Public Procurement Processes

Debate between Mick Whitley and Peter Dowd

Wednesday 25th January 2023 Westminster Hall

[Mick Whitley]

The hon. Lady makes a good point, which I will cover a bit later.

Team Resolute is led by a Spanish ship company called Navantia, which is guaranteed to get at least 40% of the work, worth about £640 million. Ministers have confirmed that there is no limit on the jobs it can create in Spain. As for Navantia being part of a UK consortium, it is true that the bid includes Navantia UK, but here’s the rub: Navantia UK was created only in May last year as a subsidiary of the Spanish firm. It has no trading history, and its two directors live in Spain.

At the very heart of the problem lies the fact that a social value calculation is not included in the public procurement process. My call on the Government is simple: make it a compulsory component—make its inclusion in the consideration of all bids compulsory.

[Peter Dowd (Bootle) (Lab)]

Is my hon. Friend aware that in the other House, Members expressed concern that the Procurement Bill falls short of the Green Paper, in that there is no exact definition of key procurement principles, there are no specific requirements on climate objectives and, as he just said, there is no real emphasis on social value elements?

[Mick Whitley]

I thank my hon. Friend for that intervention; I am just about to cover that point.

Only by including a social value calculation can we ensure that every contract is transparent, and that its impact on local communities, job creation, the standard of jobs and the local economy is taken into account and plays a key part in shaping the final decision. Its absence from the Bill is even more surprising given the noise the Cabinet Office made in response to the consultation on the original Green Paper, “Transforming Public Procurement”. The Cabinet Office wrote last December that social value

“can play a big role in contributing to the Government’s levelling-up goals.”

--- Later in debate ---

[Mick Whitley]

The hon. Gentleman makes a good point. The Government must be aware that the supply chains are too long. Instead of offshoring, they need to inshore.

Public money has been wasted on an industrial scale, and the ability of Ministers to throw taxpayers’ money away is now being codified in the Procurement Bill. Conservative peers voted down an amendment to ban the use of VIP lanes in the awarding of contracts. Together, my Labour colleagues and I will do our level best to change that and get the VIP lanes closed for good. The High Court has agreed with us and ruled the VIP lanes illegal.

[Peter Dowd]

I am sorry to interrupt my hon. Friend in mid flow. He has dealt with some specifics, but one of my concerns is that there does not appear to be any real assessment of how the measures in the Procurement Bill will fulfil its principles. For example, the Government want to launch new measures to promote jobs and new skills, but how many, and what sort of skills? They want to encourage economic prosperity and growth—God knows, we need it—but there is no indication of how. They want to tackle climate change and level up, but there are no indicators and no metrics at all to assess that. Does he agree that we need not just words but facts and assessment to back this up?

[Mick Whitley]

Yes, and the Minister should address that question in his response.

In summary, we cannot continue with a system under which one in six procurement contracts over a five-year period was found by the Fair Tax Foundation to have been awarded to companies with connections to tax havens. We cannot continue with VIP lanes. We need a system that is accountable and transparent and made watertight against cronyism; that places social value, local economies and fair employment practices at its heart; that enables the Government to recoup money from those who fail to deliver; that gives real opportunity to small, medium and social enterprises to win; and that recognises that outsourcing has been a complete failure and the time for a return to insourcing is overdue. Without extensive amendment, the Procurement Bill does none of those things.