Procurement Bill [HL]

Lord Berkeley Excerpts

2nd reading
Wednesday 25th May 2022 Lords Chamber

[Lord Berkeley (Lab)]

My Lords, it gives me great pleasure to follow my noble friend. I agree with his views on the public procurement of particularly large projects in this country. As the noble Lord, Lord Maude, also mentioned, the costs of preparing bids are much higher here than in many other European countries, and I believe that the costs relating to HS2 involved spending £15 billion on consultants. Why do we need so much money spent on consultants? Is it because the commissioning authority is frightened of making decisions itself, or is it for some other reason? It is pretty frightening. The costs of HS2 are very high—probably double what the Government are saying at the moment—and ditto with the Ajax tanks, which the noble Baroness, Lady Smith, mentioned, and, of course, Hinkley Point, which is not strictly a government procurement project but which we will all end up paying for in the end. And dear old Crossrail was opened yesterday—a wonderful project, but it is £5 billion over budget and three years late.

One thing that links many of these projects is that they usually fall down on the IT towards the end of the project. In other words, I wonder whether the people who commission these projects—whether in the private or public sector—have realised that we need to keep up with the latest IT developments rather than keeping on making sure that the civil engineering is on programme. I am a civil engineer, and it is lovely to talk about these things, but actually it is the IT which causes many problems and I think we have to learn some lessons from that.

One further point before I get on to what I really want to talk about, which is local authority procurement, is the issue of Scotland not being part of this Bill at the moment. I would like to ask the Minister: if the new HS2 trains that are going to run to Glasgow and Edinburgh are procured in England, will they be allowed to travel into Scotland, or will there be some need for financial or technical approval? It would be very stupid if there was any cost or anything else—and the vice versa would equally apply—but I think it is something we need to think about when we start to scrutinise the Bill. I hope that the Bill will improve things. I support this Bill, but, as other noble Lords have said, there is a lot of work to be done to make it fit for purpose.

I have one other question for the Minister. It may take a year or two before the Bill comes into effect, so what is the current process and rules for local authority procurement? Are we still carrying on with the European Union procurement rules, or is it a sort of free-for-all? It would be interesting to know what the present situation is.

I want to speak briefly about local authority procurement, on which the noble Lord, Lord Stevens, also made some interesting comments. I worry that the system, even as it is set out in the Bill, leaves too much control with Ministers, with very little oversight or enforcement. I think that is quite worrying. As many noble Lords have said, including my noble friend Lady Hayman and the noble Lord, Lord Fox, key principles are wonderful, but we need to get into more detail. We need clear objectives, and I am pleased that the noble Lord, Lord True, mentioned value for money, value for the customer and value for the taxpayer, and competition. But many noble Lords have mentioned— and I think these are missing in its strongest part—transparency of process, transparency of results, which includes the Freedom of Information Act, and some kind of independent scrutiny or overview, and possibly an appeals body. I would be interested also to see what exemptions are being proposed, because it is very easy for exemptions to be used as a quick shortcut to a process which may be quite difficult at the end of the day.

On local authority procurement, I have an example from the Isles of Scilly, which noble Lords may have heard me speak about before, and this week my Select Committee went to Birmingham and Coventry to look at transport—but there are many other similar examples. These things start off with the government bidding process. Local authorities are, as we all know, very short of money, and tendering costs money and time, which they do not have much of. The Government, in their localism programme for town centre improvements or whatever, offer a competition, which I am sure is welcomed by everybody, but do not actually allow the councils or the other responding authorities time to prepare a proper bid. Nor do they allow them to have the funding to do that, when you look at the rules and the amount of information that is required to produce these bids.

What it therefore needs is for the first bid to be for funding to get enough money to prepare a proper bid for the next phase. And so it goes on. We found this on several transport projects we talked about in Birmingham and the West Midlands generally. I have also found it in watching from afar—or not so far—the attempt by the local authority in the Isles of Scilly to get a new ferry through the localism bid, which would involve working with the monopoly supplier of services, for £48 million, to be given a new ferry with no competition. I can understand why it is doing it, because it does not have the money to prepare the bid.

We therefore have to be very careful that this legislation does not allow local authorities to cut corners for political or cost reasons because they cannot afford to do anything else. I could go into great detail on this but I am not going to. It is not just the Isles of Scilly, Birmingham or Coventry transport. If one reads some of the stories that come out quite regularly in Private Eye, one sees an awful lot of examples of local authorities that cut corners—and have probably been caught doing it, otherwise it would not be published—because of political expediency, because they could not afford to do anything else or because it was said to be urgent. We have to be very careful when we scrutinise the Bill that we recognise that local authorities do not have much money and that it is very tempting to cut corners politically, because it might be useful for the next election or whatever.

