Live Debate: Commons Chamber

Urgent question: To ask the Parliamentary Secretary to the Cabinet Office if he will make a statement on the Government’s Modern Procurement Strategy

Thank you, Mr. Speaker. Every year this country spends around £400 billion of taxpayers money on procurement. And if we're honest,

12:39

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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under the current complex system, we do not always spend it as wisely we do not always spend it as wisely as we could. That is why, just before the Easter recess, I announced a major package of reforms to the procurement system, reforms to the procurement system, and I'm grateful to have the chance to update the House today on it. Behind these reforms, Mr. Speaker, Behind these reforms, Mr. Speaker, our three principles. First, the procurement should do much more to protect national security and support British businesses.

Second, that it should deliver a fairer economy, and third, that it should be simpler, fairer and open doors to businesses, small businesses and charities to take those in turn. Mr. speaker, this government believes it matters where things are made and who makes them so. So we will issue new guidance for all government departments to make use of the national security exemptions in the Procurement Act, to direct procurement to serve the national industry. National interest. We will start with four sectors critical to our national security steel, shipbuilding, energy independence and AI.

This will give a clear sign, Mr. Speaker, that this Labour government will back British business and we will use both the weight of our procurement Budget and the powers in the Procurement Act to do so. We will also take two further steps to back British businesses. First, government departments will now be required to confirm whether prime contractors are using UK steel, and they will have to explain why they are not. If so, we will also develop a new shipbuilding framework to restrict government contracts to British firms, where this supports our national security interests.

Mr. speaker, the second principle of these reforms is that procurement should build a fairer economy, and the truth is that for decades, under successive governments, we have had a policy that essentially adds up to outsourcing by default. Well, Mr. Speaker, under this Labour government, the age of outsourcing will end. We will, in line with our manifesto, introduce a public interest test and it will apply to all government departments. They will now be required to assess whether a service can be delivered more effectively in-house, and if it cannot, a clear explanation must be published.

Departments will also, for the first time, be required to publish robust insourcing strategies, setting out how, over the medium term, they will build the capacity to make the biggest wave of insourcing in a generation a reality. Mr. speaker, this marks a step change in how and who our public services are run by and for, and I am proud that this Labour government is delivering it. Mr. speaker, we will also strengthen the role of social value in procurement. Too often this has become a mere tick box exercise and a barrier, not an opportunity for SMEs and start ups.

So working with trade unions, businesses and others, we will create a new definition of social value that will underpin all government procurement. The third principle of these reforms, Mr. Speaker, is to make the procurement system simpler and fairer. I have heard too many times how the complexity, duplication and endless form filling of the current system is among the biggest barriers to SMEs and charities, so we will undertake a rapid review of all existing requirements in the procurement system, and we will see which burdens and duplications can be removed.

If they are not essential, we will scrap them. We will enforce a Telus once principle.

**** Possible New Speaker ****

No, no you don't. Look at the clock. Look at me and you sit down. It's three minutes. I don't know It's three minutes. I don't know who may have told you differently. There was something going wrong in advice that's being given. It's three minutes. I presume you're now

12:43

Mr Speaker

three minutes. I presume you're now going to come to the conclusion immediately. Yes. Try the. >> My apologies, Mr. Speaker. I was

**** Possible New Speaker ****

My apologies, Mr. Speaker. I was told five, but I apologise. I completely apologise syndrome.

12:43

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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completely apologise syndrome. >> Let's. Let's. Will not stand up. Please sit down. Don't remain at Dispatch Box. I'm sorry that you were told five minutes. I think by now that Ministers should know how now that Ministers should know how long they get for a statement or a UQ. It is becoming an impossible UQ. It is becoming an impossible situation where Ministers try to change the rules of the House. They're not my rules. These are the rules of the back benches. Please adhere to them.

12:43

Mr Speaker

I can only apologise, Mr. Speaker. In conclusion, these reforms will back British businesses and workers. They will build a fairer economy. They will simplify and open up our government procurement system. There is still much to do, but this is a big step forward and I'm grateful to have forward and I'm grateful to have the chance to set it out to the House today.

12:43

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Again.

