Procurement Bill [HL]

Lord Lansley Excerpts

Committee stage
Wednesday 6th July 2022 Grand Committee

[Lord Hunt of Kings Heath (Lab)]

My Lords, as this is my first intervention, I remind the Committee of my presidency of the Health Care Supply Association. I have Amendments 82, 92 and 141 in this group, none of which have much to do with each other, but that is part of the mysteries and delights of grouping.

Amendment 82 is particularly concerned with the challenges facing charities seeking to obtain contracts from public authorities. I am very grateful to NCVO and Lloyds Bank for their briefing on this matter. While all types and sizes of charities experience challenges relating to the commissioning and procurement of public service contracts, smaller organisations often face considerable barriers. Yet a large proportion of the voluntary sector is actually fundamental to the delivery of public services. There are many examples, but we know, for instance, that the voluntary sector is the leading provider of services—according to research commissioned by DCMS—in relation to homelessness, and there are many other services where we are absolutely reliant on the voluntary sector.

However, there is a real problem in the huge amount of work that needs to be done to assemble information and make bids. Advance notice of tender opportunities is important for charities. We know that many of them have far fewer resources than private companies to support bid-writing, so they need time to plan. They also want to take time to work with service users or other charities to develop an offer, and that cannot be rushed. When commissioning services for people, especially those experiencing a range of intersecting challenges, a market does not often exist, so preliminary market engagement is critical for understanding what people need and how those needs could be met.

All my amendment seeks to do is create a presumption that contracting authorities should have ample notice through a planned procurement notice, unless there is a very good reason not to do so. This would allow the necessary time, particularly for smaller charities, to prepare bids.

My Amendment 92 is about the need for rigour and accountability in procurement. It starts from the requirement set by Her Majesty’s Treasury to ensure that the investment of public money, especially large sums, is done objectively and in a way that those who have to authorise the investment can rely on. It also deals with the principle of transparency and would ensure that business cases are routinely published.

My understanding is that it is already required under Green Book guidance from Her Majesty’s Treasury, particularly for major projects managed in the government portfolio, that at least a summary of the business case has to be published within four months of contract award. The Green Book, which has been regularly updated by the Treasury as circumstances require, describes in great detail the rigorous process that needs to be followed. The principle is that if you do not abide by this, you will not get approval for the expenditure of resources. Much in the Green Book is based on the need for a proper business case and I believe it was also envisaged that the business case would be published.

The problem is that regulation and good practice are too often ignored in the public sector. I think athere is less appetite for proper enforcement of that guidance. All campaigners can do to raise concerns about a particular tender process is go for judicial review, which, as we all know, can be very expensive.

My particular interest is the NHS. When I was a Health Minister, which seems a very long time ago, there were very strict rules about spending and investment by trusts. If public money was sought for a major procurement or programme then a strong authorisation path led from region to department, and often to the Treasury itself. Some of that remains, but what is missing is that the former strategic health authorities ensured that the required processes were followed properly and intervened when they were not. They also ensured that the public were consulted, but much of that has foolishly been thrown away. That means that it has become much harder for the public to hold decision-makers to account.

It is very noticeable that, last month, the Public Accounts Committee published a report on the Department of Health’s 2020-21 annual report. It commented that the department

“has regularly failed to follow public spending rules and across the Departmental Group there is a track record of failing to comply with the requirements of Managing Public Money. The Department is required to obtain approval from the Treasury before committing to expenditure where such authority is needed. The Treasury has confirmed that £1.3 billion of the Department’s spending in 2020–21 did not have HM Treasury consent and was therefore ‘irregular’. The Treasury has stated that ‘in the vast majority of cases’ this was because either the Department and/or the NHS had spent funds without approval or in express breach of conditions.”

If the noble Baroness, Lady Noakes, was still in the position she held on financial management in the Department of Health, that would not be happening.

My amendment would ensure that there is a proper business case and that it should be publicly available before crucial decisions are taken. If the Minister says that it is already required, the fact is that parts of the public sector are not listening. I hope that this debate will be helpful in ensuring that the Treasury and government departments look at this very closely in the future.

My third amendment follows a briefing from the RNIB and concerns the fact that, in replacing the existing legislation, the Bill overwrites requirements that are of particular significance to 14 million disabled people in the UK because they ensure that publicly procured goods and services are accessible to everyone. It is pretty unclear at the moment how the current Bill will replace that regulatory framework, and my Amendment 141 seeks to re-establish a requirement that contracting authorities have due regard to accessibility criteria for disabled people.

In June last year several organisations, including the RNIB, wrote to the Cabinet Office seeking assurances that accessibility for disabled people would be maintained in public procurement legislation. Responding, the then Minister, the noble Lord, Lord Agnew—who has certainly shown how you should resign, in style and with full transparency and visibility to your Lordships’ House, although I do not think he quite managed the grace of the noble Lord, Lord True, in his very perceptive remarks yesterday—said that the Government are committed to ensuring that accessibility for disabled people is maintained as part of public procurement legislation, and that the new regime will ensure that specifications take into account accessibility criteria and design for all users. Despite that, the only reference we can find to accessibility is in Clause 87(2), which states that any electronic communications utilised as part of the public procurement exercise must be

“accessible to people with disabilities.”

This is partly probing—finding out the government response to it. If the Minister argues that the public sector equality duty under the Equality Act is sufficient, we will argue that it is not sufficient because we have seen contracting authorities failing to consider their obligations and procuring inaccessible products. This amendment is only a start, but I hope the Minister will be sympathetic to the issue.

[Lord Lansley (Con)]

My Lords, before I speak to my Amendments 84 and 88, I will just say that, while I do not think it is a registrable interest or a conflict of interests, my experience in these things is largely derived from my work, over a number of years now, advising LOW Associates SRL in Brussels, which has a number of contracts with the European Commission and other European agencies. We have participated in procurements on a number of occasions each year in the European context. That gives one quite a lot of experience of the system we are moving from and some of the ways it can be improved. I put that on the record.

My noble friend and other noble Lords may recall that at Second Reading the most important point I made—it is one I will return to on a number of occasions, including when we talk about the procurement objectives and the national procurement policy statement —is that procurement by the public sector is a very large element of economic activity. The way in which it is conducted can have a significant and beneficial impact on productivity in the economy if the issues of innovation are properly incorporated into the consideration of how procurement is undertaken and who the suppliers to public authorities are.

In a sense, the noble Baroness, Lady Worthington, is trying to do the same kinds of things in Amendments 85 and 87. We are maybe trying to approach it in slightly different ways. The same will be true in relation to the procurement objectives.

I hope that in responding to this debate my noble friend can at least give us a sense that we can work together to try to ensure that the promotion of innovation is one of the central aspects of how contracting authorities go about their process of delivering best value, and that the broader externalities of procurement, through promoting innovation in the economy, are realised. They are significant.