We need your support to keep TheyWorkForYou running and make sure people across the UK can continue to hold their elected representatives to account.

Donate to our crowdfunder

Steps to Work Contracts

Private Members’ Business – in the Northern Ireland Assembly at 12:45 pm on 27th April 2009.

Alert me about debates like this

Photo of William Hay William Hay Speaker 12:45 pm, 27th April 2009

The Business Committee has agreed to allow up to one hour and 30 minutes for the debate. The proposer of the motion will have 10 minutes in which to propose and 10 minutes to make a winding-up speech. All other Members who wish to speak will have five minutes.

Photo of Alex Attwood Alex Attwood Social Democratic and Labour Party

I beg to move

That this Assembly notes the procurement process for the award of Steps to Work contracts; expresses concern about the management, the requirements and the conduct of the process; and calls for a joint inquiry involving the Committee for Employment and Learning and the Committee for Finance and Personnel, into the conduct of the procurement process.

I ask you to please correct the clock, Mr Speaker.

I will make some preliminary remarks before I get to the heart of the motion. I want to ensure that there is no doubt about the scope of the motion. It is six or seven years since the current public procurement arrangements in Northern Ireland were put in place. Annually, in excess of £2 billion of public funds may be used for public procurement exercises. Concerns have been raised in some places about a range of public contracts, particularly in relation to Steps to Work. Given the number of successful challenges to our procurement policy that have been taken through court proceedings, it seems timely to take the process into a new phase.

I reassure the House and the Minister that the object of the motion is not to circumvent a principle that the Minister outlined to me in a letter in September last year, when he said that there was a need for a:

“procurement process to satisfy the principles of EU law, particularly with regard to non-discrimination, fairness and transparency.”

The purpose of the motion is not in conflict with that declaration of principle nor with the requirements of EU procurement policy. Neither is it the intention of the motion to create an insular and protectionist approach to public procurement policy in Northern Ireland. The motion is not intended to do any of that.

Businesses in the North, of whatever nature, need to be stretched and challenged in respect of the service that they provide and the contracts that they might be awarded to ensure that they offer efficiency, effectiveness and value for money. The motion is not some attempt by a politician or the Assembly to cry after the Steps to Work milk has been spilt.

In August of last year, before the Steps to Work contracts were awarded, I wrote to the Minister for Employment and Learning to flag up issues of principle that I believe needed to be satisfied when it came to the procurement exercise, to ensure that the issues that have arisen subsequently may be mitigated or would not arise at all. This is not a motion in which we are crying over split milk; it reflects some of the concerns that existed in and around the time of the procurement exercise. That is the purpose of the debate, and I hope that the Minister and others are reassured of its intention.

To explain what is at the heart of some of the concerns around the Steps to Work contracts, I will give three or four examples. When one organisation that was awarded contracts under the procurement exercise was tendering for the contracts, it made explicit how it intended to proceed. In its submission for the tendering process, that organisation stated that it was its:

“intention to act as Managing Agent, subcontracting out the majority of the provision and ‘filling gaps’ where required.”

When a contract for Training for Success, Steps to Work or any other public provision in the North is being awarded, there is an obligation on those managing the procurement process and on government to probe what those sorts of words mean and ask whether it is appropriate that an organisation that is bidding for work outlines in its opening statement its intention to subcontract out the majority of the work. That may be consistent with procurement policy, but I ask — a joint Committee inquiry should also ask — whether that is the best way to proceed.

If that is the best way to proceed, a second question arises about that procurement exercise: what is the quality of the submission that is expected at the tendering stage in respect of the subcontracting proposals? I know of a tenderer who was awarded a contract worth millions of pounds over a number of years, but, when that contract was awarded, all that was outlined regarding the subcontracting proposals was a letter of support — just like the one that I have referred to already — indicating in minimum terms what the subcontracting arrangements might be in the future. In that instance, unsolicited letters of support that were sent out to trade organisations in Northern Ireland, some of which some received the letter only two weeks before the deadline for tendering submissions, in May of last year were regarded as a sufficient basis for the procurement unit to conclude that there was evidence of a subcontracting relationship and allowed the contractor to be awarded preferred status. Is that a process that is fit for purpose, given that the Assembly previously endorsed the Committee for Employment and Learning’s report on Training for Success, which dealt with subcontracting relationships?

The report states that the Central Procurement Directorate should put in place:

“mechanisms to ensure that stated agreements in contract bids are supported with formal written documentation clearly demonstrating the willingness of third-parties to be considered as part of the substantive bid (and which provide details of the level of resources agreed to be provided)”.

That is what the Committee had endorsed by the Assembly. It seems to me, however, that, when it came to a subsequent procurement exercise, the Central Procurement Directorate endorsed a preferred status to contract bids on the basis of a letter of support. That does not stand up to what the Assembly previously endorsed, namely that details of the level of resources agreed to be provided should be outlined in sub­contracting arrangements.

My third example is that, when preferred status was granted to one organisation three weeks before those contracts went live, that organisation had one member of staff in Northern Ireland and no training accommodation here. That organisation, having had no involvement in the North, had little or no knowledge of local and regional employment opportunities, which was the essence of the tender process’s requirements. When that organisation went live three weeks later in its Steps to Work training provision, which, according to Department for Employment and Learning (DEL) officials, was required to be fully operational when the contracts went live, it was still interviewing dozens of people to provide the services that it was contracted to provide. When the contracts went live, people in Northern Ireland who were contacting that organisation were referred to offices in England and were then given a mobile telephone number to ring to pursue their interest in taking up Steps to Work.

My fourth example concerns the rigour and capacity of the evaluation process. Departmental officials signed off evaluations several weeks after the evaluation process had been undertaken, and there was little information in the documentation about the basis on which officials had made decisions on which contracts should be awarded. There is a need, especially given the McLaughlin and Harvey court case last year, to re-examine how processes are managed, whether they are exhaustive and detailed, and whether all relevant information is recorded on that documentation. That is the essence of some of the thinking behind the motion, which will, I hope, attract support.