I hope we can allow a bit more devolution of the funding for, say, transport in the West Midlands so that local authorities have an incentive to do it properly, with oversight scrutiny but not total nitpicking of the kind that goes on at the moment. I repeat what I said before: at the moment, the Treasury requires Network Rail to apply to it for approval to paint the railings at a station. That is micromanagement just gone darn stupid.

My last comment is on the role of government in the Bill. It is as the “contracting authority”, what is called the “appropriate authority”, the compiler of debarment lists—I am sure all noble Lords know what that means—and a sort of appeal body to the Minister of the Crown in Clause 61. As the noble and learned Lord, Lord Thomas, said, there need to be some remedies that do not involve central government. I am not sure what that is—I am no lawyer—but it really is important. All these things coming together under government, with the local authorities also being subject to their political pressure, means that we could end up with a disaster. We do not want that. There is enormous potential in the Bill, but there will be quite a lot of discussion in Committee, and probably further on, about some changes that will need to be made to make sure it really works properly.

Procurement Bill [HL]

Lord Berkeley Excerpts

Committee stage
Monday 4th July 2022 Grand Committee

In my understanding, that is what “covered procurement” does. If it did not, Clause 12 would introduce a national covered procurement policy statement, but it does not and there is no such amendment. Clearly, the intention is to have two concepts running through the Bill: procurement, which is every kind of procurement, and covered procurement, which is above the threshold. I do not understand why that is necessary, but at least I think I see what is going on. If I am wrong, I am happy to be put right.

[Lord Berkeley (Lab)]

I found the explanation of the noble Lord, Lord Lansley, quite interesting, but whether he is correct, we will have to wait for the Minister’s response to find out.

My problem, as has been mentioned by my noble friend and the noble Lord, Lord Fox, is that of definitions and the lack of reasons for change. For me, procurement is the process of awarding a contract. We need to know the definition of what is a public contract—perhaps the noble Lord is right; perhaps he is not—and what is not. In Amendment 1, the only difference between procurement and covered procurement is the word “public”, as he said. Where is the definition of uncovered procurement, if you like? We need that, and we also need an explanation of all these amendments, but I shall not go on, because my noble friend has delivered a massive argument. She said she spent all weekend on this, but she is just scratching the surface—which is even more frightening.

At the end of Amendment 1, we get something called the “centralised procurement authority”, which seems to be the top level—perhaps they are very large contracts. Can the Minister give some examples of what kind of contracts will be covered by that? It states that that is a

“contracting authority that is in the business of carrying out procurement for or on behalf of, or for the purpose of the supply of goods, services or works to, other contracting authorities.”

We can all give examples of those, and I am sure we will come to them later, but it is important that we have a definition of “public” and of “procurement”, and of how that is different from awarding a contract. Procurement, to me, is a process. It starts with tendering and ends up with, you hope, an award of contract. Why all these changes? There needs to be a definition and explanation against each one.

I will say just one more thing, because I am sure that everyone else will have spent the weekend going through each of these amendments. Amendment 440, which a noble Lord—I cannot remember who—just mentioned, refers to

“a supplier’s association with a state”.

“State” is an interesting word. What is a state? Is it Scotland or Wales? My noble friend next to me will have views on Wales but there needs to be a definition of “a state”. It suddenly pops up in Amendment 440. Presumably, if it means separate states, such as Wales and England, there will be frontiers between the two to make sure that goods go in the right direction.

I wanted to cover those two small issues, and want explanations from the Minister. I end by wishing the Minister well in taking the Bill forward. Noble Lords who have already spoken, in particular my noble friend Lady Hayman, have done a magnificent job but we are probably going to have several weeks of going through each of these amendments and asking the questions that she so rightly asked.

[Lord Wigley (PC)]

My Lords, I will speak briefly, as I intervened on the Minister’s opening speech. I want to reinforce the points that have been made and perhaps add a little to them.

I come to this from the viewpoint of the Welsh Government, who have worked closely with the UK Government on this matter over a period of time; designated civil servants from the Welsh Government have been co-operating on it. Therefore, this is not a matter of contention in that way; it is a question of making sure that there is an understanding and that the end product will work for both. Where it is necessary to have some fine-tuning for the sake of Wales or Northern Ireland, but not Scotland in this case—

[Lord Berkeley (Lab)]

Why not?

[Lord Wigley (PC)]

Scotland may come in but, at the moment, it is doing its own thing. This is a matter of getting a process where fine-tuning is possible.

It is not so much the content that concerns me—frankly, I was engaged in other things yesterday and did not have an opportunity to work through the amendments. As I said in the Chamber, the previous Sunday I worked through every one of the 80-odd amendments, so that I could have a coherent conversation with the Welsh Minister, civil servants in Cardiff and noble Lords who were involved, including the noble Baroness, Lady Humphreys, and the noble and learned Lord, Lord Thomas of Cwmgiedd. I did so in order to get their understanding. To be fair, they were constructive about this Bill—as the Bill stood, relatively few points were of contention to them. But as I indicated earlier, I am concerned that they have an opportunity to see whether any of the changes that are now being made through this large number of amendments might have an effect on their understanding of its slightly different application in Wales than in England.

