minister plans to do to try to extend the spirit of the social value Act to the sorts of projects that the hon. Member for South West Devon talked about. One point that Lord Young made in the review was that very few public sector commissioners know about the Act, so I hope that the Government will tell us today that they will take up his invitation to promote the Act much more heavily and the principles that lie behind it, because although at present it does not apply directly to school infrastructure projects, the spirit and ethos of the Act would have been extremely helpful in this case.

There is an agenda coming, I think, to most regions, regardless of who is in government after the general election. All three major political parties are committed to a greater devolution agenda. We need to think that through and get it right in advance of power being devolved to city and county regions and locally, because as more and more of these spending decisions are taken at local and regional level, getting it right will become very important indeed. It would make nonsense of the devolution agenda if the responsibility for major projects lay with a national Government who did not take account of the strengths and talents in regions such as the south-west, so I would be interested to hear what the Government have planned, as part of the devolution agenda, to ensure that we draw on those skills and help to boost growth and productivity in every region of the UK, not just a small section of it.

Freedom of Information Act

Debate between David Simpson and Lisa Nandy

Wednesday 14th March 2012 Westminster Hall

[Lisa Nandy (Wigan) (Lab)]

I requested this debate to seek clarification about a specific piece of Cabinet Office guidance that was apparently issued to the Department for Education last year to clarify its responsibilities under the Freedom of Information Act.

Ministers from both Departments—the Cabinet Office and the Department for Education—have refused to answer any of my parliamentary questions about the guidance, except to confirm that it was issued. However, this is a matter of pressing public importance about which I have sought answers for nearly eight months. There is evidence now in the public domain that the Secretary of State for Education and his advisers used personal e-mail accounts to discuss matters relating to the award of public money and the Building Schools for the Future programme.

Disclosure of those e-mails was refused because Ministers wrongly appeared to believe that the e-mails were not covered by the Freedom of Information Act. The Secretary of State has since told me, at a recent hearing of the Education Committee, that he believed that to be the case because of the specific Cabinet Office guidance that is the subject of today’s debate.

I will briefly summarise the background and say why the matter is of such pressing public importance that the guidance should be published without delay. In August and September last year, in the leaked e-mail obtained by The Guardian, the Secretary of State’s adviser told officials that he would no longer respond to inquiries on his official departmental e-mail address and urged them to do the same. At the time, Ministers in the Department appeared to believe that private e-mail addresses were not covered by the Freedom of Information Act.

Further e-mails were then revealed by the Financial Times that had been leaked to them by officials in the Department for Education. Those e-mails revealed that personal e-mail accounts had been used by the Secretary of State and by his advisers in relation to Government business. Requests were made for some of the leaked e-mails in question but those requests were refused. The Secretary of State told me in January at the Education Committee hearing that the decisions were taken clearly on the basis of guidance issued by the Cabinet Office. That guidance remains unpublished, may or may not have been written down and has since been discredited, hence my keenness to shine a spotlight on that mysterious guidance today. It apparently contradicts earlier guidance given to the Secretary of State for Education by his Department’s chief freedom of information officer, stating that personal e-mails were covered by the Act. The Information Commissioner also clarified that in December last year, but the Secretary of State confirmed to me that he had ignored both those pieces of guidance and preferred instead to rely on the mysterious piece of guidance apparently issued by the Cabinet Office.

I would like to know why the Cabinet Office is still refusing to publish the guidance given the Secretary of State’s constant references to it, its apparent centrality to decisions taken and the seriousness of the allegations that have arisen against the Department for Education. Will the Minister publish the guidance now, so that we can assess whether any attempt was made to evade the requirements of the Freedom of Information Act? The Minister for the Cabinet Office told me that he would not publish it due to a long-standing convention, but can the Minister tell me why he and his colleagues cannot even tell me in what form it was communicated? Surely there is no convention around that? Freedom of information requests suggest that the DFE holds a copy of the advice, but according to press and FOI queries to the Cabinet Office, it says that its guidance was, variously, not written down, or not held. Can the Minister explain this contradiction for me today?

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Lady on securing the debate. She will be aware of the controversy about the whole aspect of freedom of information requests in recent months. Does she agree that the matter is not only about the case she is outlining, which is very interesting, but the whole aspect of the abuse of freedom of information, and its cost?

[Lisa Nandy]

I very much echo the hon. Gentleman’s comments; this kind of affair damages us all, which is why I am seeking answers today.

