Procurement Bill [Lords]

Nick Smith Excerpts

2nd reading
Monday 9th January 2023 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

I welcome this Bill’s aims of openness, effectiveness and transparency. A third of public expenditure—£300 billion—goes on public procurement, so we must get this right. Unfortunately, though, the Government’s record here has been undermined by the PPE scandal. I do understand that exposure to fraud was a risk during the panic of the pandemic and that the global PPE market was highly competitive. However, big mistakes were made, and billions have been wasted.

The National Audit Office has done brilliant work on tracking the Government’s covid spending. Its investigation into the management of covid contracts in March 2022 found that 46 of the 115 contracts awarded to the Government’s VIP lane did not go through the Government’s due diligence process. That meant that the Department for Health and Social Care could not fully understand the contract management risks it was exposing itself to. Therefore, the sheer scale of Government waste is not just explained by global markets pressures; the UK Government’s failures must also be acknowledged. After all, the PPE scandal has seen £4 billion of taxpayers’ money wasted on unusable equipment and now £2.6 billion-worth of disputed contracts.

I am specifically concerned about contracts awarded to Unispace Global Ltd, which won more than £600 million of PPE contracts during the pandemic. It is extremely difficult to follow the financial paper trail: a look at its manoeuvres, and the chopping and changing of its directors, raises big questions. For example, payments from the Department of Health and Social Care were made to Unispace Global Ltd, but in 2021, it transferred its contracts to a new company, Unispace Health Products LLP, which now trades as Sante Global LLP. Private Eye says, however, that the companies’ accounts do not feature anywhere near the £600 million paid to them, which begs the question: why this chicanery? Will the Bill deal with such shenanigans?

I welcome the introduction of a single central Cabinet Office online platform—that is quite a mouthful—but it should go further and include a publicly accessible dashboard for Government contracts. In that way, we can track delivery and performance, make contractors truly accountable to the people, and close the loopholes that profiteers enjoyed. The British people also deserve to know the profits, commissions, dividends and big bosses’ bonuses being made on the back of public money.

We need measures that financially penalise those who benefited from the public contractors’ PPE super-profits, but when a company changes its identity multiple times, that is made much harder, and the other route—recovering money through the courts—is very expensive and hugely time consuming. What measures will the Government bring forward to deal with those PPE profiteers and their like? We need a Bill that mandates open accounting of public contracts and shines a light on the vultures that prey on the public purse. We need a Bill that allows us to properly follow the money.

--- Later in debate ---

[Alex Burghart]

The right hon. Gentleman says that it does not, but the shadow spokeswoman, the right hon. Member for Ashton-under-Lyne (Angela Rayner), said at the start that it did and praised the fact that it was creating a single rulebook. This will make it easier for our authorities to procure decent services from people who will be able to provide better value for money and will be held to account better. I am very pleased that it is this Government who are bringing it forward.

Opening up public procurement to new entrants such as small businesses and social enterprises so that they can compete for public contracts is a major part of this work, as is embedding transparency throughout the commercial lifecycle so that the spending of taxpayers’ money can be properly scrutinised. The main benefits of the Bill have been reflected by hon. Members on both sides of the House, including my hon. Friend the Member for West Worcestershire (Harriett Baldwin). By delivering better value for money, supported by greater transparency and a bespoke approach to procurement, the Bill will provide greater flexibility for buyers to design their procurement process and create more opportunities to negotiate with suppliers. As my right hon. Friend the Member for North East Somerset said, that will drive better value for money.

As we slash red tape and drive innovation, more than 350 complicated and bureaucratic rules governing public spending in the EU will be removed. We are creating better and more sensible rules that will not only reduce costs for businesses in the public sector, but drive innovation. That will be at the heart of our work as we encourage authorities to publish pipelines that allow businesses of all sizes to prepare for contracts in new and interesting ways.

We will make it easier for people to do business with the public sector. The Bill will accelerate spending with small businesses. A new duty will require contracting authorities to consider SMEs, and will ensure that 30-day payment terms are made on a broader range of contracts.

We also intend to take tough action on underperforming suppliers. The Bill will put in place a new exclusions framework that will make it easier to exclude suppliers who have underperformed on other contracts. As has been mentioned a number of times, it will also create a new debarment register—accessible to all public sector organisations—that will list suppliers who must or may be excluded from contracts.

A number of hon. Members on both sides of the House have referred to the excellent work that has been done on the ProZorro service in Ukraine. I am pleased to be able to let the House know that Ukraine was on our advisory panel and has actually informed our work, and our single digital platform takes a lot from what Ukraine has done with ProZorro. The platform will enable everyone to have better access to public procurement data. Citizens will be able to scrutinise spending decisions, suppliers will be able to identify new opportunities to bid and collaborate, and buyers will be able to analyse the market and benchmark their performance against others on spending with SMEs, for example—better transparency; better for taxpayers.

[Nick Smith]

Will the Minister please tell us when his single digital platform will be ready for use by industry across our country?

[Alex Burghart]

The platform is based on a system that we already have. We are confident that we will be able to introduce it in line with bringing this Bill into force. Obviously, we have to pass the legislation and get Royal Assent, and then there will be a settling-in period. But it is going to be functional very soon.

We are also strengthening exclusion grounds. The Bill toughens the rules to combat modern slavery by allowing suppliers to be excluded when there is evidence of that, accepting that in some jurisdictions it is unlikely that a supplier would ever face conviction. My hon. Friend the Member for Totnes (Anthony Mangnall) made some important points on that score. It is absolutely right that we should be able to debar suppliers who have engaged in such dastardly crimes. It is too soon, however, to say exactly which suppliers are going to be debarred, but he has read the legislation and can see what the potential is. We will consider suppliers according to a prioritisation policy. Once on the list, suppliers will stay on it for up to five years unless they can show that they no longer pose a risk—these are the self-cleaning clauses. Any contracts awarded during an investigation can be terminated if the supplier is debarred. Safeguards are built into the grounds to stop suppliers from renaming themselves. I am happy to talk about those.