Procurement Bill [HL]

Lord Clement-Jones Excerpts

Committee stage
Monday 18th July 2022 Grand Committee

[Lord Clement-Jones (LD)]

My Lords, I rise to speak to a number of amendments in this group on behalf of my noble friend Lord Wallace and myself. I must first apologise that there was no presence on the Liberal Democrats Benches at the beginning. I am afraid my colleagues have been in the wars. My noble friend Lord Wallace is at the dentist, my noble friend Lord Fox is suffering from Covid and my noble friend Lord Scriven was delayed for four hours on a train—so it has all been a tale of disaster.

I shall speak first to my noble friend Lord Wallace’s Amendments 450 and 451, which are intended to probe the nature of the exemptions from publishing or disclosing information. It is welcome that centralised investigations by a Minister of the Crown into whether suppliers should be excluded are explicitly allowed under the Bill and that reports from these investigations must be published. However, under the current Bill the grounds for not publishing such reports include national security and the release of sensitive commercial information. Sensitive commercial information is defined under Clause 85 as any information which

“would be likely to prejudice the commercial interests of any person if it were published”.

Given that a debarment investigation, by its very nature, is likely to prejudice the commercial interests of a person in that it will have a significant reputational impact on a company or individual that will affect their commercial relations, this test is too broad and is likely to lead to many debarment investigation reports not being published or to decisions to do so being contested by the company.

Clause 85(2)(b) is likely to lead to more redaction of information than is necessary or in the public interest by putting the onus on the contracting authority to prove there is no chance it will cause any harm to the commercial interests of any person—a standard which is very vague and difficult to enforce. We therefore argue that information in public contracts regarding how public funds are spent should be public by design and redacted only by exception when doing so is in the overriding public interest. Doing so reduces the risk for contracting authorities and will avoid overreaction.

My noble friend’s Amendment 448 has the same intent as Amendment 449A. The noble Lord, Lord Berkeley, spoke to that amendment extremely cogently and I have signed it. As he said, the Freedom of Information Act 2000 applies to information about a contract held by a public authority but not normally to information held by the contractor. Public access to information about public sector contracts varies from contract to contract, depending on their precise terms and on the willingness of the parties to adopt measures permitting greater access.

Much of the information the public may seek will relate to problems not anticipated at the contract stage or to information which the authority did not consider it needed to monitor in relation to performance under the contract. The Bill provides for only limited disclosure to the public about the performance of a contract. An annual assessment of performance against KPIs will be required for contracts valued at over £2 million, but an authority will not be required to publish more than three KPIs and may not be required to publish any at all if it considers that they would not allow the appropriate assessment of the contract’s performance. The actual information to be published about compliance with KPIs will be left to regulations.

In any event, a 12-month wait for an annual publication is unlikely to satisfy the needs of those concerned about an existing problem, and this amendment, as the noble Lord described, provides that all information relating to a contract with a public authority held by the contractor or a subcontractor will be subject to the FoIA or to the Environmental Information Regulations 2004. As he described, this follows the approach of many countries’ FoI laws: for example, Australia, Germany, Ireland, Italy, New Zealand—I could go on.

Amendment 449 would in effect make this position under the UK’s Freedom of Information Act and the EIR. It would ensure that any information held by a contractor in connection with a public authority contract would be deemed to be held on behalf of the authority and thus be subject to the FoIA and EIR. The public’s right to such information would no longer depend on the precise terms of the contract. We strongly support that amendment.

We also support Amendments 455 and 459A in the name of the noble Baroness, Lady Hayman. I have also tabled Amendment 456, which is complementary to Amendment 459A. As the noble Baroness described, Amendment 459A is designed explicitly to frame a duty around transparency in UK procurement beyond publishing the notices themselves as required in the Bill. As she described, this is drawn from the OECD’s recommendation on public procurement and seems to have some purchase with the Cabinet Office. The amendment would help establish how and where the notices should be published. It also says why or what the objective behind publishing the notices is. It is important that the completeness and comprehensiveness of the notices are not changed without accountability.