12:44

Leigh Ingham MP (Stafford, Labour)

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A change in procurement policy that is more focussed on backing British businesses, investing in British businesses, investing in Britain to help secure thousands of good, unionised jobs and by remaining community focussed, the government will make sure local people are reaping the rewards from this move. I welcome it and I welcome the Minister's statement. Please can the Minister outline what the first steps are to deliver this procurement reform and what it will mean for manufacturers in my constituency and those in constituencies around the UK?

12:44

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Can I thank you for that? And this is a point she's raised a number of times with me before number of times with me before about the importance of changing procurement rules. She's a tremendous champion on this. In terms of next steps, the Cabinet terms of next steps, the Cabinet Office is working on new guidance that we will put before the House very shortly, I hope, before the summer recess. That will sort of make flesh the commitments I've made today, and as I say, it has three big principles behind it backing British businesses, creating a fairer economy and making the system simpler and fairer for all.

12:45

Mike Wood MP (Kingswinford and South Staffordshire, Conservative)

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Mike Wood Sharon Hodgson. >> Mr. Speaker, and I congratulate the hon. Lady on securing this urgent question. I know how rare that is for a government PBS, and I that is for a government PBS, and I welcome the government's ambition to as she's not anymore, sorry, I apologise. I welcome the government's ambition to modernise public procurement, but ambition, as ever, must be matched by delivery. And there are a number of questions the Minister must answer today. The government promised transparency through a new online register of commercial agreements.

When precisely will that register be live and will it be comprehensive from day one? Ministers often speak of backing small business. Will the Minister publish in a single accessible place? Every department's SME target, its latest outturn and whether it is on track or off track, a non prompt payment? How many suppliers have actually been excluded from major contracts for failing to meet the required standards? If this strategy is truly about value for money, why has the government still not resolved the fragmentation, poor quality frameworks and poor use of data and technology that was identified by the National Audit Office on National Security contracting authorities are now required to assess risks not just from the prime contractors, but from associated persons and subcontractors.

How many procurements have been referred for national security consideration, and how many suppliers have been excluded or challenged as a result? What assurances can the Minister give that public contracts are not still flowing into supply chains, with links to hostile states? And what assessment has the Minister made of the EU's emerging Buy Europe policies? Isn't this a protectionist barrier by the European Union? And finally, if social value is now mandatory at 10%, what assessment has been made of the risk that this adds cost and complexity? And particularly for SMEs? I know the House will want clear answers.

12:47

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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For those questions. Let me try and answer a few of them. Firstly, on SMEs and department spend. I mean, as I say, part of this package is to try and support SMEs and to make sure they have a greater chance of winning contracts. We did publish the departmental spends the day before recess. I know there was a lot going on, but we have published them. They are there and they show a very ambitious step forward. I believe around £7 billion of government contracts will go to SMEs as a result of those changes.

I'm very proud of what we are doing. It's the first time government have done it and we've helped drive that through. We've worked very hard on that. He asked about Buy Europe. Look, this is not in conflict with any of our international agreements. It's obviously not in conflict also with our negotiations with the EU that my right hon. Friend is is leading on and we work closely on that. But at the heart of this is a recognition that we need to use our procurement Budget within international law and with international regulations to do more to support our industries.

And that is quite the right thing to do, and I hope we can get cross-party support. He also asked me about social value again. I think he was implying that we are making this mandatory. It is already mandatory and it is already weighted at 10% within the contracting system. I'm not changing that here. What I'm saying is I'm changing the definition of social value so it will do more to support communities, and it will do more to make sure that it really works.

And it really supports communities for doing it. So there's no change on that. He asked me a couple of specific questions around national security points. I will get back to him if that's OK. But in general terms, I hope we can get cross-party support on this. The Procurement Act was passed with cross-party support. It was a step forward, but this is the next big step in trying to make sure we do much more with that Budget to support Britain.

12:48

Dame Chi Onwurah MP (Newcastle upon Tyne Central and West, Labour)

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Thank you, Mr. Speaker, and let >> Thank you, Mr. Speaker, and let me applaud the government's move to me applaud the government's move to use the £400 billion of public procurement. Almost one eighth of British GDP in the interests of the British people and the British economy. And the Select Committee for science, Innovation and Technology has often heard that a government contract is worth more than a government grant to the start ups and spin outs, which are so important to our economy.

Can you also confirm that this approach will be joined up with our strategy for sovereign capability, so that we do not find ourselves once again in the position where the Ministry of Defence awards a contract without competition to a US large US AI company, Palantir. When there are UK companies desperate for that kind of investment.

