Clause 1 - Temporary increase in capital limit of Contingencies Fund

Contingencies Fund (No. 2) Bill – in the House of Commons at 12:51 pm on 11th March 2021.

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Question proposed, That the clause stand part of the Bill.

Photo of Nigel Evans Nigel Evans Deputy Speaker (Second Deputy Chairman of Ways and Means)

With this it will be convenient to discuss the following:

Clause 2 stand part.

New clause 1—Contingencies Fund: reporting in financial year 2021-22—

“(1) The Treasury must lay before the House of Commons within 15 days of the end of each calendar month in the financial year 2021-22 a report which includes a complete list of each advance from the Contingencies Fund, in each of the following categories—

(a) during the Vote on Account period, to meet urgent cash requirements (other than supporting a new service) in excess of the net cash requirement granted in the Vote on Account;

(b) to meet the cash requirement supporting an urgent service which Parliament has already approved through specific enabling legislation but for which existing provision is not available;

(c) to meet the cash requirement supporting a new service which is urgent and cannot await Parliamentary approval of both the specific enabling legislation and the necessary Estimate;

(d) to meet a further urgent cash requirement for existing services when provision for the total net cash requirement on the Estimate is exhausted; and

(e) in the case of an Estimate where expenditure is largely financed from income, advances made in anticipation of the receipt of cash associated with such income.

(2) The report under subsection (1) must include a reference to any written ministerial statement made to the House of Commons in relation to each advance from the Contingencies Fund in financial year 2021-22.

(3) The report under subsection (1) must include any relevant formal written direction to the accounting officer where a Minister of the Crown decided to continue with a course of action which the accounting officer had advised against.

(4) If a report under subsection (1) mentions in relation to subsection (2) or subsection (3) anything in connection with procurement from the private sector, the Treasury must refer the matter to the Comptroller and Auditor General for a preliminary opinion on the regularity and propriety of the procurement referred to.

(5) Nothing in this section affects access by the National Audit Office to any documents as provided for under section 8 of the National Audit Act 1983.”

This new clause is intended to enhance accountability to Parliament for as long as the increased flexibility of the Contingencies Fund is in place, and in particular to provide an additional check on the regularity and propriety of any procurement decisions which lead to advances being required from the Contingencies Fund.

Photo of James Murray James Murray Opposition Whip (Commons) 12:55 pm, 11th March 2021

The new clause is intended to ensure that the Government learn from the past year and, as I set out in my earlier contribution, not only recognise that they have repeatedly done too little, too late to protect the public’s health and the economy through the outbreak, but make serious and structural reforms to how they initiate and examine the spending of public money. The new clause would ensure that the extra financial freedoms that Parliament grants in the Bill are used in a manner that reflects the importance of transparency with public money.

I shall not repeat the arguments that I and other hon. Members made on Second Reading, but address the substance of the new clause. Our new clause is simple. Subsection (1) sets out that, in respect of each plausible category of unforeseen Government spending—urgent cash requirements for existing services; urgent cash requirements for new services, whether yet approved in principle or not; increased cash requirements; and short-term cash flow issues—the Treasury must lay before the House a report of all the advances made that month.

Subsection (2) sets out that each payment from the fund should be explicitly associated with ministerial statements, which explain the purpose of such expenditure. Subsections (3) sets out that where such payments have been carried out only on the basis of ministerial direction, the fact and nature of that direction should also be disclosed. We fully accept that on occasion ministerial directions are a vital part of how our country and political system responds quickly and effectively to unforeseen circumstances. There are occasions when the accounting officer will not be able to align urgent needs with normal accounting procedures. What matters is not the fact of the direction, but its nature.

Subsection (4) ensures that where rapid procurement decisions are taken, they provide an opportunity for the Government to improve and are assessed as such. The role of the Comptroller and Auditor General is crucial in our system of parliamentary control over public finances. There are lessons to be learned from the specific practice of emergency procurement. It is wrong to see each instance of rapid procurement as a special case.

Subsection (5) reflects the premise of subsection (4) and ensures that there is no conflict with the wider role of the National Audit Office. I very much hope that the Government will feel able to accept the new clause in the spirit in which we propose it.

The Financial Secretary will be aware of the many extraordinary and frankly irregular arrangements, which have been explored in the court and in the media recently, for the disbursement of public money in the past year. I will not take the Committee through the full annotated catalogue as time is so limited, but I will mention just two of the most egregious examples to emphasise our concerns.

First, there was the contract given to Randox Laboratories for £133 million in respect of tests. Randox is a company that we understand is advised by a Conservative Member. The Department of Health and Social Care ordered that 750,000 of those tests be withdrawn from use for safety reasons. Secondly, at least £150 million of a £252 million face mask contract with Ayanda Capital seems to have been wasted owing to the unsuitability of one type of mask in the order. We understand that the contract included FFP2 masks, which did not meet requirements for use by frontline healthcare workers because they had ear loops instead of head loops. The sum of £150 million pays the salaries of some 4,000 nurses. That fact alone should make clear why it is so important for public money to be spent on improving the lives of those we serve.