There is, of course, another reason why we should send out a message about procurement: to inform those who tender for contracts in the North that there will be accountability on the Floor of the Chamber for what happens to ensure that the billions of pounds that are spent on the public good in Northern Ireland are spent properly, efficiently and effectively.

Photo of Sue Ramsey Sue Ramsey Sinn Féin 1:00 pm, 27th April 2009

Go raibh maith agat, a Cheann Comhairle. Before I get into the substance of the motion, may I congratulate the Member on the birth of his new baby? I hope that he is not losing too much sleep, although it does not seem as if he is. I also hope that the Member is carrying out his fair share of night feeds.

Photo of Sue Ramsey Sue Ramsey Sinn Féin

I will check that out to confirm that it is true.

Mr Attwood outlined the Committee’s significant concerns around how the procurement process for Steps to Work was handled, and individuals and organisations have approached Committee members, including me, to express concern and dissatisfaction with the process. Mr Attwood is by no means unique in that regard — everybody on the Committee was contacted in one way or another. I remind Members that I brought the issue to the Committee at that time, and we discussed concerns about the process. The Committee had face-to-face meetings with the Minister and the permanent secretary, and we sent correspondence to the Department on the issue.

I cannot stress enough that the Committee has considered the issues with Steps to Work, and it has sought to have those concerns addressed. Mr Attwood highlighted some of the processes that the Committee was involved in during its inquiry into the Department for Employment and Learning’s Training for Success programme, which has been touched on today. We are worried that some of the issues around procurement came out of the Training for Success programme and went into the Steps to Work programme.

The Committee was convinced that there was a need for a broader assessment of the public procurement process. We contacted the Committee for Finance and Personnel, and I spoke to the Chairperson of that Committee about the issues a number of times. The Committee for Finance and Personnel is seeking to scrutinise the whole issue of public procurement policy and practice in the North.

The remit of the inquiry includes looking at ways to increase the access of small and medium-sized enterprises (SMEs) and social economy enterprises to public procurement contracts and to maximise the economic and social benefits to local communities from those contracts as a result. I have no doubt that other Members will raise the issues affecting their constituencies.

At our Committee meeting on 21 January, we agreed that the most practical approach to making public procurement policy and practice more user-friendly to local SMEs and social economy enterprises (SEEs) is for the general policy and practice to be reviewed. We could be revisiting other departmental policies and programmes every other week, so we agreed that, unless we dealt with the policy and practice of procurement now, we could be dealing with it every other week or month. We need to get to the crux of the matter to ensure that we are coming at it from the point of view of what local communities need, while ensuring that we are dealing with the issue of procurement once and for all.

Our Committee made a submission to the Finance and Personnel Committee’s inquiry, and we highlighted issues that we had identified in both the Training for Success and Steps to Work programmes on the issue of procurement. Our Committee is conscious that the Committee for Finance and Personnel will examine issues at the heart of the public procurement process as part of its inquiry, and I am sure that the Chairperson will remind us of that. The inquiry is ongoing, and it is only now considering written submissions.

We are also very conscious of the fact — Mr Attwood has also mentioned it — that there are still live issues around the procurement process for the award of Steps to Work contracts, as one contract has still to be awarded.

I am in no way seeking to oppose the motion per se, but I suggest that we wait until we see whether the outcome of the Finance and Personnel Committee’s inquiry addresses our concerns, especially about Steps to Work. It would be a duplication of work and resources for our Committee to attempt to pre-empt the recommendations that will flow from the Finance and Personnel Committee’s inquiry. Based on the wording of the motion, it is my understanding that Mr Attwood would like the issues involved in the management, requirements and conduct of the procurement

Photo of William Hay William Hay Speaker

Will the Member bring her remarks to a close?

Photo of Sue Ramsey Sue Ramsey Sinn Féin

The issues that are being highlighted today are very relevant, but I ask the House to give us time to see the outcome of the Committee for Finance and Personnel’s inquiry. Go raibh maith agat.

Photo of Robin Newton Robin Newton DUP 1:15 pm, 27th April 2009

As Deputy Chairperson of the Committee for Employment and Learning, I have no objections to the motion. It is appropriate to point out — and the point has been made by the Chairperson of the Committee — that there is a live issue around the awarding of one of the contracts. Therefore, I am conscious of and concerned about debating the issue at this time, before all of the ramifications of that contract have been settled.

I imagine that, when DEL put Steps to Work out to tender, every Member of the House was contacted by community groups in their constituency. Those groups were concerned that, having delivered community-based programmes through community-based projects and having satisfied the Department’s requirements, they would lose the contracts to deliver Steps to Work to organisations with a more sophisticated approach, larger budgets, greater expertise in certain areas and the ability to put a tender together on a more professional basis. They had stood by the communities during the Troubles, and now that there was a relative peace they found that they were unable to tender as effectively as those other organisations.

I suppose that the requests from many Members to see efficiency in all levels of Departments prompted the need to reduce the number of tenders, and allowing one point of contact for the delivery of a contract by DEL largely took us down this road. In an attempt to improve the programme, the Department put the contracts out to tender as it had to do under EU rules and regulations.

My feelings on the issue are very much in line with the approach taken by the Chairperson and the majority of the Committee. In the search for contractors of a sufficient size to be commercially viable for potential suppliers, each of the 10 contracts that went out for delivery in the Steps to Work programme was intended to be awarded to a single contractor with the right to employ subcontractors, delivering such elements of provision as required to meet the conditions of the contract. That was made quite clear within the contracts. From that arrangement, the Department gained a single point of contact, and the lead contractor took sole responsibility for all aspects of delivery and compliance with the operational guidelines of the programmes, including the quality of provision, which was to be delivered in line with the Department’s Success through Excellence strategy.

