Public Procurement Policy

– in the Northern Ireland Assembly on 27th May 2002.

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Photo of Lord John Alderdice Lord John Alderdice Speaker

I have received notice from the Minister of Finance and Personnel that he wishes to make a statement on public procurement policy.

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

With permission, I want to make a statement on behalf of the Executive on public procurement policy. Members will be aware that in November 2000, and in line with commitments in the Programme for Government, the Executive agreed to establish a procurement review team to review public procurement policy and purchasing arrangements in Departments and their non-departmental public bodies.

The procurement review team’s report was issued for public consultation last September to over 400 individuals and organisations. Members of the team also met with the Committee for Finance and Personnel to discuss their findings and recommendations. Team members considered the responses to the consultation and views put forward by the Committee, and they were given the opportunity to clarify or amend their original recommendations.

The Executive have recognised the need for a more strategic approach to the development and implementation of procurement policy to ensure that Executive procurement expenditure, which is around £1·2 billion a year, was being spent in the most effective and efficient manner and to ensure that the policy had due regard to equality obligations. In today’s climate of tight budgets and ever-increasing demand, it is critical that the Executive make optimum use of the resources available to them.

The Executive have, therefore, agreed to a revised public procurement policy, and they plan to initiate more than 70 measures over the period to March 2005 to implement that policy. Those measures are aimed at greater central guidance, collaboration and aggregation of procurement, with the objective of delivering increasing and sustainable value for money savings in the years to come.

The four main areas covered by the measures relate to policy; organisational structures; procurements processes and practice; and integration. I intend to spend a few minutes on the key points in each of those areas, starting with policy.

The definition adopted by the Executive describes public procurement as:

"the process of acquisition, usually by means of a contractual arrangement after public competition, of goods, services, works and other supplies by the public service".

The acquisition process spans the whole life cycle from initial conception and definition of the needs of the public service through to the end of the useful life of an asset or the end of the contract.

Both conventionally funded and more innovative types of purchases, such as public-private partnerships and private finance initiatives, are included in the definition, as is the use of the private sector to deliver services previously delivered directly by the public sector — otherwise known as contracting-out of services.

The Executive also adopted 12 principles that will be the basis of Northern Ireland procurement policy in the future. Departments, non-departmental public bodies and public corporations will be guided by those principles. They include transparency in policy and its delivery; integrity, fairness and consistency when dealing with suppliers and potential suppliers; purchasing by competition unless there are convincing reasons to the contrary; responsiveness to the needs and aspirations of the community served by the procurement; compliance with European Union and other legal requirements; procurement staff being effective in carrying out their work, meeting the commercial, regulatory and socio-economic goals of Government in a balanced manner appropriate to each requirement, and carrying out procurement as cost-effectively as possible; and accounting officers and their equivalents in other bodies continuing to be personally accountable for procurement expenditure. Where appropriate, as part of the process of developing and implementing procurement policy, other Government economic and social policies will be integrated into procurement policy rather than cutting across it.

During the consultation process, some respondents expressed the view that the principles should contain an explicit reference to equality. While the Executive noted those concerns, Ministers believe that the principles are sufficiently clear, and it is worth repeating that the equality obligations of section 75 of the Northern Ireland Act 1998 are already a duty on Northern Ireland public bodies in implementing procurement policy.

However, in applying the 12 principles and our equality obligations in procurement policy, public bodies need to bear in mind that the primary objective of the policy is best value for money. That concept is central to public procurement policy. The Executive have not adopted a narrow definition, but have defined it as

"the optimum combination of whole life cost and quality (or fitness for purpose) to meet the customer’s requirements."

Members should note that that definition encompasses and sums up the 12 principles and allows for the inclusion, as appropriate, of social, economic and environmental goals in the procurement process.

In adopting the 12 principles, the Executive acknowledge that they will have certain implications for the development of the strategy required to implement the new procurement policy. For example, wider economic, social and environmental strategies and initiatives of the Executive should become more closely integrated into the policy. In respect of strategic procurements, and policy in general, public bodies should ensure that there is appropriate consultation with members of the public who will be directly affected by the outcome of the procurement, and with the wider community and other stakeholders in the procurement system.