The new clause sets out a new standard of transparency that would pull Ministers up, force them to sharpen their focus on value for money, and ensure that we have more money to spend on the things that matter to us all. With such concerns in mind, I ask the Committee to support the new clause.

Photo of Nigel Evans Nigel Evans Deputy Speaker (Second Deputy Chairman of Ways and Means)

Before I call Andrew Jones, let me just say that I am grateful for the restraint that people demonstrated on Second Reading. We have a rather extensive call list for the International Women’s Day debate that follows, so if people could show the same restraint in Committee, whether they are remote or in the Chamber, I would be grateful. A number of people withdrew from the Second Reading debate; if anyone wishes to withdraw from Committee stage, please will they do so in the normal manner, through the Speaker’s Office?

Photo of Andrew Jones Andrew Jones Chair, European Statutory Instruments Committee, Chair, European Statutory Instruments Committee 1:00 pm, 11th March 2021

I will keep my remarks as short as possible; I fully recognise that we have a very well-subscribed and important debate to follow.

I read new clause 1 with interest, but it should be rejected. On Second Reading, I outlined the transparency and accountability mechanisms already in place when funds are drawn from the Contingencies Fund. I will not repeat any of that, but what the Contingencies Fund does not need is extra layers of bureaucracy, and that is what the Opposition are seeking to bring in. The whole point of the fund is to facilitate speed of response. Adding monthly reporting to the existing reporting is not necessary, and it goes against the whole purpose of the fund.

For one year, in the midst of the greatest health crisis in a century and the consequential biggest economic crash in three centuries, the suggestion from the Opposition is more bureaucracy. What problem are they seeking to solve? Accounting officers are still accountable. Departments must still notify Parliament. The Contingencies Fund is managed by Treasury officials. The agreed procedures must be followed.

The Opposition also want to bring in extra measures when dealing with the private sector. How does dealing with the private sector reflect the cash flow in a Department? Liabilities are liabilities, to whichever organisations they are owed. Speed of response is need-based, not sector-based.

Basically, what we have here is Labour distrust of the private sector underpinning its suggestion. It is not relevant to the Bill, and it underlines Labour’s lack of relevance to the nation. That is why the new clause should be rejected.

Photo of Saqib Bhatti Saqib Bhatti Conservative, Meriden

I cannot support the Opposition’s new clause 1 because, in my view, it would do nothing but introduce an additional layer of bureaucracy where, frankly, sufficient and robust transparency and accountability systems are already in place.

As I said on Second Reading, of course accountability and transparency matter. The Bill does not take away the usual mechanisms already in place to ensure that expenditure met through the Contingencies Fund is scrutinised. Requiring private sector procurement to be referred to the National Audit Office would do exactly what businesses cry out against time and again when it comes to procurement practices. They want less bureaucracy and less burden, not more unnecessary red tape that would hinder engagement from the private sector.

To me, the new clause speaks to the intent of the Opposition and their general attitude to the private sector. It does not recognise the crucial role that business has played over the last 12 months in helping to tackle one of the greatest public health crises of our times. It does not recognise the businesses that otherwise would have been shut down—Formula 1 teams such as McLaren, for example—that adapted their processes to make ventilators; the companies, such as Burberry, that retooled to make personal protective equipment; or the companies, such as the National Exhibition Centre in my constituency, that gave up part of their business to build Nightingale hospitals to ensure that the national health service was not overwhelmed.

The new clause does not recognise, either, the big pharma companies that came up with new drugs at unprecedented rates, using innovative methods that only the private sector can come up with to vaccinate and protect the most vulnerable in our society. Frankly, it is time that the Opposition recognised the role that the private sector played in overcoming this crisis. While it is not yet done, we on the Government side of the House certainly will not forget that role.

While I am on the subject of intent, I commend the Government for their aspiration to reform procurement rules. The Green Paper put forward by the Government puts value for money and transparency right at the heart of the United Kingdom’s procurement rules. The Government buy around £292 billion-worth of services from the private sector. Their proposed reforms will allow UK procurement rules to be more modern and flexible, allowing the Government to consider things such as social value, including economic, social and environmental factors.

These new measures will also allow competition for Government contracts under £4.7 million for public works and £122,000 for goods and services to be limited to small businesses, whether they are voluntary, community or social enterprises. Fundamentally, that will improve the quality of suppliers’ output, and it will also increase competition, ensuring that taxpayers get a better deal while our small and medium-sized businesses have greater access to Government procurement contracts.

That intent can only be applauded, in contrast to the Opposition’s desire to make the process clunkier, more difficult and less accessible.

On accountability, as has been said, Ministers cannot choose to use the Contingencies Fund. That is managed entirely by Treasury officials, and the accounting officer must ensure that advances are given in line with strict rules agreed between Parliament, the National Audit Office, and the Treasury. Such rules can be found in the Estimates Manual. Finally, business is and can be a force for good. We would do well to recognise that.

