Police Procurement (Motor Vehicles)

Mike Penning Excerpts

Thursday 16th July 2015 Westminster Hall

[Richard Arkless (Dumfries and Galloway) (SNP)]

I thank the hon. Member for City of Chester (Christian Matheson) for securing this important debate, for his excellent speech and for his passion about the principle of buying British. I have some degree of sympathy for that principle.

Policing in Scotland is a devolved matter, but there is now a single police force in Scotland, which procures police vehicles through the Home Office contract. As far as I am aware, the Scottish Police Authority is part of the consortium of 22 or 23 police authorities that procure cars through the Home Office contract.

[The Minister for Policing, Crime and Criminal Justice (Mike Penning)]

I welcome the hon. Gentleman to his position in the House. Actually, it is not the Home Office contract, but a contract with West Yorkshire, which is the central procurement team for the forces. He is absolutely right that Police Scotland is involved in the procurement process, but this is not a Home Office issue. It is done through the constabularies themselves, and West Yorkshire leads.

[Richard Arkless]

Nevertheless, the hon. Member for City of Chester made some excellent points. Before I heard them, I intended to outline the procurement process in Scotland and the savings that the single police is making within it. However, given what the hon. Gentleman said, I am not sure the debate would be served by that analysis.

I give the hon. Gentleman a commitment that I will approach the Scottish Police Authority and ask it about this issue. I will ask whether it is aware of the contract potentially being given to Peugeot and get its view on the matter. I will also liaise with the Scottish Government and talk to the hon. Gentleman about the results of that, so we can take that forward. I do not have the information he has about whether the contract will go to Peugeot, but if it is going to, I share his concerns.

I cannot add a great deal to what the hon. Gentleman said, other than to agree with the comments of the right hon. Member for Leicester East (Keith Vaz). I think the procurement process is best served by a consortium for procuring vehicles, so we can take advantages of economies of scale and get more bang for our buck. We could make demands on price, and we could make things cheaper and more cost-effective for the UK taxpayer.

I will leave it at that. I give the hon. Member for City of Chester my firm commitment that I will contact the Scottish Police Authority and the Scottish Government, and liaise directly with him on this issue to see what we can come up with to take it forward.

--- Later in debate ---

[Mike Penning]

I am grateful to the Chair of the Select Committee for being so generous in giving way, as always; I hope I always do the same for him. I shall probably be appearing before his Committee quite soon, so I am going to be nice.

In Leicestershire there is a fantastic chief constable and the PCC is doing exemplary work. Sadly—it may be because of procurement issues and already being locked into a contract—Leicestershire is not part of the consortium. I hope that it will join, and perhaps the right hon. Gentleman will join me in the hope that it will come forward to do so; it is important to get as many as possible. I respect the fact that the force may already be in a contractual obligation, although hopefully that will come to an end quite soon. If the right hon. Gentleman will join me, perhaps we can bring Leicestershire to the party as well.

[Keith Vaz]

I am happy to do so. That is the second thing that I have learned this afternoon. I did not know that, and I think that Leicestershire should be part of a consortium or collaboration because that is the best way, working together among the various police forces, that we can get the best possible deal for taxpayers.

We have not yet reached the Scottish situation outlined by the hon. Member for Dumfries and Galloway (Richard Arkless) in which there is one police force and one chief constable who can work with the national Government to procure the best deal. Who knows whether we may be looking in that direction? I have just been looking at the evidence that the permanent secretary at the Home Office gave on Monday to the Public Accounts Committee. He hinted at economies of scale with reference to mergers. I do not say that we are going to consider mergers, because that always causes a lot of concern among hon. Members, who are all keen to preserve their local police forces. However, value for money is an important criterion.

My second point, and I suppose a more important one for the present debate, is what kind of vehicles we would like our police officers to be in. Of course as British citizens we would like them to be in vehicles manufactured in our country. When we considered the issue of value for money, we found that cheapest is not always best. Of course we would want the best possible deal. I am not sure how the bidding process happens—whether by sealed bid or open negotiations; but I think that if there were a way for the consortium to put to a British manufacturer the deal that it had got with a foreign one, to see whether it could be matched in this country, that should be done.

The only way that can be done, of course, is if what has happened is properly examined. I promise my hon. Friends the Members for City of Chester and for Ellesmere Port and Neston that I will write to whoever is the lead in the consortium—as the Minister has made it clear that he will not be signing the contract, at the end—and ask the reason for the decision. Buying British is not always the best option. We are not the ones who sit at the negotiating table, in the end. However, both my hon. Friends have made a compelling case for the matter to be looked at carefully, and of course we want the police to use vehicles made in this country, if that is possible.