Concerns were raised in the Committee following contact from community groups, and every party represented in the House has questioned the Minister in plenary meetings on the Steps to Work contracts. Indeed, departmental officials appeared before the Committee on 8 October 2008, and every member of the Committee present at that meeting pursued the issue of Steps to Work and the concerns that were being raised via their constituency offices.

I was approached by those who were concerned about some of the language used in the contract document, and I wanted an assurance that all efforts had been —

Photo of William Hay William Hay Speaker

The Member should draw his remarks to a close.

Photo of Robin Newton Robin Newton DUP

I wanted an assurance that all efforts had been made to engage with community groups. I was assured that there had been three large, well-attended meetings where community groups were permitted to question the Department.

Photo of William Hay William Hay Speaker

The Member’s time is up.

Photo of David McClarty David McClarty UUP

I thank the Member for West Belfast, Mr Attwood, for bringing the issue to the Chamber. However, my party and I do not fully understand the purpose of the motion.

It cannot be denied that the procurement process for Steps to Work was difficult: indeed the issue is ongoing in Foyle. However, it has been addressed by the Minister for Employment and Learning on a number of occasions and by the Committee for Employment and Learning, which encouraged the Committee for Finance and Personnel to carry out a review of public procurement in general. The Committee for Finance and Personnel has already held evidence sessions, and we await its findings.

Public procurement is a complicated business, but it is worth pointing out that ultimate responsibility for it lies with the Department of Finance and Personnel, through the Central Procurement Directorate. It is also worth pointing out that the rules by which procurement decisions are made were created in 2002, when Mr Attwood’s party leader, Mark Durkan, was Minister of Finance and Personnel. Procurement is also subject to EU laws, and we are often restricted by EU guidelines.

From Mr Attwood’s speech, I discern that he is concerned that local businesses are not being given the best opportunities to obtain Government contracts. That concern is shared by the Ulster Unionist Party and by many businesses in Northern Ireland. I hope that the Committee for Finance and Personnel’s review will set out how improvements can be made in that area while staying within European law. During this time of recession, it is crucial to give local companies the best opportunity possible within the rules. Is the SDLP, which appears to be the most pro-European party in this place, arguing for us to scrap the single market?

A recent CBI questionnaire showed that 46% of respondents found it difficult to obtain information on forthcoming tenders. Figures such as those are not encouraging, and it is obvious that improvements are needed in certain areas. However, as has been stated, the Committee for Employment and Learning has already examined the specifics of the Steps to Work procurement process, and the Committee for Finance and Personnel is addressing the issue of procurement more generally. I am sure that, on publication of the Committee for Finance and Personnel’s report and if deemed necessary, the Committee for Employment and Learning will address the issue again.

Let us not forget that the Steps to Work programme is operating successfully throughout Northern Ireland and that it offers innovative and crucial opportunities to people recently made redundant and the long-term unemployed. Although I recognise Mr Attwood’s concern, I fail to see the need for his motion.

Photo of Anna Lo Anna Lo Alliance

I thank Mr Attwood for proposing the motion, and I share a lot of the concerns that he expressed. However, I agree with my three colleagues on the Committee for Employment and Learning that it is premature to call for an inquiry, given the legal implications and the fact that the Committee for Finance and Personnel is considering the procurement process.

Lessons must be learnt from Training for Success and Steps to Work, and better procurement processes are needed. Although we do not want to limit the award of contracts to just local businesses, which is protectionism, goes against free trade and is not allowed under EU legislation, there must be a more common-sense approach, which is not just based on value for money. Most importantly, we must establish whether the needs of signatories to the programme are being met.

Although large multinationals may have the competence to write excellent application forms for contracts and to satisfy the criteria on methodology, we need to scrutinise them thoroughly to assess whether they can deliver on the ground. To say that they are just managing agents leaves me asking a big question about their competence to deliver the programme.

The Department’s timescale for setting up the programme was crazy. Training for Success was such a rushed job — even DEL staff have admitted that the programme was totally rushed. The timescale for Steps to Work was incredible. We issued a call for tender on 22 April 2008, for which the closing date was 6 June 2008. At that stage, many groups had already complained about the short time available in which to prepare their bids. The preferred bidder was announced in mid-August 2008. Some of the bidders from England rushed into advertising positions in order to fulfil promises.

The formal contracts were awarded to eight local areas on 17 September 2008, with an expectation that the programme would start on 29 September 2008 — 12 days after the contracts were awarded. How on earth did we expect those programmes to operate properly and smoothly? How could any group, be it local or English, have started the programme efficiently? Did we expect people to work in tents?

Photo of Kieran McCarthy Kieran McCarthy Alliance

And use mobile phones?

Photo of Anna Lo Anna Lo Alliance

Yes, as Mr Attwood said earlier.

Staff had to be recruited and then trained to operate the programme, which was supposed to be person-centred. Staff need proper training to understand the programme and individuals’ needs. Twelve days in which to recruit and prepare staff is a nonsense. I really question DEL’s thinking in that instance. We should have called for tender and prepared for the process well in advance of April 2008, especially since the programme was supposed to be live a few months later.

Photo of Simon Hamilton Simon Hamilton DUP

I will not dwell on the Steps to Work programme or the process that led to the awarding of contracts, because, frankly, I know little or nothing about it. That is a rare admission of a lack of knowledge on my part. Instead, I will talk more generally about the procurement process in Northern Ireland and about some of the issues that are frequently raised about the process, which do not exactly stand up to scrutiny when considered.

Several Members mentioned that the Committee for Finance and Personnel, of which I am Deputy Chairperson, is conducting an inquiry into the procurement process in Northern Ireland. We are doing that because we are very aware of the concerns that are frequently expressed about public procurement in Northern Ireland. One cannot escape noticing the various legal challenges that have been launched, as well as the controversy that has built up around the likes of procurement frameworks and the cases that have already been mentioned.

