Procurement Bill [ Lords ] (First sitting)

Kirsty Blackman Excerpts

Committee stage
Tuesday 31st January 2023 Public Bill Committees

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Mundell. I start by paying tribute to Sarah, Christopher and Huw in the Public Bill Office for all their hard work in going through over 100 amendments tabled for Committee stage. I also thank the Minister for his opening remarks.

We have been clear that we want to work constructively with the Government to get the Bill into as good a state as possible. We all want procurement to work for British people, inspire confidence in the system and offer genuine value for money. I hope that the Minister will consider our amendments on their merits, as genuine attempts to get the Bill into as good a place as possible.

As we know, the Bill began its life in the Lords and underwent significant changes before reaching this place. While we expected the Government to table amendments to their own Bill—especially given that, sadly, we have seen four Chancellors of the Duchy of Lancaster since the Bill’s introduction in the Lords on 11 May 2022—I have to say that the scale of change between the Bill as drafted and the Bill before us today does not inspire confidence that what we end up with will be without significant loopholes. Even as we start Committee stage today, the Minister has put his name to 71 amendments. That is a noticeable number, following on from the hundreds we had in the other place. Of course, we welcome changes that bring the Bill into a more workable state, but if we are having to amend it on such a scale with just one stage of parliamentary scrutiny left, we cannot have much confidence that the end product will not be riddled with errors and inconsistencies that have gone unfixed.

When we are talking about a third of public spending and the livelihoods of countless workers rely on us getting this right, it is disappointing that the Government introduced a Bill that still clearly needs significant work in Committee and on Report. I know that several of the amendments have come as a result of the ministerial merry-go-round that the Government have subjected us to over the past year. We broadly welcome those changes, particularly in relation to the increased consideration of small and medium-sized enterprises within the Bill.

[Kirsty Blackman (Aberdeen North) (SNP)]

Does the hon. Lady share my concern that a lot of the evidence we have seen, such as the oral evidence given in the Lords, was provided on pretty much a different Bill from the one we are discussing today, and the one we will end up with after all the Government amendments?

[Florence Eshalomi]

I thank the hon. Lady for that point. It is so important, because we have seen what can happen when we do not get procurement right. We all know the impact it has on our local communities; we all have small businesses and organisations in our communities that are good at handling and dealing with public contracts but never get a look in. The fact that so many really good amendments were tabled in the other place but not taken up by the Government is quite disappointing.

What businesses ask us for is certainty, especially during these difficult economic times, but the mess the Government have made of the Bill does nothing but offer more confusion to the many businesses who rely on procurement. The Bill today is vastly different from the Bill introduced in the Lords, but it is also different from the Bill promised in the Government’s Green and White Papers and—who knows?—it may be vastly different from the Bill that ends up on the statute book. That does not scream strong and stable from this Government, and it is unacceptable when public services and livelihoods are on the line.

I am sure we will hear warm words from the Government that many of the amendments we discuss in Committee are unnecessary as they plan to address them in the national procurement policy statement. But how can the Government ask us, businesses and the people who rely on procurement for the day-to-day running of the country to trust them on their word after the year of chaos and uncertainty they have subjected us to, not least in the state of the Bill?

Even this first clause had to be forced in by the Government in the other place due to confusion in the Bill originally introduced to the Lords. Labour did not oppose the introduction of clause 1, which narrows down the definition of procurement to cover public contracts, and we will not oppose it today. We understand why the definition has been included—to distinguish between the specified procurements and other general procurements, particularly as we know that certain procurements that are not meant to be caught by the full framework of this legislation are no longer automatically included. We also agree with the need to familiarise our language in respect of the World Trade Organisation’s agreement on Government procurement, which the United Kingdom became a part of on 1 January 2021.