--- Later in debate ---

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Brady. I congratulate my hon. Friends the Members for City of Chester (Christian Matheson) and for Ellesmere Port and Neston (Justin Madders) on obtaining the debate. They are right that we must work towards British bobbies buying British cars.

My hon. Friend the Member for City of Chester was right when he referred to the world-class success story that is the automotive sector. I welcome the fact that the steps that the Labour party took in government for a dedicated industrial strategy and the Automotive Council UK were continued in the past five years. There has been a welcome continuity of policy in the automotive sector, designed to build on that success. My hon. Friend the Member for Ellesmere Port and Neston was right when he said that we need constantly to bolster that success, particularly when decisions that can be influenced by the Government are being made.

We would not be having this debate in France. Sadly, I vividly remember what happened to the Peugeot factory in Coventry. I was involved in the efforts to persuade the company to change its mind. If we were having this debate in France and anyone said to the French Police Minister, “Will you buy British cars?”, I think the Minister’s response would be, “Pas croyable! On achète des voitures Anglaises, pour nos flics Français? Merde!” Or, loosely translated, “You cannot be serious.”

[Mike Penning]

I bet Hansard is loving this!

[Jack Dromey]

Part of the problem is the approach towards procurement. However, there is also the issue raised by both my hon. Friends in respect of the interpretation of the European Union procurement rules. I remember that in my former role as deputy general secretary of, first, the Transport and General Workers Union, and then Unite, we regularly sought to influence procurement decisions under successive Governments. The rather narrow interpretation of EU procurement rules in our country, compared with France and Germany, was stark. In one rather heated discussion with senior civil servants in the Treasury some years ago, they said, “Well, we would like to, but we can’t, because of the constraints of the EU procurement rules.” Perhaps my Catholic education lets me down, but my recollection is that when Moses came down from the mountain with the tablets of stone, they did not have written on them EU procurement rules. EU procurement rules are manufactured by Minister and man and can, and should be, interpreted flexibly, exactly as happens in France, Italy and Germany, who traditionally hold their industrial base in much higher regard than we do, all too often.

[Mike Penning]

The hon. Gentleman mentions Italy, a part of the world that I love dearly. I am informed that Italy has just awarded a contract for 4,000 cars to SEAT, from Spain.

[Jack Dromey]

I am aware of a Franco-Italian-Spanish collaboration. Interestingly, that refers back to the point made in an earlier intervention about countries making reciprocal arrangements that benefit the countries and industries involved.

There are two problems: first, the interpretation of EU procurement rules; and, secondly, the lack of a strategic procurement strategy. The Minister was right to mention the welcome step in the right direction in the 22 forces coming together and the role of the Crown Commercial Service, anchored by West Yorkshire—a collaboration not before its time. I take the point made by the hon. Member for Dumfries and Galloway (Richard Arkless), the Scottish National party spokesman, that it is different in Scotland, where there is a national strategic procurement approach, but the problem is that while we have 43 forces in England Wales, taken as a whole, the story of our life is all too often separate decisions being made that do not necessarily make sense in terms of operational effectiveness and efficiency, and the best interests of our industrial base.

That long-standing problem has recurred under successive Governments, but under the previous Government a damning National Audit Office report mentioned a particular sum in respect of the procurement portal’s potential: if it were fully realised it could lead to a benefit of £50 million. However, what was being realised was peanuts, because there was only 2% take-up through the national procurement portal.

The official Opposition have argued that collaboration is crucial, but there needs to be a move one step further in a nationally driven strategic approach with the police service, including mandated procurement. Some of the work that we have done during the past two years has demonstrated that saving 25% of the £2.2 billion procurement budget, or £550 million, is eminently achievable, considering the experience elsewhere in the public and private sectors. By the way, that sum could save many police officers who would otherwise go. Whether in respect of a sensible approach to realising savings to enable investment in policing, or in respect of procurement and the industrial interests of our country, the time has come for a national strategic approach, at the heart of which should necessarily be—where appropriate and not in all circumstances—mandating.

I warmly welcome my right hon. Friend the Member for Leicester East (Keith Vaz), the Chair of the Home Affairs Committee, saying that his Committee might return to this at the next stages, not least because of the enormous benefits there would be for our industrial base in Britain, but also because we would have capacity to invest in policing, particularly front-line policing, at a time of continuing constraints on public expenditure.