To optimise efficiency gains, greater emphasis should be placed on integrating the North/South, as well as the UK and Europe-wide, procurement markets. There should be greater collaboration between Northern Ireland public bodies to meet the wider social, economic and environmental goals of procurement policy.

There is an urgent need to develop better management information systems to enable costs and savings to be measured and reported, and to make for more informed decision-making on procurement and equality matters.

Given the financial importance of procurement policy, both in terms of total spend and in relation to the Executive’s budget, the Executive have agreed that a procurement board should be established and given responsibility for the development, dissemination and co-ordination of procurement policy and practice for the Northern Ireland public sector. The board will be responsible to the Executive and accountable to the Assembly.

I shall chair the board in my capacity as Minister of Finance and Personnel, and membership will comprise, among others, the 11 departmental permanent secretaries. That high-level membership from each Department will ensure that there is compliance with the agreed policies and procedures in all Departments, their agencies, non-departmental public bodies and public corporations.

A central procurement directorate has been established to support the procurement board’s work, and a new director will be appointed. In formulating procurement policy and practices for the board, the new directorate will consult staff from several centres that have specialist procurement expertise across the public sector.

The Executive will consider the interface between that new approach to procurement and the infrastructure investment issues that will fall to the new strategic investment body. However, the principle is clear that the strategic investment body will play a core role in planning and implementing capital investment, including public-private partnerships. Much detail must be considered and agreed before the new body can come fully into being, and the general approach to procurement policy must be established and advanced in the meantime.

The procurement board will be responsible for ensuring that a wide range of operational processes and practices are introduced as appropriate. The aim is to improve the efficiency and effectiveness of procurement activities for contracting authorities and suppliers.

The Executive will integrate economic, social and environmental policies within the new public procurement policy. Most respondents to the public consultation on the procurement review team’s report accepted the need for integration. The integration of social policy drew the most comment, especially a proposed pilot scheme to help the unemployed return to work. The main reservations were that the scheme would increase costs to the contracting authority and that, as is outlined in the report, the scheme may prove difficult to implement.

The Executive acknowledged those concerns and recognised that the integration of social policy is difficult in the context of European Union and international procurement law. Nevertheless, they have decided to proceed with the development and implementation of the pilot to test whether those concerns are real, and whether the proposal is worthwhile and workable. The pilot scheme will cover 20 construction or service contracts — at least one will come from each Department — and will last two years. It will not proceed until the details have been agreed with the procurement board. Before that, there will be discussions with the representatives of the affected industries, namely the construction and service sectors, and the Equality Commission, to ensure that the scheme is workable. The results of the pilot will be reported to the Executive to determine whether the policy will be mainstreamed.

Similar issues are under consideration by my Executive Colleagues Sir Reg Empey and Carmel Hanna. The Department of Enterprise, Trade and Investment has recently taken receipt of the west Belfast jobs task force report, and the Department for Employment and Learning is close to concluding the work of the task force on employability and long-term unemployment. In moving ahead with the pilot project that arises from the new procurement policy, I shall liaise with my Colleagues to ensure, as far as possible, consistency of approach.

Other integration issues that the Executive have agreed that the procurement board should be tasked with introducing are encouraging and promoting the use of special contract arrangements to help disabled workshops; environmental purchasing; actions to assists small- and medium-sized enterprises (SMEs) to compete more effectively for procurement contracts; post-contract award mechanisms to provide assurance that contract conditions are adequately monitored, including an internal mechanism for considering and resolving complaints by third parties that contract conditions have not been honoured; and the development of a database to assess the integration policy’s success.

