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Public Procurement

Volume 709: debated on Thursday 24 February 2022

14. What steps he is taking to ensure that underperforming Government contractors may not apply for further Government contracts. (905635)

18. What steps the Government are taking to increase opportunities for small businesses to bid for Government contracts. (905639)

Her Majesty’s Government are reforming the procurement rules to make it simpler and quicker for suppliers, including small and medium-sized enterprises and social enterprises, to bid for public sector contracts. The reforms will entrench transparency for the full extent of a commercial transaction, and will make it easier for buyers to take account of previous poor performance by suppliers.

The Government need to get on and reform those rules somewhat more quickly, do they not? In answer to my written question about steel targets for HS2, the Government told me that they were unable to set targets for British steel procurement because of World Trade Organisation rules, but that is not true, is it? The US sets informal targets through the Buy American Act because the WTO allows it to do so. Where, then, is the Buy British-made Steel policy in Government contracts in this country, using the informal targets that are allowed by the WTO? Labour will make more, buy more and sell more in Britain; why will the Conservatives not do so as well?

One of the opportunities of Brexit is that we will be able to encourage people to buy more from SMEs, which tend to be UK-based rather than from overseas. Opening up procurement has the effect of ensuring that more British companies get contracts, and that is a good thing to be doing, but there is always a balance to be struck between ensuring that one buys cheaply and efficiently and supporting British companies. I believe that British companies can out-compete, and be as efficient as, anyone in the world, and that that is how procurement ought to operate.

The Government spend £2 billion every year on food for schools, hospitals, prisons and so on. When they eventually respond to the national food strategy, will they accept its recommendations on reforming procurement rules so that food purchased with taxpayers’ money is always healthy and sustainable—and will the Minister confirm that foie gras will not be on the menu?

I do not think we need to go into my personal dietary habits. I have mainly been giving free publicity to Cadbury Creme Eggs over the years, rather than going into the details of whether or not I like foie gras—although people may be able to guess what the answer is.

As for the strategy for procurement of food, one of the things it will do is allow social benefit to be taken into account. It will not just be about value for money, although value for money is inevitably fundamental to all procurement, so it will be possible for people to make decisions on a broader range of issues.

I welcome my right hon. Friend’s answer, and the reform that he has promised for contractors, but many large-scale projects suffer because the Government’s ability to procure and contract management have not been as good as they should be. In his role as Minister for Government Efficiency, will my right hon. Friend take that on board, and will he ensure that the Government set out new guidelines for procurement for themselves so that they do not keep changing them and hence building in inefficiency?

I am grateful to my hon. Friend for that question. The new procurement rules will make it easier for buyers to exclude suppliers that have underperformed on other public contracts. Currently, that is possible only if poor performance has led to contract termination, damages or other comparable sanctions. We will establish a new, centrally managed debarment register, which will identify any companies that should be banned from any new public contract.

Crucially, though, there has been a change within the procurement from Government to ensure that the management of contracts once they are procured is improved and is the great focus of the energy of the procurement department, because however brilliantly the procurement is issued, if it is not then managed well and effectively the benefits are lost. This is, in fact, an issue that we discussed when I had another role in this distinguished House.

Government tender documents are full of ancillary requirements that have laudable objectives individually but collectively form an enormous barrier to the participation of small and medium-sized enterprises because it is much harder for them to demonstrate compliance than it is for large businesses. Will my right hon. Friend consider relaxing those non-core requirements, to enable SMEs in Broadland and elsewhere to compete?

The personal liability insurance that people were required to have when contracting with the Cabinet Office inevitably excluded some smaller companies for which the cost of the extra insurance may have outweighed the benefit of winning the contract, and one of the first things I did in this post was to ask for that to be reviewed to see if it was proportionate and what we really needed. My hon. Friend is absolutely right to say that it is the detailed pettifogging conditions that keep SMEs out, and we want to bring SMEs in.

Around 70% of all central Government contracts in 2021 went to suppliers in the south of England, with almost half going to companies in London. The Conservative Government’s procurement strategy could not be more at odds with the stated aims of their levelling-up agenda. They have made big promises but they are failing to deliver. We must see proper investment in our communities to create good-quality jobs and opportunities across the country and to boost local economies, so can the Minister outline the specific targets in the procurement Bill that will ensure that Government purchasing of goods and services is better spread across our country?

I cannot reveal the details of Bills before they are published, but I agree with the hon. Lady’s basic thrust and point. One of the advantages of our new procurement system is that we will have better data and will therefore be able to ensure that the whole of the country is represented. To revert to the point made by my hon. Friend the Member for Broadland (Jerome Mayhew), part of the way of spreading it more widely around the country is to bring in smaller businesses, which means getting rid of rules that are unnecessary and that hinder businesses from tendering for contracts.

The Minister is very welcome to come to Worthing, where I am sure he will get an even better culinary experience than when he goes to Cleethorpes. One of the great benefits of Brexit is that we are no longer bound by EU bureaucratic procurement rules, so will he ensure that there is clear guidance to local authorities, local schools and other areas of public procurement that they should favour local businesses, particularly smaller businesses, and local producers so that our children and public service workers can enjoy quality food and drink products that are locally produced in this country, environmentally friendly and create fewer air miles?

I look forward to my trip to Worthing and I am grateful for my hon. Friend’s invitation. He is absolutely right; this comes from the de-bureaucratisation—if that in itself is not a bureaucratic word—of the system, because it makes it easier for small companies to apply. The thing to remember is that large companies have departments that fill out tender documents, but small companies do not. We need to simplify the tender documents to bring the small companies in.

Over a year ago, at the Public Accounts Committee, I discovered that there were 10,000 shipping containers filled with millions of items of personal protective equipment costing billions of pounds, and I am afraid of waste. A few months later, I heard that there were 14,000 shipping containers full of unused PPE. I have put in a parliamentary question for an update, but so far it remains unanswered. Can the Minister please give us an update on how many shipping containers are still full of PPE this month?

That is a matter for the Department of Health, but I would defend the procurement of PPE because we needed PPE urgently, as we needed a vaccine urgently. We have heard constant criticism from the Opposition of something that had to be done urgently and had to break through the slowness of normal procurement timescales. Normal procurement takes three to six months, but we needed PPE tomorrow so we had to act urgently, as we did.