Public Procurement

Nia Griffith Excerpts

Monday 13th May 2024 Commons Chamber

[Dame Nia Griffith (Llanelli) (Lab)]

Labour Members will not be opposing the regulations, which provide the detail needed for the Procurement Act to come into effect later this year. As Members across the House will recall, there was a need for a new procurement Act to reform the EU law-based procurement regime following the UK’s exit from the EU and to consolidate various procurement regulations into one place. For those reasons, we did not oppose the Procurement Bill on Second or Third Reading.

The purpose of the Procurement Act was to create a simpler, more flexible commercial system that better meets our country’s needs after having left the EU, while remaining compliant with our international obligations. However, as we have made clear in this House before, we are concerned that the Procurement Act was a wasted opportunity to reform procurement. In spite of our attempts to strengthen and improve the Bill with our amendments, the Procurement Act, when it comes into force in October, will unfortunately allow the same wasteful approach to emergency contracting rules that we saw during the pandemic, when friends of and donors to the Conservative party were given the first bite of the cherry while decent, skilled local businesses were denied the same opportunity. Billions of pounds of public money was wasted while excellent small and medium-sized businesses were overlooked. Nothing in the draft regulations will address that concern.

We also made it clear that we were very disappointed that the Act failed to mandate social value to secure investment in good British businesses, and I have to say that I was disappointed by the answer the Minister just gave to my right hon. Friend the Member for Warley (John Spellar). The procurement policy of a Labour Government would be rooted in getting value for money for every pound spent. Our national procurement plan would reward businesses that create jobs and pay their taxes, slash red tape for disadvantaged SMEs and claw back money from contractors that fail to deliver.

The statutory instrument is required to implement the new public procurement regime established by the Procurement Act 2023. It specifies what information should be included in the notices that contracting authorities must publish as per the requirements of the Procurement Act, and where and how these should be published. Other regulations in the statutory instrument impose requirements as to how contracting authorities should obtain specified information from suppliers, and provide further detail about how certain organisations and contracts are to be regulated. It gives details about how the Act covers Welsh and Scottish procurement in relation to reserved matters, and clarifies the disapplication of the Act in relation to regulated healthcare procurement.

Turning to the specific measures in the regulations, there is clarification about the various notices that will be published on the central digital platform. The platform was set up by the Minister for the Cabinet Office, and I hope it is progressing well. Notices that must be published there include planned procurement notices, tender notices, dynamic market notices and transparency notices. There is further specification of the information that should be included in the notices, with the purpose being to increase transparency and make the procurement regime more accessible to smaller businesses.

Measures that improve transparency and increase access to procurement opportunities, particularly to small and medium-sized businesses, are very much to be welcomed. The challenge will be in how to make these notices and the digital platform as user-friendly as possible, with all the relevant information easily accessible and searchable. As we move forward, it would be helpful if the Minister updated the House on progress in meeting the requirements of the regulations and on what impact they have on the number of small and medium-sized enterprises that bid for contracts. Goods purchased from small and medium-sized enterprises often mean providing local jobs, and local jobs mean that people can stay in their home towns and not have to move away for work, and importantly that they will spend their money in their local areas thus boosting the local economy.

The regulations also set out the details for supplier information requirements that will enable the creation of a supplier information system, the purpose of which will be to hold commonly used supplier information and allow it to be shared with contracting authorities, with the laudable aim of reducing the burden for suppliers, who have to provide the same information in relation to every procurement. Anyone who talks to businesses will say just how frustrating it is to have to supply the same information time and again. That is a particular burden for small and medium-sized businesses which simply do not have the capacity to deal with endless red tape. Measures that help to reduce that burden are very much to be welcomed, but again the challenge will be in the design and operation of the system. It should become a useful tool that saves repetition, rather than becoming a burden in itself, with businesses struggling to upload the necessary information.

The regulations also specify a list of services that may form the subject matter of what are called light-touch contracts, which would enjoy a less onerous regulatory regime, with the aim of encouraging organisations such as social enterprises and mutuals to bid for contracts for certain social, health and other person-orientated services. The key issues will be to maximise transparency and to ensure sufficient regulation to protect and get value for money for the public purse while at the same time encouraging a wider range of organisations to bid for contracts. The regulations specify that the Act does not apply to what is termed “regulated health procurement”, which is governed by other legislation.

The UK’s commitments under the World Trade Organisation agreement on Government procurement require us to have one financial threshold that applies to central Government authorities and another for the procurement of goods and services by local government and wider public sector bodies, as well as a specific threshold that applies to procurement for what are termed “works”—construction procurement that reflects the typically higher monetary values involved in procuring construction. The regulations therefore set out lists of which bodies are defined as central Government authorities and construction-related services that constitute “works”. These regulations set out further requirements in respect of what happens at the awarding of contracts and thereafter, with regulation 31 setting out what the assessment summary should contain, including an explanation as to why the particular scores were given against each criterion.

There are some innovative measures, and we welcome those that help to make the whole process more transparent. Regulation 37 sets out the information required in a procurement termination notice that is published when a contracting authority decides not to award a contract, and regulation 40 sets out the details to be included in a contract change notice, including the grounds on which modification will be made.

The regulations also change the frequency of reporting on the prompt payment of invoices by Government bodies from one year to six months and spell out requirements in respect of the contract performance notice, including the details required when used to report poor performance or a breach of contract. The explanatory notes clarify that these regulations do not include a statutory review clause, as they do not regulate an activity carried out by a business for the purposes of the business, but rather that they place obligations on the public sector. However, feedback and monitoring are crucial to ensuring both that we are getting value for the public purse and that the regulations are working effectively for business, including reducing the burdens on business and encouraging a wider range of businesses, particularly small and medium-sized enterprises, to bid for contracts.

I note that the approach to monitoring this legislation will be through feedback from contracting authorities, suppliers, industry representatives and professionals. As I noted earlier in my remarks, what is important is not just the content of the regulations but the way in which the requirements are implemented. The smooth operation of the supplier information system and the ease of access to the digital platform where the notices of procurement opportunities will be posted are crucial. I note that the Government have given the required six months’ notice of the coming into force of the Procurement Act on 28 October, when public bodies and businesses will be required to follow these regulations. It would be useful if the Minister kept the House updated about the implementation of the Act, and going forward, its impact, including, importantly, the impact on the uptake of procurement opportunities by small and medium-sized businesses.