Photo of Sarah Owen Sarah Owen Labour, Luton North

I rise to speak in favour of the amendment tabled by the Leader of the Opposition, which hopes to improve the transparency behind emergency spending that we are being asked to sign off. When the Conservative party took office 11 years ago, it promised people transparency and responsible spending. The Prime Minister’s predecessor even told us that sunlight was the best disinfectant—could we not do with some disinfectant to rid us of the stench of cronyism right now?

One hundred and eight million pounds to a pest control firm to make PPE; £60 million on antibody tests that did not work. To top it off, a £37 billion test and trace system that at times did not test and did not trace. It was run not by clinicians or the NHS, but by a failed phone company executive, who just so happened to be one of the Prime Minister’s mates from the other place.

Cronyism, irresponsible spending and sweetheart deals that handed the public’s taxes to their mates are what this Government are all about—a £133 million testing contract to a Tory donor, £108 million to Serco, and a £40,000 pay rise to Dominic Cummings. Under this Government, someone who breaks the rules and fails at their job gets a pay rise; those who save people’s lives get a pay cut. If the Conservative party cannot be trusted to spend people’s taxes wisely, it does not deserve to serve our country.

The Minister asked for questions, and I am sure we all look forward to some answers. Will he tell the House why as much as £11 million was spent on the initial trial version of the NHS Test and Trace app before it was abandoned? Will he confirm whether he personally played any part in recommending contractors to the Government over the past year? We are often told by the party of Government that money cannot be found to feed hungry schoolkids, or that the healthcare heroes who looked after our loved ones during the pandemic cannot have a pay rise. We are told by Conservative peers that nurses should be grateful for the job security they have.

The public have a right to know how their money is being spent. Covid contracts handed out to Tory friends and donors have now risen to almost £2 billion. Such money could have provided free school meals to each of the 1.4 million children in poverty, including nearly 4,000 children in Luton North. If there is money for the Prime Minister’s mates, there is money to feed hungry kids. If we can find £30 million for the bloke down the pub, we can find money to give nurses, and every other healthcare worker, a pay increase.

Conservative Members will say there was no choice at the start of the crisis and that it was an emergency, as it was. However, there is always a choice. Instead of turning to established PPE providers from the UK safety industry, Ministers chose a deal that handed £30 million to the Health and Social Care Secretary’s mate from down the pub. That is a cruel and blatant failure by this Government. The Bill asks us to sign off up to £266 billion in emergency loans by the Government. That might be necessary, but it is unnecessary for such a number to go unchecked.

It is our job as MPs across the House to hold the Government to account. The public expect better and for us to spend their money properly, which is why Labour has tabled this amendment. We are not saying that the Government should not do everything in their power to help people in an emergency; we are saying that they must never forget whose money they are spending, and who they need to answer to in the end: the British people.

Photo of Anthony Browne Anthony Browne Conservative, South Cambridgeshire

I agree with the shadow Minister that we need accountability and transparency, but there is already a whole framework for public spending. As others have said, all the amendment does is introduce more bureaucracy into the Contingency Fund, without adding any value from the perspective of public accountability.

We need to learn the lessons from all this. It is an unprecedented thing that hopefully will never happen again, but we must ensure that we learn those lessons. Fortunately, there are bodies that help us learn those lessons, such as the National Audit Office, which has already done several reports into procurement.

Given that the speeches made by various Members on the Opposition Benches have been all about scoring cheap party political points, casting aspersions on the Government and Ministers and so on, I thought it was worth quoting the finding of the main National Audit Office report about the issues to which they are referring. It said:

“In the examples we examined where there were potential conflicts of interest involving ministers, we found that the ministers had properly declared their interests, and we found no evidence of their involvement in procurement decisions or contract management.”

That is the National Audit Office, which has strong powers of investigation.

I find it rather disturbing that the Opposition are trying to use this important issue just to score cheap political points. I suppose I should not; I am a new politician, and I should get used to it. What I find most concerning about the Labour party is its clear disdain for the private sector. It is using this issue to criticise private sector manufacturers. The speaker before me, Sarah Owen, for example, criticised companies that were trying to produce PPE. We did not have a PPE industry in the UK at the start of this—we imported it all—and I welcome the fact that lots of companies that had not made PPE put in the effort to develop it and then supply it to the national health service. That is to be welcomed.

The drugs company in my constituency, AstraZeneca, did not do any diagnostic testing. That was not what it did; it had no arm doing that. It said, “Right, we will learn how to do this”, and it did it. It set up a whole arm to do diagnostic testing. It did that at no profit, and that is now a huge part of the testing industry in the UK. It also agreed to produce the Oxford-AstraZeneca vaccine at no profit to itself and to give that to the developing world on a not-for-profit basis throughout the pandemic.