That is the general intention: to get a system of procurement that can work for the Welsh Government in delivering their economic targets, which they have using successfully over the past few years, and to do so in a way that does not disrupt the UK market. A balance must be struck there. It is essential that both ends of the M4 understand each other on this. I am sure that the noble Baroness who opened for the Opposition will have had conversations with Welsh Ministers and will know about their concerns.

This is not about undermining or opposing the Bill. It is about making sure that it works properly, as intended, for both sides. That is what I hope for. If it is necessary to step back at this point, check and make sure that that is the case, it would be far better for us to do that now rather than pass into law things that become challengeable in the courts, at which point we will end up with all sorts of mess.

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I look forward to the Minister’s answer and would particularly request an impact assessment on these provisions. This should compare the EU way with what is now proposed, and the cost to business of all the bureaucracy it will encounter as it becomes clear which bits of legislation it will be subject to and which it will not. Of course, I would very much appreciate a fleshing out of the Government’s current plans for private utilities.

[Lord Berkeley (Lab)]

My Lords, I added my name to Amendment 2, and tabled Amendments 25 to 27. The noble Baroness raised some interesting questions. I will start by trying to establish some definitions. Clause 1(1)(b)(iii) refers to “a private utility”. We all know what a utility is, but there are subsets of risk and government involvement. It would be nice to know what exactly the Government mean by “a private utility” in the context of this Bill. That is my first question and the reason for my putting my name to this amendment. The Bill defines a “public authority” and a “public undertaking”, but it does not define a “private utility”. I think it should. I have lots of questions and examples that I could ask the Minister to come back on, but I will not do that now.

When one reads about the problems of utilities, whether water, gas or transport, they all have regulators of some description but they often have slightly different powers. I have noticed over the past 10 or 15 years in the water sector that, when the regulator changes the instruction or whatever that it gives a company, it sometimes changes dramatically. If the Government do not like it, they can either advise the regulator quietly, “Would you mind doing it slightly differently?”, or, in extremis, I believe they can sack the regulator.

Then we get into the question of whether these utilities should be in the Bill at all. We had a Question in your Lordships’ House today about a passenger franchise rail operator that was roundly criticised by a number of noble Lords for its bad performance. Should the appointment of those operators be subject to competitive tendering? Should they be appointed by the regulator? They are certainly not at the moment. The regulator is supposed to keep an eye on them, but they are effectively appointed by the Government. One could argue, “What’s wrong with having it in here?”, but I believe they are an excepted utility at the moment anyway.

I am afraid I get confused by all this. I hope that the Minister can explain the exact reasons for excluding these utilities. I am in a bit of a quandary as to whether they should be excluded. It probably comes down to the risk the noble Baroness referred to and whether you like what they are doing. That is not a good reason for doing it, because what we might individually or collectively like is not necessarily the same.

I come back to this question of “a public authority”, “a public undertaking” and “a private utility”. I will give one other example. Some noble Lords will know I have been involved in trying to get the Council of the Isles of Scilly, where I live, to put in a proper bid to get a new ferry. Unfortunately, it has decided that it would like to get £48 million from the Government to give to the monopoly supplier of transport services without any competitive tendering. To me, competitive tendering for all these things is vital because you get not only value for money but a much better service on the whole.

On the whole, the contracting authority should be able to make changes if the people it is contracted with are not performing. I therefore ask the Minister: why are utilities excluded? Is it for the right reason, or will the Government find another way of doing what they presumably want to if the regulators—I think the noble Baroness, Lady Neville-Rolfe, said that the regulators have the last say in this—do not have the scope to award contracts?

As I said on the previous group, we need explanations and definitions. I am afraid that I shall go on a bit about this, because it is very difficult to understand it all if you do not get them.

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I look forward to hearing what my noble friend has to say and whether he can explain the rationale, along with the question of the internet and broadband. Unless I have mistaken it, that is not in Schedule 4 and if it is somewhere else in the Bill, I have not found it.

[Lord Berkeley (Lab)]

I am grateful to the noble Lord for expanding fully on these amendments but in the case of some of the categories in Schedule 4, there is no regulator with the power to appoint companies to do things. Ports and airports come to mind; the Government will probably do those. Are we happy that the Government can do that without any sort of regulatory oversight?

[Lord Moylan (Con)]

Since that is technically an interruption to my speech—

[Lord Berkeley (Lab)]

I am sorry.

[Lord Moylan (Con)]

No, I am delighted. It adds much illumination.

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[Baroness Neville-Rolfe (Con)]

My Lords, I very much welcome the question of the noble Lord, Lord Scriven, about local authorities. They are so often underappreciated and undervalued, and we need to know what can and cannot be done in a collective way—the question he is rightly probing. For example, a simple question would be: for planning services—where my committee has identified a huge shortage of talent and resources in some planning authorities—could you have a collective procurement, and would that be caught by this Bill?

