Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025

Finally, the regulations outline how to calculate whether the sale of excess electricity, gas or water produced as a by-product of a non-utility activity falls under the Act when the operator wants to sell it to a network. It explains the calculations needed to determine eligibility for vertical and horizontal arrangements, exemptions and the utility contract exemption for affiliated persons.

Given the highly technical nature of the instrument, I was somewhat surprised that an amendment of regret was put before the House in respect of these regulations specifically. The powers under which the regulations are made are limited and do not allow for more substantive policy measures to be introduced. The instrument introduces no additional burdens for business and simply ensures that the Act can be implemented smoothly and efficiently. The regulations have been reviewed by the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee, neither of which has drawn any special attention to it.

Contrary to the amendment proposed by the noble Lord, Lord Robathan, the Act introduces a number of reforms to make it easier for small businesses to access public sector supply chains and removes unnecessary burdens and costs. It introduces an obligation on contracting authorities to have regard to the particular barriers facing SMEs through the procurement life cycle and to consider what can be done to overcome them. In particular, the Act makes bidding easier for SMEs by requiring bidding companies to submit their core credentials only once on to a single digital platform, saving them time and money. It makes it clear that contracting authorities may not, in most instances, require audited accounts to test the financial standing of bidders, nor require insurance relating to the performance of a contract to be put in place prior to contract award. This will encourage start-ups that are not legally required to file audited accounts but can instead show financial capability by other means. The Act ensures that prompt payment flows down the supply chain, making it more and not less viable for SMEs to get involved.

I needed a 17-year run at this, but when I stepped down to come into your Lordships’ House last year, council tax was 30% lower than inflation over the same period. It can be done.

So why am I speaking in this debate? It is because, sad to say, we could have gone further and done more. I direct noble Lords’ attention to new Regulations 42A relating to vertical arrangements and 42B to horizontal ones. A vertical arrangement is where a council wants to run a service itself. A horizontal one is where several councils may club together over a wider area to achieve the same outcome. On too many occasions, having to follow these pointless procurement procedures held us back. They acted as an excuse for work. They were a drag anchor on not just my ambition but that of the talented young graduates we struggled to recruit.

If we are to change the state, if we are to be more agile and if government is to work for the people, not the other way round, we cannot afford the sort of verbiage that decorates pages 12-15 of the public procurement regulations that my noble friend Lord Robathan regrets. They achieve nothing for the taxpayer and even less for residents. They encourage huge amounts to be spent on lawyers. They force delay and everybody else pays more as a result.

Looking at the small print of the regulations, one sees that the well-meaning but counterproductive way they work is to mark down the entrepreneurial councils which can and should be setting an example, especially in rural areas. These are the sorts of councils that want to earn a shilling by collecting the trade waste from a remote bed and breakfast as the bin lorry passes by every Tuesday and whose proprietor is grateful because no other waste company will touch it.

The attributable turnover calculations, the time spent assessments and the relevant period durations are just an excuse to snuff out the sorts of good behaviours that we should be encouraging—not just in councils but across the whole of government. They act as recruiting sergeants for those with an axe to grind. I listened carefully to what the Minister said, but in truth they prevent local firms co-operating with their local councils, lest a large corporation cries foul and challenges in the courts. They foster a risk-negative, rather than an ambition-positive, approach to public services. They stand in the way of councils getting together and co-operating to do the right thing in the public good for the public’s benefit.

Where do your Lordships think Birmingham would be if Joseph Chamberlain had had to follow this stuff? Where would the clean water and gas that built that metropolis be if he had had to follow these pettifogging rules?

The Explanatory Note explains how new Regulations 42A and 42B will affect councils by giving waste collection as an example. These regs should be consigned to the dustbin of history. I thought this Government had instructed officials to clear a path through the treacle that holds us back, but no—it was just too much to ask.

My noble friend is right to regret, and it is something we should all reflect on. We are never going to get growth if we carry on like this.