That is a private sector company, as is Pfizer, which produces the Pfizer vaccine, and Moderna, which does the Moderna vaccine. All these are private sector companies coming to our rescue and to the rescue of other countries around the world when we need it, and that is very much to be welcomed. I wish the Opposition would pay tribute to the efforts of the private sector, often working in collaboration with the public sector. It is a partnership.

Photo of Anthony Browne Anthony Browne Conservative, South Cambridgeshire

I will just give way to the hon. Lady before I finish.

Photo of Meg Hillier Meg Hillier Chair, Public Accounts Committee, Chair, Public Accounts Committee

The hon. Gentleman has talked a lot about money going out into the private sector, but a lot of this contingency money has gone into the public sector. The key point is, as my hon. Friend Sarah Owen highlighted, that it is taxpayers’ money. Surely the hon. Gentleman agrees that we should have clear oversight and regular reporting of how taxpayers’ money is being spent.

Photo of Anthony Browne Anthony Browne Conservative, South Cambridgeshire

I agree, and I welcome the points that the hon. Lady makes. I did say in my speech on Second Reading that I welcome the fact that the Labour party have this new-found interest in value for money, because I absolutely believe that taxpayers’ money is not the Government’s money. It is taxpayers’ money and it should be treated as such. As I said earlier, we have sufficient mechanisms for accountability and transparency. We do not need this new clause, and I will not support it.

Photo of Kevin Hollinrake Kevin Hollinrake Conservative, Thirsk and Malton

I would like to speak to new clause 1. First, I am grateful to the Financial Secretary for putting the record straight. It was a reflection of the fact that there was no Opposition Minister on duty. It is suboptimal to have an Opposition Minister speaking by video link: Members have no opportunity to challenge some of his statements, many of which I thought were absolutely out of order. You are obviously the judge of that, Chair, but to call Ministers corrupt, as other Members have in this debate, or to accuse them of cronyism, is basically bringing this House into disrepute.

Yet again, we have the Opposition’s obsession that everything public sector is good and everything private sector is bad. It is simply outrageous. It goes back to that sturdy horse analogy. It is pulling the whole wagon, whether it be vaccine companies or indeed our GPs. Our GPs have done a wonderful job disseminating the vaccine to so many people, and it is heart-warming to go to those centres and see that. GPs are private practices. The health service has never been totally public sector, and we should recognise that. We should recognise the benefits that the private sector brings, just as the public sector clearly brings huge benefits, too.

I agree with my hon. Friend Andrew Jones that this new clause would simply bring an unnecessary added layer of bureaucracy. I absolutely support the need for accountability and the proper assessment of where taxpayers’ money is spent—we absolutely must be responsible about that—but I do not know where it would end under the new clause, because much of the money that we have provided to deal with the coronavirus crisis has been provided through the private sector, not least the loans through the banks. Sarah Owen seemed to think that there were no checks on that process, which is clearly not the case. Banks go through a lot of checks, even when the Government are guaranteeing loans, so that is simply not correct.

The new clause deals with procurement. The comments on procurement and allegations of corruption and cronyism just do not sit with the facts. As my hon. Friend Anthony Browne rightly said, there is no evidence of ministerial involvement in any of the decisions. The NAO report on procurement said:

“Government was having to work at pace…in a highly competitive international market” and

“secured unprecedented volumes of essential supplies…to protect front-line workers.”

Do we honestly want to go through a complex procurement process at a time when we are desperate for supplies?

This is obviously a case of the Opposition trying to score cheap political points. I think the public look at it and think “a plague on all your houses” when outlandish claims of corruption are made. Clearly, some of those claims will land, and the public think that all politicians are corrupt, but that is clearly not the case. The vast majority of people who come into politics do so for the best of reasons. It is deeply unhelpful and totally inaccurate.

Finally, of course we need to improve procurement. In December, an excellent Green Paper was published. It was all about value for money, transparency, the cutting of red tape and, crucially, making it much easier for small and medium-sized enterprises to get involved in the procurement of public sector contracts, even to the extent that there would not have to be the international competition that the EU rules used to require and we could have geographical conditions and thereby benefit SMEs in a local area. I absolutely support that approach. There are lessons to be learned and there is room for some really good reform, but the new clause should not be supported.

Photo of Nigel Evans Nigel Evans Deputy Speaker (Second Deputy Chairman of Ways and Means) 1:15 pm, 11th March 2021

The next speaker, by video link, is Jamie Stone. [Interruption.] Jamie, you may be on mute—I know that you are audio only. [Interruption.] We will try to get back to you. Waiting in the wings is Meg Hillier.

Photo of Meg Hillier Meg Hillier Chair, Public Accounts Committee, Chair, Public Accounts Committee

It gives me pleasure to rise to speak on the Bill and perhaps slay some of the misstatements that I have already heard in the short while I have been in the Chamber.

