My Lords, I shall speak to my Amendments 43 and 51 in this group and comment on the other amendments. I thank the noble Baroness, Lady Bennett, for supporting Amendment 43. Amendment 43 would reintroduce the procurement principles that were laid out in the procurement Green Paper and put them in the Bill.
The procurement Green Paper stated that the principles of the new regulatory framework for public procurement should be consistent with the Treasury’s Managing
Public Money and the seven principles of public life as set out by the Committee on Standards in Public Life. The Green Paper states:
“The Government proposes that the following interdependent principles should be included in the new legislation.”
I shall remind noble Lords of the interdependent principles: they are public good, value for money, transparency, integrity, fair treatment of suppliers and non-discrimination. We absolutely support these principles, as I am sure all noble Lords do, because they are crucial for good business practice. Will the Minister say why these principles are not in the Bill as expected, particularly when we consider that, in the consultation on the Green Paper, the majority of the more than 600 respondents supported the principles for procurement being in the Bill? If we look at the Government’s response to the consultation, they said:
“The Government intends to introduce the proposed principles of public procurement into legislation as described.”
What has changed since then? Why now are those principles not in the Bill?
We believe that these principles are an integral part of procurement and a vital tool for setting out what this legislation wants to achieve and how its success will be judged. In the Bill as currently drafted there is a notable absence of mentions of equality or protected characteristics. The public sector equality duty requires public bodies to have due regard to the need to eliminate discrimination, advance equality of opportunity and foster good relations between different people when carrying out their activities. This includes promoting equality and eliminating discrimination through public procurement as well as ensuring that the PSED is adhered to by those with whom public bodies contract.
Furthermore, this is important domestic legislation that asserts that international obligations on procurement in the UK entered into must be compatible with social objectives. We are concerned that the UK has signed a trade agreement with Australia that potentially threatens the inclusion of social criteria in procurement rules. The UK-Australia agreement states that social and labour considerations can be used in the government procurement process only when based on objectively justifiable criteria. This means that social criteria could be challenged by Australian companies via their Government as unjustified. Furthermore, the World Trade Organization’s government procurement agreement that the UK has acceded to does not contain social criteria for procurement. We believe that the current positron needs to be revised and that these principles should be clearly in the Bill.
Moving on to my Amendment 51, it would add proportionality to the procurement objectives. The Procurement Bill covers a wide range of goods, works and services and a range of scales from tens of thousands of pounds to hundreds of millions, but it can be implemented effectively only if proportionality is applied throughout the process. Ensuring the Procurement Bill is proportionate is also key to achieving two of the Government’s key aims in this legislation: to improve value for money and to open up the market to smaller providers, including charities. Proportionality is crucial to the effective procurement of person-centred public services through ensuring that resources are not wasted
on overly complex processes when they are not necessary and that the most appropriate provider to run the service can be procured rather than being excluded because of their size or where this is disproportionate to the scale or nature of the contract. Proportionality is referenced in the legislation, but only in specific parts, yet we believe it is relevant right across the entire process.
NCVO, which represents over 17,000 voluntary organisations, charities, community groups and enterprises across England, and the Lloyds Bank Foundation have drawn attention to the fact that this Bill will impact on the services and support that people access. We therefore believe that it is important to ensure that it is appropriate for the commissioning of procurement of people-centred services that are delivered by a range of service providers that also include charities. Charities are often well placed to deliver these services because they are embedded in local communities. They are trusted by local people and often able to reach those whom other services fail to reach.
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Resources should not be wasted, as I said, on overly complex processes. We must make sure that we always have the most appropriate provider to run a service; we must not risk them being excluded because they are too small. Will the Minister consider accepting my amendment or, if not, propose something similar so that we do not lose the important services that charities and smaller providers are so often able to provide?
I will briefly say that I also support Amendments 128 and 130 in the name of my noble friend Lord Davies of Brixton. These amendments would provide that consideration of value for money does not override other procurement objectives. Amendment 57 in the name of the noble Lord, Lord Wallace of Saltaire, also looks at the meaning of “value for money”. These amendments are important, because the Bill does not define value for money; nor does it set out what can or should be considered when assessing what is the “most advantageous tender”. We support the removal of MEAT and its change to MAT, in order that “economically advantageous” is no longer right at the centre. However, we need to make sure that, in practice, value for money does mean that tenders that are perfectly good and acceptable are precluded because that is still being taken as the number one priority.
I will finish with some comments on the introduction to the amendments that the noble Lord, Lord Moylan, put down. I must say that I was very interested to listen to his introduction and hear his proposals. He is absolutely right that we need flexibility when we are procuring, and he is also absolutely right to say that we should be focusing on the principles. To me, the principles that we are looking at and which the Government have already said are important and should be part of the Bill are what will be needed to underpin any new procurement law.
I look forward to listening further to this debate and to the Minister’s responses.