The Procurement Board

Ministerial Statement – in the Northern Ireland Assembly at 10:45 am on 1st December 2020.

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Photo of Alex Maskey Alex Maskey Sinn Féin 10:45 am, 1st December 2020

I have received notice from the Minister of Finance that he wishes to make a statement. Before I call the Minister, I remind Members that, in the light of social distancing being observed by the parties, the Speaker's ruling that Members must be in the Chamber to hear a statement if they wish to ask a question has been relaxed. Members still have to make sure that their name is on the speaking list if they wish to be called, but they can do that by rising in their place, as well as by notifying the Business Office or the Speaker's Table directly. I remind Members to be concise in asking their question.

Photo of Conor Murphy Conor Murphy Sinn Féin

I wish to provide Members with an update on the Procurement Board. Procurement expenditure accounts for some £3 billion annually, representing one quarter of the Executive's Budget. That makes the Executive a hugely significant buyer of goods, services and construction work, and there is tremendous potential to use that spending power for good.

Procurement policy is overseen by the Procurement Board, which I chair as Finance Minister.

(Mr Principal Deputy Speaker [Mr Stalford] in the Chair)

As with many areas of work, the restoration of the Procurement Board has been delayed by the pandemic. The procurement team in my Department has been focused on the response to COVID, and I thank the team for assisting in the procurement of essential PPE for our public services. In particular, working with the Department of Health and the Executive Office, it secured a £60 million order of PPE from China. In a competitive global market, that was a remarkable achievement for a small regional Government.

Today, I can announce the restoration of the Procurement Board, which will meet on 16 December. I would also like to update Members on how, with the agreement of the Executive, I decided to restructure the Procurement Board. I have completely changed the make-up of the board. Previously, almost 20 people attended the Procurement Board. That was too large a group, and I have reduced the membership by half. That will allow the group to meet more regularly and to drive forward reform.

Previously, the Procurement Board was staffed by permanent secretaries. As accounting officers, permanent secretaries have a significant interest and role in procurement, but I believe that the board should be made up of the experts who actually design and manage procurement exercises. I am therefore replacing the permanent secretaries with four procurement practitioners. From the health sector, I am appointing Peter Wilson, interim director of operations in the Business Services Organisation (BSO), who is responsible for procurement and logistics. To provide expertise in the delivery of infrastructure, I am appointing John Irvine, director of major projects and procurement in the Department for Infrastructure. Sharon Smyth, commercial director in the Department of Finance, will also be appointed, as she has extensive experience in procuring a wide range of supplies and services for Departments. From the Strategic Investment Board (SIB), which is responsible for the Buy Social policy, I am appointing Brett Hannam. The people who design and manage public contracts will, therefore, be at the core of procurement policy.

It is also important that procurement policy benefits from the expertise of the sectors that tender for and deliver public contracts on behalf of the public sector. I have therefore appointed five representatives from key sectors of the economy. From the construction industry, I have appointed Mark Spence, managing director of the Construction Employers Federation (CEF), and Denise McMahon, chair of the Northern Ireland Construction Group. To represent the manufacturing sector, I have appointed Mary Meehan, deputy chief executive of Manufacturing NI. To speak on behalf of small and medium enterprises, I have appointed Ian McClelland, director of LM Services, which is a mechanical and electrical engineering company, and a member of the Procurement Board forum for small businesses. To champion the interests of social enterprises, I have appointed Colin Jess, director of Social Enterprise NI. Those representatives will be asked to engage with their respective sectors in order to bring their views and experiences to the Procurement Board.

I thank the outgoing members for their time and commitment during the term of the previous board.

To date, procurement policy has been approved by the Procurement Board and circulated throughout the public sector through guidance notes. Compliance with that guidance has not been entirely consistent. It is, therefore, important to elevate the status of procurement policy. From now on, procurement guidance notes will go to the Executive for approval. Procurement policy will, therefore, carry the authority of Ministers, who are accountable to the public, and their accounting officers, who are legally responsible for ensuring that public expenditure provides value for money.

The new members of the board will be asked to identify problems, quickly develop solutions and bring fresh thinking to procurement policy and practice. However, I want to finish my statement by highlighting some of the immediate priorities that I will ask the board to progress.