Amendment 456 goes a bit further and adds specific requirements about the platform’s implementation and would ensure that the information on the digital platform was regularly reviewed for accuracy, timeliness and completeness. A crucial aspect is the need for the contract award notices to be published in a timely fashion. Current legislation requires contract award notices to be published within 30 days, yet research by the Spend Network shows that the mean time to publish contract award notices is over 40 days. Many ministerial departments spending billions of pounds take more than three months to publish notices. The Cabinet Office takes an average of 2.7 months. Vital information is missing from nearly three-quarters of contract award notices, and this is wrong because it denies the public, businesses of all sizes and the media the ability to understand what financial commitments the Government are making and with whom—as with that egregious fast-track PPE contract situation.

We need to ensure that this long-standing problem does not get worse and that the appropriate authority ensures that public sector organisations publish complete, accurate and accessible data under an open licence and that the 30-day threshold set out in Clause 51 is respected in practice. That is what Amendment—

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[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

My Lords, I am tempted to say to the noble Lord, Lord Clement-Jones, that he need not sit down since I am about to call him.

[Lord Clement-Jones (LD)]

Thank you. My Lords, if noble Lords thought that my previous speech took a long time, they will not be happy with the second half of it, which concerns the technical parts. These relate to Amendments 452A, 452B, 519A and 519B, which are technical amendments from the Local Government Association designed to ensure that all notices come within the new digital platform.

Amendments 452A and 452B relate to Clause 86(1) of the Bill, which sets out that appropriate authorities may by regulations make provision about

“the form and content of notices, documents or other information to be published or provided under this Act”

and

“how such notices or documents are, or information is, to be published, provided or revised.”

The amendments would help ensure that future regulations do not contravene the purpose of the single digital platform wherever possible and support the move to progressively streamline the many different publication requirements for procurement information and contract-spend data placed on local government and the public sector as a whole through different pieces of legislation.

Amendment 519A would omit Section 89(4)(b) and 89(5) of the Transport Act 1985. This would remove the requirement for local authorities to issue notices of tender individually to all persons who have given to that authority a written notice indicating that they wish to receive invitations to tender for the provision of local services for that authority’s area. This would bring the requirements to advertise tenders for transport services into line with those set out in the Bill and facilitate the ambition to create a single digital platform where all public tenders are advertised in one place.

Finally, Amendment 519B would amend the Service Subsidy Agreements (Tendering) (England) Regulations 2002 by removing Regulations 4 and 5. Regulation 4 requires local authorities to publish information relating to tender invitations in accordance with Part 1 of Schedule 1 to the same regulations. Regulation 5 requires local authorities to publish tender information to the general public at times, in places and in a form which are convenient to the public, and to publish notices of tenders in local newspapers. Removing the two regulations would ensure that information about contract pipelines and contract awards for service subsidies will in future be published in the same place and format as information about any other public contract, to improve consistency and accessibility. A service subsidy in this context is where councils subsidise companies operating public passenger transport services to run services on routes which may not otherwise be economically viable, for example bus services in rural areas. I hope that has explained these rather technical amendments and very much hope that the Minister understands the motive behind them.

[Lord True (Con)]

My Lords, I apologise for not rising sooner; I never know how many spokesmen are going to rise from the various Benches. This has been another interesting and informative debate. It has also been extremely wide-ranging, as has become our custom in this Committee. I will try to answer as many points as possible, but there are things coming from various areas that we will look at carefully. This is your Lordships’ Committee and therefore it is perfectly reasonable for points to be made. My aspiration is to answer, but I may not be able to answer them all.

Before I get on to the main amendments, I will address various things I was asked about. The noble Baroness, Lady Boycott, asked about the Palantir contract. I am advised that this is a DHSC NHS contract. I am not informed in my department of the details she asked for, but I will ask my officials to follow up and respond to her later.

The noble Lord, Lord Berkeley, asked about a Written Ministerial Statement made last week. The timing of the publication of the participation in government commercial activity guidelines for Ministers referred to in that Statement is not connected to this Bill. The guidance sets out how Ministers can be appropriately involved in commercial activity, including procurements, under the current procurement rules.

