HANSARD
Public Procurement (Amendment etc.) (EU Exit) Regulations 2020
- Considered in Grand Committee
- 2:31 pm
- Moved by
- That the Grand Committee do consider the Public Procurement (Amendment etc.) (EU Exit) Regulations 2020.Relevant document: 31st Report from the Secondary Legislation Scrutiny Committee
- My Lords, procurement by the Government and public sector bodies represents a significant part of the UK economy. It is essential to the day-to-day running of government and should be appropriately regulated. The Government are committed to ensuring the continued functioning of this important marketplace when we leave the EU.This statutory instrument will ensure that the UK will meet the requirements of the withdrawal agreement and the Northern Ireland protocol and replaces the earlier statutory instruments that did not take these matters into consideration. This legislation is essential to provide legal clarity for public procurement and certainty going forward, as we look at the possibilities for wider procurement reforms, which may be brought into domestic legislation.The majority of this SI is unchanged from the Public Procurement (Amendment etc.) (EU Exit) Regulations 2019, as amended by a second SI made in 2019, instruments that were debated in both Houses before being signed. Those instruments however, addressed deficiencies in a no-deal scenario. This instrument consolidates the first 2019 SI as already amended, incorporating further changes and new provisions, where relevant. The amendments made by this instrument do not amount to a material change in procurement policy. They will ensure that the UK’s procurement system continues to function as intended at the end of the transition period. UK contracting authorities will be able to continue to procure goods and services without substantial changes in the process. In that way, the Government are ensuring that those entities can continue to be able to obtain value for money for UK taxpayers.The instrument makes amendments to the three sets of regulations that implement the EU directives on awarding contracts and concessions in the public and utilities sectors outside the field of defence and security. Your Lordships debated a separate instrument amending the Defence and Security Public Contracts Regulations last week. Where this instrument differs substantially from the 2019 instrument is that it seeks to provide a level of continuity for procurement procedures which began before the end of the transition period. Procurements that fall within this category, including orders from ongoing contracts, will continue in substance to follow the unamended procurement regulations. We do not expect that there will be many procurements which fall into this category; however, it would be difficult to measure these exactly. A number of new technical amendments have also been included in this instrument.This instrument makes it clear that specifications with an information and communication technology component can continue to refer to the common technical specifications recognised by the EU Commission. This is an extremely dynamic area of technical specifications, and the EU’s process for recognising them is based on accepted best practice that the UK Government have been instrumental in developing. We have decided that, pending a mechanism to identify these domestically, retaining the reference to the EU’s standardisation process is deemed the best solution.
- 2:39 pm
- My Lords, the Minister has spelled out very clearly the rationale for this instrument and I do not think that anyone this afternoon will object to taking this forward and providing for the next 14 months the certainty critical to business, commerce and our future trading arrangements.I should just like to lighten the afternoon a bit by explaining that last week I was responding to a student who had asked me about the lead-up to Brexit. In replying to her, I dictated on to my digital recorder, for download by my assistant, my thoughts, which included the word “Brexiteers” several times. On every single occasion the predictive text provided us with a bit of a smile by downloading “bringing tears” rather than “Brexiteers”. For many of us, those tears continue to run down our cheeks.This afternoon’s measure is very practical and I merely want to raise three points. First, there is the importance, highlighted by Paul Blomfield, my former parliamentary colleague from Sheffield, when this was debated in the Commons, of widening the issues that we would want to take forward in future. I hope that in the Trade Bill and any instruments arising from it we will be able to do that in terms of social value, the carbon agenda and environmental impact, and therefore be able to widen the current harmonisation and continuation of existing practice, including through the GPA.The second is to ensure that we continue the process of recognising that harmonisation and alignment are a benefit to us rather than a disadvantage. The Minister spelled out why that was the case for the next 14 months and I think most of us recognise that it will be the case for many years.The third and slightly more controversial point, which I could not resist making in my short intervention on these regulations, is that we are in a bit of a mess in this country at the moment on procurement. We have seen examples—understandable, given the speed of operation—of procurement in dealing with Covid that are completely unacceptable and place civil servants in an impossible situation. I would like the Minister to take back to his colleagues people’s genuine worry about how procurement is operating and the real danger of nepotism and worse. We really do need transparency, as well as systems that do not allow those in the know, or those who know the people in the know, to be the ones who get the contracts.