One of those priorities is social value. I am aware that that is something that the all-party group on social enterprise chaired by Mr Stewart Dickson is also passionate about. It is important to point out that social value is not only a concern of social enterprise: there are many private sector businesses that want to contribute to social good, for example, by lowering carbon emissions or paying their staff a living wage. Those social benefits are not factored in to tenders that score only on price and quality. Therefore, I intend to bring a new policy on social value to the first meeting of the Procurement Board. With that policy, social value will be a mandatory component of procurement exercises rather than an optional add-on.

Another policy priority is security of supply. The COVID pandemic triggered a global scramble for PPE and other essential supplies. We do not want to be in that position again. It would be much better if we could source vital supplies locally rather than worrying about supply routes by air and sea. The need for secure supply routes is also heightened by Brexit, which is likely to disrupt trading relationships, particularly if the British Government fail to agree a trade deal with the European Union. A stronger focus on security of supply will, of course, benefit local businesses and help increase employment levels, so I will ask the Procurement Board to develop policy in that area.

There are many other policies that I would like the board to consider, and I would welcome Members' views on what other procurement issues they would like brought to the table.

The new structure of the Procurement Board will mean that procurement policy is co-designed by those who manage and those who deliver government contracts. That will mean that procurement policy carries the authority of Executive approval.

I believe that the changes will help to maximise the social, economic and environmental impact of the Executive's £3 billion annual spend on procurement. I welcome Members' views on the new Procurement Board and the issues that it should focus on.

Photo of Steve Aiken Steve Aiken UUP 11:00 am, 1st December 2020

I thank the Minister for his remarks and for meeting me earlier today.

As the Minister is aware, the Committee wrote to him in March about the formation of the board, and, despite the delay, we welcome his statement today. There is much detail on the formation of the board, and the Committee will want to take the time to scrutinise it closely.

We have a few initial questions that we would like you to answer. First, is forming a board under your chairmanship that will seek to control and manage £3 billion — approximately a quarter of our Executive's budget, I think — appropriate, given the other instruments that are being set up through New Decade, New Approach, particularly the fiscal council? When should we expect the fiscal council to be in position?

Where are the terms of reference? Who will have primacy in the procurement process? Is the role entirely to provide policy, or is it to direct cross-Executive procurement spending? How does the Procurement Board interrelate with the services sector? Since a lot of government expenditure seems to go to the likes of PwC, Deloitte and other consultancy services, will there be a representative of the services sector on the Procurement Board?

There will be significant procurement issues, and I notice that you talk in your statement, Minister, about the importance of making sure that the Northern Ireland supply chain is given primacy. You will be aware, if we ever get any details out of the Joint Committee or the Specialised Committee, that we will still have to apply EU procurement rules and may not be able to do what, you said, you wish to do with procurement in your statement. We need some guidance on that.

Bringing outside experts into the process is welcome. I cannot think of any Member who does not welcome the external expertise. However, would you consider having an independent chairman of the board? If you are chair of the board of a procurement process that looks at significant government spending, it may seem that the best will, guidance and advice from external sectors are not being utilised appropriately to get us the best out of our procurement spend.

The Committee looks forward to getting more details on this and to your talking to us about the Procurement Board at the earliest convenience.

Photo of Christopher Stalford Christopher Stalford DUP

Not only did the Chairman of the Committee go up to the line with that series of questions, but the line is somewhere in the distance. The Minister is under no obligation to answer all the questions — I think that there were six — but I am sure that he can try.

Photo of Conor Murphy Conor Murphy Sinn Féin

I also identified six questions and will attempt to answer them.

In relation to the fiscal council, as with the Procurement Board, COVID-19 has impacted on the speed at which we have been able to deliver on that New Decade, New Approach commitment. However, we are at an advanced stage, and I hope to bring proposals to the Executive in relation to that very soon. The terms of reference will be signed off in the next day or two, and we will ensure that the Committee is informed of them.

On the role of the board and the chairing of it, one of the consistent complaints has been about a lack of consistency, in that procurement policy and guidance have been the property of the Procurement Board but have not necessarily filtered down through Departments and into arm's-length bodies and agencies. To ensure consistency of delivery, authority is being given to the Executive because they will pass the procurement guidance notes and will be responsible for authorising them. My role in chairing the board, as an Executive Minister, will be to ensure continuity through to the Executive and for that Executive authority to flow down through Departments, through permanent secretaries and Ministers, to make sure that there is follow-through.

There have been good procurement policies and guidance notes, but they have somewhat slowed as they have moved down the chain through Departments and not necessarily been reflected in output.