However, I share some of the concerns expressed by Lord Coaker in the other place about the use of the term “procurement” in the Bill. In particular, amendment 34 moved in the other place took non-covered procurement outside the remit of procurement objectives. I understand why that is necessary for the purpose of the Bill, but I would like to think that all procurement, covered or not, is carried out along the principles of value for money, integrity and maximising public benefit. However, I read carefully the explanation from Baroness Neville-Rolfe in the other place and found her explanation convincing enough to not table an amendment on the issue.

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[Kirsty Blackman]

Will the Minister give us some examples of bodies that could be included or excluded by the continued inclusion of those words?

[Alex Burghart]

I am delighted by the hon. Lady’s enthusiasm to hear my next paragraph.

The relevant NHS bodies that are covered by the Bill will be specifically identified in regulations made under the power in schedule 1(5). This is exactly the same approach as under our existing procurement regulations, which is appropriate and helpful as it enables the list of central Government authorities to be updated from time to time as organisations change. There is absolutely no doubt that NHS trusts and various other NHS bodies are contracting authorities. This is because they clearly meet the test for a public authority set out in clause 2(2)(a), which is that they are publicly funded. That test is how we determine whether an entity is a public authority.

Clause 116, which was inserted in the other place, needs to be removed and replaced with the original clause. As it stands, the clause would delete the power agreed by Parliament in the Health and Care Act 2022 for the Department of Health and Social Care to make healthcare procurement regulations that are appropriate for patient care—otherwise known as the provider selection regime. NHS England and the Government have consulted extensively on proposals for the provider selection regime since 2021, and it has received strong support from health and care stakeholders.

The 2022 Act and the powers within it were approved by Parliament and received Royal Assent as recently as April 2022. Parliament recognised then that the procurement of healthcare services provided to patients is a special case and would benefit from procurement rules that would allow for the further integration of services and more joined-up care for patients. The provider selection regime is designed to support the reforms made by the 2022 Act by having flexible and robust procurement rules to support greater collaboration and integration in the NHS.

If clause 116 remains unamended, DHSC will be unable to proceed with its plans to foster the greater integration of healthcare services that better serve patients. If this power is not reinstated, procurement for NHS healthcare services will end up with a confusing scheme of double regulation under the Department of Health and Social Care’s healthcare procurement regulations and under this Bill. It is also likely to lead to greater competition and less collaboration for those healthcare services. I am working closely with colleagues in DHSC to ensure that the provider selection regime is compatible with, and not used to circumvent, the procurement obligations in the Bill, which properly apply to much of the NHS procurement landscape. Parliament will have the opportunity to scrutinise the provider selection regime regulations through the affirmative procedure when they are laid by DHSC in due course.

New clause 13 provides a power for a Minister of the Crown to make regulations disapplying the Bill in relation to areas covered by healthcare procurement regulations made under section 12ZB of the National Health Service Act 2006, as inserted by section 79 of the Health and Care Act 2022. Hon. Members will recall from the debate on the Health and Care Act that a separate but interrelated process of reforms is under way for the procurement of certain healthcare services. Using the powers in that Act, DHSC is currently preparing regulations to govern its proposed provider selection regime, with the aim of improving collaboration in the sector and removing barriers to integrating care. The Bill, following enactment, will therefore need to be disapplied to the relevant extent to enable that scheme of regulations to exist and achieve its intended purpose.

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Will the Minister clarify that legal point, as well as the point on housing associations? They are just two cases in which the lines between public and private may be blurred, and there are countless other examples in which that ambiguity may exist. I will save him the trouble of our opposing the Government’s amendment, but I expect some responses from the Minister on the issue.

[Kirsty Blackman]

Thank you for chairing this sitting, Mr Mundell, and I thank your fellow Chair, who will be responsible for overseeing us and ensuring that we behave ourselves, which I am sure we will. I appreciate the opportunity to take part in the Committee and look forward to positive discussions about improving the Bill. I am not terribly hopeful that the Government will listen to much of what we say, but I hope they will listen even if they do not necessarily take it on board. In previous Bills, the Government tabled amendments that we had tabled. I hope the Minister will listen to some of what we say and that we can get clarity on some matters in response to our questions.

