Oral Answers to Questions

Debate between Meg Hillier and Nick Hurd

Monday 29th October 2018 Commons Chamber

[Mr Hurd]

I completely agree with my hon. Friend. Roger Hirst is doing a fantastic job in seizing the opportunity to get more out of existing resources, and I completely understand the point about capital budgets. There are restrictions in place for good reasons, but Roger and other PCCs can already use police and fire budgets to invest in shared functions, such as joint back offices, although both fire and police budgets need to make an appropriate contribution to the shared service.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

One of the issues with capital budgets is that some services are selling their capital assets and then renting from another part of the service, which can lead to very imbalanced budgets locally. Does the Minister have a grip at the centre on the long-term impact this could have?

[Mr Hurd]

I recognise the point the hon. Lady is making. In taking through the enabling legislation in this area, we were careful to put restrictions in place to assure stakeholders in particular that it was not a takeover of fire budgets, for example. Restrictions are in place, and for good reasons, but we monitor the situation carefully and listen to representations on both sides of the argument.

Police: Financial Sustainability

Debate between Meg Hillier and Nick Hurd

Wednesday 12th September 2018 Commons Chamber

[Mr Hurd]

I do agree, and that £460 million includes an additional £8 million for Avon and Somerset, which I know my hon. Friend will welcome. She is entirely right: Avon and Somerset is a superb example of a force that has adapted and innovated. I consider it to be best in class in respect of its smart use of data to manage demand, which means that it has some of the best response time statistics in the system. It provides an example to the rest of the system of how demand can be managed better through a more intelligent use of data, and I congratulate it on that.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The former permanent secretary at the Home Office has acknowledged that the funding formula for policing is ineffective. However, as there has been a delay, it now looks like we will be waiting until the spending review before the new formula is agreed and comes into force. On my calculation that means it will not come into force or make a difference until 2020-21. Can the Minister give us any comfort on that and explain when the funding formula will be properly revisited?

[Mr Hurd]

I say to the Chairman of the Public Accounts Committee, as I have said publicly, that the appropriate point to address this issue—which is very sensitive and which a number of forces and MPs representing forces feel very strongly about—is in the context of the CSR, which is the most important framework for long-term financial planning in the police. I will be very frank: my priority, working with the Home Secretary, is to make an argument to set the size of the total cake. We have made it clear that we will then need to deliver a compelling analysis and plan for how that cake gets divided up in a way that more fairly reflects the demands on the current policing system, which are evolving. We are very serious about that, but we just happen to think that the CSR is the most appropriate framework in which to do this work.

Sellafield

Debate between Meg Hillier and Nick Hurd

Tuesday 6th September 2016 Commons Chamber

[Mr Hurd]

I understand the point that the hon. Lady makes on behalf of her constituents. That reinforces the point that I was trying to make earlier about the importance of this statement to try to give some reassurance to all communities that may be affected. I hope that I have done so. As I said, we have confidence in the NDA. We monitor its work closely in terms of both value for money and pace.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The Minister has talked a number of times about cleaning up Sellafield as “cost-effectively” as possible, yet it was only when the Public Accounts Committee in the last Parliament looked closely at the issue that the Government moved to remove Nuclear Management Partners, the American consortium that was running Sellafield. Will he now undertake, as the new Minister, not only to visit, but to make sure that, in all the complex engineering work on this very complex site—I think three of the top 10 engineering challenges internationally are at Sellafield—the difficulty does not overblow the challenge of benchmarking engineering projects in similar fields, so that we get good value for money for the taxpayer while carrying out the important clean-up?

[Mr Hurd]

I take this opportunity to congratulate the hon. Lady on the extremely effective way she has chaired that Committee. The point she makes about the role of the PAC in this is really important in terms of reinforcing the framework of transparency and accountability around this incredibly complex process. This process carries a huge bill for the taxpayer, so it is absolutely imperative for a Government of any colour to drive it forward in as responsible and cost-effective a way as possible, with value for money being a prime consideration, but I take on board her suggestion very seriously.

