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.