I am really pleased to have this opportunity to highlight an issue of some concern to me and, I hope, to convince the Government to put right a couple of misguided policies introduced by the previous Administration. Ministers not only have an opportunity early next year to take action on at least one of those policies; they also have the opportunity to promote the localism agenda that is at the very heart of the coalition agreement.
Until 2007, prisons were supplied with fresh produce by local suppliers, one of which, Brambledown (Kent) Ltd, is based in my constituency of Sittingbourne and Sheppey. Indeed, Brambledown used to supply a wide range of fruit and vegetables to both the Sheppey prison cluster and a number of other Kent prisons. In 2007, the then Government changed their procurement policy for prisons. They scrapped local supply contracts and introduced a national framework contract. That contract was awarded to a company called 3663 First for Foodservice, which is part of a multinational group based in South Africa.
I would have understood the logic of the previous Government changing their procurement policy if such a move was designed to save taxpayers’ money, but written answers that I have received to questions show that not to be the case. In the two years prior to the changeover, the average annual cost to the public purse for the provision of fresh produce to prisons was £8.7 million, whereas in the three years after the changeover it was just over £9 million. What those figures show is that the only people who appear to have lost out in this deal are the local suppliers who have seen their business plummet in the past four years.
To give an idea of the extent of the impact that the Government’s policy had on individual companies, Brambledown (Kent) Ltd saw its annual income from the Prison Service drop from £345,000 in 2004 to just £375 in 2008. I have spoken to a number of prison governors and they have confirmed what I suspected, which is that the service and quality of food have not improved under the national procurement regime, and prisons have lost their much-valued link with local suppliers. I think that if the Minister were to ask governors, he would find that many of them would welcome the opportunity to purchase more of their fresh food locally, because it enhances their position in their local community.
Of course, one advantage of buying from local suppliers is that often much of the produce is grown locally, which leads me neatly on to another aspect of the previous Government’s procurement policy: the Government’s lamentable record on supporting British farmers, producers and processors. The Department for Environment, Food and Rural Affairs publishes statistics that show the proportion of domestically produced food both used by Departments and supplied to hospitals and prisons under contracts negotiated by the NHS supply chain and the National Offender Management Service. Coincidently, the latter was established in 2007, the same year as the food procurement policy for prisons was changed. Or perhaps that is not a coincidence, because the decision to change the procurement policy and the decision to create the National Offender Management Service were, in my view, equally misconceived. Setting aside the merits of those particular policies, the statistics contained in the DEFRA document make interesting, but very depressing, reading, particularly coming as I do from a constituency in the garden of England with a sizeable farming community.
Let me quote a handful of product groups from DEFRA’s statistics. Just 2% of poultry used by the Prison Service comes from British producers. A miserable 18% of pork meat is home bred. If we think that is bad, it gets worse. The proportion of orchard fruit, which includes apples, pears and plums, that the Prison Service sources from domestic producers is 0%. Not a single apple sourced by the Prison Service comes from domestic producers, and the same goes for soft fruit and bacon, which to my mind is scandalous and deeply unpatriotic.
No doubt I will be told that foreign produce is cheaper, but I do not accept that argument; cheap is not always best. It might be that buying French Golden Delicious apples instead of Braeburn apples from Kent is superficially advantageous. However, when one considers the harm being done to British farmers by this policy and the impact that transporting fruit and vegetables long distances in chilled containers has on our carbon footprint, buying local starts to make an awful lot more sense.
I hope that my hon. Friend the Member for Reigate (Mr Blunt), the new Prisons Minister, and his colleagues in other Departments will pursue a different procurement policy from that of the previous Government, who set a very bad example. How can we expect consumers to support British farmers if Ministers are not prepared to do so? Let us not forget that it is taxpayers’ money that Ministers are spending. I am pretty sure that British taxpayers would much prefer their money to be spent on British food.
I urge my hon. Friend to do two things that would make him popular not only with farmers in my constituency but with the public at large. These days, being popular with anybody is a very rare thing for a politician. First, I should like the Minister to issue a guidance note to his Department officials instructing them always to purchase domestically produced goods unless doing so would place a disproportionately high burden on the taxpayer. Secondly, I should like my hon. Friend to refuse to renew the national framework contract when it comes up for renewal next May, and instead revert to a system of allowing prisons to enter into contracts with local suppliers. Pursuing such policies would help to promote the coalition Government’s localism strategy, and that must be worth a brownie point to any Minister.
