Procurement Act 2023

Question

14:37:00

Asked by

To ask His Majesty’s Government what plans they have to change procurement guidance and operations under the Procurement Act 2023.

My Lords, the Procurement Act 2023 aims to create a simpler and more transparent regime for public sector procurement that will deliver better value for money and reduce costs for businesses and the public sector. I commend the noble Baroness on the Benches opposite for the commitment to small businesses, in particular, in the Act that she personally championed. The new regime will now go live on 24 February next year—a short delay of four months from the previous go-live date—in order to allow time for a new national procurement policy statement to be produced that clearly sets out this Government’s priorities for public procurement and economic growth.

I thank the noble Baroness for her courtesy. I remind the House that, in June, Prime Minister Starmer said that his number one mission was economic growth, so it is ironic that in addition to the Employment Rights Bill, the Government are planning to damage economic growth by delaying the Procurement Act 2023. Why are they adapting the rules on procurement to help their union paymasters and to encourage costly equality and green add-ons? My concern is the resulting red tape, which is against the direction that the Prime Minister set—yesterday he said that he wants to get rid of red tape —and which I believe will harm efficiency and the path to growth.

I absolutely and wholeheartedly refute the noble Baroness’s suggestion. I would also note that, last week, I was criticised for continuing with measures announced by the previous Government and this week I am being criticised for their delay. I hope that noble Lords from across the House agree that we should look at such matters on a case-by-case basis to ensure that this country gets back on the stable footing it needs and deserves.

My Lords, will the Minister give a complete assurance that this Government will not introduce a VIP lane which gives preference to Conservatives and their colleagues? Will she also give an assurance that the Government will appoint a Covid corruption commissioner as soon as possible?

This Government are absolutely committed to using every means possible to recoup the public money that was lost in pandemic-related fraud and contracts that have not delivered. In July, the Chancellor announced that the Government would appoint a Covid counterfraud commissioner, who will be appointed by open competition for a fixed term. I am pleased to say that applications closed on 30 September and the Chancellor will announce the commissioner in the coming weeks. I hope that noble Lords will welcome this measure to address some of the shocking instances of pandemic-related fraud and awards of contracts that happened in the past.

My Lords, it was a pleasure to work cross-party on the Procurement Act, but my party objected to the NHS and the Ministry of Defence being granted an exception from having to follow the Act. Avid readers of the Health Service Journal will see that about once per week the NHS is being taken court to by its suppliers for its new procurement rules. Will the Government now review the recent NHS procurement rules in the Health and Care Act 2022 to see if they are up to the standard that the rest of the public sector is required to follow?

In passing the Health and Care Act 2022, Parliament recognised that healthcare services delivered to NHS patients and service users, such as 999 emergency ambulance services and cancer-screening services, had particular issues and challenges which necessitated special procurement measures. Consequently, as the noble Baroness made clear, the Procurement Act does not include special provisions for those healthcare services.

My Lords, during the proceedings on the Procurement Act, the noble Baroness will recall that the House was united in not wishing to see goods made in Xinjiang by slave labour, particularly Uighur Muslims, being brought by public policy into our own supply chains. Can the Minister tell us what this Government are doing to ensure we maintain a prohibition on goods that have been made by Uighur slave labour?

Abhorrent practices such as these have absolutely no place in public supply chains. The Procurement Act strengthens the rules around excluding suppliers due to serious misconduct anywhere in their operations, including the supply chain.

My Lords, what effect will this have on the defence procurement budget, which is already under considerable pressure?

I do not have any detail specifically on the defence procurement budget. This is more about the processes. The Procurement Act includes specific rules for defence and security procurement, including flexibility for contracts to be upgraded.

My Lords, it seems to me that it would be good for the Opposition to visit Germany, where there is a great relationship between trade unions and employers and the productivity rate is much higher, and compare it with the failed policy of the last Government.

I can only agree with my noble friend.

My Lords, does the Minister recall that, when the Procurement Act was first presented—it started in the Lords—it was one of the most badly drafted Bills I have ever seen, and that the Government themselves produced 350 amendments between Second Reading and Committee? Do the Government intend to look again at the rules covering outsourcing, particularly to companies which have in the past made excessive profits from government contracts?

I will look into that matter and write to the noble Lord on that point.

My Lords, in their manifesto, the Government committed themselves “through public sector targets to source locally-produced food” to help farmers. We on this side would applaud that, but how does the Minister square that with the terms of the Procurement Act, which prevents farmers and others from bidding to be sources of food in schools, prisons and hospitals?

I am not aware of any particular measures that would prevent them from doing that, but I will look into that matter and revert to the noble Baroness.

My Lords, I declare my interests in the register. Defence procurement has previously had a policy of global competition by default, so what plans do the Government have to look more carefully at what can be sourced from the UK and support our domestic industries in this area?

The Procurement Act has provisions around defence to enable a contracting authority to exclude suppliers from procurement if they present a threat to national security. This can identify suppliers that must be excluded from certain contracts, as well as suppliers that contracting authorities should consider excluding from the procurement. I hope that at least partly addresses the noble Lord’s point.

My Lords, can the Minister max out, as it were, on the provisions to help small businesses achieve procurement? As well as doing that, can she look at the Subsidy Control Act and its effect on early-stage procurement and pre-procurement? Can she look at the chilling effect of contracts requiring the sharing and licensing of innovative companies’ development of intellectual property with competitors in order to comply with the Subsidy Control Act?

I am happy to look into the point the noble Baroness raises. A new duty under the Procurement Act will require contracting authorities to have regard to small businesses, including ensuring 30-day payment terms on a broader range of contracts. We are keen to encourage more suppliers, particularly SMEs, to bid, which increases competition and should in turn support growth.

On my noble friend’s point, I am not sure the Minister quite grasped the key issue, which is that if small businesses are required to make public their intellectual property and innovation—so that it then becomes available for much larger firms to take it over and use it without any payment—they are totally discouraged from putting forward their names for contracts to government.

I understood the point that was raised, but I did not have the answer. I apologise that I did not have the exact answer. I will go back and look into this, and I will make sure that I write to both noble Baronesses.