Procurement: Security of Supply

Oral Answers to Questions — Finance – in the Northern Ireland Assembly at 2:45 pm on 24th November 2020.

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Photo of John O'Dowd John O'Dowd Sinn Féin 2:45 pm, 24th November 2020

3. Mr O'Dowd asked the Minister of Finance how procurement policy will reflect the importance of security of supply, given the learning from the COVID-19 pandemic. (AQO 1188/17-22)

Photo of Conor Murphy Conor Murphy Sinn Féin

Security of supply is a fundamental in all public-sector contracts. It is essential that commissioners continually monitor and assess the resilience of supply chains as COVID-19 continues to impact on demand and production in the manufacturing sector. Security of supply will also be impacted by EU exit if the British Government fail to secure a trade deal with the EU. I plan to appoint an expert advisory panel from industry to bring fresh thinking on procurement matters and to advise the Procurement Board of lessons learned during the pandemic to help to build the resilience of government supply chains.

Photo of John O'Dowd John O'Dowd Sinn Féin

I thank the Minister for his answer. He will be aware of many small and medium-sized enterprises that were capable of responding to the shortages of PPE and other equipment in the health sector but were not able to do so because they were disadvantaged by the scale of the contracts. Will the new Procurement Board ensure that there is not only value for money but a mandatory provision for social value?

Photo of Conor Murphy Conor Murphy Sinn Féin

From my perspective, the Procurement Board and the general procurement of contracts has to follow a set of criteria. However, the experience of the pandemic is such that security of supply has to be key whereas, previously, price was king with regard to procurement. The evidence during the pandemic was that there is sufficient capacity, skill and ingenuity in local manufacturing to meet some of the critical supply that is necessary for us on the island. Certainly, with regard to food, pharma and manufacturing, that critical supply exists here. One of the lessons that we have to learn across the island and between these islands is, as a consequence of this, that cheaper prices and goods on the other side of the world may be fine for saving some money, but they do not bring security of supply or assist local economic growth in the way that procurement should be tailored to do. There are a lot of lessons to be learned, and I look forward to the newly constituted Procurement Board getting stuck into the issue fairly quickly.

Photo of Jim Allister Jim Allister Traditional Unionist Voice

The Minister will be aware of the recently exposed scandal of the obscene amounts of money paid to middlemen in obtaining PPE. Will he assure the House that the PPE that was acquired for and within Northern Ireland was free from any of those payments of obscene amounts of money?

Photo of Conor Murphy Conor Murphy Sinn Féin

Yes. Officials dealt with the contracts in China. I spoke to one of them, and he was amused at the amount of money that someone had received when the official was doing it as part of his public service to us. He did a remarkable job. The focus on the first attempt to obtain PPE here pales into insignificance compared with the obscene amounts of money that the British Government were prepared to pay to middlemen to achieve this. I would not say that it was panic, but there was certainly great urgency in securing PPE, and we were not alone in trying to source material in the Far East. That undoubtedly added to costs, but it also added to the complications in accessing those goods. It goes back to the original question from my colleague Mr O'Dowd about security of supply, knowing your suppliers and easy access to them being as important as cheaper prices in the Far East.

Photo of Mike Nesbitt Mike Nesbitt UUP

Does the Minister agree with the interpretation of the House of Lords that the protocol suggests that, when it comes to security of supply for those who supply key sectors such as health, we will be subject to EU regulations rather than the will of the Executive?

Photo of Conor Murphy Conor Murphy Sinn Féin

That remains to be seen. There is much uncertainty on the Brexit issue. Legislation is going through the Houses of Parliament. The Lords has taken a particular view, and, from reading commentary, I know that the Commons intends to take a different view when the Bill comes back for further processing through the legislative framework.

All of it is unsatisfactory as far as we are concerned and, I am sure, as far as the Member is concerned. We should not be in this position a couple of weeks away from the exit date. The mess is not of our creating. It is certainly not the creation of the democratic wishes of the people in this part of the world. It is not of our creation in terms of the negotiations and the processes developed between the British Government and the EU. The sooner it is resolved with a greater degree of clarity, the better for all of us.

Photo of Rachel Woods Rachel Woods Green 3:00 pm, 24th November 2020

I thank the Minister for his answers so far. Security of supply will also be impacted by climate breakdown. Minister, will environmental and climate impact be reflected in procurement processes and policies going forward to ensure that the policy is sustainable? For example, will a sustainability clause or criteria be considered for security of supply?

Photo of Conor Murphy Conor Murphy Sinn Féin

Clearly, one of the first issues is that, if you are not transporting goods from the far side of the world, there is certainly an environmental benefit. Having goods produced on this island in these islands certainly cuts down on transportation costs. I am happy to look at all the issues that the Member has raised and ensure that the Procurement Board, when examining these issues, considers all those matters going forward.

Photo of Matthew O'Toole Matthew O'Toole Social Democratic and Labour Party

Will the Minister be more specific about issues on security of supply caused by Brexit? Have any orders been taken forward to forestall the uncertainty around 31 December? Will the Minister also briefly give an update on whether he has made any specific allocations or has been asked to make any for the procurement of the vaccine that, we all hope, is closer than we once feared?

Photo of Conor Murphy Conor Murphy Sinn Féin

With regard to the first question, there is huge uncertainty about what our future trading relations will be like. That could challenge significantly the security of supply. We need to bottom out all those issues. As yet, the Executive are still fairly in the dark about how this will eventually fall down. The British Government have not been keen to share information with anybody outside their own narrow confines.

I am advised by the Minister of Health that the vaccine will be procured centrally in the British government system and supplied to us. The logistics of rolling out a vaccination programme will be a matter that the Executive will meet the cost for.