We urge the Minister to consider two things during the next stages. First, a powerful case has been made for the pause, if I can use my right hon. Friend’s words. Concern has been expressed, rightly, about what may happen at the next stages—will a major contract be placed with a company that has not, in the past, shown quite the loyalty to this country that it should have done? My hon. Friends are right to raise that matter. I hope the Minister is prepared to sit down with those able to make the decisions and urge them to reconsider, very much along the lines that my right hon. Friend mentioned. Of course, we need value for money, but we should think of the wider and longer-term interests, including our country’s industrial interests.

Secondly, I would be the first to recognise that there have been some welcome steps in the right direction under this Government, but I hope they go significantly further in the aspect of procurement relating to hardware —to use the shorthand—whereby, working with the Department for Business, Innovation and Skills and the police service, they seek a strategic focus on getting the best for Britain out of procurement.

In conclusion, it goes without saying, but it is worth saying nevertheless, that the best should always be bought for our police service, because, particularly at times of stress and crisis, it needs to be absolutely confident that what is purchased for its use works and is of the highest possible specification, subject to value for money. We need to be confident that that is so. However, having said that, I do not believe that that contradicts a “Buy British” policy, for which my hon. Friends argued powerfully. No one is suggesting that always, on every occasion, nothing else is done, but we should have that approach. My hon. Friends have flown the flag for their two constituencies today, and our approach should be to fly the flag for the country as a whole.

[The Minister for Policing, Crime and Criminal Justice (Mike Penning)]

Mr Brady, it is a pleasure, as usual, to serve under your chairmanship in my first Westminster Hall debate in the same role as I had in the previous Government, but doing more. The Prime Minister kindly inserted the word “Crime” into my portfolio—a short five-letter word that means I have apparently taken over most of the rest of the Home Office.

I congratulate the hon. Member for City of Chester (Christian Matheson). It is a beautiful city; I know it well. It is a long time since I was there, so perhaps I need to go back soon and go out on patrol. The hon. Member for Ellesmere Port and Neston (Justin Madders) also spoke in the debate. As a young fireman I did a bit of moonlighting in the Port Sunlight area, delivering quite a lot, and I used to drive through that part of the world regularly—well, I tried to drive, but it was like a car park on the motorway most of the time.

Anybody who knows me will know that I am ever so slightly Eurosceptic, so I have a great deal of sympathy with what has been said in this Chamber this afternoon. As a Minister with experience in five Departments now, I assure colleagues that I have pushed the parameters as far as I can when it comes to what I perceive—and what I am sure the Government perceive—as incorrect interpretation of EU regulations. My advice is that many of the things that Members have been asking be done—I will ensure that I check this when I write to them—are illegal under the EU procurement directive. Even looking at the matter again in 2015, as Members have mentioned, that would have made no difference to the geographical part of the procurement process. If I am wrong, I will certainly write to colleagues to correct it, but that is the advice I stand here with as a Minister.

[Justin Madders]

On the lawfulness of the process, is the Minister aware of any judicial testing of how the system operates in other European countries compared with our own?

[Mike Penning]

As a Minister in the Home Office and the Ministry of Justice, I would not want to take on other responsibilities, but I promise to made sure that we look into that and get the facts on how other countries do it. Other countries interpret their membership of the European Union differently. I have committed infractions on more than one occasion in more than one Department, because my interpretation was different both from what my officials were pushing me to do and from the interpretations of courts in Europe.

If I was sitting on the Opposition Benches—I have sat there—I would be arguing for similar things. Whether we can physically do those things and how we get to the position where we can do them are important. To be honest, a Select Committee could look at this in procurement terms, so that we can be open and honest about what we can and cannot do. I thank the shadow Minister for his comments; we have come a long way in the past couple of months. We disagree that there should be a centralised purchasing system. We have freed up the police authorities to police their areas in the way that they feel they should. The police are doing fantastic work in Cheshire: crime has dropped with fewer police officers and less money, and the situation is exactly the same with West Midlands police.

One point that the shadow Minister and I agree on is that there is money to be saved in procurement. There is no argument about that; I was banging on about that long before I came into the House. As a fireman, I used to complain bitterly about the money that we spent. There were cupboards full of stuff bought 15 years before; it was sitting there and would never be used. I am desperately trying to push that spending down. To be fair to the PCCs and the chiefs, they are coming to the table. We created the PCCs to be independent and to be able to do what they want, and all I have said to them all along is that there has to be value for money. Some of them have clearly said to me, as Members have in this debate, that if they can buy locally, that should outweigh a little of the cost that they could have saved if they had got it cheaper elsewhere, and I understand that point. There are, however, huge differentials in what forces are paying, not only for cars, but for batons, shirts, fleeces and trousers. They are so huge that I have decided in the next couple of weeks to publish by police force the main things that they buy, so that the public can see what their force is spending in their area. We will make that information available, including for Cheshire, West Midlands and Leicestershire.