Government Contracts

Debate between Meg Hillier and Nick Hurd

Tuesday 3rd December 2013 Westminster Hall

[Mr Hurd]

We are trying to embrace a culture change. There was a culture of buying big and buying badly in a very risk-averse way, and we are trying to improve that—to touch on a point alluded to by the hon. Member for Hackney South and Shoreditch—not least by instilling much greater commercial capability and confidence in the system. A saving of £10 billion in one year is an important improvement, which is equivalent to about £600 per UK household. That is real money, which has real-world impact. Within that, we have been working hard to improve the procurement processes that the hon. Lady quite rightly criticised. We need to make it easier and cheaper for firms, particularly smaller ones, to bid for work.

In the context of my main responsibilities as Minister for Civil Society, I might add that we are particularly keen that charities and social enterprises feel they have more space and a level playing field on which to compete. The hon. Lady mentioned the length of procurement times, and we have cut the length of the average procurement by 40%, which makes the UK faster, we think, than any of our European neighbours. I am always delighted to hear about specific cases where the procurement process has been too long and too clunky, but we have taken a big step in the right direction.

Part of the process is improving our commercial capability and confidence at the heart of the civil service, so 1,800 officials have already been trained in procurement and 150 leaders have been through the Major Projects Leadership Academy in Oxford. We need to go much further, as I have said, and get smarter at managing performance. For the first time, the Government have allowed past performance to be taken into account when bids for new work are evaluated. It is astonishing that that has not happened before. Suppliers can now be rated high risk when there are material performance concerns, and we have introduced a new approach for managing gross misconduct. Our long-term goal remains the creation of a vibrant, competitive marketplace. Where bad practice is uncovered, we will crack down on it robustly. We intend to continue to build on the progress of the past three years, focusing on commercial capability and promoting transparency.

I turn to the meat of the hon. Lady’s contribution on behalf of businesses in her constituency. We are absolutely determined to wrestle with some of the challenges, problems and barriers to which she alluded, to make it easier for small businesses to come in, compete and give those spending taxpayers’ money more choice and more access to the innovation that we desperately need. She talked about procurement time, and, as I have said, we have reduced the average turnaround time from advert to contract award by more than 40% to 100 working days. That is better than France and better than Germany. Within that, small procurements can be much quicker, and we are keen to continue to improve. Some progress has, therefore, been made in that area.

The hon. Lady talked about contract complexity, which I definitely recognise as a problem; the contract with some 150 key performance indicators that she mentioned is simply extraordinary. Our next step to try to simplify the system and introduce more consistency is to release a model contract for services, which sets out best-practice contracting approaches and includes a streamlined performance management regime.

The hon. Lady asked about intellectual property, which is of particular interest to technology companies in her constituency, and whether the Government still demanded that intellectual property be handed over to them. Our approach is to make that decision on a case-by-case basis. In the new model service contract, ownership of previously existing intellectual property rights will stay with the author. If the Government pay for new IPR to be created, however, in some circumstances it will be appropriate to retain ownership.

[Meg Hillier]

I am heartened by what the Minister has said. It would be helpful if people knew the position at the beginning of the process, because such hurdles are often added during the bid, which sends a very negative message around the small business community.

[Mr Hurd]

I take that point on board, and I give the hon. Lady an undertaking to feed it into the system as we look at the model contract and the best-practice contracting approaches. She spoke passionately about the need to open up more opportunities for SMEs, and I assure her that we are committed to doing so. She challenged me to get beyond mere words, and those are not just words; we can now talk about numbers. Since 2010, overall spend from Government with SMEs has increased by £1.5 billion, which is serious money. We are not concerned simply about the relentless pursuit of value for money for the taxpayer. Given the recent economic circumstances and the search for growth, it is in the interests of the taxpayer and the country that we support growth where it can be generated. As we all know, SMEs are the engine of growth in the economy, so the agenda is extremely important. As she knows, the Government set out an aspiration that 25% of Government spending should go to SMEs. Although the data are not perfect—I would not claim they were—we think about 19% of Government spending is directly and indirectly with SMEs. That is progress.