A key area that was highlighted during consultation and in discussions with the Committee for Finance and Personnel was that of ensuring the compliance of public sector organisations and, in respect of anti-discrimination legislation, of suppliers. Although a few respondents argued strongly in favour of legislative compliance, the Executive agreed that legislation was not necessary to ensure that Departments and their non-departmental public bodies complied, because implementation can largely be achieved by means of administrative action through the membership of the procurement board. However, the Education and Libraries (Northern Ireland) Order 1993 would need to be amended to enable that sector to comply with the proposals on integration.

The district councils’ different and separate framework of accountability must be recognised. Under existing legislation, compliance is voluntary. The procurement review team’s opinion was that some uncertainty existed in current Northern Ireland legislation as to the extent to which the award of procurement contracts is subject to a requirement not to discriminate. The Executive have agreed that procurement legislation should state unambiguously that direct and indirect discrimination are prohibited on the grounds included in current Northern Ireland anti-discrimination provisions, and should allow for such provisions in the Disability Discrimination Act 1995.

Moreover, equivalent sanctions similar to those contained in the Fair Employment and Treatment (Northern Ireland) Order 1998 will be introduced to prevent firms found guilty by a tribunal or a court of persistent and recalcitrant breaches of anti-discrimination legislation from benefiting from public procurement contracts. The Executive agreed that those matters should be covered in the single equality Bill.

To develop the public procurement policy, an equality impact assessment has been carried out, as is required under section 75 of the Northern Ireland Act 1998. The report stresses the limited quantitative data available on which to base the assessment. Using quantitative data and other sources of information brought to our attention during the public consultation, my Department, having consulted the Equality Unit, has concluded that the new procurement policy will not directly or indirectly discriminate against any of the categories included in section 75 of the Northern Ireland Act 1998. Indeed, the policy could have a positive impact on equality of opportunity with regard to religious belief, political opinion, gender and disability. Moreover, the proposals are in line with the Executive’s policy on targeting disadvantage and social need.

The procurement review team’s report was issued to more than 400 individuals and organisations for public consultation, and the policy that the Executive adopted incorporates all the recommendations contained in the revised report. The Executive have, therefore, agreed that they do not consider it appropriate to repeat the consultation process. However, given that the Executive have approved the broad thrust of the policy only, my Department is content to receive comments on how the policy might best be implemented.

I hope that this statement has been helpful to Members in highlighting the main issues involved in the new procurement policy, and the way forward. I shall issue a copy of the full policy document to Members shortly. I look forward to chairing the first meeting of the procurement board, which is scheduled for early July. Policy implementation as it develops will require the co-operation and support of my ministerial Colleagues if we are to achieve the optimum level of efficiencies and savings for the public sector. There is much to be accomplished, and, as I said earlier, the new processes and practices will be implemented up until March 2005. A successful outcome would contribute greatly to assuring the general public that every effort is being made to ensure value for money from this substantial element of Executive expenditure.

Photo of Francie Molloy Francie Molloy Sinn Féin 12:30 pm, 27th May 2002

Go raibh maith agat, a Cheann Comhairle. The Committee welcomes the implementation of a co-ordinated procurement policy, particularly the setting up of a board chaired by the Minister. It is important that departmental activity is co-ordinated so that each does not operate alone.

What savings will result from the procedure? Will it end select tendering, which discriminated against many suppliers so that they found it impossible to get onto the select list? I welcome the proposal to support small and medium-sized enterprises (SMEs) and I hope that it will increase the number of local suppliers. Will the Minister explain the proposed pilot projects in more detail?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

I record my appreciation of the work of the Committee for Finance and Personnel during deliberations on the matter.

With regard to savings, there are signs that if we were to become as efficient as our counterpart across the water, we could save up to £24 million over three years. It may be unwise to specify a precise target until the board is in operation and the new procedures are in place; however, that record of achievement provides us with a goal. The estimate of £24 million is a scaled comparison of what would be saved in our circumstances. It will be up to the board, working with the new director and his colleagues, to set targets, which I hope they will be able to detail to the House soon.

