Procurement Bill [HL]

Lord Hunt of Kings Heath Excerpts

Committee stage
Monday 18th July 2022 Grand Committee

[Lord True (Con)]

My Lords, here I pay the penalty for the discussion we had before the Committee started: there are more government amendments that I must move in this group. I will beg to move a range of amendments today.

Government Amendments 90 and 91 make improvements to preliminary market engagement notices. Together they ensure that, where a contracting authority chooses not to publish a preliminary market engagement notice, a justification must be set out in any subsequent tender notice. I know this will be welcomed, particularly by small businesses, which often rely on early market engagement.

Government Amendment 277 makes provision for contract details notices. It removes a superfluous reference to contracts awarded under this part, which is unnecessary as the definition of a public contract in Clause 2 covers that which needs to be covered.

Government Amendments 278 to 281 correct a timing error in relation to the publication of a contract details notice for a light-touch contract. This will ensure that the contract details notice is published first, within 120 days of entering into the contract. The publication of the contract is required within 180 days of entering into it, allowing time for the contracting authority to make any necessary redactions before publication.

Government Amendments 282 to 286 are at the request of Northern Ireland and exclude transferred Northern Ireland authorities from the obligation to publish contracts above £2 million.

Government Amendment 287 is a minor drafting change, which better reflects the operation of the provisions.

Amendments 355, 356, 357 and 359 make changes to the requirements in Clauses 64 and 65 for contracting authorities to publish information about, respectively, compliance with the prompt payment obligation in Clause 63 and payments made under public contracts. Northern Ireland has chosen to derogate from both those requirements, so these amendments reflect that policy.

Government Amendment 358 makes it clear that the exemption for utilities in Clause 65(4)(a) applies to private utilities only. Government Amendment 403 clarifies that user-choice contracts which are directly awarded are not subject to the requirement to publish a contract termination notice.

Government Amendments 429 and 430 are technical amendments to Clause 79 to reflect consistent drafting practice and the fact that Northern Ireland has chosen to derogate from the below-threshold rules in Part 6 and so does not require the threshold-altering power in subsection (7).

Government Amendments 446 and 447 to Clause 84 also relate to Northern Ireland. Northern Ireland has chosen to derogate from the requirement for its contracting authorities to publish pipeline notices.

Government Amendment 457 inserts a new clause entitled “Data protection” after Clause 88. This is a now standard legislative provision that reiterates the need for those processing personal data under this Bill to comply with existing data protection legislation. As we discussed on an earlier group, I look forward to engagement with noble Lords opposite on issues of particular concern relating to processing and holding data. I beg to move.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I have Amendment 445 in this group. This amendment is concerned with the challenge facing charities seeking to obtain contracts from public authorities. The Bill is ambitious in its aim to simplify procurement rules, which is very welcome, but it is important that it is done in a way which does not make it more difficult for small businesses and particularly charities successfully to bid for contracts.

We know from past experience with current contracting rules and law that charities experience some barriers here. I hope that in our discussions on the Procurement Bill it will be recognised that a large proportion of the voluntary sector is pretty fundamental to the delivery of public services—indeed, in some cases the voluntary sector is the leading provider of such services. For example, according to research commissioned by DCMS, voluntary and charitable organisations and social enterprises won 69% of the total value of contracts awarded for homeless services between April 2016 and March 2020, and 66% of the total value of contracts to support victims of domestic violence and sexual abuse.

We know that the voluntary sector can produce outstanding results; we know about its ability to build trusting and long-term relationships with communities that are often excluded, its focus on prevention, its versatility and its agility. So I welcome the requirement for contracting authorities to publish pipeline notices—the Minister referred to this in relation to one of his amendments today—but, given the utility of such notices for smaller providers and the market diversity and improved services that could be cultivated by giving smaller providers a chance to prepare the bid, we want transparency to be prioritised in the requirements to publish pipeline notices; hence my amendment.

My Amendment 449 is slightly different but it none the less raises issues in relation to the way in which public authorities engage with the private sector—or the independent sector, depending on how you look at it. This amendment arises from concerns that public bodies are failing to act within the spirit if not the letter of the freedom of information legislation in relation to procurement contracts.

I just want to refer the Minister to an openDemocracy report, published last year, which looked at the operation of the Freedom of Information Act in 2020. It found that

“2020 was the worst year on record for Freedom of Information Act transparency … Official statistics published by the Cabinet Office show that just 41% of FOI requests to central government departments and agencies were granted in full in 2020—the lowest proportion since records began in 2005 … The Cabinet Office is blocking requests from MPs about its use of public money to conduct political research … Stonewalling, a brutally effective tactic for evading FOI, is increasingly prevalent … Government departments are cynically exploiting a legal loophole to deny timely access to information in the name of the ‘public interest’ … Government departments are failing to comply with a legal requirement to work constructively with requesters”.

The FoI Act was meant to be a safety net for members of the public so that there would be as much openness as possible. However, there are two obstacles to that happening. The first is the operational aspect of policing the Act through the Information Commissioner. The commissioner has been seriously affected by huge cost-cutting. Last November, Elizabeth Denham, the former commissioner, told the House of Commons Public Administration and Constitutional Affairs Committee that the ICO’s resources were “40% less” than in 2010 while, at the same time, the number of requests had increased by one-third. In its most recent annual report, published in July 2021, the ICO noted that there had been a build-up of the caseload over the financial year.

The other obstacle to the public being able to find out what is going on is the subject of my amendment. One exemption in FoI legislation relates to commercial interests in Section 43(2). This is a qualified exemption subject to the public interest test. Its application ought to be straightforward but, unfortunately, it is used regularly to refuse information in often the most absurd situations. The outgoing commissioner said:

“The reality of the delivery of Government services involves so much of the private sector now. The scope of the Act does not … cover private sector businesses that are delivering public services. I think that is a huge challenge. I have seen statistics that say up to 30% of public services are delivered under private sector contracts, but those bodies are not subject to”


FoI legislation.

I am afraid that the NHS is a frequent offender when it comes to this. We know that, over the years, the Government and the NHS have looked to expand private sector involvement. There is a long-established trend of trying to outsource some NHS functions to private contractors and a recent trend to set up what I can only describe as tax-dodging subcos, as they are called, to avoid VAT payments and reduce staff’s terms and conditions. This is where public health bodies set up their own subsidiary companies and transfer staff over. Basically, they do it to get around VAT payments, but we have also seen them use it to reduce the terms and conditions of the staff who are so employed.

What is so objectionable is that trusts frequently refuse to disclose information about what they are doing. Decisions are made in secret. In one example, an FoI request went in for the business case. In the decision-making record, the request was turned down on the basis of commercial confidentiality. This happens up and down the country. Section 42(2) is also used to refuse to disclose information long after any commercial considerations have gone.

This is a serious issue. As members of the public, we have a right to know when the NHS outsources services. The FoI legislation was never envisaged as getting in the way of transparency in those cases. When you combine it with the enforcement problem that we have, in essence we are seeing the FoI legislation not being effective. I am not sure how hopeful I am, but I am ever hopeful that the Government will see the error of their ways in relation to FoI. It was set up with the best of intentions and its principles still stand today in terms of transparency, but the more we see the public sector using the private sector, the more FoI considerations ought to come into play.