Public Contracts: Conflicts of Interest

Lord Berkeley Excerpts

Thursday 17th November 2016 Lords Chamber

Asked by

[Lord Berkeley]

To ask Her Majesty’s Government what are their policies on conflicts of interest in respect of contracts with public and private organisations which provide or deliver public services or projects; and where those policies are made publicly available.

[Baroness Chisholm of Owlpen (Con)]

My Lords, public sector procurers are required to seek value for money through competition that is fair, open and transparent. Rules on addressing conflicts of interest are set out in the Public Contracts Regulations 2015, which make clear that contracting authorities should put in place measures to avoid any distortion of competition and to ensure equal treatment to all bidders.

[Lord Berkeley (Lab)]

I am grateful to the Minister for that reply. There are a number of conflict of interest issues around at the moment, but the one that I would like to mention is about HS2. The very eminent company CH2M has been project managing the work for the past few years. This year, it was awarded a further £360 million contract as a “delivery partner” and, more recently, it supplied the interim CEO for HS2. In a Written Answer I got from the noble Lord, Lord Ahmad, who I am pleased to see is in his seat, he said that the conflict of interest had been cleared by an internal panel and that the names of the members of the panel were confidential. This is a £50 billion contract. Surely there needs to be independent scrutiny and transparency about the process. There is always a risk that even a partner can screw the Government. I suggest that the solution that the noble Lord the Minister has given us is not sufficient and needs greatly strengthening.

[Baroness Chisholm of Owlpen]

My Lords, there were lots of questions there. HS2 Ltd follows recruitment practices that are similar to those followed in Civil Service appointments and are made through open and fair competition. The short-term services of the interim CEO have been obtained to fill the gap until those fair and open procedures for the permanent appointment can be completed. The interim CEO is not an employee of HS2 Ltd, so it would not be appropriate to follow a recruitment process for such an appointment.

To quickly cover the noble Lord’s point about not being open regarding the people on the panel, as my noble friend Lord Ahmad said—indeed, I wonder why my noble friend is not standing here instead of me—in his previous Answer:

“It is not possible to provide the names of HS2 Ltd’s Conflict of Interest Panel Members, nor details of specific cases which have been heard as we do not consider doing so would be consistent with the Data Protection Act 1998 (DPA). Unfair disclosure of personal data is a breach of the First Data Protection Principles under the DPA”.