I also ask what the GPA does on telecoms and the internet infrastructure. I must say that I tried in vain, as a Minister, to get contracts for the roll-out of infrastructure around Washington DC—there was not a level playing field. I fear that overseas interests will benefit preferentially from this Bill, as they have done in some other areas, such as contracts for difference in energy. Can the Bill help to hold the GPA to level the playing field?

I strongly support my noble friend Lady Noakes, both on her brilliant technical points, which I barely understand, and on ARIA. On the latter, I agree with her that it must be free from hassle—I think we agreed that in our debates in this House. It probably does not have enough money, but it is important to ensure that it can proceed without the benefit of lots of new regulations, which could be quite bureaucratic to them.

[Lord Berkeley (Lab)]

My Lords, I shall speak to my Amendment 7. I do not think I need comment on any of the other amendments in this group. I tabled this probing amendment to ask why this particular piece of text is here:

“This Act does not apply to Her Majesty acting in her private capacity.”


That is quite unusual in Bills. Usually at the end there is a clause that says something along the lines that Her Majesty and, often, the Duke of Cornwall have given their consent to that piece of legislation. Sometimes when I ask the Minister what relevance the Bill has to the Duke of Cornwall they cannot answer; no one seems able to because it is nicely confidential.

Obviously I can see why Her Majesty acting as the Crown is included in this Bill because effectively the Crown is the Government. However, why is the Duke of Cornwall not included in the Bill in his private capacity? He usually appears alongside Her Majesty. The Duchy of Cornwall has said it is in the private sector, which means, whatever we are going to call it, that it is a private sector organisation that presumably will have to comply with every other part of the Bill.

It is interesting to see where the sovereign grant for transport comes in. I happened to get a Written Answer today. I asked who funded the return charter flight of the Duke of Sussex from the United States for the jubilee. According to media reports, it was the most expensive charter plane that you could possibly get, and it seemed to me that, as in so many of these matters, they could actually have gone on the scheduled service. The answer I had was that it was not funded by the sovereign grant because that

“only covers expenses incurred by other Members of the Royal Family when they undertake official duties on behalf of Her Majesty”,

and clearly that was not the case. When it comes to the sovereign grant and the award of contracts for helicopters or planes across the world that the Royal Family—or even occasionally members of the Government—might take, presumably that will be subject to competitive tendering because they are acting in their public capacity.

It would be good to hear from the Minister what correspondence, if any, took place before Clause 1(9) came into the Bill. Are the Government quite happy with it? I look forward to hearing his answer.

[Lord Wallace of Saltaire (LD)]

My Lords, my name is on some of these amendments. My colleagues have spoken to several of them so I shall merely add a few things.

I was particularly concerned by the term “centralised”. The context in which we are operating is that England is by far the most centralised country in the developed world. The concept of a centralised procurement authority implies, “Whitehall tells the rest of you what to do”. For that reason, we think it important to put a number of phrases into the Bill emphasising that local authorities have a part to play. In particular, we should put here the idea that consortia of local authorities—for example, the local authorities of West Yorkshire operating together—have the ability to co-operate as centralised procurement authorities.

There will be a number of other occasions in the Bill where I and my colleagues will want to put in social enterprise, social values, non-profits and charities. They were strongly emphasised in the Green Paper and the consultation; they are not in the Bill. We think that including those elements will help to broaden the way in which Ministers and officials will approach outsourcing and public contracting. This relates also to the issues that my noble friend Lord Purvis raised about the international dimension and the importance of trade and co-operation agreements, and the point the noble Baroness, Lady Neville-Rolfe, made about the unbalanced way in which these occasionally operate: we are much more open to others than they are to us.

Procurement Bill [HL]

Lord Berkeley Excerpts

Committee stage
Wednesday 6th July 2022 Grand Committee

[Lord Wallace of Saltaire (LD)]

My Lords, the previous discussion has demonstrated the active concerns a lot of members of this Committee have that this Bill should not cramp the ability of local authorities to experiment with forms of local procurement, the encouragement of local enterprise, and so on. I had a message from a county council this morning on precisely that point. We are concerned about this. Perhaps there is enough room below the threshold, but we need to explore that a little more.

These amendments respond to the report on the Bill from the Delegated Powers and Regulatory Reform Committee. Members of that committee are here, so I shall be brief and defer to their expertise.

The Minister will be well aware that many in the Lords are deeply concerned about the Government’s determined move away from clear, detailed legislation towards skeleton Bills and executive discretion. The perhaps soon to depart Prime Minister campaigned to leave the EU on the promise of restoring parliamentary sovereignty but has worked instead to bypass Parliament wherever he can. The Minister for Brexit Opportunities and Government Efficiency, who, as far as I understand it, has some influence over this Bill, is pre-emptively arguing that the Prime Minister was elected by the people and not Parliament, and therefore does not have to go if he loses the confidence of Parliament. We all recognise that both Houses of Parliament are deficient in a number of ways and in need of reform, but, for the moment, we have the constitution that we have inherited, battered though it is, and the spread of Henry VIII powers across legislation is a breach of that constitution, as the DPRRC notes.

