Government Contracts: Underperforming Suppliers and Legislative Proposals

Cabinet Office – in the House of Commons on 13th January 2022.

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Photo of Bob Blackman Bob Blackman Conservative, Harrow East

What steps he is taking to ensure that underperforming suppliers do not receive Government contracts.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs)

When the Government plan to bring forward legislative proposals to reform public procurement.

Photo of Nick Smith Nick Smith Labour, Blaenau Gwent

When the Government plan to bring forward legislative proposals to reform public procurement.

Photo of Nia Griffith Nia Griffith Shadow Minister (International Trade)

When the Government plan to bring forward legislative proposals to reform public procurement.

Photo of Kate Osborne Kate Osborne Labour, Jarrow

When the Government plan to bring forward legislative proposals to reform public procurement.

Photo of Michael Ellis Michael Ellis Paymaster General

In December 2020, we published the Government’s response to the consultation on the Green Paper on “Transforming Public Procurement”. We intend to bring forward these detailed and ambitious legislative proposals when parliamentary time allows.[This section has been corrected on 20 January 2022, column 6MC — read correction] The reforms will make it easier for buyers to take account of previous poor performance by suppliers, which is an important factor in deciding whether to award contracts, and there will be clearer and stronger rules about excluding suppliers that pose an unacceptable risk.

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

I thank my right hon. and learned Friend for that answer. What action will he take to get contractors to supply the service for which they are contracted, rather than necessarily cancelling them? However, if they continue to underperform, what action will he take to cancel those contracts and get suppliers in who do the job properly?

Photo of Michael Ellis Michael Ellis Paymaster General

I am grateful to my hon. Friend for his excellent question. As he knows, the Prime Minister is bringing forward some of the biggest reforms in decades in this country. One of them will be in procurement, which is worth £300 billion a year to our economy. We have seen underperformance and it is of course current Government policy to ensure that suppliers’ past performance in adhering to contracts is taken into account when awarding new contracts. Under the public contract regulations, contracting authorities can use selection criteria, but we will make across-the-board improvements and reforms in the procurement system. I know that my hon. Friend will look forward to that and its benefits.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs)

The Government maintain buying standards for food and catering services. The relevant Select Committee, campaign groups such as Sustain, and Henry Dimbleby with his food plan have all made the point that those standards should be brought up to date. The shadow Chancellor has pledged that Labour will ensure that public bodies have to report on how much British produce they buy. What are the Government doing on that, or is it just open season for Australia, New Zealand, Brazil and the rest?

Photo of Michael Ellis Michael Ellis Paymaster General

The Conservative party is a party of free trade and a free economy. I do not know about the Labour party. We are improving procurement and thereby having a major effect on the economy. The hon. Member, like everyone else, will have to wait for the details of how the new rules will be implemented and how they will work, but, through a Green Paper, we have asked everyone to feed in their ideas and suggestions for detailed policies. Based on that, a Bill is currently being prepared for introduction to Parliament and I know that the hon. Member will look forward to that.

Photo of Nick Smith Nick Smith Labour, Blaenau Gwent

Given that the Government’s VIP lane for personal protective equipment contracts has been ruled unlawful, will there be immediate publication of contracts after emergency procurement to restore faith in the system? It would help avoid having the Government hauled so embarrassingly through the courts.

Photo of Michael Ellis Michael Ellis Paymaster General

I do not accept that characterisation of any technical breaches that may have occurred. If the hon. Member looks at the judgment, he will see that the court ruled yesterday that the Government’s industry call to arms was open, transparent and justified in a time of national emergency. Actually, the court found that it was highly unlikely that the outcome would have been substantially different if a different assessment process had been followed.

Photo of Nia Griffith Nia Griffith Shadow Minister (International Trade)

During the pandemic, UK companies stepped up to the mark and changed production lines to meet our needs and increase our resilience. They were encouraged to think that they would get ongoing business for helping out during the PPE shortages. A local SME in my constituency invested more than £700,000 in automating its hand sanitiser production, but now finds that most of its UK Government Department customers have gone back to their original foreign suppliers. What will the Minister do to recognise the resilience that British firms provided, improve the uptake of British-made products by Government Departments and ensure that build back better is not just a slogan?

Photo of Michael Ellis Michael Ellis Paymaster General

I would appreciate it if the hon. Member wrote to me with that particular example. I know that companies in her constituency are ably supported by her and I would like to hear more about that example. She is right that companies across the United Kingdom provided support at a time of national emergency, and they should be thanked for that.

Photo of Kate Osborne Kate Osborne Labour, Jarrow

The shocking news this week that the Government broke the law by handing out contracts worth huge sums to those with political connections shows that cronyism is rife in the Tory party. When will all the emergency procurement procedures end and all the emergency covid contracts finally be published?

Photo of Michael Ellis Michael Ellis Paymaster General

I do not accept that characterisation. The court found that we did not rely on referral to the high priority lane when awarding contracts in certain cases, but that it was a technical matter, and that we were open, transparent and justified in what we did. “Justified” is a key word. As for emergency procurement, that is perfectly routine. It happens all the time, every year, including outside pandemics for various reasons. That will have to continue, but we are looking, in a new procurement Bill, at different ways of proceeding.

Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham

Frustratingly, pre-Brexit, “EU procurement rules” was always trotted out as a reason why local firms, local farms and others never got a look in when it came to local public service contracts. Post Brexit, will the Government take a proactive lead to support local procurement, which benefits local small businesses especially, as well as farmers and local food and drink producers? That would also help to reduce food miles.

Photo of Michael Ellis Michael Ellis Paymaster General

The short answer is yes. Thanks to the work of my noble friend Lord Agnew, who has been working on this matter for a considerable time, my hon. Friend can look forward to further progress.

Photo of Rachel Hopkins Rachel Hopkins Shadow Minister (Cabinet Office)

The Government’s use of emergency procurement during the pandemic has raised concerns around the transparency of contracts, potential conflicts of interest and the unsuitability of suppliers. Nearly two years on, Government Departments can still use those emergency regulations to bypass open competition and scrutiny. That is unacceptable, and it implies that Departments have failed to plan ahead to meet demand. Will the Minister explain why that has been allowed to continue?

Photo of Michael Ellis Michael Ellis Paymaster General

The availability of an emergency mechanism for procurement existed prior to the pandemic. It has taken place under Governments of all political colours, and it will continue to take place occasionally. The contracts signed by Government with third parties are myriad, and there will frequently be circumstances of supply, or circumstances that relate to particular individual cases where emergency mechanisms have to apply. That is routine and it continues on a regular basis when it has to.

Photo of Rachel Hopkins Rachel Hopkins Shadow Minister (Cabinet Office)

Good procurement that benefits the whole country needs good decisions made by a civil service that reflects the society it serves. However, the civil service fast stream recruitment over the last three years—from 2019 to 2021—resulted in more successful applicants coming from homes in London than the whole of the midlands and north of England put together. Although young people whose parents did not go to university made up more than half of external applicants, they made up only less than a third of those who were offered jobs. What is the Minister doing to rectify that regional and class discrimination in the civil service fast stream recruitment?

Photo of Michael Ellis Michael Ellis Paymaster General

Procurement or otherwise, I am proud of our civil service, and I hope that the hon. Lady is, too. She criticises the civil service and makes a class warfare-type assertion about it—I do not accept that. This country, under this Government, is levelling up. We are levelling up across the country and making reforms in all our mechanisms of government, including in the national health service, housing, the economy and transport, and we are doing it in the civil service, too.