As a Committee, we are also mindful of the economic downturn and the desire to assist local firms in trying to avail themselves of as much public procurement in Northern Ireland as possible, whether that be the record levels of £1·6 billion of investment in capital infrastructure or the countless other millions in revenue expenditure. The Committee is aware of those considerations. Indeed, rather than just paying lip service to them, it intends to get stuck into the matter by conducting an inquiry.

From time to time, there are legal challenges to our procurement process, as there are in any part of the world. If one were to look at the evidence that has been submitted to the Committee for Finance and Personnel since, say, the start of April 2007, one would see that there have been legal challenges costing approximately £3·9 million. Given that, one could not but be concerned about the process. However, although that figure looks bad and is certainly too high, evidence from industry experts indicated that Northern Ireland is far from being the worst region in the UK and Ireland. Such evidence came even from members of the legal profession, who, one could say, have an interest in saying that the process is shoddy and not fit for purpose.

Indeed, those experts cited an example that sticks in my mind. Even before putting a contract out to tender, councillors in a large city in the north of England indicated to whom they wanted that contract to go. The procurement process began, and, lo and behold, the contract was awarded to that very company. That is the sort of shoddy practice that we see elsewhere. Although we may have difficulties with our procurement process, as everybody does, we are certainly not as bad as that.

I also examined some of the experiences that are associated with contract awarding in Northern Ireland. The perception that it is exceptionally difficult — indeed, nigh on impossible, as some suggest — for local firms to get their hands on some procurement contracts in Northern Ireland does not stack up whenever one considers the evidence. From the start of February until the end of March 2009, the Central Procurement Directorate, which is caught in the headlights of Mr Attwood’s motion, awarded 45 out of 54 — 83% — of contracts to local firms. We must bear in mind that that is only one centre of procurement excellence. The monetary value of the contracts awarded by that one centre of procurement excellence was £3·2 million. Everyone would agree, particularly in these difficult economic times, that that is a sizeable chunk of money. I picked up that evidence from the Central Procurement Directorate’s website, and, if one were to delve into its history, I am sure that one would discover similar stories. In fact, given that that is only one centre of procurement excellence, the overall figure for the others would probably be much higher. Moreover, the proportion of contracts awarded to local firms is much better here than in the rest of the United Kingdom.

The Committee for Finance and Personnel’s inquiry was mentioned, and there is nothing that has been said in the debate that that inquiry will not touch on. In fact, I expect fully that those specific and general matters will come up in evidence and will be mentioned in the report. Therefore, given that the inquiry is ongoing and that it will afford ample opportunity to carry out the sort of work that is mentioned in the motion, I see no merit to the motion. The issues that have been raised are serious and of the utmost importance, and they deserve to be considered in the context of that inquiry.

Photo of Martina Anderson Martina Anderson Sinn Féin 1:30 pm, 27th April 2009

Go raibh maith agat. Éirím le tacaíocht a thabhairt don rún seo. I support the motion, and I thank Alex Attwood for securing the debate.

Many Members will recall that Sinn Féin secured an Adjournment debate on this very subject last year, when the issue became a source of considerable controversy in my constituency in Derry. At that time, it emerged that a local consortium of training organisations had lost out on a vital tender to deliver the Steps to Work programme in Derry. The consortium had been providing that training for years, and it was stunned when the contract went to an English firm. That happened despite the well-grounded fears that the successful company had neither the capacity nor the proven track record to deliver such a service. Sinn Féin challenged the Minister about that decision directly, and its representatives on the Committee for Employment and Learning challenged departmental officials. Indeed, I acknowledge that the Committee Chairperson, Sue Ramsey, raised the matter first. Eventually, the decision was overturned, but Raymond McCartney and I warned that that pattern would be repeated throughout the North, and we called for a review of the procurement process that allowed that to happen.

We were determined that the same thing would not happen again, and we tried our best to avoid a repeat of the fiasco by raising our concerns when another major contract to provide training for mechanics was awarded to the Carter and Carter Group, another English firm. At that time, it was clear that the Carter and Carter Group lacked the capacity to deliver, and it was in severe financial difficulties. Sinn Féin vigorously opposed the decision to entrust the Carter and Carter Group with training our young people. Fortunately, the decision was overturned eventually, and, shortly afterwards, the Carter and Carter Group collapsed. However, both those examples show that there is something wrong with a procurement process that allowed such appointments to be made in the first instance.

I acknowledge that Alex Attwood, along with Raymond McCartney, Sue Ramsey and me, has been highlighting and challenging the Steps to Work debacle. It is hoped that this debate can assist the process of instituting the type of inquiry that is needed, and I acknowledge that work by the Committee for Finance and Personnel is ongoing.

The tendering process relating to such contracts should be carried out in an open, transparent and fair manner, and the standard of service that we are aiming to deliver at the other end should be central to the process. We are not talking only about numbers on a balance sheet; contracts should not go simply to whoever is cheapest. In many cases, the successful bidder will be entrusted with training our young people for the workforce. They will be creating tradesmen and tradeswomen for the future. We may be in a recession now, but that will not always be the case; today’s young people will rebuild our economy. Those young people deserve the chance to gain first-class skills and training, and their well-being should not be placed in the hands of organisations that are unfit for purpose.

The Department for Employment and Learning has been providing training for years. I am aware that the Minister for Employment and Learning is not in the Chamber, but, given the debacle that I have outlined, it may well be time that he went back to the classroom. Tá sé thar am ag an Aire gabháil arais go dtí an seomra ranga.

Photo of Jim Shannon Jim Shannon DUP

I wonder whether it was necessary to have today’s debate, and other Members have touched on that point. I understand that the motion was tabled some time ago, so perhaps that is why the debate is being held.