I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) on securing this important debate, and I am grateful to him for providing me with the opportunity to examine our strategy in this area and to see whether it should change when the contracts come up for renewal next May. There is a significant attraction in my hon. Friend’s arguments. Anyone arguing for a politician to be popular is likely to be on pretty strong ground. He helpfully outlined his arguments to the Ministry of Justice, which has enabled me to provide a comprehensive answer to him.
Before I focus in depth on my hon. Friend’s remarks, I should like to respond to the point he raised in a letter to me in September concerning Brambledown (Kent) Ltd. He kindly told us in private that we appeared to have missed that company off the list of contracted suppliers, which gave me the opportunity to examine the position without public embarrassment to the Ministry if we got our answer wrong. He was correct to say that Brambledown did not appear on the list of contracted food suppliers. The reason for our response, which did not mention Brambledown, is that it was not a contracted supplier to the National Offender Management Service, but it continued to supply the Sheppey cluster of prisons under existing local ad hoc arrangements. That continued until an electronic ordering system was introduced in 2007-08, which brought the transitional arrangements to an end.
Contracted suppliers are those who are awarded contracts to provide goods to prisons following a fairly contested tender process, which ensures that they meet minimum criteria and are capable of meeting the Department’s requirements. The response listed 18 fresh produce suppliers who were contracted to supply prison sites.
Despite the charm and skills with which my hon. Friend made his case, there is a strong argument for the existing method of supply. Food supply contracts that are awarded by the Ministry of Justice, particularly those for prisons, are not just a straightforward matter of whether the supplier operates on a national or local basis. There are many key factors in deciding the best approach and I should like to share a few of them with the Chamber.
Operational concerns are very much at the forefront of our decision making. It is worth remembering that discontent about the quality of food, changes to menus, and failure to deliver what was previously promised have been known to be the catalyst for serious disturbances. As well as being a key issue in control, food demonstrably contributes to prisoners’ overall well-being. A high proportion of prisoners are from socially excluded sections of the community, with lifestyles that are more likely to put them at risk of ill health than the rest of the population. Many have never registered with a doctor or a dentist, have drug habits and/or mental illness and live chaotic lives without a stable home. Prison gives an opportunity to improve the health and lifestyle of prisoners to the benefit of all, and diet is a major component of a healthy lifestyle.
Prisons aim to provide food that is nutritious, well prepared and served, reasonably varied and sufficient in quantity and that also meets a range of religious and cultural needs. Inadequate portion sizes, lack of variety and poorly cooked food can contribute to serious complaints and dissention. Providing prisoners with the opportunity to choose a healthy, nutritionally balanced diet, with enough knowledge to make informed choices, is important because prisoners can be in custody for long periods and are largely dependent on prison food.
Then there are the commercial and supply chain considerations. In the 2009-10 financial year, the Department spent around £60 million on food for prisoners. Although that is a big sum in itself, it amounts to an average cost of just £2.22 per prisoner per day for all food and beverages. Given that contaminated food can have disastrous consequences among a closed prison population, those costs have been achieved against a background of tight regulation and control.
I could go on with the list of factors that require consideration, and I have not even begun to touch on the environmental footprint of the vehicles that deliver food. The point is that any contractor appointed to supply food to prisons must meet all of those stringent criteria. Typically, smaller suppliers do not have the organisational infrastructure and resilience to meet the requirements day in, day out, which results in a higher proportion of contracts being awarded to larger suppliers.
Before moving on, I should also point out that the choice of a supplier that operates nationally as opposed to just locally does not mean that the produce is not sourced locally. That is an issue for our supplier—in this case it is 3663. National operators draw heavily on domestically produced food and will obviously use it when it makes commercial sense to do so. It is also not the case that our arrangements cause unnecessary mileage in delivery. National operators often have regional depots and use them to keep their mileage and costs to a minimum. Because those depots can carry the full range of products required by a prison, they are able to send just one vehicle to that prison, whereas several vehicles would be used by a number of locally based suppliers to fulfil the same overall requirement.
I will now turn to the specifics of the current food supply arrangements serving prisons. The Department uses two contractors to fulfil its requirement for food. The first of these, 3663 First for Foodservice, provides groceries, fresh produce, chilled and frozen food. The other supplier, Hovis, provides fresh bread and morning goods. Contracts with those suppliers have operated since 2007 and they offer 1,500 products for prisons to create meals with.
The delivery of products is only the beginning of the meals service. The 128 public sector prisons in England and Wales employ about 1,050 catering staff and 3,500 prisoners to prepare the food for more than 75,000 prisoners each day of the year, which amounts to more than 82 million meals a year, all served at predetermined times through 900 service points. That service is particularly challenging, given the tight financial constraints that prison kitchens must operate under.
