Baroness Neville-Rolfe:

Moved by Baroness Neville-Rolfe

That the House do agree with the Commons in their Amendment 1.

1: Clause 2, page 2, line 13, leave out “including the NHS”

My Lords, in moving this Motion I will speak to Amendments 1, 4, 5, 81 and 82. I am very pleased to bring this important Bill back to the House today for consideration of amendments made in the other place. It is, I believe, a key Brexit dividend, making it possible for us to develop and implement our own procurement regime, which will be simpler, more transparent, better for small businesses and better able to meet the UK’s needs. I thank noble Lords on all sides of the House who contributed to the lengthy discussion on the original Bill, first introduced to this House in May last year.

In the other place, we made a number of important changes to the Bill, including a debarment appeals process, clarification of the City of London’s status under the Bill, at its request, and provisions to address trade disputes relating to procurement. Importantly, we also took significant steps to strengthen national security provisions in the Bill, creating a new mechanism that will allow us to protect public procurement from risky suppliers. We also committed to removing Chinese surveillance equipment from government departments’ sensitive sites and dedicating additional resources within the Cabinet Office to scrutinise suppliers for potential national security threats. It is now crucial that we take the Bill through to Royal Assent, so that we can implement its many useful provisions.

This first group of amendments focuses on procurement rules for healthcare services and the national procurement policy statement. They overturn amendments made to the Bill on Report in this House. Amendments 1, 81 and 82 are necessary to ensure the proper functioning of the Bill and the regulation of healthcare procurements. Engagement with the NHS has identified the requirement for a bespoke regime for healthcare services to drive the integration of healthcare and the development of better, more joined-up patient pathways through healthcare systems. This responds to the idiosyncrasies of the health system, as identified by those who work in it.

The forthcoming provider selection regime is a free-standing regulatory scheme of procurement rules which commissioners of healthcare services in the NHS and local government will follow when arranging healthcare services in their area. Parliament accepted this when passing the Health and Care Act 2022, which was debated for many days in this House. The DHSC published the results of its latest consultation in July and aims to lay the regulations in Parliament this Autumn. It would be incredibly unhelpful at this critical stage for both schemes, when both the healthcare regulations and the Procurement Bill are on the cusp of delivery, to start attempting to unpick it all. Doing so would add unacceptable and entirely avoidable costs and delays to both programmes for no tangible benefit.

Amendment 1 removes from the definition of a public authority in Clause 2(2)(a) the words “including the NHS”. This addition is unnecessary because it clearly meets the test for a public authority set out at Clause 2(a), which is that it is publicly funded. This is backed up by the fact that the relevant NHS bodies to be covered by this Bill as central government authorities are identified in draft regulations to be made under the power at Schedule 1(5). These regulations were consulted on over the summer and have been welcomed in this regard. Setting out the list of central government authorities in regulations is appropriate, as updates are needed from time to time as organisations inevitably change. Moreover, the NHS is not a single legal entity and does not have a clear meaning in law, so the naming of the NHS as a public authority in Clause 2 would have reduced clarity.

I turn now to Amendments 81 and 82. The version of what was then Clause 116 inserted on Report in this House needed to be removed and replaced with a provision that enables the DHSC to proceed with the provider selection regime. This is crucial for the reasons I have already set out, and I emphasise that this House will have the opportunity to scrutinise the new affirmative regulations when they are laid. I hope that I have been able to provide the noble Baroness, Lady Brinton, whose Motions 1A and 81A deal with these matters, with sufficient reassurances and that she will not press her amendments today.

Amendments 4 and 5 removed two amendments from Report stage in the Lords relating to the national procurement policy statement. These required that, prior to publishing an NPPS, the Minister must give due regard to a number of specified principles and mandated the inclusion of a number of priorities in the NPPS itself. In respect of the first amendment, the noble Baroness, Lady Hayman of Ullock, has subsequently tabled a modified version of it—in Motions 4A and 4B in lieu—which, as before, would require the Minister drafting the NPPS to have regard to a set of principles. The modification suggests a set of principles more in line with those we have already established in Clause 12, and I am happy to set out the Government’s stance on this issue now.

The Government recognise that these principles are important to procurement, which is why they are already reflected throughout the Bill. For example, value for money, integrity and maximising public benefit are set out as procurement objectives in Clause 12, which I have already mentioned. Contracting authorities must have regard to these when carrying out procurements, and transparency requirements already run throughout the Bill.

Before we proceed further in relation to Clause 12, will my noble friend confirm that the procurement objectives in Clause 12 relate to covered procurement only—that is, procurements that are in excess of the threshold—and therefore does not include exempt contracts, whereas the national procurement policy statement applies to all procurement?

If I may, I will come back to that when I have finished presenting. I did ask that question today; I do not think there is that much difference, but I will come back to my noble friend.

There are other specific requirements in the Bill that place obligations on contracting authorities regarding the fair treatment of suppliers and non-discrimination in decision-making. On value for money, I know there is concern from across the House that it is often interpreted to mean lowest cost. We have sought to address this through the move from most economically advantageous tender to most advantageous tender at Clause 19, which stakeholders tell us is a powerful signal in this regard.

Including a similar set of principles in respect of the NPPS risks creating duplication and confusion when we are looking to simplify the regime. However, while the NPPS should focus on the priorities of the Government of the day, many of them are already reflected in the current non-statutory NPPS introduced by this Government, and we have consistently demonstrated our commitment to them through measures such as the strengthening of social value policy following the collapse of Carillion and the procurement policy on carbon reduction introduced in 2021. In addition, the Public Services (Social Value) Act 2012 will continue to exist alongside the new regime established by the Bill. I hope that this will satisfy the noble Baroness.

The second Amendment made by this House added a sub-section which required the inclusion of specific priorities in the national procurement policy statement relating to achieving targets set under the Climate Change Act 2008 and the Environment Act 2021, meeting the requirements set out in the Public Services (Social Value) Act 2012, promoting innovation among potential suppliers and minimising the incidence of fraud. I believe that these issues are already addressed in the Bill—for example, in Clause 12—or elsewhere outside of this legislation. For example, the Public Services (Social Value) Act 2012 requires contracting authorities to consider the economic, social and environmental well-being of an area when planning specified procurement, and there are additional obligations imposed by the Environment Act 2021. From 1 November 2023, Ministers will be under a statutory duty to have due regard to the environmental principles policy statement when making policy and will be subject to this duty when preparing the NPPS.

Finally, the scope and extent of the NPPS needs to be flexible, and these things should not be set in stone. Noble Lords have highlighted net zero, social value and innovation, but new challenges arise, such as the security threat from the Russia-Ukraine war. The Government of the day need to be able to respond to each major new challenge in an appropriate manner, without needing to change primary legislation. I beg to move.