Infrastructure (South-West)

Debate between Gary Streeter and Rob Wilson

Tuesday 24th February 2015 Westminster Hall

[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.

[Mr Streeter]

Before my hon. Friend moves on, will he deal with the issue of tenders being judged on whether they are closest to the average price, rather than the lowest price, once they have got over the quality threshold? He said that I may have misunderstood the methodology, which is very complex, and that he is prepared to share it with me. However, for the purposes of the debate, will he tell me whether I am wrong about how the tenders are judged, or whether that is part of the process?

[Mr Wilson]

If my hon. Friend will allow me, I will come to that. To return to the previous intervention, however, where there is poor practice in the system and companies are being squeezed, we have a mystery shopper system, which will investigate cases thoroughly. [Interruption.] It is indeed called a mystery shopper system, which is probably mystifying everybody. By and large, it has yielded significant results for those who have made complaints.

As a contracting authority for the purposes of the applicable legislation—the Public Contracts Regulations 2006, which were introduced by the previous Labour Government—the EFA is bound by requirements of objectivity and non-discrimination. Those extend to a duty not to extend preferential treatment purely on the grounds of a bidder’s geographic location at the time of submitting a tender. EFA officials have assured me that robust and effective selection criteria were applied in the exercise we are discussing. They have also assured me that, in line with legal requirements, the evaluation criteria to be applied were shared openly with all the bidders.

It is important to remember that the largest part of procurement spend in the construction industry is with subcontractors, the majority of whom will be local suppliers. My hon. Friend tried to block that avenue off for me, but the evidence is that subcontractors are local in most cases. If he is telling me that local subcontractors are not being used in the south-west, I will ask my officials to look at what is happening there, but this does not seem to be the case in other areas. The French company that is one of the seven companies on the EFA’s list bought out Leadbitter, a UK company active in the south-west, although I am not sure of the full details of the purchase.

[Mr Streeter]

Never heard of them.

[Mr Wilson]

Okay.

[Mr Wilson]

As I said, where there is an imbalance, and subcontractors providing a service to the main contractor are being, for want of a better word, abused, we have the mystery shopper system, which will thoroughly investigate any abuses. Where it has investigated complaints on behalf of individual organisations and it has found problems, it has taken actions that those organisations have found very useful. Most of these concerns can, therefore, be sorted out on the ground while contracts are being supplied.

The third point made by my hon. Friend the Member for South West Devon was that the seven firms include three foreign firms, including the French one I have just mentioned. Public sector procurers are required to seek value for money through fair and open competition. Through our membership of the European Union, and because we are a signatory to international agreements, our contracting authorities are required to place suppliers from Europe and various other countries on an equal footing with UK suppliers. That is a two-way street, as it gives our suppliers access to public procurement markets overseas, maximising value for money for the UK taxpayer, while ensuring that UK companies are able to compete abroad.

The Government want UK companies to be successful in public procurement. The best way to bring that about is for those companies to offer the goods and services we need at quality levels and for whole-life costs representing value for money. To that end, the Government are seeking to ensure that their large-scale purchasing power supports the task of boosting growth and enables us actively to shape the UK market for the long term. To place a value on a bid based on the geographical origin of the bidder would be contrary to the single market.

All the same, the Government understand the importance of a long-term approach to supporting UK business and aligning activity to deliver that. As part of the work, several areas where Government action can have an early impact have been identified. They are sectors, technologies, access to finance, skills and procurement. Strategies for 11 key sectors, including construction, are being developed in partnership with business. I should also point out that use of the Education Funding Agency regional framework is not mandatory. I am aware of two other construction frameworks for the south-west. Construction Framework South West, managed by Devon county council, has 11 suppliers, nine of which are British, including Midas. South West Consultancy Framework, managed by Torbay council, has seven suppliers, of which six are British.

The Government are committed to increasing opportunities for suppliers of all sizes to bid for work successfully through the procurement reforms, which also secure value for money for the British taxpayer.

[Mr Streeter]

Have the Minister’s officials been able to provide him with a list of British companies that have won contracts in France when the funding has come from the French Government?

[Mr Wilson]

Before the debate, I had not been given any such list, but during it I have been given some information; I think it has been provided from memory, and we should do some research and send that to my hon. Friend. I understand that a company based in west Cumbria just won a £1 million contract in France. We are not quite clear about whether that was Government-funded. I think the best thing would be for me to write to my hon. Friend.