Members are aware of the worthy goals that are set out in the Steps to Work programme. Everyone would and could hang their hats on the process and on the objectives that it sets out to deliver. It aims to assist people who depend on benefits to get by, and, importantly, it sets out to help people who have disabilities and those who are in need of therapeutic employment but who, in some cases, are restricted in what they are able to do by health problems.

I had questions about the scheme and whether it could deliver. Although its goals were admirable, I felt that many people were unable to work and felt pressed to return to work when, emotionally and physically, they were not ready for that step. Aside from that concern, however, has the scheme delivered? Has the procurement process succeeded in doing what it set out to do? I am not sure whether that has been clarified to its full extent. Perhaps the Committee will consider those questions in the future.

I am concerned about community groups and their involvement, as is my colleague Robin Newton, who mentioned his concerns in his contribution. Many questions must be asked about the tendering process. Some of those questions appear in Members’ information packs. Members have already tabled questions for oral and written answer, and Members have asked other questions during today’s debate. Among those questions are: how was the tendering process carried out; was it done fairly; was it transparent; and did it deliver? The Committee will be able to answer those questions, and, ultimately, the Minister should take on board those answers.

Members who wear another hat — as I do on Ards Borough Council — are aware of the tendering process. Regardless of whether a tender is 10 minutes or 10 days late, it is late. If a tender does not adhere to the criteria, it is outside the guidelines; it is as simple as that. In the case of the Steps to Work programme, it is a pity that the procurement process has thrown up many questions and that a golden opportunity to help people with disabilities and on benefits to get into work has not been fully realised.

Cud a’ jist pae tribuet tae tha woarkers en staf at tha Sooth Eastern Reginal Coelege in tha Airdes, fer ther help in takin fort tha Steps tae Woark skeem? They er baith proafesinal an aproachabal an caun still mak shair that tha skeem is delivered.

I pay tribute to the staff at the South Eastern Regional College in Ards for their help in delivering the Steps to Work programme in that area. They were and are always professional and approachable and can still ensure that the scheme can deliver.

Lots of questions have to be asked, and they are significant enough to place a large question mark over how the tender process was put together and, importantly, how the procurement process was introduced. However, I urge caution. I understand that an inquiry, as other Members said, has already been started by the Committee, and action is taking place. I feel that that inquiry will ask the questions and get the answers. We should let that process run its course and deliver its conclusion first.

Photo of Robert Coulter Robert Coulter UUP

In listening to the debate, I cannot help but wonder what the point is in bringing it to the House at this time. In view of the fact that an inquiry is ongoing and the fact that a very good programme is working very well for young people, the motion should not have been brought to the House today.

We in the Ulster Unionist Party are proud to be behind the Steps to Work programme and to have delivered it for Northern Ireland. It may have its problems and face some difficulties, but, at the present time, we should consider the effect that such a debate will have on the young people who are involved in the programme. What confidence are we in this House giving to them today?

The programme provides much-needed help and support for those who are unemployed, and it provides access to an experienced adviser to guide them through the process of returning to work. It also provides them with access to training courses and programmes that will improve their skills base and employability. Furthermore, it provides them with a small but vital financial aid during their period of unemployment. Are we giving them confidence today as they work through this phase of their lives?

Some of the contractors who have been engaged with the programme are from the private sector, and, as we have just been told, at least one contract was awarded to a college. Many contractors provide support and training through a period of unemployment to those who need it. As far as I understand, the private-sector companies have excellent track records of providing similar services in other parts of the world. Why, then, are we today questioning work that is already going to be examined and that, at present, seems to be developing well?

The issue of the procurement process has been pushed before and rightly so. There should be transparency and openness. The Committee for Finance and Personnel is investigating the public procurement process, and that inquiry will surely fulfil the needs of the motion. Why then, are we debating it today?

It is worth noting that the Steps to Work procurement exercise was conducted by DFP in line with public procurement policy that was adopted by the Executive in 2002. It is a good procurement policy, and it serves taxpayers well. As far as I can tell, it has done nothing but a good job. The contracts that were awarded for the delivery of the Steps to Work programme have been in operation for some months now, and by all accounts, they seem to be working satisfactorily.

The motion is largely superfluous. As I said, the Committee for Finance and Personnel is already conducting an inquiry, which will identify and seek to resolve any issues that exist.

I am afraid that I cannot support the motion.

Photo of Pat Ramsey Pat Ramsey Social Democratic and Labour Party 1:45 pm, 27th April 2009

I thank the Member for proposing the motion. There may not be consensus on the wording of the motion, but most Members have talked about the difficulties, problems and concerns, not just with the Steps to Work programme, but with procurement in general. One thing is certain; it is in the public interest that Members have an opportunity to discuss and highlight the issues and ensure that, where there are difficulties, Ministers make the changes necessary to improve performance.

I want to reiterate some of the points that Mr Attwood has, rightly, introduced. There are concerns about the potential for suboptimal delivery were a Steps to Work contract to be awarded to a company that, on paper, has a good track record of delivery but has no experience, track record or presence here. Suboptimal delivery will mean a raw deal — not a good deal — for the unemployed, who are entitled to high-quality, work-related training.

Will the Minister assure Members that all companies that have been awarded the Steps to Work contract are able to deliver, particularly those that have little physical presence here? Most Members have alluded to the fact that such companies have minimal experience of and no relevant contact with Northern Ireland.

Another concern is that competent Northern Irish organisations with a track record in the management and delivery of training are failing to win contacts. That should be a concern to all Members. Small companies here are, typically, smaller than their British and European counterparts. That has its advantages and disadvantages. However, it is important that those companies are strategically placed to win contracts. If the failure of Northern Irish organisations to win contracts is reflected across a range of Government procurement activities, which I suspect it is, we need to look at the way in which various Departments work, particularly with Invest Northern Ireland, to ensure that local companies are better prepared.