First, I should point out to Anthony Browne that value for money in respect of taxpayer spending is not a new-found interest for most of us on the Opposition Benches. I have spent 27 years being responsible for either spending taxpayers’ money wisely or scrutinising that spending. I am very aware, as are the shadow Chancellor and her team, that every pound of public money saved is a pound to spend on something else. We may disagree about what that something else might be, but scrutiny is really important.

Contingencies Fund Bills are interesting pieces of legislation. They are about as old as the Public Accounts Committee, which I chair, and are an important mechanism for making sure that the Government cannot just routinely spend over budget. It is fair to say that in this House we are very bad at scrutinising Government spending. That is not down to individual Members or the official Opposition; it is because the structures of this place do not allow us properly to discuss estimates, excess votes and so on. In fact, some time ago the OECD said that as early as the 18th century our scrutiny of finances in this place was “reduced to hollow ritual.”

The change in this legislation, which will allow the increase in contingency funding, has been rushed through. I do not deny that it is necessary to have additional contingency. The way it works normally is that if a Department overspends on its budget as granted, albeit inadequately, by this House, the matter then comes to the Public Accounts Committee and we have to examine whether the excess is justifiable and reasonable. Pretty much our only weapon is the ability to call in the officials who have made a mistake and get them to explain the issue in public, but then a Government majority can certainly agree the excess vote regardless.

In Ghana—Mr Evans, you might be interested to know this, and officials might be quaking as I say it—if an official overspends taxpayers’ money, they have to go to court, and if they take an appeal to court, they have to pay up front half of the money that has been wasted. Certainly, that would sharpen minds.

The point is that it is right that we have a Contingencies Fund Bill. I accept it is necessary, but I welcome new clause 1, because the mechanisms for oversight of this are very flimsy; they are reports on paper after the event. This is not about more bureaucracy. I see it as being about greater transparency. As Chair of the Public Accounts Committee, which has had an important constitutional position in this place for 160 years, I get passed information by Government—from Ministers and senior officials—about issues relating to the finances of Government, sometimes confidentially, and that is counted as the scrutiny of Parliament.

I believe there is a very important role for the constitutional position of the Public Accounts Committee and thereby the Chair, a role I am privileged to occupy at the moment—it is not about me, it is about the position—but that is not enough scrutiny. We are in the middle of a pandemic, and spending eye-watering sums of money—hundreds of billions of pounds—with the public sector and the private sector. It does not matter where the money goes, in this sense; it is about scrutinising that expenditure and making sure that Treasury Ministers, whom I would have thought would be aligned with me completely on this issue, are clear that we are not allowing Departments to overspend willy-nilly. Although the Treasury has its checks, it is important and vital that Parliament has its checks too and that we have sunlight on these issues in real time. This is important, and I would say that the new clause is really pretty anodyne. It is saying that we want better reporting to the House of what the Contingencies Fund Bill already allows to the Government.

The National Audit Office has been much quoted, and I do not have the exact phrase in front of me—forgive me, Mr Evans, but for once I paraphrase, which I really try not to do—but the NAO has looked in detail, as other Members have commented, at the Government’s approach to procurement, and this is its clear message. All these allegations are out there, but part of the reason for that is the lack of transparency and the lack of information being published in real time on some of these issues. We have seen, heard and talked about in this place the many contracts that were not published on time, and that undermines public and parliamentary trust in the process. Whether or not anything has gone wrong, it is undermining trust, and people start asking questions and laying down allegations whether or not they are true.

It is in Government’s interests, the taxpayer’s interests and Parliament’s interests to agree to this new clause. I am disappointed—I am embarrassed really—that those on the Treasury Bench can come forward with a change at such short notice and not have a meaningful discussion about what is a reasonable new clause to allow this place greater scrutiny over what are unprecedented amounts of spending in the middle of a pandemic. At a time like this, we need more transparency, not less. This is actually a minor change. It is not about bureaucracy; it is about accountability and transparency, and taxpayers deserve better.

Photo of Charlotte Nichols Charlotte Nichols Labour, Warrington North

Labour’s new clause seeks to make contingency spending more transparent and accountable to our Parliament and, through us, to the public—taking back control, if you will. It is right that Governments have the flexibility to act in an emergency such as this pandemic, but this greater latitude for Ministers should oblige them to be additionally vigilant about the value for money of the decisions that they make and the contracts that they sign. This has unfortunately not been the case. As we have heard from my hon. Friends, this year we have seen case after case of appalling mis-spending of taxpayer money, too often on procurement from Tory friends and donors—with, according to The Times in November, £1.5 billion to Tory-linked firms. Companies and individuals with no track record of producing the materials needed were given vast sums on a promise, and businesses in constituencies such as mine, with experience in manufacturing this sort of equipment, were denied on spurious grounds.

