Infrastructure (South-West)

Debate between David Simpson and Rob Wilson

Tuesday 24th February 2015 Westminster Hall

[The Minister for Civil Society (Mr Rob Wilson)]

I am very grateful to my hon. Friend the Member for South West Devon (Mr Streeter) for initiating the debate. He is a great champion of his constituents and of Devon, but also of the wider south-west region. This debate is evidence of that fact. I will start with general comments and then move on to the specific issues that he raised.

Changing and improving the way in which the public sector spends money on goods and services has been a Government priority since 2010. We have brought about unprecedented and comprehensive reform across all areas of procurement and will continue to do so, making Whitehall leaner and more efficient, so that Britain can compete in a global sense. Through our rigorous commercial reform programme, stripping out waste and buying more goods and services centrally, we have made the way in which we do business in central Government quicker, more competitive, more transparent, better value and far simpler than ever before. Those commercial reforms, combined with a baseline of spend in 2009-10, have created savings of £2.9 billion in 2010-11, £3 billion in 2011-12, £3.8 billion in 2012-13, and £5.4 billion in 2013-14.

To be regarded as a global competitor, Britain must ensure that the right investment is made in national infrastructure, with a focused investment in skills, technology and efficiency initiatives that help businesses to operate and expand in a global economy. The construction industry underpins the growth of this sector and facilitates future prosperity. We are reforming public construction enterprises to make them more efficient, collaborative, innovative and competitive, both at home and abroad, ensuring that the money that we spend boosts Britain’s competitiveness and delivers greater social mobility.

We are rebalancing the economy to achieve strong, lasting growth and widely shared prosperity. The Government construction strategy is about cutting waste and reforming our procurement processes, and reinvesting the savings that we make in more progressive ventures that stimulate the economy, ensuring liquidity of all businesses, big and small. It gives us a competitive advantage, underpins economic growth and generates higher-quality jobs.

We are backing the industries of the future and making Britain a great place to do business. The construction pipeline will provide more than £127 billion of strategic investment opportunities for businesses from this year onwards—a significant boost to economic growth in the sector. Government and industry are working together to create strong communities and to support local and national economies, investing in world-class, functional public buildings and spaces and inspiring businesses to grow.

Let me turn to the south-west. I can assure my hon. Friend that the Government are fully committed to a flourishing and prosperous south-west. Last month, my right hon. Friend the Chancellor of the Exchequer set out the Government’s long-term economic plan for the region. In delivering it, we will increase regional productivity, create more jobs and improve road, rail and digital communications infrastructure. My hon. Friend gave a couple of examples of where we are doing that, including the tunnel under Stonehenge and some of the rail improvements that will ensure a better rail service to the south-west in due course. The Government are therefore actively reforming procurement, encouraging construction and promoting regional growth, all of which is good news for companies in the south-west. Nevertheless, we recognise there is still a lot more we can do.

I am grateful to my hon. Friend for his three comments about the procurement activity undertaken by the EFA as part of its regional framework in the south-west, and I would like to deal briefly with each in turn. The first was about tenderers being selected on the basis of not the cheapest tender, but being closest to the average of the tenders. I understand from EFA officials that tenderers were selected on more complex price grounds than those mentioned by my hon. Friend, and I would be happy to share with him separately details of the methodologies used. I can assure him, however, that the approach adopted was meant to ensure a level playing field for suppliers by preventing larger companies from artificially deflating prices in their initial bid and then squeezing subcontractors in the supply chain. Contracts awarded under the framework follow a mini-competition to ensure that best value for money is achieved.

My hon. Friend asked about the procurement process, so let me briefly outline it for him. Public procurement rules apply to public purchases above defined thresholds and require those purchase opportunities to be advertised across Europe. In October 2013, the EFA advertised a prior information notice in the Official Journal of the European Union. Bidder days were then held to explain the tendering process to interested applicants. Interested firms were required to provide submissions by completing a pre-qualification questionnaire consistent with the Government’s publicly available specification 91 format. Following their submission, the PQQs were evaluated according to the published selection criteria. Shortlisted bidders were then invited to tender. I hope that gives my hon. Friend confidence that the proper process was followed in this case.

[David Simpson]

The Minister’s last comments were about as clear as mud, but I understand that that is what was on the paper he was given. I do not doubt for one minute the Government’s sincere objectives in this procurement process, but what is happening on the ground is totally different from what he has just said about procedures preventing subcontractors from being squeezed. Subcontractors are being squeezed, and that is why we need to look at what is happening down at the coal face.

[Mr Wilson]

I thank the hon. Gentleman for raising that issue. If what he says is the case, we will certainly look at it. The second point my hon. Friend the Member for South West Devon raised was that there are no local companies in the framework, despite there being substantial companies in the south-west.