In supporting SMEs, we are required to operate within the public procurement parameters set by the European Union. However, if we want to benefit from our membership of the European Union, we must accept that we are working in a single market and that opportunities to tender for contracts in Northern Ireland must be open to others beyond our boundaries. Nonetheless, it has been Government practice for some time to make local suppliers aware of opportunities. InterTradeIreland is bringing suppliers, North and South, to the attention of Government buyers in both parts of the island so that our suppliers can avail of contracts in the South, and vice versa. That applies also to suppliers across the water, but we are anxious to ensure that our local suppliers maximise the opportunities that are available to them. The procurement directorate will intensify initiatives to bring local suppliers in touch with Government buyers.

Details of the pilot projects are not yet available. However, recommendations are being made about how the Government can stimulate economic development in areas such as west and north Belfast. The task force in west Belfast has reported to my Colleague, Sir Reg Empey, and the task force on employability and long-term unemployment is about to report to my Colleague, Carmel Hanna. It is likely that the latter report will recommend how we might use the means at our disposal to address the needs of the unemployed more effectively.

The west Belfast task force’s recommendations are available, and we are anxious to see how we can use procurement opportunities to address some of the needs identified. We will be discussing with agencies, employers, trade unions and training agencies, where appropriate, to agree on pilot projects that would be most effective and enable us to learn relevant lessons.

Photo of Roy Beggs Roy Beggs UUP

Does the Minister agree that the administrative cost of the new proposal should be minimal so that savings, rather than additional costs, accrue?

Does he recognise the dangers to the Assembly of procurement policies undertaken in euros, which would not relate to departmental budgets? Will he therefore confirm that procurement will be carried out in sterling?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

Overall procurement policy must be informed by a best-value approach. I assure the Member that that point will be borne in mind in administrative structures as well as in procurement practice.

I am not sure how the euro or any other currency will affect our procurement policies. Those who tender for contracts will know that we are in a sterling area. However, people from other parts of Europe may submit bids in euros. The bids will be assessed using the sterling equivalent. I doubt that we could prescribe the currency to be used in tenders. I imagine that people will bear in mind the local currency.

Photo of Alex Attwood Alex Attwood Social Democratic and Labour Party

I welcome the Minister’s statement and, in particular, the Executive’s adoption of the integration of economic, social and environmental policies within the new public procurement policy. As an expression of the integration policy, one noteworthy proposal is that to develop and implement a pilot scheme of 20 construction and service contracts to last two years each, with at least one contract from each Department. Annoucements have yet to be made in respect of the west Belfast task force. Will the Minister concur that any pilot projects awarded by the procurement board, which are designed to assist unemployed people to return to work, should be based where unemployment is an enduring issue?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

As I said earlier, that part of the procurement policy will raise several questions. Indeed, the Chairperson of the Committee for Finance and Personnel has already asked such a question, and I would be surprised if there were not more on that point. The Executive believe that they have an obligation to coherently and comprehensively address their policies in respect of social and environmental issues, and to do so across all of their responsibilities. That is an example of the Executive taking their responsibilities seriously.

The precise details of the pilot schemes are not yet worked out. However, I will outline some of the thinking that is currently being developed in the Department of Finance and Personnel. For example, it is proposed that a contractor will be required to submit a plan with his tender, indicating how the firm will use the unemployed in the work of the contract, including work carried out by subcontractors. Failure to submit a plan will exclude the tender from further consideration.

The successful firm will be required to comply with the plan during the term of the contract. Failure to do so will mean that appropriate penalties are applied. The pilot scheme will take place over a two-year period, and will require about 20 works and service contracts to enable a proper assessment of its value and to fully address any teething problems. At the end of the two-year period, the results of the pilot will be reported to the Executive to determine whether the policy should be mainstreamed.

Obviously, if the unemployed — in particular, the long-term unemployed — are targeted, the contracts that are identified for inclusion in the pilot will be, in many cases, contracts that relate to significant pockets of unemployment — in particular, long-term unemployment. Broadly, that is the kind of thinking that is being pursued. I will return to the House with information when the details have been decided.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

What is the difference between the principles currently being exercised for procurement, and the Minister’s 12 new principles? Does the Minister suggest that to date there has been no transparency in policy and delivery, no integrity, fairness or consistency, no purchasing by competition, no responsiveness to the needs and aspirations of the community, and no compliance with European Commission and other legal requirements?

