Procurement Bill [HL] — House of Lords, 2022-05-25
Topic: Government Operations
Sheila Masters (Conservative, Centre-right): My Lords, there is a lot to like in this Bill and, like my noble friend Lord Maude of Horsham, I do not think that it will be improved by adding a lot of extra things to it My favourite kind of Bills are the ones which repeal EU-derived legislation and replace it with legislation designed for the UK. As such, my favourite clause in this Bill is Clause 107, and my favourite schedule is Schedule 11. Unfortunately, some of the new rules still seem to be written in EU-speak. In particular, I have in mind the description of a "public contract" in Clause 2 which uses the term "for pecuniary interest", which I have failed to find in any UK-based legal usage in this context. I am sure we can explore that in Committee I have one main problem with the Bill: the public procurement rules are still very complicated. Creating the new procurement system requires over 110 pages of primary legislation in this Bill, and who knows how much more in the secondary legislation. I acknowledge that we must remain compliant with the WTO’s Agreement on Government Procurement, and I also pay tribute to the extensive consultation the Government have carried out before bringing this Bill forward. Of course, the Government have made significant changes, reducing seven procurement categories to three, and having a single set of procedures for most public procurement. I will say in passing that I regret that there is a power in the Bill to allow the NHS to go its own way; it would have been very much more satisfactory if a single code had applied across all public procurement. The NHS, in particular, needs to be exposed to more competitive procurement, not protected from it. I would really like to see Clause 108 removed. However, I am a political realist when it comes to the quasi-religion of the NHS, and I accept that I may not achieve that ambition My challenge to my noble friend the Minister is whether more simplification could have been achieved. Could the procurement code be even more streamlined and even more principles-based My personal knowledge of public procurement is limited to being engaged in a number of public procurements as both a seller and a buyer over the years, and therefore I claim no specialist knowledge of public procurement and I cannot point to a better way to draft it. However, I am aware that there is a whole army of public procurement specialists out there. A number of noble Lords have already referred to the sorts of numbers of people in various parts of the public sector who are handling public procurement. I have a feeling that we should have a way to liberate more of them so that they can be more productively employed in the economy My noble friend the Minister will also be aware that the UK’s reputation for gold-plating regulations is well known and that we often went voluntarily much further even than we were required to by the EU. Can my noble friend tell the House how the Government satisfied themselves that gold-plating does not live on in this Bill? It would be terrible if we allowed the UK to be dragged down by the kind of bureaucratic groupthink that we really ought to have left behind I said earlier that there is a lot to like about the Bill, and, like other noble Lords, I particularly like the way in which the Government have shaped the basis of contract award, shifting from the "most economically advantageous tender" to the "most advantageous tender". The previous formulation had a tendency to drive contracts towards lowest-cost tender and left little scope for longer-term strategic considerations or for innovation, which other noble Lords have spoken about. Although it was entirely possible under the EU system not to award contracts to the lowest bidder, the new formulation makes it clear that a narrow economic evaluation is a part of, but not the heart of, public procurement—and that is good. Turning to SMEs, which other noble Lords have already covered, we know that they have traditionally found the public procurement processes intimidating and inaccessible. With its emphasis on proportionality, the Bill may well help to open up public procurement to more SMEs. The 30-day payment term throughout the supply chain will certainly be welcomed by SMEs if it is actually delivered. The noble Lord, Lord Mendelsohn, who is no longer in his place, made some important points about that The Government will be aware that SMEs may still perceive that significant barriers will be associated with engaging with public sector procurement, despite the improvements made in the Bill. What will the Government do to promote SME involvement in public sector procurement and to demystify the new regime and help them to access it My final point relates to light-touch contracts, which are allowed under Clause 8. I rather liked the Government’s initial proposal in their consultation to subsume light-touch contracts into the mainstream, especially given the reformulation of contract classifications and the articulation of procurement objectives. However, the Government have given in to pressure to keep the light-touch regime going. I do not challenge that, but I hope that the Government will keep it under review The extraordinarily wide power to designate light-touch contracts under Clause 8 has already been mentioned, in particular by the noble Lord, Lord Fox. Although there are matters to which the Government must have regard for specifying services as light-touch, there is no actual restriction on what the Government could put in this category. The regulation-making power is the affirmative procedure, which is of course better than the negative procedure, but not by much in practical terms. I hope that my noble friend can explain why the Government have chosen to make the light-touch regime so open-ended, otherwise we may need to look at that very carefully in Committee I look forward to scrutinising the Bill in Committee, but also hope that we can get it on to the statute book as quickly as possible so that its benefits can be realised. That hope may well be unrealistic given the evident enthusiasm from other noble Lords for an extensive Committee stage, but I can but hope.