Outsourcing: Government Departments

Debate between Graham Leadbitter and Mike Wood

Wednesday 29th January 2025 Westminster Hall

[Graham Leadbitter]

Will the hon. Gentleman give way?

[Mike Wood]

I really need to make progress so that the Minister can respond.

It is particularly troubling that Labour has refused to clarify exactly how the new procurement rules will work in practice. The NPPS, which is meant to lay out the Government’s plans, has yet to be published, leaving businesses uncertain about the future landscape of public contracts. The previous version was published nearly six months before the Procurement Act was due to commence. It is now less than four weeks before the date the Minister indicated that the Act will commence. There is no sign of what the new rules will be, and yet businesses will be expected to adapt.

Furthermore, it is essential to recognise that the regulatory burden placed on firms seeking Government contracts will have a chilling effect on investment, innovation and the growth that I understand the Chancellor is speaking of this morning. If businesses perceive that public procurement is more about politics than performance, they will simply withdraw from bidding for contracts. That will leave fewer providers and make us more reliant on a small number of mega-contractors, reducing competitive pressure to drive efficiencies. That would be disastrous for taxpayers, who deserve the best services at the lowest cost.

The previous Government recognised the need for reform and took decisive action to improve procurement. This Government, on the other hand, are undoing that work by creating a system in which trade unions hold the keys to public contracts and require businesses to comply with unnecessary and costly obligations that do nothing to improve service delivery.

Public procurement should be about securing the best services at the best price for the taxpayer, not about enforcing an ideological agenda. Labour’s approach will lead to inefficiency and waste, and will reduce competition —all at the expense of businesses and the public, who rely on well-managed services. If the Government continue down this path, they risk severely damaging the UK’s ability to run a fair and efficient public procurement system.

I have a number of questions that I hope the Minister will address. When will the Government next update their model services contract guidance and the outsourcing playbook? Are Departments still on track to save £550 million this financial year, as the Government promised they would in November? What steps are the Government taking to ensure that microbusinesses and SMEs are not excluded from bidding for, or engaging with, public sector outsourcing opportunities? What contact has the Minister had with the Business Services Association regarding any updates to the Government’s outsourcing policies? What discussions have she and her colleagues had with colleagues at the Crown Commercial Service regarding the operation of the RM6277 framework? Finally, do the Government still expect the Procurement Act to commence on 24 February? If they do, does the Minister think the very short time that businesses have to adapt between the publication of the policy statement and the commencement of the Act is acceptable?

Outsourcing and public procurement are a real test for this Government. Will they fall back on the ideology of the past or represent the interests of the public going forward? Are they working in the interests of those who use and pay for services, or in the interests of union paymasters?