He has advanced 12 principles. He should be able to tell the House plainly how those principles differ from the present policy. He briefly mentioned the EC. However, the EC is all-important, because — as the Minister knows — it has certain legal requirements. Money must be spent in order to meet them. Therefore, as the Assembly considers those matters, it must keep new law in mind — removing the focus from Northern Ireland and dealing with European law.

Those of us who are in the business of politics are approached continually by firms that point out the difficulties that result from EU laws, especially in this field.

How much will the new directorate cost? What salary will the newly appointed director be paid? How many more Assembly task forces will there be, despite the fact that work on the task in hand has not been accomplished? Surely some work should be completed by now.

This is perhaps the most important question: will the Minister promise the Assembly that he will initiate a full debate on the matter when he produces his other documents, so that we will be able to ask questions?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party 12:45 pm, 27th May 2002

The Member asked a nest of questions. I trust that I will remember most of them.

On the Member’s final point, a consultation process has been under way for some time, during which no Member was precluded from initiating a debate. The Member’s party is represented on the Committee for Finance and Personnel, which has discussed the matter in some depth.

The public consultation process afforded many opportunities to make contributions, from inside and outside the House, to policy development. If the Member wishes to table a motion on the matter, it is up to the Business Committee to decide when that debate might take place.

Brevity of reference — if brevity describes my reference to the European Union framework — should not be taken as an indication that the European procurement framework lacks significance. We operate within that framework, which requires that opportunities to tender for public contracts be afforded to suppliers across the European Union. The Executive and the Administration accept that obligation.

Notwithstanding that obligation, and without violating the principles of the framework, we want to be proactive and ensure that our suppliers are made fully aware of the opportunities to compete and tender for and win contracts.

It is not for me to determine the number of task forces. I am responsible only for the task forces in my Department. If it is necessary for issues to be reviewed, task forces may be the most appropriate method. There may also be other review mechanisms. It is necessary, especially at the early stages of devolution, to conduct in-depth reviews of the practices, policies and legislation that we have inherited. Otherwise, we might be rightly accused of simply implementing what was there in the past. I doubt if that is the way that the Member, who has always been a keen proponent of devolution, would want to see devolution progress.

I trust that there will be many opportunities to review other aspects of Government policy and practice. With respect to his question on costs, I do not have the precise figure for the directorate and its associated administrative arrangements. The director has been appointed at grade three level with a salary in excess of £60,000. I believe that I have addressed all the questions from the Member.

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

No. If I have not addressed all the Member’s questions, Hansard will reveal that, and I will reply to those in writing.

Photo of Seamus Close Seamus Close Alliance

I draw particular attention to what the Minister said about the Executive, in initiating the new procurement policy, introducing more than 70 measures to be put in place between March 2000 and March 2005. The Minister went on to state explicitly that the Executive are adopting 12 principles as the basis for future Northern Ireland procurement policy. In other words, something is to be done that has not been done in the past.

I hoped that the hallmark of good Government in the public sector would be value for money, to be achieved through principles such as transparency, integrity, fairness, accountability, effectiveness and efficiency — the same principles that the Minister is trying to tell me are new. Can the Minister advise me which of those principles is currently not in use, and why?

I noted the Minister’s comments on potential savings. According to the Minister, public procurement has a market of £1·2 billion a year and he mentioned potential savings of £24 million over three years. He can correct me if those figures are wrong. If my mathematics are correct, that represents a saving of 2% over three years — for 70 new initiatives and the list of principles, some of which I doubt are new because they should be already in place. There is, therefore, much camouflage and verbiage in the Minister’s statement and, ultimately, not much product. Does the Minister not agree that a cost benefit analysis should be carried out in respect of anything done in the House to ensure that value for money is clearly demonstrated?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

The Member’s question reminded me of Dr Paisley’s first question. Given that Dr Paisley asked so many questions, it slipped my mind. However, one of them was almost the same question as that asked by Mr Close.