We want to ensure that this is not just an organisation or a board that produces policies for the sake of having documents, but one that changes the way that business is done.

The consultancy sector is a varied one, as the Member knows, as is the service sector. We have looked for sectors that have groups that represent the broad sector from which to draw expertise. If other sectors are identified where there is a gap, I will be happy to look at that again to see whether that sector can come together and whether there is an organisation that might represent it and make someone available from it.

On the question of supplies, as a response to the pandemic, we did have local businesses and manufacturers that stepped up and repurposed their output. I am thinking of firms such as O'Neills, which supplied scrubs, and Bloc Blinds and Huhtamaki, which produced PPE gear. They were very effective and very successful, and the issue of security of supply is something that, increasingly, all governments across the world will be looking to. Clearly, the experience during the pandemic was around the difficulty in accessing that critical supply that was needed very quickly by the health service. We need to look at that, and it is doable within whatever arrangements we have with Europe beyond 1 January. We need to ensure that, if local manufacturers are going to repurpose, they have a guarantee, or at least a huge degree of certainty, about an ongoing contract and ongoing demand for the goods that they might supply.

Photo of Paul Frew Paul Frew DUP

I thank the Minister for his statement. I can certainly tell that he is hungry — hopefully, hungry for reform. I want to pay tribute to my colleague William Humphrey, the Chairperson of the Public Accounts Committee, who has been pushing for some time now for private-sector influence on the Procurement Board. The Minister said that compliance with the guidance had not been entirely consistent in the past. Can he outline to the House what he means by that? Also, he told us that procurement guidance notes will now go to the Executive for approval. How were they approved before?

Photo of Conor Murphy Conor Murphy Sinn Féin

The lack of consistency is reflected in the fact that some policies and guidance that the Procurement Board brought forward, particularly in relation to social value, were seen as optional add-ons rather than being essential. We want to give the board more expertise to develop better policies in a quicker way by having key people involved. That is not to disregard the permanent secretaries, but there would be duplication if a policy went through the permanent secretaries and ended up in the Executive, and then the Executive gave it the authority. Previously, the guidance notes were approved by the board itself, and that was the extent of their status. This time, the guidance notes will be approved by the Executive, and there is then a responsibility on Executive Ministers, and on their accounting officers, to make sure that those guidance notes are followed through by their own Departments, arm's-length bodies and agencies.

The guidance and policies that are produced will have more teeth and more enforceability, which, in turn, gives them more consistency. Depending on the attitude of a permanent secretary, it may have been that some Departments were keen on pursuing and promoting the issues, while others, perhaps, were not. We want to get consistency across the board and we want to ensure that there is a level of expertise within the board to get the best possible policies and guidance notes.

Photo of Martina Anderson Martina Anderson Sinn Féin

I welcome the Minister's statement. For far too long, the social component of procurement contracts was the least enforced. Those who are further away from the labour market, particularly the brokers, have found it very difficult to get access. Will the Minister ensure that the more robust monitoring and enforcement that he mentioned in his statement will mean that the £3 billion of public money that is spent yearly on this process will result in training and job opportunities for those in greatest need in the most deprived areas, such as Derry city and beyond?

Photo of Conor Murphy Conor Murphy Sinn Féin

Yes, that is the intention. On the social value end, we have brought in the Strategic Investment Board (SIB), which was largely responsible for the Buy Social policy. When it comes to the other issues of employment, apprentices and the long-term unemployed, we want to ensure that that consistency travels down through. That is why the involvement of the construction industry on the board itself gives us that interface so that we can see what the issues are from the other side. It is one thing to produce policies through civil servants and public representatives but another to engage with the sector that has to implement them.

We had a useful discussion with people in the Derry area in relation to how some of this had not made its way onto the ground. Those are the sorts of issues that we want to correct through our engagement with the board. We want to ensure that it is effective, that there is a clear understanding of where the policy becomes unstuck in its practice and that we fix those things to make sure that the desired outcomes are achieved.

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

I want to ask the Minister more about the process of procurement policy, specifically guidance notes going back to the Executive. It is fair to say that, this year, the Executive have not always covered themselves in glory with regard to the timing of their decision-making, notwithstanding the unique circumstances. Will the Minister assure us that the notes that go back to the Executive will not gum up the process of procurement, jeopardise the inclusion of actual, real social value aims or allow this simply to be another tool for divvying up favours between certain parties in the Executive?