Prisoners are provided with three meals a day, choosing from a multi-choice, pre-select menu system that is compiled to cover a minimum of four weeks. That menu format takes account of seasonal variations and prisoners’ preferences, and it is capable of meeting differing dietary requirements, such as vegetarian, vegan and religious meals.
Prison governors bear the ultimate responsibility for prisoners’ diets. They are required to approve food as being fit for service to prisoners and to approve local food budgets. The prison kitchens are run by catering managers, who are responsible for implementation of standards, training of staff and control of the food budget.
I hear everything that my hon. Friend has said and it is quite logical. He says that it is the governors’ responsibility to ensure that inmates receive proper food. However, why is it that the governors themselves would prefer to revert to using local suppliers?
I heard what my hon. Friend said about that issue. I confess that, in the visits to 20 or so prisons that I have already made, I have not discussed the issue of food supply with governors. Food supply has not been raised with me directly as an issue of concern for the governors. Following this debate, however, I will make my own inquiries on my future visits to prisons as to whether there is an issue about food supply. I am looking at all the services that are provided in prison, to see whether nationally provided services are better than locally provided services or not.
I will quite happily share my prejudice that I would prefer it if things were locally managed and locally resourced. As far as I am concerned, there needs to be a pretty high test to move to a nationally provided system. As my hon. Friend will have gathered from the tenor of my remarks, on the basis of what I have seen so far the argument that I am making is that I actually think the national food service supply chain that we have at the moment is meeting that test. However, as I get to the end of my remarks I may give him a little glimmer of hope.
More than 20,000 items of food are ordered each week across all temperature ranges. That means that the total cost of the delivery of food per day tops £230,000. To put that into perspective, it is equivalent to visiting a cash and carry warehouse to empty the shelves each day. Even if such visits were practical, there could be no guarantee of the consistency or the completeness that the prison environment demands.
The supply chain infrastructure to support this volume of food is significant and yet it also manages to deal with a wide variety of prison locations. Those locations range from Victorian prisons, which have small entry gates, low arches and limited turning space, to prisons in city centres and prisons in rural areas, which are accessed by small country lanes that vehicles have to negotiate. Few prison buildings are conducive to the delivery of the volume of food that is required and yet deliveries must be made each day, without fail, to ensure the continued running of the prison.
As I mentioned previously, food deliveries are made from a number of regional supplier depots. The deliveries are consolidated as far as possible, given the constraints that I have just outlined, so that the number of gate openings and associated security risks are minimised. Each delivery can take up to two hours to complete, depending on the security and regime of the prison. For that reason, deliveries are centrally co-ordinated to an exacting timetable. That maximises the efficiency of deliveries and minimises their impact on the prison operation.
Hovis and 3663 have introduced consistent working practices in their depots for their contracts with us. That means that each depot is easily able to support other regions in the event of a supply chain interruption. The two suppliers that are in place have been rigorously tested through open and fair competition, to ensure that they are capable of managing deliveries into prisons and can support those deliveries with robust contract management. There is little as challenging in this field as procuring food for the 82 million meals that are served in prison each year, given the limited facilities offered by prison kitchens and the tight financial constraints that they have to operate under.
The food suppliers comply with central specifications, to ensure that all food that is delivered is of good quality, safe and free from any contamination. Products are tested, where appropriate, to ensure that quality and quantity standards are met.
Reliable management information gives prisons the assurance of safety, traceability, provenance and quality that they need for the prison regime to operate with confidence. Central to that relationship between prisons and suppliers is the confidence that the suppliers can provide consistency. An undersize apple handed out at the servery will create issues of order and control, so we use suppliers that are sensitive to that need and that use their sourcing ability to maintain consistency from their supply base.
I apologise to my hon. Friend, who is a representative of the garden of England, that I used the example of an apple just now. [Laughter.]
Happily, the effect of this existing contract is that that is not a matter for me; it is a matter for our supplier, which is 3663. It is its responsibility to procure apples for us. I do not know the details of its apple procurement contract and I am delighted that I do not have to know them. As I say, that is a matter for 3663.
It is very proper for my hon. Friend to pursue that point with 3663 on behalf of his local orchards—to ask, “Why not? Why are these local orchards unable to compete in that way?” Like him, I have a prejudice in favour of domestically produced food and as long as the interests of the taxpayer are protected, of course we should be buying British.