Amendment 18 therefore challenges the delegation of power to Ministers to make exempted contracts for the provision of public transport services. Amendment 21 similarly challenges the degree of autonomy given to Ministers in providing concession contracts for air services. Amendment 28, to the schedule on utility contracts, challenges the width of the powers granted to Ministers to make exemption determinations.

Amendment 31 is more egregious on the same theme. It would give permission for Ministers to specify by regulation which services will be subject to the light-touch regime for contracts and which will be excluded. The DPRRC’s comment on this is that the power

“should be narrowed unless the Government can fully justify it.”

I suspect that the Minister is unable to do that.

Amendment 208 also addresses the remarkably wide freedom given to Ministers with regard to light-touch contracts. Here, it goes into tertiary legislation, allowing Ministers by regulations to

“specify services of a kind specified in regulations of the authority under section 8”.

I hope that members of the Committee understand that; I am not entirely sure that I do.

Clause 86, to which I have tabled a stand part challenge, gives Ministers powers to make regulations about a range of documents on contracts and information about contracts. Clause 109 gives Ministers powers

“to amend this Act in relation to private utilities”,

requiring them to consult

“persons appearing to the authority to represent the views of private utilities, and … such other persons as the authority considers appropriate”—

but not anyone with any standing in terms of public or parliamentary accountability.

Clause 110, which is covered by Amendments 530 and 532, relates entirely to regulatory powers. Our amendments would implement the DPRRC’s recommendations to make pricing determinations for qualifying defence contracts subject to the affirmative procedure and restrict the ministerial freedom to raise financial thresholds above the rate of inflation. On all these clauses, the DPRRC argues that the breadth of ministerial discretion should be narrowed. It comments that, in a number of instances,

“the Government … have chosen this approach for no other reason than that it hasn’t yet developed the underlying policy.”

I ask the Minister to attempt to justify these overextended executive powers or, otherwise, to narrow the powers granted and recognise the importance of parliamentary scrutiny and the principle of parliamentary sovereignty. I beg to move.

[Lord Berkeley (Lab)]

My Lords, I put my name to Amendment 18 in the name of the noble Lord, Lord Wallace of Saltaire. I support everything he said. I am worried about the powers that the Government want to keep for themselves. I apologise to the Committee for not being here earlier; I was having a discussion with Ministers on the future railway structure, on which I believe there will be legislation this autumn. To some extent, that pre-empts what is covered by Amendment 18, which is to do with public passenger transport services. It is not just about trains; it includes buses and probably many other things as well.

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However, with full respect to the Delegated Powers Committee and noble Lords’ points, I recognise that change could be considered. We have given an undertaking to engage on these areas before Report, in full cognisance of the Delegated Powers Committee report and the important submissions of noble Lords, including my noble friend, in the debate. In seeking to explain the Government’s belief that the position that we have set out is justifiable, I certainly did not intend to close down discussion on these important points, which include the right and duty of Parliament to hold Governments to account. We must carry through that dialogue on the Bill, and I give that undertaking.

[Lord Berkeley (Lab)]

I take the noble Lord back to his response on Amendment 18 in relation to public passenger transport services. He argued, probably rightly, that they are the responsibility of the Department for Transport and should therefore be exempt here. Paragraph 17 of Schedule 2 defines a “contract”, and paragraphs 33, 34 and 35 at the end of the schedule cover “Concession contracts”, which are all exempt. I assume—perhaps the Minister could confirm this—that the exemptions for “air services” and “a qualifying air carrier” come under the definition of “concession”, because the Bill says this, although it does not define what a concession is.

I am concerned that there are examples in this country of a third category: a franchise. I am not sure where that comes into this; I know of one air service that is a PSO and probably a franchise, and, certainly, some bus and train contracts are franchises. If the Minister does not have the answer to that today—it is a little detailed—perhaps he could write to us, because it is quite important. If the Bill is going to exempt all these things, the whole lot needs to be exempted and handed to the Department for Transport. It is no good having concessions exempted and franchises not. I look forward to the Minister’s comments.

[Lord True (Con)]

My Lords, I will have to take counsel and advice on that, and I will certainly come back. As I said, the fundamental position is to try to keep things as they are, exempting passenger transport services that are currently exempt and covered by the Department for Transport. Concession contracts are dealt with slightly differently under the regime—we will discuss that later—but I will come back to the Committee to clarify the points that the noble Lord asked about.