Photo of Conor Murphy Conor Murphy Sinn Féin

I cannot, in turn, ask the Member to explain. His point that procurement policy is used for "divvying up favours between parties" in the Executive requires some explanation. That is an outrageous statement. I ask the Member to justify it in some other place. He is accusing people of corruption — of divvying up procurement favours in the Executive.

His party has a member on the Executive. The Executive have had plenty of well-documented disagreements over key issues. They have also produced a range of agreements on a multitude of issues, and I do not see those issues becoming of significance. I brought the proposal for a reconstitution of the board to the Executive, and no dissenting voices were raised. I outlined my ambition to have a more effective social value policy and procurement and more consistency in the application of policies. All of that was agreed by the Executive, so I do not anticipate any difficulty in that regard.

I am not sure how the Member intends to stand over the last remark of his contribution. I know that he has the cover of this institution for such remarks, but, if he is making an insinuation that there is divvying up in procurement among Executive parties, he has an obligation to stack that up or withdraw it.

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

On a point of order, Mr Principal Deputy Speaker. I want to make clear that, when I talked about divvying up, there was no suggestion that I was talking about the procurement of individual contracts. I did not say that. The Minister has read too much into what I said. I said that there is an issue around things going to the Executive and becoming part of the political bartering. That was the point that I was making. I think that it was fairly clear in my remarks, and I stand by them.

Photo of Christopher Stalford Christopher Stalford DUP

Strictly speaking, I do not think that that was a point of order, but the Member has put on the record his intention. It is important that, at all times, Members speak to each other with moderation and tolerance. I suppose that "tolerance" is as good a word as any. However, I understand that Members have strong views. The Member's remarks are on the record and clarification given.

Photo of Andrew Muir Andrew Muir Alliance

I thank the Minister for his statement. Procurement will play a vital role in the economic recovery that we will need in the years following COVID-19. One of the key issues, which the Minister will be aware of, is an infrastructure commission. Proposals have been circulated in relation to that. Will the Minister provide an update on his views on those proposals and how it would interact with what has been announced today?

Photo of Conor Murphy Conor Murphy Sinn Féin

There is a range of reasons why we want to see the most effective use of significant amounts of capital money for infrastructure. We want to see it being spent well, we want to see maximum value and return for it and we want to see the maximum contribution to the local economy as a consequence of that spend. Construction is a key component of our local economic activity, and, where possible, we want to see local construction companies benefit. Having the Construction Employers Federation, as well as the person responsible for procurement policy in the Department for Infrastructure, represented on the procurement board, brings a new level of expertise in that regard. I hope that that will see better outcomes in procurement, which is something that we all want to achieve.

Photo of Mervyn Storey Mervyn Storey DUP

I welcome the statement. The Minister will be aware that I, as a former Finance Minister, raised concerns about procurement in the past. I trust that today's announcement is about more than a name change, as was the case previously. We had the famous change from CPD to CPD.

[Laughter.]

I have to say that that was a surreal moment in the Civil Service. I trust that we will see real progress. I welcome the fact that the construction industry is now involved.

I seek clarification from the Minister on two things, although I could be wrong about them. First, with regard to the involvement of the Department of Education — I declare an interest as a governor of two schools in my constituency — the procurement processes in that Department are woeful. We are being done over in that process at a cost to the public purse. Secondly, will the Minister explain what the relationship will be between the board, as reconstituted, and CPD, because many are still sceptical as to whether we can get delivery on procurement?

Photo of Conor Murphy Conor Murphy Sinn Féin 11:15 am, 1st December 2020

I thank the Member for his questions. He has raised those issues in the past. I am not sure whether the dramatic change from CPD to CPD did not happen under his watch

[Laughter.]

However, there is a clear intention. This is not just a name change for the board; it is a change of personnel. Procurement is being taken out of the hands of permanent secretaries. That is not to cast any aspersions on the people who served on the board; I thank them for their service. It is to bring in, as the Member says, expertise from various sectors. Among the people on the board, we want departmental representatives who deal with procurement. I know that Education is a gap, but that does not mean that there is no ongoing consultation with Departments. Sharon Smyth of the Department of Finance will have responsibility for engaging with Departments that are not represented on the board. Education is a significant spender of public money in public contracts, so there will be that read-across.