- 2:42 pm
- My Lords, it is a delight to follow the noble Lord, Lord Blunkett, and I agree with his point about the need for transparency in awarding contracts. If the last few months have shown us anything, it is the enormous power of procurement and what it can do when aligned with the right motives.Following on from what the noble Lord, Lord Blunkett, said, I have a few brief remarks about widening the remit and taking into account both the environmental and public health impacts, effectively, of the things we buy. The Government’s buying standards for public procurement are closely aligned with the EU’s Green Public Procurement programme, but they are not mandatory and therefore do not have enough teeth. A recent report from Sustain, the alliance for better food and farming, shows that two-thirds of councils have left food out of their climate emergency plans, only 20% include the climate implications of procurement at all, and only 13 councils are considered to have suitable plans in place, given that we face a climate emergency. This report is about to be released but, apart from the statistics above, about 67% of council climate action plans contain no new or substantial proposals on food. I think everyone has learned in the last few months or years just what that means for biodiversity and climate change.Also, for public health, a good diet in the public sector needs to be normalised at a national level. At the moment this generally means councils going against the grain, with limited budgets to implement change. We should have mandatory standards for serving meals high in fruit and vegetables and low in ultra-processed foods and serving less meat across the public sector. We need to make it easier and quite normal to serve better meat and dairy and to work more locally. This has a lot of benefits for both the environment and the sustainability of small farms. When I ran the London Food Board, we set up a big buying scheme among a bunch of schools and were able to deliver cheaper and better food through intelligent purchasing.
- 2:46 pm
- My Lords, I am delighted to follow the noble Baroness and I very much agree with her comments on working more locally. I want to raise three points with the Minister in the limited time we have.First, I ask for an assurance that no procurement contracts currently in force will be undermined, nullified or constrained by these regulations, and that no new contracts entered into by devolved Governments in Wales and Northern Ireland—I realise that Scotland may be different—will be made void by any part of these regulations if such contracts are a renewal of existing procurement contracts or are issued based on the same principles.Secondly, I draw attention to paragraph 10 of the notes accompanying these regulations, which refers to “regular engagement” having been undertaken with the Welsh, Scottish and Northern Ireland Governments, but does not say whether agreement was reached on these matters with those Governments. Perhaps that could be clarified.Thirdly, I draw attention to Regulation 16, which refers to:“The Water Industry (Specified Infrastructure Projects) (English Undertakers)”and puts the Minister for the Cabinet Office in place of the European Commission. Does “English Undertakers” refer to undertakers operating in England, or does it include operators based in England who may be operating in Wales? If so, should there not be some reference to Welsh Ministers in that context? Those are the three points I wish to raise.
- 2:48 pm
- My Lords, I am grateful to the Minister for his introduction and for the very helpful Explanatory Memorandum to the regulations, which tells us that the EU regulations have ensured that the“public procurement market is open and competitive and that suppliers are treated equally and fairly.”It goes on to say that in most respects that will remain substantially unchanged; any changes will be to correct minor deficiencies. Therefore, I should like to follow up on my noble friend Lord Blunkett’s third point and ask the Minister whether he can explain some recent public procurement decisions in light of this.Why, for example, was a contract for hand sanitiser given to TAG Energy without competitive tender, especially as that company was reported dormant on 25 February and the contract was awarded on 1 March? Why were contracts awarded without tender to Public First and to Topham Guerin, the company that ran the social media campaign for the Tories in the 2019 general election? Was there any tendering before Randox, which employs Owen Paterson MP at over £8,000 a month, was given a £133 million contract for Covid testing? Did Serco, for which the Health Minister Edward Argar used to work, have competition before it was awarded contracts for contact tracing and call centres totalling over £150 million? Finally, although I could ask about many more, did the company of the noble Baroness, Lady Mone—PPE Medpro—face competitors for the contract for 25 million gowns? Was it advertised to any other bidders?These are just a few of many examples where it seems the proper procedures were not followed. I understand the urgency at the moment, but it is no excuse to say that we are in the middle of a pandemic when lucrative contracts have been given to companies with no experience in that area, many of which seem to have only one thing in common: a link with the Tory party. It is small wonder that the media have again said today that there appears to be a new virus around—“crony-virus”. I look forward to the Minister’s answers to my questions with keen anticipation.