Given that local companies have lost out considerably, there seems to be something badly wrong with the criteria, the process or the preparation. Many local companies are second- or third-tier subcontractors, which means that the opportunity to reap the multiplier effect as regards Government spending is lost.

Will the Minister outline how his Department works with Invest Northern Ireland to ensure that as many outsourcing contracts as possible are won by local companies? How much of the value in total contracts is being captured by local companies?

My final concern relates to my constituency. Martina Anderson has already mentioned the fact that the final award of a contract in Derry was to Rutledge Joblink and that that has been put on hold because of the objection of a locally based organisation. The Minister may not know about that, but I am sure that officials from the Department for Employment and Learning could inform him about it. The delay in implementing the contract is disadvantaging unemployed people in the Derry area. I have spoken to representatives from a range of professional, community-based organisations that currently deliver the New Deal programme and are keen to deliver the Steps to Work programme. Will the Minister shed light on the process and outline when a final decision on the contract will be made?

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. Although I wish to contribute to the debate as Chairperson of the Committee for Finance and Personnel, I should, at the outset, point out that my Committee has not had an opportunity to consider the proposal, nor has the Committee been briefed on the Steps to Work programme, which falls, primarily, within the remit of the Committee for Employment and Learning.

Members of the Committee for Finance and Personnel will have noted that the Committee for Employment and Learning has already raised concerns about the procurement exercise for the Steps to Work programme. Those concerns were referred to in a submission that the Committee for Employment and Learning made to my Committee’s ongoing inquiry into public procurement policy and practice.

The Committee for Employment and Learning, as well as highlighting its concerns with the process around the tendering and awarding of contracts for the Steps to Work programme, suggested that my Committee’s inquiry might also consider measures to ameliorate the situation whereby EU competition rules create circumstances in which an organisation can bid for contracts in areas in which it has no proven infrastructure or record of provision. That has been referred to already, when Mr Attwood proposed the motion.

The Finance and Personnel Committee’s ongoing inquiry is strategic in nature and aims to make recommendations to the Department of Finance and Personnel for improvements to public procurement policies and processes for the purpose of increasing access to opportunities for small and medium-sized enterprises and social economy enterprises. It also aims to maximise the economic and social benefits for the local community, while taking account of the principles that govern public procurement.

The inquiry will also consider the nature, extent and application of social clauses in public contracts. The Committee has received 33 written responses to its inquiry, including a response from the Committee for Employment and Learning. The Committee is due to begin its consideration of those responses when it meets this Wednesday, with a view to calling witnesses to present oral evidence.

Importantly, to supplement the oral and written evidence received during the inquiry, the Committee will commission external specialists to conduct primary research into the end-user experience of local SMEs and social enterprise committees in tendering for and delivering public contracts.

Given the wide scope and the strategic focus of the inquiry, it is unlikely that the procurement processes for individual contracts will be examined in great detail. That is not an issue that falls to the Minister or the Department that my Committee scrutinises. However, my Committee is likely to wish to include consideration of the general concern around the difficulties that EU competition rules create for local SMEs and social economy enterprises, or — this may be more relevant — the interpretation that the Central Procurement Directorate and others may apply to those rules and the steps that can be taken to address those issues.

Without wishing to pre-empt the Committee’s forthcoming considerations, I anticipate that the ongoing inquiry by the Committee for Finance and Personnel is likely to cover the general points of concern that have been identified already by the Committee for Employment and Learning.

Speaking on behalf of my party, I too wondered why the motion was being brought forward at this stage, given the inquiry that my Committee is involved in. I remind the Member of the provisions of Standing Order 64, which provides the two Committees with the procedural option of working together more closely and formally on that issue or related issues of joint concern should that prove necessary in future. However, the Assembly can support the general principles of the motion, because it draws attention to important concerns.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Business, Enterprise and Regulatory Reform), Without portfolio, Shadow Spokesperson (Justice), Shadow DUP Spokesperson (Without Portfolio)

As Members who have taken part in the debate are aware, Steps to Work is a new programme that has replaced the Department for Employment and Learning’s New Deal programme, and it offers support services to assist the long-term unemployed to gain employment.

To remind Members of the background to the programme, the Department for Employment and Learning established a working group in January 2007 to review alternative contractual models to the model used by the New Deal programme and to recommend a model to deliver Steps to Work. One objective of that review was to recommend a contractual model and procurement strategy that would reduce the number of contracts and service providers that the Department was required to manage and that would have more effective legal control of the contracts for the Steps to Work programme and an efficient mechanism for monitoring and managing those.

The review recommended a prime-contractor model. Prime contracting is a model that is recommended by the Office of Government Commerce for managing large supply chains, for example, in construction contracts, which require input from specialist contractors. It removes the burden of unnecessary bureaucracy from subcontractors, permitting them to focus on delivering outputs.

It is recognised by the Chartered Institute of Purchasing and Supply as a model of best practice procurement that can generate significant efficiencies in the supply chain, which is extremely important in our current economic climate. Therefore, most people will welcome and endorse the application of modern procurement techniques to deliver best value for money and assist Departments in achieving efficiency savings in their procurement expenditure.

As some Members have highlighted, public procurement processes are guided by the principles of the Northern Ireland public procurement policy, which was established by the Executive in May 2002. Public procurement processes are also regulated by European Union procurement laws. The majority of public procurement is carried out by centres of procurement expertise to ensure that the principles are effectively embedded in procurement processes. In the current straitened times, I am sure that the Assembly will be especially pleased to hear that that has resulted in value-for-money savings of £250 million over the last three years. That is a very significant amount of money in the context of public expenditure.

The procurement of the Steps to Work programme was managed by the Central Procurement Directorate. It is one of the recognised centres of procurement expertise and applies the appropriate policies and procedures. The key principles of public procurement are fairness, transparency, non-discrimination and competitive supply. CPD endeavours to ensure that all procurement processes utilise best practice techniques to satisfy those principles.

