Draft Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025

The Committee consisted of the following Members:

Chair: David Mundell

† Campbell-Savours, Markus (Penrith and Solway) (Lab)

† Dewhirst, Charlie (Bridlington and The Wolds) (Con)

† Eccles, Cat (Stourbridge) (Lab)

† Forster, Mr Will (Woking) (LD)

† Francis, Daniel (Bexleyheath and Crayford) (Lab)

† German, Gill (Clwyd North) (Lab)

† Gould, Georgia (Parliamentary Secretary, Cabinet Office)

† Holden, Mr Richard (Basildon and Billericay) (Con)

† McCluskey, Martin (Inverclyde and Renfrewshire West) (Lab)

† Morton, Wendy (Aldridge-Brownhills) (Con)

† Murray, Katrina (Cumbernauld and Kirkintilloch) (Lab)

Olney, Sarah (Richmond Park) (LD)

† Reader, Mike (Northampton South) (Lab)

† Smith, Rebecca (South West Devon) (Con)

† Taylor, Rachel (North Warwickshire and Bedworth) (Lab)

† Ward, Melanie (Cowdenbeath and Kirkcaldy) (Lab)

† Webb, Chris (Blackpool South) (Lab)

Stella-Maria Gabriel, Committee Clerk

† attended the Committee

Sixth Delegated Legislation Committee

[David Mundell in the Chair]

Draft Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025

16:30:00

I beg to move, That the Committee has considered the draft Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025. It is a pleasure to serve under your chairship, Mr Mundell, for what is my first Delegated Legislation Committee. This statutory instrument represents the final legislative step in implementing the Procurement Act 2023, which introduces a new public procurement regime responsible for over £385 billion in public contracts annually. The new regime, set to come into force on 24 February 2025, aligns with our mission-driven approach and supports the Prime Minister’s commitment to economic growth by establishing a simpler and more transparent system. In order to fully implement the Procurement Act, we must first ensure that procurement references in other pieces of legislation are updated to align with the new regime. The draft regulations make the consequential amendments that are a routine aspect of implementing primary legislation. They also make necessary updates to the schedules to the Procurement Act to ensure compliance with our international obligations. They amend schedule 9 to the Procurement Act to update the list of specified international agreements that identify treaty state suppliers for the purposes of the Act. The amendments will update the UK’s market access coverage in our trade agreements with Ukraine, Moldova, Georgia, Kosovo, North Macedonia and Albania, removing access to contracts for healthcare services and enabling the Health Care Services (Provider Selection Regime) Regulations 2023, introduced in January last year, to work as intended. Further technical amendments include updating the list of central Government authorities in the Procurement Act. In addition to those technical adjustments, the draft instrument enhances transparency in public procurement. It also updates how key performance indicators are handled in contract details and performance notices. Finally, it outlines how to calculate whether the sale of excess electricity, gas or water, produced as a by-product of another non-utility activity, falls under the Act where the operator wants to sell it to a network. In summary, the draft regulations are essential to ensure that the existing legislative framework functions as intended, while facilitating a transparent, efficient and effective public procurement regime. The final legislative step in implementing the 2023 Act will strengthen the system for public procurement across the UK, benefiting businesses, taxpayers and the public sector. I hope that all hon. Members will join me in supporting and approving the regulations today.

16:33:00

It is a pleasure to serve with you in the Chair, Mr Mundell. It is also a delight to be with the Minister who is losing her DL plates today—[Hon. Members: “Oh!”] I thought that was pretty good with two minutes’ notice. We will not be opposing the draft instrument. The core Procurement Act was introduced under the Conservative Government to consolidate and simplify existing procurement legislation, improve efficiencies throughout the process and improve transparency throughout the procurement pipeline. There remain a number of big challenges with public procurement, which represents hundreds of billions of pounds of public body expenditure every year. I hope that the legislation coming into force in February will help to tackle those challenges. Of course, I regret the fact that the Government have delayed the implementation of the measures contained within the Procurement Act, and I hope that their new national procurement policy statement will not interfere with its core efficiency and cost improvement measures. I want to ask the Minister when exactly we can expect the updated NPPS. I also want to briefly raise a couple of concerns about the measures that the Government have previously indicated will be in the updated statement. The Labour party’s make work pay plan, which sets out the most exact information we have as to the content of the updated NPPS, suggests that the new principle of procurement will be based on learning from the Social Partnership and Public Procurement (Wales) Act 2023. As the TUC has pointed out, that Act means that public bodies must consult and work with unions and: “Attempts to shirk this duty, or lock unions out from decision-making can no longer be done without consequence” securing the “place of trade unions as essential partners in public policymaking.” Is it the Government’s view that the NPPS, implemented through the Procurement Act, will ensure that trade unions cannot be locked out of decision making without consequence? We also know that the Government have set out their intention for a social value council, as in Wales. I would appreciate some further clarity on the expected make-up of the council. As the Minister will know, public procurement involves not just large businesses that have the capacity to maintain a stringent Government social value and trade union requirement but lots of small businesses that can offer fitting and cost-effective services and products but that might not have the broader capabilities to uphold some of those tight requirements. Previously, the Minister appeared to confirm to me that small enterprises would be exempt from those requirements and I would appreciate her confirmation of that, as well as her understanding of how exactly that will fit in to the cost-saving and efficiency measures set out by the Act, in which small and medium-sized businesses can play a central role. Anything in that regard would be appreciated. We can all appreciate the need for public procurement reform and the fact that the Government are taking forward this work, which was initially set out by the previous Conservative Government. However, the Government should offer a little more certainty and clarity about the extent of trade union involvement in the public procurement pipeline and the extent to which they will preserve the potential for small and medium-sized businesses to have a fair go at the bidding process and involvement in that pipeline. If the Minister will write to me on those points, I will be happy not to oppose the regulations.

16:36:00

I am delighted to engage in my first such debate with the hon. Gentleman. We are absolutely clear that the Procurement Act and the new national procurement policy statement have to support economic growth, small and medium-sized businesses and innovation. I have been engaging heavily with SMEs and the message they have given is that they can find Government procurement as it is slow and burdensome, and they often do not feel that they have a place at the table. I believe that the changes we have made to the NPPS strengthen the commitment to small businesses that is absolutely at the heart of our agenda. The hon. Gentleman referenced the Employment Rights Bill. Obviously, that is a completely different piece of legislation and is not relevant to today’s regulations, but decent jobs are really important in supporting economic growth. The Procurement Act is very much focused on growth and supporting SMEs, and that is what we will take forward. I am happy to have further discussions on the other points he raised. Question put and agreed to.

16:38:00