I want to make a couple of comments on the NHS. I am glad to hear the Minister’s confirmation that NHS trusts will definitely be included in the definition. It is good to have him say that in Committee, and it is helpful to the wider understanding of how the Government intend the Bill to work.

Let me comment on how procurement rules are intended to apply, and how the NHS and NHS trusts in England are moving. We need NHS reforms and NHS procurement reforms to result in two things: the best outcomes for patients and the best outcomes for people working in the NHS. Those two things are not mutually exclusive; they go hand in hand. If people have good terms and conditions, and pay that they can afford to live on, they will do a better job than if they are struggling to make ends meet and therefore worrying.

If decisions around NHS procurement are best for businesses—putting businesses’ interests first—those decisions will directly conflict with those other two aims. It may be that having some private-sector input is the best option in some situations, but it should never be the first port of call. We should run and manage the NHS so that we have fair pay and terms and conditions for people working in it, and the best possible outcomes for patients. We should outsource as a last resort. It will be interesting to see the further guidelines and the statutory instruments put forward by the Department of Health and Social Care in that regard.

It may seem odd that I am commenting on this issue, as an MP from Scotland whose NHS is entirely separate, but it has a significant impact on Scotland’s budget. How the NHS is funded in England gives rise to Barnett consequentials that allow the Scottish Government to fund the NHS in Scotland, so the less the Government are willing to spend on the NHS in England, the less the Scottish Government have to spend on our priorities, particularly in the NHS but also in other areas. I look forward to seeing the future statutory instruments and I will not oppose any of the suggestions under consideration.

[Alex Burghart]

Again, I thank the Opposition for their support for the amendments.

The hon. Member for Vauxhall asked an important question about housing associations. On the question of whether the definition of contracting authority includes housing associations, the proposed definition, as with its predecessor, does not address all individual bodies or categories of bodies explicitly. It is the same for multi-academy trusts. There are simply too many bodies that exist and that change over the course of time to address it that way. Rather, the definition uses a number of tests that determine whether a particular body is covered or not. As we go through the Bill line by line, we will come across those tests over and over again. Registered providers of social housing are included in our coverage schedules to the WTO Government procurement agreement under the indicative list of bodies that may be covered. The new definition aims to ensure consistency with those international commitments.

It is the case that under normal circumstances, simple oversight would not meet the test for management and control. However, in the case of registered providers of social housing, it is well understood and documented that the Regulator of Social Housing has more than simple oversight, carrying out regulatory activity that does meet this threshold—as under the existing regime as a body governed by public law. I reassure the hon. Lady that the Bill does not change that position.

I thank the hon. Member for Aberdeen North for her interest in the English NHS. We are also committed to having an excellent NHS that both supports the people who work in it and is free at point of use for all citizens.

Amendment 27 agreed to.

Clause 2, as amended, ordered to stand part of the Bill.

Clause 3

Public contracts

Question proposed, That the clause stand part of the Bill.

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[Florence Eshalomi]

Hear, hear, and I thank my hon. Friend for making that important point. We all remember the summer flash floods almost two years ago. People may think, “Actually, London is insulated from that”, but a number of my constituents were affected, and one issue that they outlined was the failure of Thames Water to maintain its pipes. Thames Water is another utility company that is essentially rewarding its shareholders instead of making sure that the public, which receives a vital and critical service from the company, is treated fairly. Customers see their water rates increasing and ad hoc repairs causing disruption on many roads, but all some of those companies think about are their shareholders, who continue to receive massive payouts. When we talk about procurement contracts, it is important that we think about the end users—the customers, the residents, our constituents—who all deserve value for money.