I was a tad cheeky in saying that Leicestershire was not part of the consortium of 22 police forces that has done the recent review. The West Midlands force, sadly, is not part of it either. I am sure there are reasons for that, and I am sure they will come to the party. We can get that 22 up, but it is not just about having all 43 forces. As we have heard, Police Scotland is part of the consortium, which is welcome as it helps us to get more bang for our buck, as are the British Transport police.

I will touch on the points raised on it being only Peugeot that won a contract, because it was not only Peugeot. BMW, Ford, Vauxhall and Peugeot were successful in the e-bid process that we have just come through. An interesting point was made about whether, when manufacturers have brought something else to the UK, that balances things out. That is similar to what the shadow Minister said about Italy buying 4,000 SEAT vehicles from Spain that were manufactured in Spain—some of the parts might have been produced here in the UK. We are a major exporter of car parts, and we should not underestimate that part of the system. BMW makes the Mini in this country, and that very successful product employs lots of people in Swindon. Sadly, Ford does not manufacture vehicles here any more. As a young fireman in Essex, I used to go to the Dagenham plant all too often—it was technically over the boundary, but we were often needed when there was an incident. The TCDI engine is a world-leading diesel engine that is exported all over the world. Some 80% of the vehicles manufactured in this country are exported, and Members have alluded to that great success story.

I must declare an interest: many of my constituents in the great constituency of Hemel Hempstead work in Vauxhall’s Luton van manufacturing plant, which is part of the consortium. Vauxhall vans will be with police forces, based on the process that took place, and Peugeot has also won a contract.

A new bidding process will take place this autumn. I am sure that Vauxhall, like many other manufacturers, will want to bid. Nearly every time I have visited a police force, I have been squeezed into the back of an Astra. The Astra is a bit of a Marmite subject for police forces. I love the Astra, and we have had Astras in our family, but colleagues who have been out on patrol will know that if there are two burly bobbies with all their kit and a burly Minister in the back, it can be interesting—but it does the job. Peugeot has won this contract, and I am sure that Vauxhall will be bidding for the other one.

What has happened here for the first time is economies of scale. I was a little bit cheeky by naming two forces that just happen to cover the constituencies of two of the most senior Members in Westminster Hall this afternoon. I am sure that there are contractual reasons for those forces not being in the consortium, because nearly all the chiefs I have met have said, “We’re going to be part of this. It’s very important.” I hope that forces join together at that level in other types of procurement. We see a lot of joint practice across different forces at the moment on HR and procurement in the IT sector. We have just announced a new IT company that will run the IT purchases for all 43 forces. I hope that Scotland will join us on that, because it would be brilliant to have an operable IT system. We need to work together on that with the National Crime Agency and organised crime units, and I will be working on it with Ministers in Scotland and Northern Ireland.

The key is having the right vehicles for the right people doing the right jobs. I first became a Minister back in 2010. I never dreamt that would happen to me, but it did. Having been a shadow Health Minister for four and a half years, the Department for Transport was really interesting on the first day. One thing I worked on was the Government car service. I am sure that colleagues remember the Mondeos outside Parliament over the years, then the Priuses and the Honda hybrids, but they have probably noticed that we do not see those vehicles out there any more—certainly not the Honda hybrids and the Toyotas. I made an absolutely conscious decision to buy the Avensis for junior Ministers, because they were assembled and manufactured in this country. There was not another compatible vehicle that could do the job—we tried lots of other vehicles: we had a Qashqai on loan for a considerable time, but it did not work; Hyundai sent us some vehicles, and I think one of them is still hanging around. I took a little bit of flack, but I wanted that pressure.

There are exemptions. For instance, the Metropolitan police wanted to use BMW armoured vehicles because they come off the production line armoured, whereas all other vehicles, such as the Jaguar, are retrofitted. I think we will find that the Prime Minister is in a Jaguar. It took a little while, but we got there in the end. I do not criticise the Metropolitan police for taking that time, because they wanted to keep people as safe as possible, but I want to ensure we have vehicles that create as many jobs as possible in this country, and I have a track record of trying to do that.