I was anticipating in a later group—indeed, there are some relevant amendments—a debate about Hikvision. I am grateful for what the noble Lord, Lord Alton, said, as well as for the opportunity to speak to him about this matter, which, as he said, has some security considerations. So far as the actuality of what might or could happen is concerned—that is a potential rather than a loaded spin on it—it is ultimately up to contracting authorities to apply the grounds for exclusion under this Bill on a contract-by-contract basis. The national security ground is discretionary, meaning that authorities can take into account a range of factors, including the nature of the contract being tendered. However, the debarment regime will allow for the central consideration of suppliers on the grounds of national security. As the noble Lord knows, the Government’s security group is working with the National Technical Authority and the Government Commercial Function on the government security aspects of this issue.

I appreciate the noble Lord’s impatience, given the sensitivities of the issue. Policy options are being worked out for how to mitigate the security risks posed by this type of equipment; they range from primary legislation to ban certain companies from the government supply chain to issuing more advice and guidance for contracting authorities. The Cabinet Office has also published guidance setting out the steps that all government departments must take to identify and mitigate modern slavery and labour abuse risks throughout the commercial lifecycle, focusing on the areas of highest risk. We may well return to this issue in debate on a later group, but I can assure the noble Lord that the matters he raised are ones that the Government are not minimising but currently considering.

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[Lord True (Con)]

My Lords, I have given further information. The noble Lord referred to a whole range of factors which he asked to be considered and asked me to respond to the Foreign Affairs Select Committee report and so on. I said I would reflect on all he has said and come back, but I gather there has been some reflection on this aspect of his menu. We will no doubt maintain this dialogue.

The amendments we were talking about—Amendments 448, 449 and 449A—all relate to freedom of information and seek to bring external suppliers into the scope of the Act. In practice, the Government do not believe that the amendment would add much and could impose burdens on businesses that would make public contracts unattractive. The public authority will already hold all the details of the tendering process and the resulting contracts, and that information can already be requested under the FoI Act. The desire has been expressed in some quarters to reform the FoI Act, but we are looking at the proposals before us.

Furthermore, information held by a supplier or subcontractor on behalf of a contracting authority is already within scope of the Act. The amendments also introduce unhelpful limitations on the ability of contracting authorities to withhold commercially confidential information. This is a point of debate, but the FoI Act sets out the duties on public bodies when they receive requests for information under the Act. Restating the operation of that legislation is not necessary in this Bill. The Bill sets out in detail what information is required to be published and the triggers for publication, as well as requiring contracting authorities to explain why they are withholding any data.

Amendment 449A also seeks to extend the enforcement powers of the Information Commissioner to suppliers and subcontractors and open them up to criminal prosecution. The Information Commissioner already has enforcement powers in relation to public authorities and therefore in relation to the information held by others on their behalf. We believe that transparency is a sanction for authorities that fail to fulfil their obligations to publish as the failure will be obvious to the public. Failure to publish information required by the Act could be subject to judicial review, and there is also potential for a civil claim for breach of statutory duty pursuant to Clause 89 if the supplier can demonstrate that it suffered loss or damage arising from a breach of a publication obligation. Additionally, an appropriate authority has a power under Clauses 96 to 98 to investigate a contracting authority’s compliance with the Act, make recommendations and, if appropriate, provide statutory guidance to share lessons learned as a result of the investigation. Recommendations issued under Clause 97 come with a duty on the contracting authority to have regard to those recommendations when considering how to comply with the Act, and failure to do so would also leave the contracting authority open to judicial review.

Where a contracting authority is required to publish something that includes sensitive commercial information, it may withhold or redact that information only if there is an “overriding public interest” in doing so. Where the commercial confidentiality exemption is used to withhold or redact information, this must be publicly recorded. As such, there will be full transparency about what has been withheld and why, and interested parties can always challenge such decisions by requesting the withheld information under FoI law. This process is subject to the oversight of the Information Commissioner. Interested parties can also complain to the procurement review unit, which we discussed the other day.

Amendments 450 and 451 are from the noble Lords, Lord Wallace and Lord Fox. They are absent, and I send them best wishes for their respective aliments. Expertus dico: I have just had an aliment as noble Lords saw in the last Session, and I very much feel for all noble Lords. These amendments would make it harder for contracting authorities to withhold information in instances where there is sensitive commercial content. The overall result could be the inappropriate disclosure of sensitive information or fear of such disclosure, both of which are likely to have a chilling effect on suppliers bidding if they cannot be confident that their commercial secrets will be respected by contracting authorities. This could lead to a reduction in choice, quality and value.