[Kirsty Blackman]

It is the case, though, that this Government are not keen to make a public service a public service. An awful lot of local banks have been closed, changes to Royal Mail since privatisation mean that people cannot get the services they need, and post offices have been closed. All that could be avoided by changing the mindset and ideology, and classing those things as public services for the benefit of the public, rather than for the benefit of shareholders.

[Florence Eshalomi]

I thank the hon. Lady for making such a vital point. The Minister will wonder why I have so many examples, but just last week, I was notified that another local bank in my constituency, NatWest on Clapham High Street, will close and that a number of the branch’s customers had not been told. That is just another example of key services on our high streets, which many of our constituents rely on, disappearing. It is important that we remember the public element of those key services that continue to benefit from public contracts.

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[Florence Eshalomi]

I thank my hon. Friend for making such a valuable point. I am sure that Members will remember the fantastic private Member’s Bill on fire and rehire promoted by my hon. Friend the Member for Brent North (Barry Gardiner), which we debated in the House. Sadly, the Government voted it down. Throughout the pandemic, up and down the country, we saw a number of big multinational organisations using the cover of the pandemic to fire their staff, make drastic changes to their work conditions and try to re-employ them on lower wages and weaker conditions. In organisations such as British Gas/Centrica and British Airways, dedicated levels of service from staff were thrown out of the window, yet those companies continue to receive big payouts for their shareholders and CEOs. We need to address this situation; the Government could have addressed it, but they failed to do so. We have a Procurement Bill in front of us that could help to address some of the loopholes, yet the Government are failing to take it on board.

Perhaps the most frustrating thing for our train passengers is the poor service that they continue to receive while they know that the train operating companies that do such a poor job will continue to be rewarded with those contracts. LNER runs the east coast main line and we might think that it would face similar logistics to Avanti, yet it has nowhere near the same problems. It is not just a timing issue. It is shameful that until 27 November 2020, Northern rail services between some towns were carried out using bus-like Pacer trains that were designed to be inexpensive temporary solutions in the ’80s.

We have heard a lot about levelling up, but we cannot level up when we have such inequal transport across the country. I say that as a Londoner, where we have Transport for London and regular buses. Whenever we leave—this issue is raised by many Members from all parties—we see that the level of service and transport provision across the country is not fair.

[Kirsty Blackman]

I am lucky enough not to have to travel on the west coast main line terribly often, but when I did last year I ended up having to get an overnight Megabus because there were no trains. It has put me off ever visiting any of those places on the west coast that I would normally get to by train. Those communities are losing out as a result—not just the people who live there all the time, but the people who want to visit the really cool places on that line.

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We have an opportunity to create a procurement system that is fit for purpose, fit for our armed forces and fit for British business. As the war in Ukraine continues, we must continue to support our allies and fulfil our NATO commitments, but without risking our country’s capabilities. With a reformed, fit-for-purpose procurement system, we can achieve all this, but changes need to be made. Waste needs to be reduced, and British businesses must have the first bite of the cherry. I look forward to working with the Minister on the Bill to ensure our country and our armed forces get the best and most efficient system of procurement.

[Kirsty Blackman]

I want to focus on the last point made by the hon. Member for Islwyn on local content and contract value. The value of these contracts, even when they are within budget, is significant. A huge number of jobs are being created and massive amounts of Government money are being spent, but I do not feel that the MOD is utilising it in the best possible way, not only because of the problems of budgets being overrun, the amount of time being taken, and equipment not necessarily being fit for purpose when it arrives, but also because of the fact that the way the contracts system works is that the MOD is dealing with tier 1 suppliers.

The system is not hands on enough. We need to look at the suppliers that will be subcontracted and ensure that local content is used and local jobs are created. If the MOD is only looking, for example, at the tier 1 contractors and not digging underneath, and if the majority of the contract are then being subcontracted, there is not adequate oversight or steering of the contract to ensure that best possible use is being made of public funds, so we get both the best equipment and the highest quality jobs created and funded as a result.