Both suppliers—3663 and Hovis—are large national organisations. That is appropriate to the needs of the Ministry of Justice in terms of volume, spend and complexity. An arrangement such as the existing one exploits the capabilities of large suppliers in terms of volume leverage, sourcing capability and relationships with brand manufacturers. It provides more product choice, given that large suppliers have access to wider product ranges and have a strong capability in procuring from specialist subcontractors, hopefully including suppliers of Braeburn apples.
There are some other factors to consider in the type of supplier tiering that is being promulgated. The EU procurement directives preclude the Ministry of Justice from negotiating with suppliers on prices, but the main contractors can negotiate with subcontractors on prices and pass on the benefits. In addition, small and medium-sized enterprises are spared the costs of having to conform to onerous public procurement processes and the costs of having to interface with Government e-procurement systems, because the main contractor does it for them.
Furthermore, the supply chain risks rest with the main contractor, which allows prison caterers and governors to focus on the day-to-day operation of their prisons. The unit prices currently paid by each prison reflect that. Consequently, they are homogeneous and fully inclusive of all risks. Unit prices also cover charges for keeping vehicles waiting and they do not vary according to the actual cost of delivery or indeed the number of deliveries.
Any attempt to base prices on local circumstances would introduce complications into budget allocation. In other words, prisons that could benefit from low delivery charges would have to release part of their budget to those prisons that would have to pay more because of their remote location.
Prices are carefully managed and are determined by the price of the raw commodity, the costs of processing and packaging, transportation and distribution costs, overheads and an element of profit, which is around 1%. The cost to serve the contract is spread across the total range of products, keeping administrative and management costs to a minimum. The cost to provide meals varies from prison to prison. That is due to the differences in the prison populations and the choice of products ordered, which vary depending on the age, sex and cultural mix in the prison.
I know that my hon. Friend regards value for money as being extremely important. Value for money is tested and secured throughout the life of each contract. Prices are examined through open-book reviews and by reference to commodity indices. The Ministry of Justice undertakes monthly product reviews to determine the optimum spend profile for each product area. Each opportunity to improve on efficiency or to save money, without detriment to the quality of the product, is thoroughly explored.
I am advised that overall this national contract, which is being maintained in an era of high food price inflation—10.5% in 2009 and 4.1% for the current year so far—will deliver £5.1 million of cash savings during the period of the contract, between 2007 and 2011. When inflation is factored in, the real savings to the National Offender Management Service run to tens of millions of pounds.
However, product price is not the only driver behind contracts. Underpinning them all is the need to support prisoners and rehabilitate them back into society. When 3663 recently opened a new depot in Kent, it sought prisoners on release to form part of its new team. Subsequently, 11 ex-offenders were employed in depot operations, benefiting the supply base, the community and the Ministry of Justice.
Social sustainability is only one element of the total cost to the Department. A false choice is often posited between value for money or efficiency and sustainability. Unsustainable procurement is not good stewardship of taxpayers’ money. The Ministry of Justice is committed to reducing its impact on the environment by continuously improving the environmental performance of its operations and estate. For example, 3663 delivers virgin cooking oil to prisons. After use, the waste vegetable oil is collected by a national oil collection company and sent to a third-party operator for recycling and conversion into biodiesel, which is then returned to the 3663 depots, where it is used to fuel trucks loaded with supplies for delivery to prisons, thus completing the circle and reducing distribution costs for the Department.
The supply of food is of significant benefit in reducing risk and contributing to the overall objectives of the Ministry of Justice. Nevertheless, given the importance of food in prisons, we will re-examine how it is delivered and consider every option. If my hon. Friend, who has listened to my arguments in this debate as I have listened to his, can identify further proposals, I invite him to continue this conversation. It need not take place formally on the Floor of the House, but I am happy to listen to any further submissions that he wishes to make.
The timing of this debate is ideal, given that the current generation of contracts is due to expire in May 2011 and that planning is already under way. In considering every option, I want not just to look at the obvious but to challenge thinking on the issue. For example, most of what used to be a large network of farms and market gardens operating in prisons were closed in the past decade. There is certainly merit in revisiting the idea in order to make prisons more self-sufficient, lower costs, and get more prisoners working. About 425 prisoners already assemble some 100,000 breakfast packs every day as part of a supply chain developed with our current suppliers.
To conclude, this has been an excellent opportunity to discuss a subject that might seem uninspiring and that risks being considered simplistically. As I have outlined today, it is complex and of great importance, so I will be paying close attention to the development of policies and procurement strategies in the area. I welcome the attention that my hon. Friend has given it and the constructive contribution that he has made with this debate.
Question put and agreed to.