I have not claimed that all of the principles are new; many have been the basis for operating procurement practices. There is, however, a new emphasis in respect of integrating the principles so that future policy can be more coherent and targeted. There are some new principles, and I single out consistency, responsiveness and integration as being new or as receiving new emphasis. The overall approach will be judged on value for money and on how we contribute to the social and other cross-cutting principles upon which the Executive’s policies are based. It is to be hoped that the savings will be greater than those anticipated in the informal target that I suggested at the outset.

Mr Close is a member of the Committee that addressed the issue in considerable depth. The information supplied to me does not indicate whether the questions were posed in the same way to my officials during the consultation.

Photo of Robert McCartney Robert McCartney UKUP

Although I thank the Minister for making the statement, it leaves a lot of questions unanswered. Will the Minister confirm that the basic premise for the initiative is the belief that the £1·2 billion procurement expenditure was not being spent in the most effective and efficient manner and that the Executive were not making optimum use of the resources available to them? If that is not the case, what is the justification for the initiative?

The Minister has been loath to reply to a brutally leading question from Mr Beggs about the minimal costs of administration. He ignored that question and now tells Members that there is no estimate of what additional administrative costs will result from the establishment of the central procurement directorate and procurement board. Is the Minister telling the House that no cost analysis of any kind has been made; that there is no suggestion that fresh administrative staff and bureaucrats will be recruited rather than seconded from existing Departments? Will the Minister first confirm that the assessment of possible savings is nebulous, as it is based on a comparison of much greater public expenditure on the mainland, which statistically cannot be indicative of cost savings here and secondly the cost savings, as estimated, are minimal in relation to uncosted expenditure?

Will the Minister guarantee that Northern Ireland firms that tender for Government procurement in Northern Ireland will be given preference? Will he state how many, if any, tenders for Government procurement in the Republic are given to Northern Ireland firms?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

Once again, I am faced with a series of questions. I therefore apologise in advance if I do not answer all of them. Mr Speaker, you will appreciate the difficult situation in which Ministers are placed when a plethora of questions are posed.

European Union regulations require us to be open to tenders from across the EU. The preferential treatment to which Mr McCartney referred is not open to us. As I said in answer to an earlier question, if we want to have the benefit of a single market and remain assured that our suppliers can tender for contracts elsewhere — and I am sure that all Members want our suppliers to win contracts elsewhere — the same opportunities must be afforded to suppliers from elsewhere that tender for contracts in Northern Ireland.

I underlined the fact that the Administration — going back to before devolution — has been involved in making local suppliers aware of the opportunities in the whole range of Government contracts. They have been made aware of the standards required, the likely quantities required and the general conditions of Government contracts so that they can make their bids as competitive as others.

Several people have asked whether we were operating effectively and fairly prior to this, implying that if we were, it may not have been necessary to review the process. We are always being urged, not just in the Assembly but also in life, to do better. To do so, we must examine our progress and the way in which we are operating whatever we are being urged to improve.

The Executive believe that it was necessary to improve procurement practices, which had been operating on a disparate basis across Departments, public corporations and non-departmental public bodies. The Executive had a well-founded belief that the coherence needed to maximise the opportunities for obtaining best value for money and the best goods and services was not being achieved. Providing a more coherent, centralised approach to policy development will not be a major operation that will take over the responsibilities of various Departments for procurement. That approach will deliver better value, and, as Ministers report to the House, it will be tested over time. Ministers of Finance and Personnel in particular will have that responsibility and will be open to scrutiny. If the savings that have been indicated, and best value for money, are not achieved, we will be reminded of this debate and the points that have been made.

Mr McCartney also raised questions about the involvement of companies and suppliers from south of the border in supplying to our Departments and agencies. I do not have those figures to hand. However, InterTradeIreland has been active in highlighting the opportunities for our suppliers in the South and for Southern suppliers here. I trust that the Member welcomes opportunities for our suppliers to compete for public contracts in the South.

