Armed Forces Readiness and Defence Equipment

Debate between Meg Hillier and Danny Kruger

Thursday 21st March 2024 Commons Chamber

[Dame Meg Hillier]

Given what the hon. Gentleman has just said, does he agree that it would be good to have tighter scrutiny of that spending, which might mean a new system set up so that we can look at sensitive matters?

[Danny Kruger]

I defer to those on the Front Bench on what transparency is appropriate, but I recognise the point made in the hon. Lady’s Committee’s report and I think in the Defence Committee report about the difficulty of getting the information that the Committees need to do their work. I recognise that nuclear is identified as a separate line in the budget and is protected in theory, but I am concerned about what might be a marginal increase in this enormous budget. It is around a quarter of our total defence spending. If that increases even marginally and the shortfall has to be made up from our conventional defence budget, that entails a significant reduction in that conventional spending, which is so important at the present time.

Procurement Bill [Lords]

Debate between Meg Hillier and Danny Kruger

Report stage
Tuesday 13th June 2023 Commons Chamber

[Dame Meg Hillier]

I agree with the hon. Gentleman. Of course, if evaluation is built in from the beginning, the company that has been contracted to do the work would be required to collect data. They will say that that involves more cost but, over time, it would wash out. We need a better standard of data collection on all sorts of issues.

Take the example of a contractor that was asked to run a prison. The Government provided data on the prison’s maintenance, but the data was not right as it did not count the number of windows and toilets, and so on, that needed to be fixed, so the company had to come in and count them. In that case, the company had not banked on prisoners breaking more windows than the average in other buildings. There is lots of data, and we keep pushing for it to be collected, and that data could be built into evaluations.

The hon. Gentleman is bang on about making sure we do not send good money after bad. If something is not working, we need the evidence and the political courage, sometimes, to end the contract. We need to make sure that the people delivering a contract are clear that they are delivering the contract’s aims. Evaluation should have the impact of tightening procurement, tightening the management of contracts by the civil service and sharpening up those who bid for contracts to do a better job and to be proud of that job, in the knowledge that doing a good job may well mean that the contract is extended, but not if they do not do a good job. We should also reward good behaviour. I am keen to hear what the Minister has to say about that.

My right hon. Friend the Member for Barking (Dame Margaret Hodge) tabled amendments that would ensure that organisations involved in nefarious activities are excluded from public procurement. It is extraordinary that companies that are making money in nefarious ways can bolster their activity and give themselves credibility through public procurement. Others have talked a lot about the issues around China, so I will not go into that much more. My right hon. Friend has a strong reputation in this area, and her amendments speak for themselves.

We do not want to miss this opportunity. I recognise that not everything in procurement is about legislation. It would give me some comfort, as Chair of the Public Accounts Committee, if the Minister showed that that is being thought about a bit more deeply across Whitehall.

[Danny Kruger]

This has been a very interesting debate, veering from grand geopolitics to the sourcing of public services and paperclips. All of this is, in a sense, the responsibility of an independent country, so the debate is one benefit of Brexit, for which I am sure we are all very grateful.

I am pleased with the Bill and the Government amendments. I think of it as the patriotic Procurement Bill, which is exactly what we need. I particularly welcome the explicit commitment to national security that has been added to the Bill, and I pay tribute to my hon. Friends the Members for Rutland and Melton (Alicia Kearns) and for East Worthing and Shoreham (Tim Loughton), and my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), for their work and their contributions today. I am particularly grateful to my hon. Friend the Member for Isle of Wight (Bob Seely) for his tremendous speech about the dangers we face from a more hostile China.

In the Government amendments, and in Government policy in general, we see a necessary new realism in UK policy. Security is the new watchword of our times, and to me it means much more than defence against hostile states. We face all sorts of other threats to our security, including, as my hon. Friend the Member for Isle of Wight mentioned, our extreme dependence on supply chains around the world, not only but particularly those in hostile states.

Conservative Members tend to regard “protecting” and “subsidising” domestic industry as dirty words and unorthodox policies. Nevertheless, we see around the world a growing tide of tariff barriers and domestic subsidies. Our great friends in the United States have committed to spending $500 billion on domestic manufacturers, particularly to wean themselves off Chinese imports. I welcome the Prime Minister’s commitments this week to a new US-UK economic collaboration arrangement to secure our common interests and to ensure that we have safe supply chains. We will need to rely more on our allies in future.

As we move from a just-in-time procurement model, we need to recognise, particularly on this side of the House, the role of Government in ensuring economic security. The fact is that £300 billion a year makes the Government the biggest player in the UK economy. As we have heard today, and I pay tribute to the speeches made by Opposition Members, the Government are often not very good at procurement and spending public money for public goods. We could go into the sources and origins of that, but we should recognise that since the late 1990s, and under the Blair and Brown Governments in particular, the model of new public management has created a new doctrine of how Government money should be spent on private sector providers. The principle of introducing internal markets—the purchaser-provider split—was an attempt to ensure greater efficiency, greater value for money and greater responsiveness to the users of public services, and it engendered all sorts of difficulties, too. The hon. Members for Poplar and Limehouse (Apsana Begum) and for Oldham East and Saddleworth (Debbie Abrahams) listed some of them, and I recognise them from my previous work. Providers have to jump through really bureaucratic processes.

There is a concentration of big suppliers. My right hon. Friend the Member for Chingford and Woodford Green has done a lot of good work, although he did not speak about it today, on the importance of SME procurement. Large charities in particular can game the system, in the way that large companies can, to secure Government contracts. The Government often do not buy the best; they buy the service that gives commissioners the least risk. Those suppliers often run rings around Government. In the way services are designed and delivered, we see cost deferrals, with payment pushed back beyond the budget cycle; cost shunting, with different parts of the public sector having to carry the cost for a bad contract; the creaming of the high-value, low-cost clients or services; and the parking of high-cost, low-value services. So the providers, whether they are charitable or commercial, game the system. We see that all time, so all this needs improvement and this Bill takes important steps towards ensuring that.