- 2:50 pm
- My Lords, it was extremely tempting, in preparing for my three-minute slot, to talk about the endless stream of disastrous public procurement decisions in the Covid pandemic, which made the term “chumocracy” such a figure in media headlines, as the noble Lord, Lord Foulkes of Cumnock, just reflected. But I have chosen instead to follow the noble Baroness, Lady Boycott, by taking this opportunity to focus on the impact of procurement on the dangerous, disastrous state of public health; the UK’s responsibility, as chair of COP 26, to show the way in public procurement that benefits our poor, fragile, battered earth; and to add to that, as the noble Lord, Lord Blunkett, did, the need for procurement that adds social value in our poverty-wracked society.The Government tell us they want to be world leading in every area they mention, yet we are, once again, at the back of the pack in using public procurement to improve public health and the environment. Back in October 2019, I asked Written Questions of the respective Ministers about what percentage of food served in schools, prisons and hospitals was organic or locally sourced. On schools, I was told that the Government had no information at all. The noble and learned Lord, Lord Keen of Elie, was able to tell me quite a bit on prisons, although not the specific information that I asked for. On hospitals, I was pointed to a forthcoming independent review of NHS hospital food that did indeed report last month. Henry Dimbleby’s initial food strategy report highlighted similar issues.So it is good that there are signs that the Government are catching up with this agenda, even though they are many years, even decades, behind. In Latvia, for example, since 2014 it has been mandatory to apply green public procurement criteria in food and catering services in state and local government institutions. Finnish procurement for public food aims to assist the national goal of every adult consuming half a kilo of fruit, vegetables and berries every day. The city of Copenhagen aims to serve 90% organic food in public kitchens, favouring seasonal and diverse produce. For example, one tender included 86 different varieties of apple from seven different wholesalers.
- 2:54 pm
- My Lords, in October 2019, the Prime Minister agreed the political declaration on the UK’s post-Brexit relationship with the European Union, which committed Britain and the EU each to adopt “common high standards” in state aid, competition, employment law and social legislation. In November 2019, the Prime Minister boasted that Brexit would free him to make fundamental changes to Britain’s public procurement rules. The implication was clear: he planned to relax the current rules on procurement and state aid and introduce some kind of “buy British” policy to echo Donald Trump’s “buy America” policy.We are told that this week could be when the EU-UK trade talks finally come to a conclusion. We know that Ministers are already discussing a draft Green Paper on procurement and that the Cabinet Office is consulting stakeholders on future procurement rules, including new criteria for awarding contracts. Perhaps the Minister could say what those criteria might include. They ought to include setting stronger employment standards, delivering a fairer deal at work, and doing more to help those hit hardest by technological change.Achieving record rates of employment is not enough. The last Labour Government did it and, despite a decade of austerity, the coalition Government and the post-2015 Tory Governments have done it too. Until the virus crisis there have been lots of jobs, but too many have been insecure, with nearly a million people struggling to survive on zero-hours contracts and a million in temporary work or doing second jobs. Many more have been vital jobs done by key workers filling essential roles but receiving unfairly poor pay and scant recognition. The Institute for Fiscal Studies reckons that key workers receive significantly lower pay than other workers. Surely the Government must use their procurement power to deliver a fair deal to their own employees, such as health workers, and to staff employed by private sector firms working on public sector contracts, such as care workers, delivery drivers and cleaners.
- 2:57 pm
- My Lords, I thank my noble friend the Minister for introducing an important SI to the Committee. Could he set out, as page 9 of the Explanatory Memorandum mentions, the sequence of events for Britain applying to join the GPA? Is there any possibility that our application might be refused? What is the procedure for signing up to the new arrangements? I note that paragraph 7.30 of the Explanatory Memorandum says that the Trade Bill is“highly unlikely to have completed its parliamentary passage”and its implementing regulations adopted. Paragraph 7.32 then says that“it is likely that the extension of existing duties … will be revoked and replaced.”That begs the question of what the sequence of events will be. It would be helpful to know that there will be a smooth transition to the GPA.I note that the Minister set out today and in one of the stages of the Trade Bill that the threshold for the GPA and EU public procurement arrangements are virtually the same—about €135,000. This is obviously a multi-million pound business. I wonder to what extent the Government encourage our businesses to bid in particular for food and agricultural products to supply schools, hospitals, prisons and other public bodies in other countries. Without this public procurement there would be huge benefits to our local farmers and producers supplying our very own schools, hospitals, prisons and other public bodies with locally sourced meat. It would be helpful to know that they will be encouraged to bid for this wider market in so far as it is feasible.One remaining question, to which my noble friend referred—and I declare that I am a non-practising Scottish advocate—is that the definition of “lawyer” has been changed. Is that to take account of the United Kingdom Internal Market Bill? I just wondered for what particular reason the definition has been changed at this stage.
- The Deputy Chairman of Committees (Lord Brougham and Vaux) (Con)I call the noble Lord, Lord Bhatia. Lord Bhatia, are you there? I call the noble Baroness, Lady Wheatcroft.