Some of the examples sound as though they come from an old episode of “Yes Minister”: £150 million of the £252 million of unusable face masks ordered from an investment firm advised by an adviser to the President of the Board of Trade; a £60 million contract to provide free laptops for disadvantaged pupils that delivered less than half of what was needed, leaving too many pupils in Warrington North without the tech they needed to learn; and £208 million to provide food boxes wholesale for people who were clinically sheltering, at a cost of £44 a box, when analysis showed that the content could have been bought for £26 from their local Tesco. There was the £133 million to a Tory donor, a private healthcare firm, to make testing kits that were withdrawn for safety reasons. Its contract was actually extended for another six months for a further £375 million, without any other companies being invited to bid. During this time, consultants have been employed on up to £7,000 a day, equivalent to £1.5 million a year, by a Government who believe that nurses and other NHS staff should not even receive a pay rise at least in line with inflation.

We understand that there was an urgency to get contracts in place for PPE in particular, but this was not just a case of suck it and see, as Ministers doubled down on their projects, such as the £37 billion on the outsourced test and trace programme—or test and waste, as it is increasingly known locally. The National Audit Office says that this incredible amount of money has been spent for no clear impact, while the skills and expertise of our local public health staff were spurned. Should we not be demanding better?

We understand that the Government had to act quickly to put contracts in place at the beginning of the pandemic, but we are now a full calendar year on from then. They should no longer be operating in crisis mode, but should be able to make clear, sensible and justifiable decisions. Since the Chancellor announced that he is to run the biggest deficit since the second world war, with public debt at over 100% of GDP, I think our constituents should expect us to be as open about our financial decisions as we can possibly be. It is not onerous to request that the Government make a monthly report on its contingencies expenditure, and improved transparency would help to halt bad decisions earlier, rather than waiting for spendthrift contracts to finally be revealed in court.

This is a reasonable and responsible new clause. A fiscally sound Government should not fear it or have any objection to it.

Photo of Ruth Jones Ruth Jones Shadow Minister (Environment, Food and Rural Affairs)

This is a technical Bill, but it is important and so is parliamentary authorisation of public expenditure. That authorisation is an absolutely crucial part of our democracy and of the principle of parliamentary control over the decisions taken by Ministers in this Government.

Of course, I accept that the Government need to be able to act swiftly and decisively, and that financial control provisions may need to be relaxed proportionate to the need for the Government to take unforeseen and unforeseeable actions to reduce, resolve and mitigate the threats we face. As such, I fully accept the approach taken by the shadow Minister and support the fact that Labour is not opposing the Bill. However, while it is vital that the Government have the space and ability to respond to the crisis, it is vital that Ministers do not take the people of this country for fools. Contracts for cronies, pals from the pub and family members cannot be the order of the day and must be rooted out fast.

The Tories, as we have already heard, have wasted hundreds of millions of pounds across Government during the pandemic, from failed tracing apps to useless PPE to insufficient provision for disadvantaged children. The analysis by my party and other independent organisations shows that the Government have made the wrong decisions throughout the crisis. I hope they will listen and learn. Every penny of public money must be accounted for and the people who pay their taxes must be able to see that these monies are spent wisely and properly.

I support the Bill. I hope Ministers will accept Labour’s new clause and will look to spend the people’s money wisely, sensibly and properly.

Photo of Naseem Shah Naseem Shah Shadow Minister (Housing, Communities and Local Government)

We recognise that in the circumstances of a global pandemic the Government need to be able to act swiftly and decisively, and that financial control provisions may need to be relaxed proportionate to the need for the Government to take bold actions to reduce, resolve and mitigate the threats we face. However, we know full well that the Government’s record on proper and transparent procurement processes, and on securing value for money on public spending for emergency purposes, has been shameful.

The Times estimates that during the crisis £1.5 billion of taxpayers’ cash has been given to companies linked to the Conservative party with no prior experience of supplying the Government, from failed tracing apps to useless PPE to insufficient provision for disadvantaged children. Analysis by Labour shows that the Government have made the wrong decisions time and time again throughout the crisis.

That is exactly the story of Tory waste, negligence and cronyism, but the Tories want a pat on the back for spending over £700 million on coveralls, despite NHS records showing only 500,000 out of 13 million were actually used. In April, £16 million-worth of antibody tests were sourced from two Chinese firms. Two million units were purchased, but the test did not work. A PPE contract worth £108 million was handed to a pest control company, PestFix, which has just 16 members of staff. Some of the masks failed checks by the Health and Safety Executive and emails obtained by the BBC suggest that the HSE came under political pressure to ensure that PestFix’s PPE passed necessary quality assurance tests.

Many companies, often better qualified to produce PPE, but lacking political connections, were completely shut out. One such example is Multibrands International based in my constituency. It is a British manufacturer that had already been producing PPE for China. Its owner, Rizwana Hussain, spent months trying to reach Government officials through public channels, but because she did not have the Health Secretary’s WhatsApp number and she was not on a VIP list, Rizwana and Multibrands International lost out. Let us not forget the £108 million for Serco for contact tracing and the £84 million for Sitel. Those services were never fit for purpose, forcing local authorities to take matters into their own hands.