The procurement process for the Steps to Work programme was a competitive tendering exercise. It is Government policy that goods, services and works should be acquired through competition unless there are convincing reasons to the contrary. Competition promotes economy, efficiency and effectiveness in public expenditure, and it is a very important and useful means of ensuring that the market is fully tested. Procurement through competition remains the best way of achieving best value for money, and it assists in demonstrating transparency and integrity.

The principle of transparency relates to the clarity and openness of the procurement process and not directly to what is being procured or who is supplying it. In short, transparency in public procurement is intended to ensure that there is no unnecessary secrecy or lack of openness. To ensure that the procurement process for Steps to Work satisfied the concept of transparency, a series of market-sounding information events were held in Belfast, Armagh and Limavady. Interested organisations were briefed on the content of the new programme and given an overview of the proposed contractual model and the procurement process prior to the publication of the invitation to tender.

The invitation to tender clearly defined the contract objectives, requirements and outputs and stated the evaluation criteria. Those criteria were predetermined by representatives from the Department for Employment and Learning who have experience and expertise in the delivery of the programme. All tenderers were notified of the outcome of evaluations promptly, and, within the bounds of commercial confidentiality, they were offered the opportunity of a debriefing on the outcome of the tendering process. That informed the suppliers of the relative merits and demerits of their tender offer and will help to facilitate better performance in future competitions.

CPD advised the Department for Employment and Learning throughout the development of the invitation to tender, which ensured that the requirements of the tender would promote fairness in the competition and would not result in unnecessary restrictions to potential suppliers, particularly new market entrants, which is very important in the context of the EU procurement laws. A total of 17 tender offers were received, and those were assessed against the published criteria by a representative panel from the Department for Employment and Learning with the necessary knowledge and experience of the programme to identify the offers that demonstrated best value for money. The panel was advised by representatives of CPD to ensure that the principles of fairness, transparency and non-discrimination were maintained.

All tenderers were notified of the outcome at the conclusion of the evaluation processes. In line with the recommendations of the Committee for Employment and Learning, the preferred bidders were only issued with formal contract awards following confirmation from the bidders that formal agreements were in place with all their proposed subcontractors. The procurement process in the Foyle area is ongoing, but contracts have been awarded in nine out of 10 areas, and CPD has been advised that the service is being delivered satisfactorily.

It should be noted that, as other Members have stated, public procurement is regulated by EU law. Those laws state that the courts are the appropriate mechanism for a review of a procurement process in regard to non-compliance with the procedures laid down by law. The courts are where bidders who feel aggrieved at their treatment in the procurement process should go. Therefore, the Assembly’s review of the conduct of the procurement process should look primarily at any perceived failure in the delivery of best value for money in accordance with the principles of the Northern Ireland public procurement policy.

This has been already mentioned on a number of occasions, but I know that the Committee for Finance and Personnel is engaged in important and valuable work in that area, and we look forward to the outcome of that work.

Specific issues were raised in the debate. Mr Ramsey asked about the current state of play in Foyle. As he is aware, a contract is yet to be awarded for there, so, until that procurement process has been concluded, I am unable to comment further. As I have always said when answering enquiries about live procurement exercises, be they in response to questions for written answer or oral answer, it is not possible for me, as a Minister, to comment.

Mr Attwood asked a number of questions about subcontracting. Officials from the Department for Employment and Learning made no stipulation that a prime contractor should provide a particular level of service. The contract model that the Department for Employment and Learning (DEL) decided on was to engage directly with a prime contractor, who would then subcontract elements of service provision to maximise the range of services and choice to clients across contract areas. The prime contractor would also be contractually responsible for the management and maintenance of those subcontractors’ performance. DEL’s intention, under the Steps to Work contract, was to rationalise the supply base, which it has direct responsibility for managing and controlling. Under the previous set-up, DEL dealt with more than 100 contractors. Therefore, to improve the quality and consistency of service delivery across contract areas, that approach was adopted.

Mr Attwood asked how it was possible for a company that does not currently have a presence in Northern Ireland to be awarded a contract. As has been mentioned on a number of occasions, his party is probably the most enthusiastically in favour of the European Union, and all that flows from it. Therefore, I do not need to remind the Member that the principles of the single economic market are based on the free movement of services within the EU and that it is not legally permissible to require organisations to have a presence in the member state where services are to be delivered at the time of tendering, or to have previous experience of operating in that member state. Such action would be regarded as being discriminatory against tenderers from other member states.

Any contracts that were awarded to organisations not currently based in, or operating in, Northern Ireland were conditional, and they required their operation to be functioning before the contract’s commencement date. Obviously, that situation could be remedied to ensure that we do not end up in the position about which some people have complained, but that would entail our signing up to a rather radical reform of policy that ran contrary to our membership of the European Union. I am interested to hear whether the SDLP wants to go down that line.

A number of Members, including Mr Hamilton, Mr McClarty and Mr Ramsey, raised the issues of general public procurement and of giving firms and companies equal access to contracts. We are committed to making unprecedented levels of capital and procurement investment. We have introduced a number of measures to assist local firms, including small and medium-sized enterprises (SMEs), to avail themselves of procurement opportunities. Those measures include the introduction of eSourcing NI, which is an electronic procurement portal.

Members should note that recent figures show that more than 95% of public-sector construction-works contracts in Northern Ireland are awarded to local firms, the majority of which are SMEs. That provides a significant boost to the local economy. When that figure is compared with equivalent figures in other United Kingdom devolved Administrations, indicative figures from Wales reveal that, historically, less than 50% of contracts are awarded to local firms. In Scotland, the equivalent figure is under 60%.