In Scotland, one of the things that the MOD is not doing quite as well as it could be is working with the supplier development programme. That programme literally links public authorities and public contracting authorities with suppliers, but it has not had as much input from the MOD as it would like. No matter what the situation is with the reserved nature of the MOD, the reality is that it has lots of places in Scotland, and lots of those require procurement. That conversation between the local contractors and the MOD itself is not happening on the scale it should be. Local suppliers do not have the access to the contracts that they should or would like to have. One way this could be improved is by the MOD becoming more involved in the supplier development programme, which is specifically about making those links.

[David Duguid (Banff and Buchan) (Con)]

I acknowledge the existence of the supplier development programme, but can the hon. Member explain why those suppliers would not ordinarily or necessarily interact directly with the MOD? Is it possible that having a Scottish version of that interaction is getting in the way?

[Kirsty Blackman]

No. A number of these contractor organisations went along to a training session that was run by the supplier development programme on applying for MOD contracts. But the thing is, those tier 1 suppliers were being given the contract. The MOD is not looking at local suppliers in the first instance in the way that it could.

I am not saying that local suppliers should always get every contract. Such a blanket approach would not be appropriate; but even those that have gone through training and have a better understanding of how to apply for MOD contracts are not necessarily being included. The supplier development programme is, for example, running a major event on 17 May this year where companies are put in touch with public authorities, but the MOD has not confirmed that it is willing to attend the event, or suggested that its tier 1 contractors should attend. I am absolutely not saying that the MOD should exclusively work with the supplier development programme. However, this is specifically about making those links. If the MOD were to get involved, it would have a better understanding of the companies out there that it would be able to contract from, the companies would have a better understanding of how best to put in tenders for the MOD, and that link would be better made between the two organisations.

I am not seeing this from the point of view of the MOD being a reserved organisation so I do not like it or agree with the way it works. The supplier development programme has not raised the same concerns with me about other reserved functions that happen in Scotland. It is specifically finding this issue with the MOD, which does have significant numbers of bases and places in Scotland, but is not as willing to engage as it could be. I am just pushing gently—I am not trying to have a big argument about this—to suggest that the MOD could do better in this regard. One of the best ways to do that would be to open that conversation and ensure that it is getting involved.

[David Duguid]

Genuinely, in the spirit of trying to resolve the issue the hon. Lady brings up, I would be interested to talk to her offline about this. I have suppliers in Banff and Buchan who have in the past, and perhaps still do, provide services to the MOD—in fact, I know at least one of them still does. As far as I know, those suppliers deal with the MOD directly. If there is a way that we can get more businesses from our constituencies to the MOD, I would be more than happy to help.

[Kirsty Blackman]

I am happy to have a conversation with the hon. Gentleman afterwards and ensure he has the contact details for the supplier development programme, so that it can lay out some of its concerns to him. Hopefully, he can similarly provide a gentle push in the background to ensure that everybody—both the people looking to contract and the contracting authorities looking to have the best possible contract and tender applications made—is getting the best possible outcome from this scenario.

[Alex Burghart]

It is a pleasure to be opposite my friend on the Opposition Front Bench, the hon. Member for Islwyn. I am sorry to say that such was the scale of his knockout defeat in that debate that it appears to have blurred his memory—we established without controversy that, as I defended, Lennox Lewis was the greatest British fighter of all time.

To the hon. Gentleman’s point, we certainly agree that it is absolutely important to get these contracts right. The spirit running through the Bill is to have a streamlined process that makes it easier for everybody to understand their opportunities and responsibilities. On the point made by both the hon. Gentleman and the hon. Member for Aberdeen North, we will see as we go through the Bill that there are many opportunities through transparency and clauses put in to support SMEs to enable British businesses of different sizes to be able to avail themselves of opportunities in procurement, generally, but also in defence. In that spirit, I look forward to having specific conversations with the hon. Gentleman on those clauses as we progress.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Julie Marson.)