Just yesterday, the National Audit Office released a scathing report on Test and Trace, saying that it was unclear whether its specific contribution to reducing infection levels as opposed to other measures introduced to tackle the pandemic has justified its costs. Time and again, this Government have failed struggling families during the pandemic. Again, businesses, small and large—despite their struggles—charitable organisations and community groups in my constituency did the Government’s job and worked tirelessly to provide free school meals to children across the Bradford district.

The simple story is this: the Government had millions to hand wastefully to their friends, but for those who worked day and night on hospital wards a pay cut and a clap are all they get. This must never happen again. Labour has tabled an amendment and will press it to a vote later today so that we can improve transparency of emergency spending from the contingency fund. Never again can we let such Tory waste, negligence and cronyism take place.

Photo of Rachel Hopkins Rachel Hopkins Labour, Luton South 1:30 pm, 11th March 2021

I refer to my entry in the Register of Members’ Financial Interests as a member of the Public and Commercial Services Union.

Parliamentary authorisation of public expenditure is critical, but we all recognise the need for this Bill to ensure that the Government can act quickly to support the economy. That said, the Government should not be able to act without accountability and transparency. I support the comments made earlier by my hon. Friend Meg Hillier with regard to transparency and scrutiny. Indeed, just this morning, as part of business questions, the Leader of the House reiterated the point that Members have a right and a duty to hold the Government to account. He also said that scrutiny leads to better government, and that it is in the interests of Government that scrutiny takes place.

It is with those principles in mind that I want to speak in favour of the amendment in the name of the Leader of the Opposition, which seeks to improve Government accountability to Parliament for as long as the increased flexibility of the contingency fund is in place. I want to speak specifically with regard to the checks on the regularity, propriety and value for money of any Government procurement decisions, particularly the importance of the reporting of any written ministerial directions given, so that Parliament can be clear when Ministers have decided to override objections made by senior civil servants.

Throughout the pandemic, the Government’s record on transparent procurement processes and securing value for money on public spending has been, sadly, too often completely inexcusable. Despite NHS Test and Trace being allocated a total of £37 billion and a Conservative peer being handed the top job, the Public Accounts Committee’s report on test, track and trace made this finding. In terms of tackling the pandemic, it said:

“There is still no clear evidence to judge NHST&T’s overall effectiveness.”

I also ask the Minister whether he has reflected on yesterday’s report by the National Audit Office on Test and Trace and whether it contained any lessons to be learned by the Government as well.

The theme of incompetence and cronyism does not end there. In a Westminster Hall debate back in December, I joined many other MPs in highlighting the fact that the National Audit Office report on the Government’s procurement during the pandemic had found that contracts had been awarded without due diligence, with a lack of documentation, and no clear audit trail or transparency. Just a few weeks ago, the High Court ruled that the Government had acted unlawfully by not publishing details on the contracts awarded within 30 days, including many awarded through the Government’s VIP lane. The judge ruled that the Government’s inaction breached a vital public function of transparency regarding how vast quantities of taxpayers’ money was spent. The passage of the Bill should not allow the Government to act without accountability and transparency. There are too many instances of the Government’s poor procurement policy representing poor value for money.

In conclusion, I wish to press the point that Ministers must be accountable and civil servants must not be scapegoated for the Government’s poor decision making. The legally binding protection of written ministerial directions ensure that they are not implicated in the Government’s incompetent decision making and cronyism. This is not unnecessary bureaucracy, as referred to by Kevin Hollinrake; it is right for Parliament to be able to scrutinise them in a timely manner in the public interest.

Photo of Richard Thomson Richard Thomson Shadow SNP Deputy Spokesperson (Treasury - Financial Secretary), Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Northern Ireland)

I will be brief. The concerns of Scottish National party MPs over certain covid-related Government procurements are well known and on the record, and we will continue to hold the UK Government to account for them. Nevertheless, whether the new clause is viewed through that particular lens or not, the fact remains that taken on its own terms it would greatly improve scrutiny, oversight and accountability, without creating any disproportionate impact on the Government or the overall efficiency of the spending process. Trying to equate the improvement in process that would result with an attack on business, as we have heard today, is frankly nonsense. It smacks of desperation, and I am certain that that is exactly how it will be seen.

The SNP will be supporting this amendment. If the Government have any care at all for transparency on these matters, and for being able to demonstrate that there is proper stewardship of public funds, there is frankly no good reason for them not to support it as well.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

As you will be aware, Mr Evans, clause 1 provides for an increase in capital for the Contingencies Fund. It raises the limit from the standard 2% to 12%, providing a sum of approximately £105 billion for the financial year 2021-22 only.

We are all agreed across the House on the central importance of accountability to Parliament, but it is the Government’s very firm view that new clause 1 is not needed in order to achieve accountability. It is important to say again that supply processes continue to be used in the usual way with expenditure still subject to parliamentary scrutiny and a vote. This Bill simply permits an advance on expenditure that will be included in the main or supply estimates.