Those comparisons demonstrate the importance that I and the Executive place on local industry, companies and businesses, particularly SMEs, at this particular time. Over 95% of contracts in Northern Ireland are awarded to local companies, compared with 50% in Wales and 60% in Scotland. It is a matter of action and delivery, not talk. The actions that I have outlined speak louder than any words that could be uttered by Members in the House.

I am grateful to everyone who took part in the debate.

Photo of Alex Attwood Alex Attwood Social Democratic and Labour Party 2:00 pm, 27th April 2009

I welcome all the contributions to the debate. Although the motion is not intended to divide the House, I reaffirm the approach required of the Assembly to the Steps to Work contracts, and, I daresay, to others: to get to the bottom of the issues that have now arisen, an individual, dedicated inquiry must be conducted into what did, or did not, transpire. For several reasons, the Assembly should never foreclose on the option to examine particular contracts, because a dedicated examination can draw out the hard experience of procurement in the North.

I noted carefully the comments of the Chairperson of the Committee for Finance and Personnel, whose contribution was most helpful. However, he said that the ongoing review of procurement in the North is strategic, not specific. He confirmed that that is the case by saying that the examination of particular contracts is unlikely. Rather, there will be an interpretation of how the Central Procurement Directorate considers certain matters, and general points of concern will be raised.

However, the procurement policy in the North must be reconfigured to make it more fit for purpose and able to deliver all the objectives that everyone seeks to achieve. To do that, the particular points of concern about what happened during the Steps to Work procurement exercise must be examined and the specific lesson must be learned. Therefore, I am convinced that the model of a particular inquiry into Steps to Work is the way to proceed.

I say that particularly in response to the Minister’s comments. His outlining of the processes and what happened, in general, during the procurement of Steps to Work was helpful. However, when one takes a step back from what the Minister said, one finds that he did not fully address the key questions. The current procurement process involves appointing prime contractors, because it is easier for the Government to work with them than with dozens, if not hundreds, of other contractors. However, once appointed, the policy of those prime contractors is to subcontract the work to other companies, some of which subcontract again. Is that sensible? Is that the intended purpose of the current procurement process?

The danger is that rather than creating a more efficient relationship, there is, ultimately, little or no relationship between the Government and a family of subcontractors. A potential consequence of how the process for Steps to Work was handled is the culture of the subcontracting of subcontractors, which defeats the purpose of the new procurement process and possibly creates a new mischief therein.

The Assembly should be telling people that a qualitative process of procurement operates in the North. Therefore, should a contractor with one member of staff and no accommodation in the North start to recruit two weeks before a contract goes live, because it would not otherwise be fit for purpose in time, such activity would stick out like a sore thumb.

I disagree with anyone in the Assembly, or in any training organisation in the North, who concludes that a procurement process is fit for purpose if it ends up with that outcome two weeks before people who are in desperate need of Steps to Work training can start. That is not to say that I oppose EU procurement proposals or that that model of procurement is not the right one. However, if we consider the qualitative assessment of whether that model achieves the desired outcome, how can we be satisfied that a process that means that an organisation that has one member of staff, no accommodation, and, on the day that it goes live, can be contacted only on one mobile phone number, will deliver what other Members referred to as training and support for people who desperately need it?

I am curious about one or two comments that have been made today. It surprises me that any member of the Committee for Employment and Learning would say that Steps to Work is working, given that seven months after it was introduced, we have received no qualitative proof that that is the case. I remind Rev Coulter that that is the situation. It is only this month that the independent inspectorate has begun to inspect how Steps to Work is being delivered. I hope that Rev Coulter and other Members are correct in saying that Steps to Work is being delivered and that the training is fit for purpose. However, no one can draw that conclusion today, because no one — not in the House, not in the Committee for Employment and Learning, not even the Minister — has been advised by either DEL officials or by the education inspectorate that that is the case.

Mr Ramsey was right to say that there is no consensus on the mechanism to deal with the issue. However, comments that were made by Mr Shannon, Mr Hamilton, Ms Anderson and Ms Lo — indeed, comments from Members across the Chamber — show that seven months after the Steps to Work contracts were awarded, collective and individual doubts remain. That is the reason that Mr McClarty was wrong to say that the Minister has answered all questions on the matter. If that is the case, why do so many Members have questions about what has happened with Steps to Work and about what has happened in the seven months since late September when the contracts were awarded? If, as Mr McClarty said, the Minister has dealt with the matter and there is to be an inquiry, why do we all have questions? The reason is that we do not have proof that Steps to Work is working and that we know that specific issues remain unresolved.

I welcome the DFP review. I think that it will add to our understanding of procurement and improve procurement mechanisms in the North. However, if someone were to ask me whether I thought that that review will deal with the Steps to Work issue, I would say no. There are many reasons for that. One is that the inquiry, as the Committee Chairperson indicated, will not only not be able to look at particular contracts, but it will be stopped from looking at them because of the ongoing risk of legal challenges. Despite a series of letters to the Minister, a lot of my questions remain unanswered, because officials continue to advise the Minister that there is a risk of legal action on certain contracts.

Not only will the DFP review not deal with specific contracts, but, in my view, there is a culture in Government and in DEL that there may be a risk of legal action so we do not deal with stuff. To some degree that is understandable, but I think that that is wrong. There is a middle way. The middle way is to answer proper, challenging questions on specific contracts, and, if necessary, have an independent inquiry into those contracts, as well as the more global review that the Chairperson of the Committee for Finance and Personnel outlined.

I believe that that is the way to go, even if that is not the general feeling of the House, because — as much as any other reason — a few weeks after issues were raised about various contracts, a senior representative of a training organisation in the North came to my office with a person from a lobbying organisation and said that political pressure from the likes of me represented an attempt to undo a procurement process. Subsequently, I wrote to the chief executive of that lobbying organisation, who did not even acknowledge receipt of the letter. That speaks volumes about the attitude of some to the political authority that rightfully resides in this Building.

Question put and negatived.