12:49

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Can I thank her for that? And obviously she brings a huge level of expertise and background on this. of expertise and background on this. And just to reassure her part of the package, I'm announcing an the package, I'm announcing an announcement before Easter is to try and help our sovereign AI industry, and it is to help science and technology as, as well, and to and to really boost start ups, because a lot of the stories I've heard in the time I've been doing this job is about how the procurement rules work.

Fine. If you if you have a large procurement part of your company to try and win them, it's not so good if you're a Start-Up, if you're a voluntary group, if you're trying to win your way into government contracts, we should be doing much more to help them. And yes, we are joining this up across government. It will be with the industrial strategy and also with our steel strategy I spoke about earlier as well.

12:50

Lisa Smart MP (Hazel Grove, Liberal Democrat)

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Lisa Smart Liberal Democrats. >> Very much, Mr. Speaker. We need to do far more to back British small businesses through public procurement, both to boost growth procurement, both to boost growth and to ensure our own national security. Public procurement amounts to hundreds of billions a year. The Procurement Act was meant to ensure more of that money reached British small businesses, but in practice, for many, they report, it's made things worse. Payment rules are being flouted by middlemen who face no consequences.

Suppliers who complain are threatened with losing future work. Bad debts amounting. This is public money disappearing into a vacuum and a security risk. There are businesses asking, what is the point of legislation that rogue traders can ignore with complete impunity, while loyal British SMEs are being pushed out of the market they built? Does the Minister agree that the target for government spending with small businesses should be far higher than the current level? And could he explain when will the payment reporting transparency be implemented? Yeah.

12:51

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Thank you very much. Look, I basically agree with her assessment of of the procurement system and how it how it it doesn't do what it should, as I say, £400 billion of taxpayers money is being spent here. We need to make sure we spend it every pound of that to support British industry as we as far as we can, and to support jobs and deliver fairness, and to support SMEs on that as well. I would just point out, though, I think the Procurement Act did help SMEs.

It did make progress towards it, but it doesn't go far enough. And, you know, it's not the job of this government to defend the status quo. It's the the job of this government to change it. So we will do that. I will come back to her on the specific point around payment thresholds.

12:52

Gareth Snell MP (Stoke-on-Trent Central, Labour )

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Gareth Snell thank you. and neighbour from Staffordshire for securing this question. Could could I ask the Minister very simply, the government's taking the simply, the government's taking the right steps towards this procurement strategy, but there is a lot more that could be done if you wanted to truly buy British, black, British and build British, that could start with government car service. He will know from written parliamentary questions. He said to me that one third of the government car service is used by foreign cars.

You know, the police services in this country use foreign made cars. He will know that we import bricks in this country to build houses that are funded by Homes England, money by taxpayers. So can he look at the easy wins that he could do by using how the government is a consumer of products to re-orientate that spend this week towards British companies.

12:53

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Yeah. are few greater champions of a Buy British agenda than my hon. Friend, although there are a few of us in government as well. And look, we are trying to make progress on that. What I'm setting out here is what I can do with government guidance and what I can do by using the exemptions that already exist in national security restrictions. I have not we haven't jumped to legislation. I'm trying to use the powers that I have. The point he's making, though, is about a bigger agenda that we, you know, hopefully can get to to drive forward more support for British industry.

This is the start of it. It is not the end. And we will work with him on doing it.

12:53

Rt Hon Sir Julian Lewis MP (New Forest East, Conservative)

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Andrew Lewin too. which, when they get to examine them, turn out to have been manufactured in places like China. What safeguards has the government got in its own new procurement strategy? That there are no concealed foreign supply chain components in the contracts that it intends to award? And why are the SMEs, or any company that is bidding having to demonstrate trade union recognition, if they might have a workforce that doesn't require this?

12:54

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Minister can I thank him for that? On the first point, look, we that? On the first point, look, we do have DB t I think has lead over it, but we do have robust processes it, but we do have robust processes in place on supply chains. The announcement I made before Easter doesn't refer to that doesn't change that. So it's sticking with the existing protections we have there and the existing regulations of the Procurement Act. What I'm talking about here is how we can use those powers to direct departments and and use government's buying power to do more on it.