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[Lord Fox (LD)]

My Lords, very briefly, I thank the Minister for her clear statement. The subject of utilities has come up both on Monday and today, and we are beginning to get some clarity around how the whole utility story fits together, but anything more she can give us on that would be helpful. This is probably not helpful, but it seems to me to be an analysis of the issue. The majority of the trade deals to date are essentially rollover trade deals, and to paraphrase the noble Baroness, Lady Noakes, this legislation is essentially rollover legislation. However, trade deals such as the Australia deal are not rollover trade deals. We are in danger of trying to pour new wine into old skins here.

The issue that my noble friend highlighted here is an example where the new-style trade deal is not easily catered for in the old-style legislation, which is essentially rollover legislation. I am not sure what the solution to that is, other than “more work needed”, but I think—and this is a dispassionate and hopefully helpful observation —we are looking at a new trading position. The Government talk about that all the time, but we are essentially looking at legislation that was dealing with an existing set of trade deals which are, by their nature, different from the new ones. This is what is being thrown up, and we will start to see problems thrown up increasingly.

[Lord Berkeley (Lab)]

To go back to Amendment 20, the noble Baroness gave some useful explanation of the definition of a utility. I want to go on briefly to the example that the noble Lord, Lord Purvis, mentioned, which is freeports. That presumably comes under paragraph 5 of Schedule 4, on page 86. It is not clear to me whether any of the activities of a freeport are exempt or not. In other words, the freeport gets a load of money from the Government, but does it have to comply with the procurement regulations and everything else in the Bill? Does it have to be transparent about how it complies, whether it has sent out for three quotes or whatever, and whether the contracts have been awarded fairly? That is one example, and I expect there are many others in other sectors. It would be interesting to know because when we get to Schedule 2, there are so many different definitions in there that it is quite difficult to understand which applies to what. I am sure that, at some stage, the Ministers will try to give us some examples of all these different issues on page 81.

[Baroness Hayman of Ullock (Lab)]

My Lords, I must say, I find the utilities section of this quite confusing in some areas. The more clarification we can get from the Minister, the better. It is not just this bit; it is the fact that it is cross-referenced a lot right across the Bill and is impacted by so many other pieces of legislation, including internationally.

We talked with officials about the Australia trade agreement this morning; the noble Lord, Lord Purvis, raised this. I am still slightly confused as to how that all links together. Rather sadly, after the discussion, I went and found the relevant parts and read them. The Bill talks about universal service obligations, postal monopolies, exclusive suppliers and specified collection, transport and delivery services. I know that the Minister is not able to come back to us on this now but I would appreciate some kind of written explanation of how this all works together and what the implications are of having that kind of reference to postal services in a trade agreement. What impact does that have on future procurement legislation? Will the Procurement Bill have an impact on future trade agreements in this area? Personally, I find this quite confusing; it would be extremely helpful to have it laid out in a crystal-clear fashion so that we do not end up with this kind of confusion and the debates we are having.

I will not repeat all the things that noble Lords said when they talked about having more clarification on Schedule 2. I will just briefly come back to cross-referencing throughout the Bill. In the previous debate, we talked about the committee report, which again mentions Schedule 4, the utility activities exposed to competition, the provisions of the WTO agreement—the GPA—and so on. For me, a lot of this is about having a clear understanding of which utilities lie in this group and which lie in that group; which utilities will have to follow certain rules; which will be exempt; and how they will be exempt. I would appreciate proper clarification on all those areas because this is a lot to take in; a lot of it needs to be right as well.

I appreciate that I have asked the Minister to do quite a complicated task but, in Committee and certainly ahead of Report, that sort of information and clarification would be extremely helpful.

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My second point, which has been alluded to by a number of colleagues, is the way that the noble Baroness, Lady Worthington, has skilfully linked putting sustainability in the Bill with innovation. I absolutely agree that those two things are fundamental. I do not mind what wording the Government take, but those two things have to be looked at together. With all the issues that the noble Lord mentioned, if we do not get innovation clearly sorted out, then companies involved in net zero and the environment are the disruptors. They are small companies, not the established big boys—or big girls, if you want to be gender neutral. That is about as far as I will go on gender neutral before we get into arguments. We need to make sure that the Bill prioritises innovation. Otherwise, we will not be able to ensure that the smaller disruptor organisations which are involved in net zero and the environment can play the role that we need them to play in future. Therefore, I look forward to the Government’s response to these points around putting into the Bill a commitment to sustainability goals through delivering the net zero and environmental goals and ensuring that innovation is in the Bill at the same time.

[Lord Berkeley (Lab)]

My Lords, I support all the amendments in this group, but particularly those tabled by my noble friend Lord Hunt of Kings Heath. In his introduction, he emphasised the importance of rigour, accountability and transparency. I would add advance notice. The Minister who responds may say that it is all in the Treasury Green Book. It probably is, but anybody who has looked at small projects—localism, levelling up, town centres—will know that you have to comply with the Treasury rules, but it is hard to find them, especially for people who do not understand them too easily. My noble friend has put in this amendment and all the other things that go with it. It is really important in a Procurement Bill that people know what to expect and how to do it.