[Jack Dromey]

The steps taken by the Minister in relation to the Government car service were very welcome indeed. However, the lesson is surely that the Minister was able to move to the overwhelming majority of requirements being met by way of a British manufacturing strategy because he had the power so to do and drove that decision centrally. Does he accept that if we continue down the path of hoping that collaboration will deliver the kinds of outcome we are debating today, it is highly unlikely we will ever succeed to the extent we could realise with a strategic, mandated approach?

[Mike Penning]

We have debated this point before. I do not agree that the Home Office is the best place to control the procurement. In the example that I used, I was the Minister responsible, but I had to prove with cost analysis that it was the right vehicle. Of course, it was a very small procurement in real terms, but it sent a message.

I also make the point and advise that it would be illegal to look at the successful bid now and then, outside that, offer a British company the opportunity to match that bid. That would be illegal under EU procurement rules. Frankly, the e-auction mechanism would just collapse, because the process would not be in place.

We need to strike a balance between getting the best possible bang for our buck with the limited funds that we have at the moment in the difficult times we are still going through, and making sure that the police are happy with the vehicles they get and use, while at the same time bringing the forces as close together as possible to ensure that they build an economic argument. I can understand the point about Peugeot, but there are three other companies. There will be lots of jobs for my constituents building vans in Luton.

[Jack Dromey]

On the wider policy issue of how best to conduct procurement, I hope that on reflection, and informed by a Select Committee investigation, we will see progress in the next stages. In the here and now, however, a decision about Peugeot is imminent. Will the Minister agree to the very reasonable requests made by my hon. Friends the Members for City of Chester and for Ellesmere Port and Neston, and at the very least use his formidable powers of advocacy to call in those who are making the decision and ask them, “Can you not think twice?”?

[Mike Penning]

I speak regularly to West Yorkshire police, which is the lead force in the procurement process. I think we are beyond that stage, because we are already discussing the autumn auction, when there will be lots more vehicles out there.

The Crown Commercial Service facilitates the process within the Cabinet Office—it used to be done all over Government, with each Department doing its own thing, so at least it has now been brought together. Under the 2015 public contracts and social value legislation, the CCS has to look at the framework and set out—it is set out on its website, and I will get the documents sent out—how it has considered social value as well as cost analysis. That is enormously important.

The shadow Minister mentioned an investigation. I thought that Select Committees did inquiries rather than investigations—it sounds like I will have to swear an oath before I sit down. I honestly think that we should be having this debate in public, and we should be honest about the restrictions that result from our membership of the EU—what we have to do, how we interpret it and whether or not we are gold-plating it. If we are gold-plating it in any shape or form, Members who have known me for a long time will know that I will push back and push back. I have the Prime Minister’s permission to do that in as many areas as possible.

As I said earlier, if I was a Back Bencher, I would probably have been here arguing in exactly the same way as Opposition Members have today. Perhaps I have allowed a little more openness in the debate by mentioning the companies other from Peugeot which manufacture in this country, which is very important. No one was more disappointed than me when I heard that Peugeot was not going to do the work. Colleagues did an awful lot of work to get Peugeot to stay, but it made a commercial decision to go. Perhaps next time, it will make a commercial decision to come back.

[Christian Matheson]

Thank you, Mr Brady, for presiding over the debate. I thank right hon. and hon. Members for joining in, and pay tribute to the Minister for his characteristically forthright and honest approach. He asked us to look at his experience and track record, which suggests that he understands at least some of the issues we have raised, and I am grateful for that. The one question I would like him to ponder after the debate is why, if he has been advised that my proposals would be illegal, the same is not the case in our partner states in the EU, such as France and Germany.

[Mike Penning]

We have some time, so it is important that I respond to that. As I mentioned earlier, when I go to ministerial meetings and meet ministerial colleagues from Europe, they often have a very different attitude to their membership. I will try to find out how they have done it. Someone mentioned Saab earlier; sadly, it went out of manufacturing and stopped producing cars. I love Saabs. I used to drive them, and they are great, fun cars to drive. I am a bit of a petrolhead, so I do get in trouble when I talk about these sorts of things.

I will find out about the legality issues relating to procurement, and I will write to Members, copying in the Chair of the Select Committee and the shadow Minister. If I have misled the House in any way, I did not mean to. I am not a lawyer, but I am trying to be as honest as possible.

[Christian Matheson]

I thank the Minister for that intervention and the interest he is taking in this issue. I am extremely grateful to the other right hon. and hon. Members who participated in the debate. The Minister mentioned future contracts; I can tell him and others present that with, I am sure, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), I will be taking a very close interest in that process—hopefully from the start of the process this time.