I would also like to understand how the situation could arise. That understanding is important if the commitment to transparency, which was made very clearly in the coalition agreement, is to have any meaning. Why was the guidance written by the Cabinet Office in the first place, given that the Department for Education’s chief freedom of information officer had already clearly communicated his view? Who requested the guidance? When was it communicated by the Cabinet Office? Was it sent only to the Department for Education? If not, has it now been revoked for every Department, given the extreme criticism of it by the Information Commissioner? In his recent ruling, he said:

“The DfE contends that the information is not held because the email in question is ‘political’. However, almost all the work of a special adviser, by definition, has a political dimension to one extent or another. Equally, the Secretary of State is a political figure…There is therefore an inevitable overlap between matters of party policy and government policy. To accept the DfE’s interpretation would be to, in effect, create a blanket exemption for communications between ministers and special advisers. In the Commissioner’s view the DfE has created an artificial distinction between ‘official’ information which is subject to the Act and ‘political’ information which is not.”

Did this interpretation, or description, of a blanket exemption from the Act arise directly from the guidance issued by the Cabinet Office? If so, can the Minister tell me how he, or officials in his Department, came to interpret the guidance in that way? Will he tell me who wrote it? Was that person aware that the DFE’s chief FOI officer had already issued contradictory advice? Did the person who wrote it have any discussions with the Information Commissioner, or indeed the Ministry of Justice, which holds overall responsibility for the Freedom of Information Act, before issuing it? Who was it sent to in the DFE? Did the Minister personally sign it off? If not, will he tell me who did?

I am seeking to understand how a situation can arise where the Cabinet Office’s guidance explicitly contradicts that of the DFE’s own chief FOI officer and the Information Commissioner, yet the Department is able to choose which guidance it wishes to follow. Does that not cause the Minister concern? Is it how the Government operate? Can Departments pick and choose different policy advice and guidance depending on which they prefer to follow? Does the Minister think it is acceptable that the Government are in the farcical situation where the DFE is apparently relying on guidance that the Information Commissioner has discredited, which is contradictory to the guidance issued by the Department itself, and which the Government still refuse to publish?

Less than two weeks ago, the Information Commissioner issued a ruling that the information withheld by the DFE amounted to departmental business and must be disclosed. The Secretary of State is currently considering whether to exercise his right to issue a refusal notice giving valid reasons for withholding it, as I understand. In the meantime, he still does not appear to have accepted the guidance of the Information Commissioner and his own Department that states clearly that those e-mails are covered by the FOI Act.

In January, I asked the Secretary of State a series of questions at a hearing of the Education Committee to clarify whether he or his advisers had ever used private e-mail accounts to conceal information from civil servants or the public that related to departmental business; whether he had ever directed civil servants not to answer FOI requests on specific issues; and what steps he was taking to prevent the deletion of private e-mails relating to Government business and deemed by the Information Commissioner to be covered by the FOI Act. It has since transpired that officials in the DFE repeatedly destroyed official Government records—130 e-mails, according to reports by the Financial Times. I have the transcript of the Secretary of State’s appearance before the Education Committee. I repeat that it is not clear, from his answers, whether he or his advisers sought to use, conceal, or delete those personal e-mails to evade the Act. What is clear is that the Secretary of State says that he was following Cabinet Office guidance in his actions.

There is an urgency to this matter, as it is unclear whether private e-mails relating to Government business are still being deleted. I asked the Secretary of State about that at the end of January at the Select Committee hearing, and he would not confirm whether that was or was not the case. Will the Minister please clarify whether that revised, updated guidance has been issued, and that, in light of the Information Commissioner’s ruling, the guidance has changed? Has revised guidance gone to every Department? If not, what is the delay? Given the clarity of the Information Commissioner’s statement, it seems extraordinary that that would not have happened. If it has not happened, does it mean that the Government are currently without guidance on the use of private e-mails and the FOI Act?

Does the Minister know whether the DFE has decided to fight the decision notice, and if so, on what grounds? Perhaps the Minister cannot answer that, but can he answer this: if the Secretary of State for Education decides to fight the decision notice from the Information Commissioner, will the Cabinet Office defer publishing new advice until the case is finalised? If so, that could mean that the FOI Act is effectively inactive and subject to a blanket exemption for a year. That is surely a broken commitment, given the prominent commitment to transparency in the coalition agreement. What is being done to ensure that this situation cannot happen again?