On his union point, I'm sorry I missed the very end of his point. There was nothing in here to change union recognition within within the procurement system that can already be weighted within the social value requirement. But what it does do is make a really important step on insourcing around government departments, which I'm incredibly proud of that this government's doing and is part of the manifesto we were elected on.

12:55

Kirsteen Sullivan MP (Bathgate and Linlithgow, Labour )

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Kirsteen Sullivan. >> Thank you, Mr. Speaker, and I thank the Minister for the changes which are welcome. A vote of confidence in UK business and confidence in UK business and industry. I welcome the rapid review of existing requirements, which we know can slow down the which we know can slow down the procurement process, leading to frustration and inefficiencies all round. But ahead of international Workers Memorial Day, will I commit to having inclusive PPE as a specification in any new public sector procurement contracts and lead the way in improving workplace safety?

12:55

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Minister. this is not the first time my hon. Friend has raised this. We have met on it as well. She's championing this this case, and it is a really important one because it addresses an inequity that many workers feel. We are working the Cabinet Office. We are working on this point. We are looking at it. Our view at the moment is that Mandation is not the right way forward and that we can work with industry to try and roll this out. But look, the equalities law already protects and make sure that this should be delivered.

I accept because she's made the case incredibly powerfully, but that is not always happening. But I'm very keen to keep working with her GMB trade union and others on this issue.

12:56

James Wild MP (North West Norfolk, Conservative)

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James Wild you. >> James Wild you. >> Very much, Mr. Speaker. Spending on public procurement was £400 billion last year, so I'd like to billion last year, so I'd like to ask the Minister a question I asked his predecessor over a year ago, which she was unable to answer. Then what is the government's precise savings target from that Budget?

12:56

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Minister excellent question. I'm >> Minister excellent question. I'm afraid I'm going to have to get back to him. I do not know the answer. This is the just say. Just answer. This is the just say. Just say. There is nothing in the announcement I've made that is that is requiring additional Treasury funding. It is within existing budgets. But the point he makes is a good one. So I will come back to him if that's OK. Speaker.

12:57

Rachel Taylor MP (North Warwickshire and Bedworth, Labour)

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Can the Minister join me in congratulating Bedworth Company. >> And Spencer, who have a proud history of ribbon weaving and supplying ribbons for insignia and medals to the queen, the king and the government for many years. And the government for many years. And could he tell me how the procurement strategy will help other local manufacturers in North Warwickshire and Bedworth?

12:57

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Minister? her? Can I thank her for raising that look? These are exactly the kind of companies we want to be helping. It's exactly the kind of British companies want to back and communities as well that, as I say, should have a a real stake in how procurement money is used. So I hope we can do more on that. And I'm happy to take up the specific point with her and the specific company.

12:57

Mr Joshua Reynolds MP (Maidenhead, Liberal Democrat)

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We'll put it in there. Joshua Reynolds. Mr Speaker. On the Business and Trade Select Committee. >> One of the things we've heard time and time again is if we want to transform the economic health of small and medium enterprises, we need to direct greater share of need to direct greater share of public procurement towards those. But the British Chamber of Commerce has said that we are stuck in a rut at 20% of spending going to SMEs. So what is the Minister doing to try and join up the approach across Whitehall to ensure we have a greater amount of spending going towards these SMEs?

12:58

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Can I thank him for that? And I agree we should be more money out of this Budget should be going to SMEs. We are already taking steps SMEs. We are already taking steps on that to do so. We've already announced powers to say contracts can be reserved in local communities through, through through powers. We've already increased the amount of government spend. As I say, the spending targets across Whitehall for the first time, we're now over £7 billion of government money will go now to SMEs, and I'm working very closely with the FSB and lots of other small businesses on that.

And I should just point out, I should just point out and thank the FSB and others, because the reforms in here are aimed to support SMEs and voluntary sector as well. I should emphasise that as well, designed in collaboration and work with them because they know the system isn't working, I know it isn't working and we need to get more money down towards them. So we've done a bit, we've done a lot of stuff, there's a lot more to do and this is part of that.

12:59

Rt Hon Sir Lindsay Hoyle MP (Chorley, Speaker)

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Linsey Farnsworth thank you, >> Linsey Farnsworth thank you, member. >> For Amber Valley Denby Pottery,

**** Possible New Speaker ****

For Amber Valley Denby Pottery, which is sadly in administration, and I'm desperately trying to save it. It's a joy in this House to use it. It's a joy in this House to use crockery made in the UK, and I welcome the minister's recent announcement on procurement, but I have written to him to ask him to go further and include ceramics, and I look forward to receiving his take this opportunity to repeat my. That we don't lose a whole sector by degree?