Amendment 452, tabled by the noble Baronesses, Lady Worthington and Lady Boycott, and Amendment 455, tabled by the noble Baroness, Lady Hayman of Ullock—which I think is intended to address the central digital platform, not the data on the supplier registration system—propose to introduce various requirements about the accessibility of published information and how it is licensed. The Government have already committed to a publicly available digital platform which will allow citizens to understand authorities’ procurement decisions. This data will be freely available. It will remain subject to data protection law and redaction under the exemptions set out in Clause 85.

However, not all information should be published on the central digital platform. For example, some associated tender documents produced under Clause 20 in certain procurement exercises may need to be circulated to only a limited group of suppliers, for instance, where that information is sensitive. As set out in the Green Paper, we will apply the open contracting data standard, and specify this in more detail in secondary legislation. Published data will be covered by open government licence where possible; personal data contained on the platform will be available without any licence.

Amendments 452A and 452B, tabled by the noble Lord, Lord Clement-Jones, would amend Clause 86 to ensure that regulations require publication on a single digital platform. These amendments are unnecessary as the Government have already committed to providing this platform.

The noble Lord, Lord Clement-Jones, has tabled Amendment 456, which imposes obligations on an appropriate authority in relation to standards and quality of data on the platform. Clause 86(1)(a) already makes specific provision for regulations to set out both the form and the content of information to be published under the various notices required by the Bill. This power is there to ensure that regulations can establish the very standards and formats that I believe the noble Lord is seeking.

On the noble Lord’s proposed new paragraph (b), a notice is usually a snapshot of a moment in time. Most notices should not be updated after the initial publication and it is the legal responsibility of the contracting authority publishing the information to ensure that it is timely, accurate and complete. The appropriate authority—a Minister of the Crown, a Welsh Minister or a Northern Ireland department—will not be in a position to verify all that information, which is why it is the responsibility of the contracting authority.

[Lord Clement-Jones (LD)]

My Lords, I apologise for interrupting, but can the Minister therefore explain why these time limits are so regularly and hugely overridden? The research shows, as I mentioned, that the Cabinet Office itself has a delay of 2.7 months compared with its legal obligation of 30 days. How does the Minister explain that, and why is no further action needed in terms of compliance?

[Lord True (Con)]

My Lords, if the Cabinet Office is sinning, I will take the matter away and look into it. I heard what the noble Lord said about time limits, but I do not have a specific response in this area at the moment, and nor can I either confirm or deny the figure he gave. We have undertaken to engage on these issues, and we will find the answers and will look very carefully at what the noble Lord said in his speech—or rather, his two speeches.

Amendment 458, tabled by the noble Baroness, Lady Hayman of Ullock, relates to the creation of a digital registration system for suppliers. The register of suppliers described in the Green Paper remains a priority, and provision for this register is set out in Clause 88.

Amendment 459, tabled by the noble Baroness, the noble Lord, Lord Coaker, and others seeks to introduce a requirement for government departments to produce reports on carbon emissions relating to procured goods, services and works. I made the Government’s position clear previously that such matters should not be included in the Bill and that remains our position.

I thank the noble Baroness and the noble Lords, Lord Coaker and Lord Clement-Jones, for their Amendment 459A. However, the Government are opposed to this amendment as well. It would create an obligation to have the central digital platform operational within six months of passing the Act. Just to be clear, Clause 86 creates the powers that the Government will use to require publication on the single digital platform. Clause 88 is the basis of the supplier registration system, which is the “tell us once” system through which suppliers will communicate information about themselves to contracting authorities.

I understand from his helpful explanatory statement that the noble Lord, Lord Coaker, was referring to the former—the single digital platform. We do not wish to commit to such a timetable now, as it might not be necessary or possible to deliver the whole functionality of that platform to that timetable. As the noble Lord knows, there is already a six-month period of pre-implementation built in, but I hear what he says and I think there is broad agreement in the Committee that this development is desirable. I welcome the positive response from the Liberal Democrats and Her Majesty’s Opposition, having had discussions about it, and I will take away what they say.