The hon. Lady talked about IT in particular. I know she has a specific constituency interest there. We are keen to break down Government contracts in IT into smaller sizes, which is essential if we are to capture the value that the SME community can bring. The massive differences in prices between the old suppliers producing old technology the old way and what can be done now through new technology are absolutely extraordinary. We are determined to break such contracts open. New presumptions are set against information and communications technology contracts worth more than £100 million and we have published an ICT strategy that explicitly supports smaller, more disaggregated approaches. We have also launched CloudStore. Some 58% of the first £54.5 million spent on CloudStore went to SMEs, which benefited from 66% of sales by number. Interestingly, the Foreign Office is a good example of success; rather than have a single ICT provider, it has split a single contract into three. G-Cloud has around 1,000 SMEs on it, which have won 66% of contract awards by number. We have also just announced the digital services framework, where SMEs constitute 84% of suppliers. I hope I can assure her that, in that space, there are not just words, but genuine achievements to point to in creating the frameworks and space for SMEs to come in and supply us with innovation and the potential to add huge amounts of value to the Government ICT spend.

The hon. Lady mentioned bad practice and sham practices in local government. The reach of central Government and the Cabinet Office in limiting local government has limits. We have, however, consulted on Lord Young’s recommendations on how we can extend some of what we have learnt in central Government and make it available for local authorities, so they can improve their procurement practice and, in particular, make it easier for SMEs to participate. We shall relentlessly bear down on the need for pre-qualification questionnaires below a certain threshold of contract. Contracts Finder has been enormously popular. It contains all opportunities worth more than £10,000. More that 19,000 contracts have been published online and 31% of contract awards have gone to SMEs. For the first time, we have published a contracts pipeline, with £169 billion-worth of contract opportunities.

We have set up a mystery shopper scheme to address bad practice and the need to blow a whistle on bad processes or notify us when things are not being done in the right way. The scheme allows suppliers to report poor procurement practice across the public sector. So far, more than 550 cases have been received, of which more than 100 have been successfully resolved in local government.

Payment terms are enormously important, because cash flow is everything when running a small business. The hon. Lady rightly asked about payment terms and whether the Cabinet Office plans to make it mandatory for large contractors to pay their subcontractors within 30 days of receipt for payment. Yes, is the answer. The Government pay all undisputed invoices within five days. We have mandated prime contractors to pay subcontractors within 30 days, through the inclusion of a contract condition in the contracts we write. The new model contract I mentioned will reinforce that, because it is enormously important. We recently consulted on Lord Young’s recommendation that those contract conditions be adopted across the whole of the public sector. There is a tremendous amount of ambition.

The hon. Lady talked about the need for post-contract audits and the need to improve the way we monitor performance. I and the Government acknowledge that. We want to do more post-contract audit, to focus on how the contract is performing, supported by much greater focus on building commercial capability and contract management in Whitehall. Too much of the capability, resource, process and thinking has been directed at the procurement process, and not at the broader commissioning process and the need to monitor and work with the supply chain after the contract is awarded, to ensure that what we bought is being delivered in the right ways.

The hon. Lady mentioned some barriers that her constituents and others face. She said that, where businesses join forces to bid for a contract, they are required to have three years of audited accounts, which they cannot provide. We are keen to remove as many barriers as possible, so that situation is suboptimal. That is why the Cabinet Office advises procurers not to request three years of audited accounts. We would be keen to review specific cases where such behaviour has occurred. The mystery shopper service is an opportunity for people, and small businesses in particular, to tell us the reality on the ground.

With that broad sweep, I hope that I have convinced the hon. Lady that our commitment to improve goes beyond words. She knows from her time in government and from the evidence she received on the Committee that such work is difficult. It is gritty. We are changing culture. We have to bring in new expertise and capability. We have to challenge the system that was frankly not very efficient at managing and spending public money. For reasons she will recognise, we are determined to secure much better value for the taxpayer, and that includes making it easier for SMEs in her constituency and others to come in and help us with the innovation, value for money and fresh approaches we desperately need.

[Meg Hillier]

I extended an invitation to the Minister, or his officials, to come to Shoreditch. I would be happy to host them on a useful working visit, if he is interested.

[Mr Hurd]

That is a delightful invitation. I can tell the hon. Lady on behalf of the Cabinet Office that we would be happy to accept.