12:59

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Yeah. >> Minister yeah. Can I thank her for that? And also on her point on Denby, look, I know how I can appreciate how important this is to appreciate how important this is to her constituency and how difficult it will be for workers there. At the moment. I understand government officials have been working with Denby over recent weeks to ensure that support is put in place as the administration process unfolds. I hope obviously that can that can support the work as affected as much as possible.

On the broader point about ceramics industry, and I think he'll have some support from the benches behind him on, on on this as well. As I say, what I've announced here in this package is to look at the the four sectors that are immediately critical to national security, using the existing powers that we have. That is not what I want to stop. I want to go further, but it's what I can do at the moment. But I'm very happy to work with her and her friends to try and do so.

Speaker.

13:00

Sir Ashley Fox MP (Bridgwater, Conservative)

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The Minister is right in trying to support small businesses by to support small businesses by cutting red tape, but can he explain why he is saying that at the despatch box, another part of government is requiring any business seeking a government contract to demonstrate trade union recognition? Does he not accept that? That is completely irrelevant as to whether a business provides a good service and good value for money? And does he not appreciate that this only imposes additional costs on businesses?

13:01

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Minister. with what I'm setting out here. And I'm sorry, I don't know the point he's making about there's no requirement to have a trade union recognition within government contracts, within the procurement system. And what I'm doing here is I'm not changing that. I'm not changing how that plays out. What I'm trying to do is to simplify the system, remove the burdens where I can look at the procurement system from start to finish, strip out all the duplication, strip out the erroneous stuff in there that has crept up like a Christmas tree over time, and to make it simpler and make it fairer.

But that is also going to happen at the same time as making sure that we we deliver the generation of insourcing that this government was elected to do, and that can bring to an end decades of outsourcing by default.

13:02

Ben Goldsborough MP (South Norfolk, Labour)

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Ben Goldsborough thank you very much, Madam Deputy Speaker, and I refer the House to my Register of members interests. One of the members interests. One of the important aspects of our spending as a government is on the NHS within food procurement, with half £1 billion being spent every year in England alone. So can I stress on the government to make sure that we back British farming and back British food and ensure that these processes were undertaken now support our British farmers?

13:02

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Minister yes, he's absolutely right to point that out and to point out, I think the link also between food security and national security and economic security, which is increasingly important part, as I say, these reforms that we announced deal with four sectors in the first instance that we feel are the most immediately available with the powers we have. But it's not where, as I say, we want to end, and I'm happy to work with him and the farming industry and others on this to see what more we can do.

13:03

Shockat Adam MP (Leicester South, Independent)

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Shockat Adam thank you, Madam Deputy Speaker. I hear, and I appreciate much of the statement that the Minister has made that the Minister has made regarding procurement. I'd like to deflect his attention to textile procurement, especially when the procurement, especially when the Ministry of Defence has contracted £37 million worth of military gear to foreign factories, including those in China and the NHS, nurses and NHS PPE. 23 million is again manufactured abroad. All the while, my constituency of Leicester South has factories, has the workforce and we're ready and we're suffering with the cost of living crisis.

So can I ask the Minister to consider please?

13:03

Chris Ward MP, The Parliamentary Secretary, Cabinet Office (Brighton Kemptown and Peacehaven, Labour)

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Yes. for raising that particular point. Look, the thrust, as I say, and he can clearly detect from what I'm trying to say, is I want to do more to support British businesses. I want to support British industries, and I want to make sure we're doing everything I can within the existing powers. To do that. I'd say we've set out four sectors that we can do that straight away. We feel there are others I'm sure we can look at going forward. I'm happy to work with him on that.

13:04

Amanda Martin MP (Portsmouth North, Labour)

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Amanda Martin thank you, Madam >> Amanda Martin thank you, Madam Deputy Speaker. Many in Portsmouth, like me, will welcome today's announcement, particularly the new shipbuilding framework and shipbuilding framework and commitment to renewed bids to reward bids that deliver local jobs and skills. Can the Minister outline today and meet with me to

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