It also needs to be not confidential. I have a couple of examples. The first is an excellent example of the need for a business case. Some noble Lords may know that Cornwall Council was supporting a new stadium for football, rugby and everything else in Truro, which everybody seems to want, and there is private sector involvement. Last week, Cornwall Council decided that it was not going to do this and withdrew from it, saying that there was no proper business case. That was brave, when everybody wants it, but there was no business case. At least it understood what was going on, but that is not the case for an awful lot of other people—I have mentioned the ferry to Scilly before, but will not mention that again—and the other side of it is things such as HS2, where the budget goes up through the roof.

My final question to my noble friend—I know he will do it for Report—and a few other people, concerns how you enforce these things when something goes wrong. That is the biggest problem that we have not solved yet. I look forward to the Minister’s reply.

[Lord Wallace of Saltaire (LD)]

My Lords, I hope the Minister is impressed by the cross-party consensus on a number of things on this issue. At the moment, this is very much a skeleton Bill. The demands to put more in the Bill come from all parts and relate to a number of different clauses. I hope that he will be able to respond outside Committee, between Committee and Report, to consider whether the Government might be able to come back to satisfy some of these requests with appropriate language. As we have already stressed, the language is already there in a number of government publications; it is just not in the Bill. I look forward to his response.

Procurement Bill [HL]

Lord Berkeley Excerpts

Committee stage
Monday 18th July 2022 Grand Committee

[Lord Mendelsohn (Lab)]

My Lords, I rise to support Amendment 445, which I was also pleased to sign. The noble Lord, Lord Hunt, made a very good case for why it would be so useful for charities and the noble Lord, Lord Aberdare, extended that. I wish to extend it further to reinforce the point that the importance of the pipeline notice is that it provides guidance for the authorities to take a risk that, in a sense, goes slightly beyond the principle that no one got fired for choosing IBM. If we are trying to get the best service, we must look for the right opportunities and the right people, not just in the context of charities, or even small businesses. Those especially penalised are microbusinesses, freelancers or even start-ups in the commercial sector, not-for-profits and social enterprises. All are massively disadvantaged by tendering for any contract. Many have more than enough skill to be able to do it, and many of the people who provide the backbone for those areas are people who accomplished it very comfortably in larger companies. The effective use of pipeline notices is a strong signal that the Government expect all contracting authorities to make a judgment that will help all those sorts of businesses and those people who can provide excellent and outstanding service. They deserve the opportunity to do so.

[Lord Berkeley (Lab)]

My Lords, I shall speak to Amendment 449A tabled in my name and that of the noble Lord, Lord Clement-Jones. I support the two amendments to which my noble friend Lord Hunt of Kings Heath has just spoken. Amendment 449A covers much the same ground as his Amendment 449, but it probably goes a bit further in arguing for the need for transparency. It relates to public service contractors and where information about them should be available under FoI.

The Bill’s disclosure provisions are very limited in comparison with what would be available under FoI. Authorities responsible for contracts worth over £200 million would be required to set and publish key performance indicators, but they do not give the same information, there is a delay of probably up to one year in them and they do not help members of the public and others who might be interested in getting the information.

The amendment sets out that the FoI Act should be extended to cover information held by public sector contractors about these contracts. At present, it allows access to such information only if it is held on behalf of the commissioning authority, which normally applies only where the contract specifically entitles the authority to obtain particular information from the contractor. Where it does not, the information held by the contractor is outside the scope of FoI provisions.

There are many examples of this. Some of those cited by my noble friend probably also apply here but I shall mention one or two others. The first is a report on potential fire safety defects at Hereford County Hospital, constructed and managed under a PFI scheme by Mercia Healthcare Ltd under an agreement with the NHS trust. The report was commissioned by Mercia Healthcare from the now-defunct contractor Carillion, which was still operating at the time. The request to the trust for information about this was refused on the grounds that the report was not held by or on behalf of the trust. There are many such examples. I could explain at length some of the contracts that HS2 has got into; I shall not, but the same comments apply. There is a complete lack of transparency about information on that.

The extension to cover information held by contractors about contracts with public authorities has been supported by the Information Commissioner, the Public Accounts Committee, the Public Administration and Constitutional Affairs Committee, the Justice Committee, the Committee on Standards in Public Life, the Independent Commission on Freedom of Information, set up by the Government to review the FoI Act in 2015, and the Institute for Government. There are many other examples from around the world where transparency is thought necessary and desirable. I believe the UK FoI provisions should be extended to allow access to such information via a request to the public authority responsible for the contract.

While I am on my feet and while we are talking about transparency, I should like to ask the Minister about a Written Statement giving guidance to Ministers participating in government commercial activity. It comes from the Minister for Brexit Opportunities and Government Efficiency and says that the Bill we are discussing

“creates a simpler and more flexible commercial system that better meets our country’s needs while remaining compliant with our international obligations. Ministers have the opportunity to participate fully in this system with certain safeguards to protect them from the risk of legal challenge.”—[Official Report, Commons, 15/7/22; col. 17WS.]