Let me set out four points that make this quite clear. First, the Contingencies Fund is about ensuring cash flow, restricting it to urgent services in anticipation of parliamentary provision becoming available and temporary funds required for necessary working balances. It is not additional spending; it is simply a cash advance to be repaid. It does not in any way preclude the scrutiny by Parliament of additional provision sought by a Department through the supply estimates, nor does it preclude the Comptroller and Auditor General from expressing his view on the regularity of departmental expenditure.

Secondly, each and every departmental accounting officer remains fully accountable for expenditure; and, of course, that expenditure will be audited by the NAO in the usual way as part of the annual reports and accounts of each Department. Transparency arrangements for ministerial directions—where they are sought under the requirements of the doctrine of “Managing Public Money”—will also continue in the usual way. Accounting officers are already required to publish any direction that they receive as soon as possible, unless there is a broader public interest in keeping it confidential.

Thirdly, the House has seen throughout 2021 that Departments must notify Parliament by way of a ministerial statement agreed with the Treasury where a commitment will be or has been entered into in advance of supply. I would like to make it clear that the mandatory WMS wording agreed with Parliament and the NAO already distinguishes whether this advance is a new service, new expenditure or simply a cash requirement ahead of a supply estimate.

I remind hon. Members that the Contingencies Fund is not a tool—some hon. Members have made this point—that Ministers can choose to use; it is not discretionary. It is managed entirely by the Treasury, and the accounting officer must ensure that advances are given in line with strict rules agreed between Parliament, the NAO and the Treasury. These rules are set out clearly in the published estimates manual. Every Department makes an application outlining the urgency of their case and how they plan to meet the listed requirement. It is worth mentioning that the NAO also audits the Contingencies Fund accounts, and that includes a full list of advances.

Let me turn to a couple of the points raised by Members in the debate. I did ask for questions on the Bill, but Sarah Owen somehow found that difficult. She raised another irrelevant issue about public spending. She asked me about my own link. I assure her that I had nothing to do with the awarding of any contracts. As my hon. Friend Anthony Browne pointed out, this is true for Ministers across the Government, according to the NAO.

Meg Hillier, who chairs the Public Accounts Committee, made a speech, wonderfully—and I thank her for it—on the Bill. I am very grateful. She asked whether the Bill is rushed through. The answer to that question is no, it is not. It is important to do it, we think, before the beginning of the new financial year. The same Bill was put through in March last year, and so it is here. She asked about Treasury controls. We fully, strongly believe in them. She recommends Ghanaian principles of public finance, but I am not sure I can follow her in that direction.

Photo of James Murray James Murray Opposition Whip (Commons)

With the leave of the Committee, I will respond briefly to the debate and pick up on some contributions that hon. Members have made. My hon. Friend Sarah Owen made powerful remarks and drew our attention to how hollow the phrase of the former Prime Minister—that “sunlight is the best disinfectant”—now rings, given how the current Government have behaved. My hon. Friend Meg Hillier spoke from great experience about the weakness of Parliament in scrutinising Government spending. She set out how the claims of bureaucracy from Government Members are misplaced and that, in fact, new clause 1 is about transparency and accountability. My hon. Friend Charlotte Nichols set out clearly the consequences of vast sums being given to companies with no track record of delivery, underscoring why this really matters to people’s lives.

My hon. Friend Ruth Jones made it clear that the Government should listen and learn from the events of the past year and regain the trust of the public, while my hon. Friend Naz Shah highlighted the Government’s shameful record on transparency, value for money and, crucially, the outcome of what is actually delivered. Finally, my hon. Friend Rachel Hopkins made some critical points on scrutiny leading to better government. She spoke from great experience of why it is so vital that the reporting of written ministerial directions is taken into account so that they can take responsibility for their decisions.

I thank the Minister for his comments, but I was disappointed that he did not use the opportunity to refute or respond to any of the comments about the Public Accounts Committee’s report on Test and Trace. I noted that despite some Government Members having spoken for a second time today, they still did not find time to justify and explain how the spending on Test and Trace has been value for money. The Minister fundamentally failed to address the inadequacy of current scrutiny arrangements, given what has happened over the past year.

As I made clear in my opening remarks, our new clause aims to introduce a new standard of transparency. We believe that it is urgently needed after the Government’s approach over the last year. I am not convinced by the Minister’s argument. I welcome the SNP group’s support for new clause 1 and we will seek a Division on it.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Question put, That new clause 1 be read a Second time.

Division number 237 Consolidated Fund (No. 2) Bill — Clause 1 - Temporary increase in capital limit of Contingencies Fund

Aye: 266 MPs

No: 360 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

The Committee divided: Ayes 267, Noes 360.

Question accordingly negatived.

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Bill read the Third time and passed.

Photo of Nigel Evans Nigel Evans Deputy Speaker (Second Deputy Chairman of Ways and Means)

We will now suspend for three minutes for sanitisation of the Dispatch Boxes, and to allow the safe exit from the Chamber of those leaving and the safe arrival of those entering for the next debate.

Sitting suspended.