The clear intention is for a new start. It is a reconstituted board that comes from a different place as regards who is involved. We want people who represent industry — construction or SMEs — and for them to engage with their sectors in order to bring forward their views. The intention is to create a facility so that people can give information privately on any complaints. Previously, people might have felt that, if they made a genuine, legitimate complaint publicly about the main contractor, that might be detrimental to their ability to do future work. We want to create a facility in which people have an opportunity to register issues with the board in a way that protects them from any blowback, if that were the case with relationships in contracts.

This is a genuine attempt to do things differently. We will have to test that as we go along, but I hope that, in the not too distant future, the Member will recognise that there is a different way to do things.

Photo of Mervyn Storey Mervyn Storey DUP

On a point of order, Mr Principal Deputy Speaker. It seems that Members can clarify things that they have said. May I clarify that the name change did not happen under my watch? However, it happened during a suspension of the Assembly, so perhaps the Finance Minister and his party should take responsibility for it

[Laughter.]

Photo of Christopher Stalford Christopher Stalford DUP

I do not think that I need to rule on that

[Laughter.]

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

On a point of order, Mr Principal Deputy Speaker. I wish to clarify whether points of order are allowed during a ministerial statement and the questions that follow?

[Laughter.]

I believe that they are not.

Photo of Christopher Stalford Christopher Stalford DUP

That is a legitimate point of order and is, therefore, unique this morning. The Member is, of course, correct.

Photo of Maolíosa McHugh Maolíosa McHugh Sinn Féin

Ba mhaith liom buíochas a ghabháil leis an Aire as a ráiteas. I thank the Minister for his statement. This is a good opportunity for change. I will be more specific. In order to ensure that social value is incorporated into procurement contracts, will the board consider a minimum score for social value alongside price and quality?

Photo of Conor Murphy Conor Murphy Sinn Féin

That would be an effective way to achieve that. If the focus is just on price and quality, we lose the ability to give proper consideration to social value. Social value is about many things. It can be about a more green approach to construction, as well as having social outcomes in employment by ensuring that there is spend in certain areas and access for people from communities and social enterprises that can provide services. There is a whole range of measures. Scoring contracts in a way that guarantees that social value is a component part of procurement is an effective way to do that.

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

Perhaps, if guidance is to be approved by the Executive, that will lessen the litigation against contracts. Given the scale of the contracts awarded at times, it is unsurprising that judicial reviews (JRs) etc are brought, but we have to reduce those. Will the Minister ensure that the Procurement Board looks at how legal action can be minimised? Several weeks ago, the Economy Committee received a presentation from the Law Society on mediation in such matters. Will the Minister ask the Procurement Board to look at that process as well?

Photo of Conor Murphy Conor Murphy Sinn Féin

Yes, as I referenced in my response to Mr Storey, litigation is really the end point. It happens when someone is dissatisfied with how a contract has been awarded. Litigation holds up capital projects in particular and can have a significant and detrimental impact on economic activity generally. That is not to say that people are not entitled to go to court if they feel strongly that they have a case to make, and we would not deny them that. However, there is an opportunity to have some kind of mitigation process at an earlier stage, which is why I will ask the board to consider an alternative service to allow suppliers to raise their concerns and, in some instances, to provide a private opportunity for them to do so. Business relationships are at the heart of procurement, and people are often reluctant to speak out in case damage is caused to those relationships as a consequence. We want an alternative measure that enables suppliers to raise concerns confidentially, and we want the matter to be independently reviewed. That will be a key part of it, and, hopefully, it will have the effect of offsetting the possibility of people going to court. While people are entitled to go to court, it undoubtedly holds up processes and has an impact on budgetary spending.

Photo of Pat Catney Pat Catney Social Democratic and Labour Party

Minister, your statement says:

"Compliance with this guidance has not been entirely consistent."

How will that be measured by the new Procurement Board? How will it measure success?

Photo of Conor Murphy Conor Murphy Sinn Féin

Success will be measured by the consistent application of policy and guidance notes. In the past, we have found that, sometimes, consistency did not filter down through Departments. The approval of guidance notes and procurement policy by the Executive gives them a strength that they did not have. There is an obligation on Executive Ministers and accounting officers in Departments to follow through on that. Monitoring by the board will ensure compliance and find where that is not happening. As outlined, we will have representatives from the sector. If the board finds that the policies are not coming through at the bottom end or that compliance is not the practical experience of people applying for contracts and engaging in the provision of services, we will quickly hear about that. It is the board's responsibility to challenge that where necessary.

