Levelling out

Sue Hayman on the government's missed opportunity to ensure public procurement delivers economic, environmental, and social value

While changes to the UK’s procurement regime are long overdue, recent events and investigations have shone a light upon government practices during the Covid pandemic and given the issue an added urgency.

£9 billion of public money spent on PPE has since been written off – including £2.6 billion on items “not suitable for the NHS”. Of course, Ministers were having to act quickly during a crisis but awarding contracts worth tens of millions through a rather secretive ‘VIP fast lane’ that lacked scrutiny and was clearly going to be open to abuse.

That’s why the Procurement Bill, which has its House of Lords second reading today, is a welcome opportunity to put in place a more rigorous regime to stop such practices happening again and help rebuild public confidence in how their taxes are spent.  

But while this piece of post-Brexit legislation is set to simplify some of the procurement rules that made OJEU tricky to navigate, there are serious concerns about the way in which the government has watered down previous commitments relating to the transparency aspects of its proposed new regime. I’m also not confident that Ministers understand how a better version of the Bill could deliver an added economic, environmental, and social value – including on the government’s own stated ‘levelling up’ ambitions.

On transparency, what was needed from the government – especially given the fall-out from the pandemic – is a genuine commitment to reshape procurement practices to the very highest standards. Perhaps Ministers, after issuing some warm words in response to the Green Paper’s extensive consultation, are finding transparency rules a bit tricky to comply with?

That response also saw the government state it would introduce a set of principles of public procurement: public good, value for money, transparency, integrity, fair treatment of suppliers, and non-discrimination. A welcome move but one that the Bill fails to deliver the detail on, despite a whole section being dedicated to ‘Principles and Objectives’.

‘Objectives’ are detailed, but these fail to put the environment and tackling climate change at the core of how public money is spent. There is no commitment to sustainable procurement, nor any duty on all government departments to comply with the Carbon Reduction Plan.

Also missing is any commitment to social value, when the embedding of this within the procurement system through appropriate guidance and reporting requirements for public bodies could bring money and jobs to many local areas. And in turn, go some way towards helping to level up the more disadvantaged areas of our country – especially if it come hand in hand with support for cash-strapped councils to help deliver a new system that widens the pool of prospective suppliers.

Another concern with the Bill relates to the fair treatment of suppliers and the weakening of the language requiring contracting authorities to make impartial decisions without conflict of interest has been weakened. Gone too is a previous commitment to a digital single-suppliers portal operating on a “tell us once” principle that would help under-resourced regional SMEs compete with the big corporate bidders.

There are several areas of exemption in the Bill – including the power to amend the Act in relation to private utilities and Defence and Security contracts – where the criterion for doing so is unclear.

Perhaps more troubling, however, is the lack of detail over the new ministerial discretion for NHS procurement and how that would apply. Nobody wants to see another pandemic but nor do we want the history of poor or dodgy PPE contracts to repeat itself. That, along with seeking greater transparency and added value, is why Labour Peers will be aiming to make this necessary Bill not just fit for purpose but the basis on which to deliver a UK procurement regime that delivers for all.

Baroness Sue Hayman of Ullock is the Shadow Minister for Levelling-Up in the Lords. She tweets @SueHayman1