Procurement Bill [HL]

Lord Moylan Excerpts

2nd reading
Wednesday 25th May 2022 Lords Chamber

[Lord Moylan (Con)]

My Lords, it is a privilege to follow the noble Lord. With 28 years of experience in local government, and eight years on the board of Transport for London, I have long had a very strong interest in procurement. I am delighted that so many noble Lords have an equally strong interest in procurement. However, it is somewhat dispiriting that so many Members have strayed off into using this Bill as yet another opportunity to roll out a number of anti-capitalist themes and proposals which will no doubt reappear in Committee and then be duly taken out by a sensible Government when it returns to another place.

My question is rather more radical than those raised by most noble Lords so far: whether we actually need this Bill at all. Of course, we need to scrap the EU regulations, but do we need to replace them at all? In large parts of Europe—I say this without specifying any particular parts—there was a history of municipal corruption in the award of contracts in a non-transparent and corrupt way, and it was right that we should tackle that as a single European Community while we were a member of it. It was also the case that the European Union saw these regulations as a means of forcing the development of a single market. As we are no longer a member of the single market, that consideration is not relevant to us.

When it comes to municipal corruption, I will be so bold as to say that, in this country, we have been remarkably free of it. In my lifetime, there have been a few very significant cases—but only very, very few. We are very fortunate; we have an enviable record of a lack of corruption in public bodies. I was expecting at this point to be jeered at in the wake of the remarks by the noble Lord, Lord Strasburger. Yet, even if the allegations made and hinted at by the noble Lord were all vindicated, the remedy for them would lie in the criminal law and not in this Bill. This is because we have a full panoply of criminal law dealing with municipal and public body corruption, against the taking of bribes and against misconduct in public office. This is where we should look for remedies to the sort of corruption with which these regulations were originally intended to deal, rather than this Bill, which in my view is almost irrelevant. Indeed, the weakness of the Bill in relation to remedies has already been pointed out by other noble Lords, particularly the noble and learned Lord, Lord Thomas of Cwmgiedd.

I ask myself—and my noble friend the Minister can explain this later—why we do not simply scrap the existing regulations, rely on the criminal law as we used to before we joined the European Union, and then perhaps an esteemed body, such as the Chartered Institute of Public Finance and Accountancy, could issue a good practice note on how local authorities should comply with our international obligations. Is anything more than that actually needed?

The bureaucratisation of honesty—which is what we are actually discussing here—has led, over recent years, to the creation of what I call a high priesthood of procurement. By that, I mean people who are dedicated to the process—because this is a process Bill—of honesty rather than to its substance. Having got the grip of the process of procurement, they often refuse to let it go, even though everyone can see—even themselves quite often—that the procurement process is leading to a disaster. I hope that this Bill would at least be drafted in such a way as to avoid the pitfalls of the current system. I know that there have been some war stories, but I will take the opportunity to illustrate what I am saying with some of my own.

Very fortunately for me, back in the 1990s a very wise council officer said to me, “Do you know, I can get any result I want out of a procurement process? The secret, Councillor Moylan, is in how you set up the conditions by which the final decision will be made.” The whole system rests on what conditions you set up. I will give just a few examples. I know of one public procurement project, for services, which allocated 40% of the points to what was called “project compatibility”. When I said, “What does that mean?”, they said, “It means that we can choose whoever it is we want to work with, because they will be compatible with us.”

On another occasion, I was brought in to sit on an architectural panel; I was not involved early on, so I did not have a chance to shape the conditions. It was an architectural procurement—not a construction procurement—for a major public building. Having interviewed the various architects and seen their proposals, when we decided which one we wanted we were told by local government officers, who had brought their own lawyers to control us, that we could not have it because it did not meet the criteria. We asked what criteria it was not meeting, and the answer was financial stability—35% of the points had been given, without anyone being consulted, to the financial stability. Financial stability is important in some contracts, but if you choose a one-man architecture practice to build something for you and he goes bankrupt, you just rehire him; there is no consideration of financial stability when it comes to procuring services such as that. But we ended up with the architect we did not want because we had left it all too late.

I will now come to the question of the new, iconic bus shelter for London. Noble Lords will notice that there is no such thing as a new, iconic bus shelter for London. I engaged with TfL on this before I joined the board, and I said, “We should have a new, iconic bus shelter for London, because they are dreadful—absolutely appalling.” Peter Hendy, who was then commissioner of Transport for London, was good enough to agree that something should be done. I was representing London Councils at the time, so we set up jointly a process in which we invited architects to submit proposals for this wonderful thing. TfL officers ran it as a procurement process.

A large number of wonderful designs were put to us—20 appeared—some of which were so extravagant that they could never have been used. A design panel was put in place to make the architectural judgments, only for us to discover at the end of the presentations that we were not allowed to take design into account because the TfL officers had used the branch of the procurement process that you would use if you were buying a piece of air-conditioning plant. So it was to be judged entirely on the specification of whether it kept the rain out and things such as that. The entire purpose of the exercise was defeated through a misapplication of the procurement process, and we all agreed, exhausted by that point, that basically we would abandon it and come back to it. But we never did, so London still has a wide variability and a high level of ugliness in its bus shelters.

These revelations may shock noble Lords—I do not know—but they would not have shocked anybody engaged in public procurement in most other European Union countries, because they are perfectly aware that most European Union legislation is written with a high degree of rigidity as far as the words are concerned, and a high degree of flexibility as far as the application is concerned. Reference was made earlier to our gold-plating things. It is not that we gold-plate them; it is that we take them seriously in a way that other countries do not.

I say to my noble friend that my worry is simply this. We are quite rightly getting rid of a set of regulations that do not work for us and were designed for certain stances that do not apply to us, but instead of taking the radical approach of asking what the point of them was in the first place and whether we need them, we are in great danger of replicating them but with an English touch—sorry, I should not say English, because I am speaking just after the noble Lord, Lord Wigley, and I should have said earlier how delighted we all are that Wales has joined in this great corporate endeavour. My worry is that we simply put a local—a national—touch on them, but we end up with the same problems. We will still be doing obeisance to the high priesthood of procurement, and we will find that we are no further forward and will certainly not be dealing with allegations of corruption because, as I said, those will effectively still be dealt with under the criminal law.