Photo of Mike Nesbitt Mike Nesbitt UUP

I am still trying to get my head around the fact that Mr O'Dowd used a point of order to make it clear that points of order are out of order at this time.

I thank the Minister for his statement. I particularly welcome the appointment of Colin Jess to represent the social enterprise sector. It is also reassuring that the Minister of Finance's grasp of mathematics is sound enough to be able to identify how many questions the Committee Chair squeezed into his remarks.

Minister, you talked about social value and included the private sector. Will you expand your definition of social value and advise whether you intend to legislate and include that in a social value Act?

Photo of Conor Murphy Conor Murphy Sinn Féin

I thank the Member for his question. He squeezed in a few questions there himself

[Laughter.]

I have to say that, in my experience, Mr O'Dowd's contribution was not the most surreal thing ever to have happened in the Chamber — not by a long shot

[Laughter.]

Social value includes a range of things, such as a greener approach to doing business or paying the minimum wage, and many private sector companies wish to engage in that. If that was a part of the scoring for the award of contracts, many in the private sector would embrace it and not see it as a burden. I am sure that the Member has had the same experience of speaking to the many people who want to deliver better outcomes for society as well as securing contracts and improving their business.

Clearly, any social value policy is much stronger when underpinned by legislation. The Department's procurement side has been very much involved in assisting other Departments to get supplies over the COVID period, and I am not certain whether there is enough time left in the mandate to legislate. We have asked officials to explore the possibility. If there is an opportunity to do social value legislation in the time left, I will be happy to do it.

Photo of Jemma Dolan Jemma Dolan Sinn Féin

Minister, thank you for your statement. Many school principals ask for more flexibility for minor procurements. Will the Procurement Board consider that?

Photo of Conor Murphy Conor Murphy Sinn Féin

Yes. We need to get that balance right. At Question Time last week, I said that many elected representatives can give examples of where things are procured for significantly higher prices than they can be got for locally. There is a balance to be struck between ensuring that there is transparency and accountability in buying arrangements — public money is being spent — and making sure that there is flexibility at a local level to get supplies for the best price that they can be got for locally, while contributing to the local economy. The Procurement Board will therefore undertake to strike the right balance.

Photo of Stewart Dickson Stewart Dickson Alliance

Minister, I warmly welcome your statement and, indeed, your reference to the all-party group on social enterprise, which has been lobbying for a lot of what you are proposing today for some eight years. Following on from Mr Nesbitt's question, you already have on-the-shelf legislation ready to run to deliver a social value Act for Northern Ireland. We will, in many ways, be playing catch-up with the other four nations of the United Kingdom and the Republic of Ireland, where social value legislation is well embedded. It is slightly disappointing to hear that that may not be achieved in this mandate. In your statement, Minister, you said:

"social value will be a mandatory component of procurement exercises".

How will that work in Northern Ireland?

Photo of Conor Murphy Conor Murphy Sinn Féin

First, if I can legislate in this mandate, I will — I give the Member that assurance — but I want to ensure that we have sufficient time to do that. He will know that, if we start a legislative process and it does not conclude, it falls off the shelf at the end of the mandate and we have to start all over again in a new mandate, with whomever might be in the post. Since I came into the Department, it has been my intention to do that, but other priorities, such as responding to the pandemic, took over.

In my view, if the policies and guidance notes that the Procurement Board send to the Executive are approved, they will have Executive approval as a policy. Each Department — the permanent secretary and staff — will then be obliged to follow through on that, as will arm's-length bodies and the agencies. As I say, because we now have people from various sectors on the Procurement Board, they can see whether that filters down to where it is supposed to achieve an outcome on the ground. We want to hear from people in the social enterprise sector and in all the other sectors to ensure that those polices are followed through on. If there is an opportunity to legislate — I would like to do it — I certainly will.

Photo of Dolores Kelly Dolores Kelly Social Democratic and Labour Party

I thank the Minister for his statement. Minister, you will be aware that international contractors win some of the biggest contracts and then subcontract and subcontract until most of the money is sliced off for management rather than for the product. How can you legislate to prevent such occurrences?