If Hansard shows that I have overlooked any important questions —[Interruption].

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

Mr Speaker, a ruling is needed on the number of questions that can be asked. I understand that Members are allowed to ask one question. If I am asked 10 questions, it is understandable that I do not remember each one.

Photo of Lord John Alderdice Lord John Alderdice Speaker

On several occasions I have ruled that if Members ask more than one question, there is no requirement on the Minister to answer all the questions. Members may choose to ask several questions, but they cannot then comment on which question the Minister chooses to answer, whether it is because he or she remembers it, or for any other reason. If Members have a particular question they wish to ask, they would be well advised to put that question, rather than a whole series. The Minister may say that a series of questions is a burden, but it is also an opportunity, because he or she can then choose which questions to respond to. That is simply the nature of the process.

Photo of Robert McCartney Robert McCartney UKUP

On a point of order, Mr Speaker.

Photo of Lord John Alderdice Lord John Alderdice Speaker

I do not normally take points of order on ministerial statements.

Photo of Robert McCartney Robert McCartney UKUP

The question was put three times by three different Members.

Photo of Lord John Alderdice Lord John Alderdice Speaker

The Member has experience of Westminster, and he knows that not just three times, but at three successive Question Times, questions can be put to which Ministers find ways of not responding. However, my advice to the House is that if there is a particular question that Members wish to ask, they ask only that question. It is then much more difficult for the Minister not to answer it. If Members ask a series of questions, they should not be surprised if the Minister chooses to take advantage of that or if his memory inadvertently chooses to take advantage of that.

Photo of Robert McCartney Robert McCartney UKUP

I am happy that the point has been made.

Photo of Lord John Alderdice Lord John Alderdice Speaker

I will take the Member’s point of order at the end.

Photo of David McClarty David McClarty UUP

I thank the Minister for his statement. My question revolves around a point made by Alex Attwood earlier about the engagement of unemployed labour. Does the Minister agree that it is unwise to engage untrained and unskilled workers — particularly in the construction industry, where construction sites are inherently dangerous, especially for untrained people? Does he further agree that it would be better to use public resources to put in place arrangements to provide proper training facilities for the unemployed? Finally, will the Minister give a commitment to consult fully with appropriate bodies, such as the Construction Employers Federation, before any recommendation is made to the Assembly?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

I can give assurances on each of those questions. It is inappropriate for untrained people to be in any form of employment. That is why I made it clear in my statement that there will be full consultation with all appropriate interests. However, we must remember that the objective is to further key social and environmental policies, as deemed appropriate and likely to be effective, through the Government’s considerable spending power, and Members must appreciate that. In taking forward these pilot projects we will not be seeking to force the employment of untrained workers at all. We will try to ensure that appropriate training is put in place.

Photo of Patricia Lewsley Patricia Lewsley Social Democratic and Labour Party

I too welcome the Minister’s statement. However, all too often procurement is thought of as a policy issue, with a perception that it applies only to big companies. We should promote local sourcing, which has already been mentioned, and local business exchanges. Is there anything in the new approach that will lend specific assistance to medium and small businesses here?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

I assure the Member that we will do all in our power to ensure that local suppliers, which, for the most part, are small- and medium-sized enterprises, are aware of what is required in terms of cost and quality. The assistance available to them will be for other Departments, or, specifically, for the procurement directorate, to provide, rather than my Department. Nonetheless, we are anxious to ensure that local suppliers take maximum advantage of the considerable opportunities that exist with Government expenditure to win contracts and develop their enterprises. The point about more direct forms of assistance needs to be addressed to other Ministers — most particularly the Minister of Enterprise, Trade and Investment.