I could add that it does not protect the taxpayer and does not seem to protect anybody from the Minister making lots of money out of NHS contracts, as we have heard. It is odd that this Statement has come out in the middle of our deliberations on this Bill. Could the Minister explain when we can see the guidance—I have asked the Library and it does not have it yet—and how it fits in with the Bill we are discussing?

[Lord Alton of Liverpool (CB)]

My Lords, I support Amendment 449 in the name of the noble Lord, Lord Hunt of Kings Heath, and Amendment 449A from the noble Lords, Lord Berkeley and Lord Clement-Jones, which deal with transparency. The Minister will not be surprised that I will use this opportunity to raise the blocking of information about the purchase of Hikvision cameras, which are used all over the United Kingdom; he was good enough to meet me twice to discuss this and I am very grateful to him for the time he gave. The noble Lord, Lord Clement-Jones, raised this in a Motion to Regret debate in February. I raised it at Second Reading, quoting the Biometrics and Surveillance Camera Commissioner, Professor Fraser Sampson, who said he was

“encouraged to see reports … that the Secretary of State for Health and Social Care has now prohibited any further procurement of Hikvision surveillance technology by his department”.

I asked the Minister at the time whether he would be willing to share his own department’s response to that letter to the Cabinet Secretary from Professor Sampson, and to explain why, if it was the right thing to do in the case of the Department of Health—and I believe it was the right thing to do—to give information to Members of Parliament in parliamentary Questions, which it was, because the Minister answered Questions from me specifically on this on 25 and 26 May, it was not possible on security grounds to give the same answers it was possible to give in connection with the Department of Health.

Even more relevant, in conjunction with these amendments, is the fact that only last week the information requested in a freedom of information request about Hikvision in connection with HS2—which I will come back to—was denied. That raises quite a lot of serious problems, I think, in the minds of any member of the public, let alone parliamentarians anxious to discover the truth about why particular things are being ordered, how much they cost, whether they pose security risks and what the dangers are to the United Kingdom.

I think we have a serious problem in our procurement supply chain when it comes to the problem of Chinese technology companies—blacklisted, I might add, by a Five Eyes ally, the United States, as a threat to national security and yet allowed in the United Kingdom —who are known for their complicity in human rights violations taking place in Xinjiang against Uighurs, and I declare a non-pecuniary interest as vice-chair of the All-Party Parliamentary Group on Uighurs. When I met the noble Lord to discuss the legislation before us, he noted that there are over 1 million Hikvision and Dahua Technology cameras in the United Kingdom —I repeat, over 1 million. The noble Lord outlined that the Government do indeed have concerns regarding the security of these cameras and their links to the concentration camps in Xinjiang.

Now as many will be aware, a number of civil society organisations, including Free Tibet and Big Brother Watch—through freedom of information requests —have found that a number of government departments, local authorities, NHS trusts, schools, police forces, job centres and prisons use cameras manufactured by Dahua Technology and by Hikvision. What is not clear is the extent of the issue across the public procurement supply chain, and that is why these amendments are so important.

I have asked the Cabinet Office how many departments have cameras manufactured by Dahua Technology and Hikvision and, as I have explained, Ministers—with the exception of the Department of Health—have refused to reply. I welcome the decision made by the former Secretary of State at the Department of Health to commit to removing Hikvision cameras from his department, but when will we have a timetable for other departments to follow suit? How can we justify doing one thing on national security grounds in one department and not elsewhere?

I have asked Ministers how many of these cameras are at UK ports, airports and train stations and, again, I have been rebuffed on the grounds that the Government will not speculate on the security provisions on our transport network. When you apply through freedom of information requests for that information, it is declined. So, sadly, the debate around the use of Hikvision and Dahua in our public procurement supply chain is shrouded in secrecy. I hope Ministers unwilling to be transparent about the issues that we have faced hitherto will see that they are wrong to have been so and will remedy that.

Nowhere is this issue more evident than when I was recently approached by a concerned party who had reported to me that Hikvision may have received a contract from HS2 to install its cameras along the entire length of this new high-speed rail network. Following this information, I submitted a freedom of information request to HS2 asking for information on whether Hikvision has any contracts with HS2, and I was informed that HS2 does not centrally hold information regarding contracts with its suppliers. This is clearly an unacceptable state of affairs. Phase 1 of HS2 is to cost taxpayers—and the noble Lord, Lord Berkeley, I am sure will correct me if I am underestimating this—some £44.6 billion, and that includes substantial procurement contracts. It is well within the public interest to ensure that taxpayers’ money is not going to Chinese technology companies that have been accused of complicity in gross human rights violations and the use of forced labour—slave labour.