Photo of Conor Murphy Conor Murphy Sinn Féin

You tend to find that, depending on the size of the contract, it can attract more international attention, and contracts can be framed in such a way as to be broken up for the various sectors, which perhaps makes them more within the range of local employers and local companies. Of course, you have to do that in a way that is correct under the guidelines and rules, and we are still not sure what the hangover from the exit from Europe will mean for state aid and all those rules. Even within those guidelines and rules, there are ways of doing procurement that can support local companies as much as possible. As it stands, local companies get about four out of every five contracts, but, of course, it is the quality and size of those contracts that needs to be measured. Where that can be achieved, it is a desirable outcome. It has to be done within regulations, but we need to do procurement in a way that provides maximum support to the local economy.

Photo of Rachel Woods Rachel Woods Green 11:30 am, 1st December 2020

I thank the Minister for his statement. On Mr Aiken's comment about an independent chairman, an independent chairwoman would be good too.

The Minister will be aware that we have an opportunity not only to build back better from COVID but to tackle our climate emergency through a just transition. What consideration will be given to a green, sustainable procurement by the board? Can it be mandatory? What role will there be for cooperative models in procurement, focusing on community wealth building and working with councils? Perhaps I can also ask what he means by the reference to "living wage" on page 5 of his statement.

Photo of Conor Murphy Conor Murphy Sinn Féin

Firstly, yes. The Executive have targets on green outcomes and carbon-emission reduction. I would like to see those reflected, as they should be, in our procurement policy, because the Executive cannot just argue for those things and then spend £3 billion and not try to use it to effect the outcome of their own policies. I think that that will be a key component in procurement. The Living Wage Foundation has outlined the definition of a living wage, and that is the definition that I work to.

Photo of Jim Allister Jim Allister Traditional Unionist Voice

Can I bring the Minister back to the point that Ms Dolan raised about the lower end of the procurement market and her example of schools? Hitherto, if a school had a broken window, it would bring in a local handyman and have it fixed for very little. Today, the school reports it to Armagh or wherever, someone comes and looks at it, someone comes back and somebody comes out again, and the cost is phenomenal. Will the Minister consider bringing to the table of the board a proposition that there should be an exemption threshold below which local service needs can be met by the local management in the way that, formerly, it was done?

Photo of Conor Murphy Conor Murphy Sinn Féin

It is interesting that people in procurement will not have heard the stories that all of us, as elected representatives, hear in conversations with school principals, who say, "I could get a local guy or woman to fix something, and it would cost a tenth of the price". There is a threshold, but I think that we need to examine it to see whether it is sufficient in its application.

As I said to Jemma Dolan, there is a balance to be found between transparency and accountability, with people not giving contracts in schools or any other public-sector procurement operation to their brothers-in-law or cousins, and value for money. Procurement is about value for money. One of its primary functions is to ensure that public spend gets value for money, so, where practices at a local level clearly do not give value for money, we have to look at that, but we also have to make sure that we have that transparency and accountability built in.

Photo of Roy Beggs Roy Beggs UUP

The Minister just mentioned value for money. Will he ensure that when the Procurement Board meets it recognises that big is not always beautiful and that that sometimes limits competition and results in significant subcontracting, where the control is lost? For example, painting a classroom can cost two or three times more than getting a local painter.

Photo of Conor Murphy Conor Murphy Sinn Féin

That speaks to the previous conversations that we have been having on all that. I think that it is about finding a balance between ensuring that you get transparency and accountability and value for money at a local level with small contracts. As I said, four out of five contracts are won locally, but that, obviously, depends on their value. That is why there is value in having people in from the various sectors. You then have people who are practitioners of how procurement works. It is one thing having a very good policy that we can all support, but it is another thing to see how the experience of that impacts on the ground and how it works in practice rather than in theory on the paper that it is developed on. I think that that will be the value of having those various sectors, and they in turn represent the voice of the industries and the sectors that they come from. Also, we have that function of hearing confidentially from people out in the world where people procure and enact these contracts. That will all be valuable, but, on local spend, it is about getting the balance and the threshold right on that.

Photo of Christopher Stalford Christopher Stalford DUP

No other Member is rising in their place or indicating to me, so that concludes questions on the statement. Before I move on to the next item, I will say to Members that, during questions to the Minister, I reviewed my copy of Standing Orders. Standing Order 19 relates to questions, and (2)(b) of that Standing Order states that questions should not contain "arguments, inferences or imputations". The use of the words "divvying up" has an imputation attached to it. I would never wish to curtail debate or free expression, but I remind Members of their obligations under the rules of the House. Members, please take your ease while we move to the next item of business.