Photo of Peter Weir Peter Weir DUP

The Minister’s statement refers to a pilot scheme. He has suggested that there is a belief that the integration of social policy may run contrary to either EU law or international procurement law. Given that belief is it not foolhardy to continue with a pilot scheme that could leave Departments vulnerable either to EU enforcement or to litigation by disgruntled companies? How can he ensure that when companies tender for those pilot schemes they do not try to fiddle the system and gain advantages by taking on long-term unemployed people on a short-term basis for the duration of the contract? If social policy is to be brought into procurement decisions, how can the Minister guarantee the long-suffering taxpayers in Northern Ireland that there is value for money in procurement?

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

The details of the project have still to be finalised, so it is not possible to answer the Member’s points with precision. An announcement will be made today about our policy approach.

It is normal practice to state what a policy will be, and then to highlight the areas that it will affect. It is the responsibility of those who will implement the policy to detail how it will affect those areas. Members who think that they know better than everybody else in the House should not snigger or make snide comments about the matter. We are aware of our obligations on EU Directives, and we can develop procurement policies that take account of social policies. We are not inhibited from proceeding with the pilots, although the Member suggested that we might be.

Photo of P J Bradley P J Bradley Social Democratic and Labour Party

Wearing my agricultural hat, does the Minister share the concern of the agriculture industry that Government food purchases for schools, hospitals and departmental canteens are usually imported and do not match the standards of local quality-assured products? That practice is questionable with regard to health, and it offers no support to local producers.

Photo of Sean Farren Sean Farren Social Democratic and Labour Party

I would be concerned if food were being procured that did not meet the required quality standards or take into account health considerations. Therefore, I would seek advice on the nature of the terms and conditions that apply to procurement practices in the sectors that the Member identified. I would want assurances that quality was a specified condition, and if the food were found to be unsatisfactory, the matter would have to be addressed. I thank the Member for raising an important question that needs further investigation.

Photo of Mr Maurice Morrow Mr Maurice Morrow DUP

The Minister’s statement points out that

"the primary objective of the policy is ‘ best value for money’."

However, he does not inform the House how that will be achieved, an issue that has been queried on several occasions. If the Minister is not prepared to tell the House how that will be achieved, will he assure Members that he will give them that information in writing, or at least place it in the Assembly Library, so that it can be scrutinised?

The statement continues by saying that

"in order to optimise efficiency gains, greater emphasis should be placed on integrating the North/South … procurement markets".

What comfort will firms in Northern Ireland take from the Minister’s statement, particularly if they are paying off workers, only to find that businesses south of the border are securing contracts here? Should firms here not be given priority?

The Minister said that the proposed approach would be compatible with section 75 of the Northern Ireland Act 1998. That section does not deal with best value; it is concerned with political correctness.

Photo of Sean Farren Sean Farren Social Democratic and Labour Party 1:15 pm, 27th May 2002

I do not accept that equality issues, as the Member seems dismissively to claim, relate to political correctness. Affording equality of opportunity to all our citizens is a fundamental principle and a requirement of the Good Friday Agreement and legislation on the matter. It must be inherent in all aspects of Government policy and practice, and we must clearly demonstrate that.

With respect to the Member’s initial question on best value, I said later in my statement that the concept is central to public procurement policy, but the Executive have not adopted a narrow definition. They defined it as

"the optimum combination of whole life cost and quality (or fitness for purpose) to meet the customer’s requirements."

Those criteria must be applied to every contract so that we can demonstrate always that best value for the public’s money has been achieved. Therefore, we are not shying away from the question of best value.

I refer Mr Morrow to my previous answers relating to Northern Irish suppliers. Suppliers, North and South, operate within the European framework. Suppliers from the South are entitled to bid for Government contracts in Northern Ireland, as suppliers here are entitled to bid for contracts in the South of Ireland. Indeed, suppliers can bid for contracts beyond the shores of this island, and many have done so successfully. I am sure that everyone is anxious to see suppliers gain even more contracts outside Ireland. Our responsibility is to encourage and assist them to do so, while complying with the requirements of European Directives on public procurement.

Photo of Lord John Alderdice Lord John Alderdice Speaker

Dr Paisley, you had a point of order. Do you wish to —