My Lords, I thank noble Lords for their contributions to this debate and thank my noble friend Lord Moylan for his general point about the purpose and effect of the Bill; it was a point well made. I also agree with the noble Baroness, Lady Hayman of Ullock, that we need to restore trust in procurement. I will come on in a minute to explain what we are doing to avoid a repetition of the VIP lane problems.
I shall speak first to the government amendments. The Bill strengthens existing obligations on conflicts of interest, and I think everyone will agree that it is crucial that the requirements are clear. I am therefore tabling Amendment 116 to Clause 78(4), which will avoid a contracting authority being required to address all circumstances that a reasonable person “might” consider a conflict, a potentially impossible feat. Instead, the Bill will require the authority to address those circumstances the authority believes “likely” to cause a reasonable person to consider there to be a conflict.
I do not accept that this is a problem. The noble Baroness, Lady Bennett, spoke on this issue, and it is always good to have her challenge. This amendment narrows the scope of the obligation, but in a way that makes it deliverable. Sensible, practical ways of doing things are an issue that I have been concerned about, and when I get feedback on these points, we try to make changes.
Part 10 of the Bill allows Ministers to undertake investigations of contracting authorities’ compliance with the Act and issue recommendations that contracting authorities must have regard to when considering how to comply. Without government Amendment 139, Ministers could investigate the House of Commons, the House of Lords and the devolved Administration equivalents, which we believe would create a constitutional impropriety.
Government Amendment 153 ensures that a Minister of the Crown may issue statutory guidance, as a result of a procurement investigation, to Northern Ireland departments only with the consent of a Northern Ireland department, in order to be consistent with the requirement for consent from Welsh Ministers.
The Bill has improved obligations regarding conflicts of interest that apply to all procurement procedures, including direct award. I accept that concern remains over conflicts of interest in Covid procurement, partly because of the history we have all been debating, and these are being addressed by the Government. The concerns expressed from a public procurement perspective are around failings in due diligence and contract management. The noble Lord, Lord Alton, eloquently raised some of these issues on Monday, and I am very glad he found our letter useful. That letter is of course in the Lords Library.
I reassure noble Lords that the Department of Health and Social Care is continuing to investigate contracts and to work through resolution processes with companies that provided PPE which cannot be used. There is a confidentiality issue, as we have heard several times, but I appreciate that there is a desire for more specific information on this. That is why I will be raising it with Health Ministers, as the noble Lord has mentioned. However, I hope I can also reassure the Committee in relation to this group of amendments.
Amendment 72, a key amendment in this group, has been tabled by the noble Lord, Lord Scriven, to help prevent the future use of parliamentary VIP lanes for public contracts. I do not believe the amendment is right or necessary, as I will explain. The Bill contains safeguards ensuring that if a conflict of interest puts a supplier at an unfair advantage, and if steps to mitigate cannot avoid that advantage, the supplier must be excluded. That is laid out clearly in Clause 77(3). Noble Lords should note that this is not at the contracting authority’s discretion; it “must” exclude in those circumstances.
The noble Lord asked what we are doing to prevent VIP lanes in future. Perhaps it is worth reiterating two or three points for the convenience of the Committee. Yes, we will be preventing VIP lanes in future. Our direct award provisions have clear and narrow parameters for use. They include new transparency obligations, requiring contracting authorities to publish a notice before making a direct award, and retain obligations to publish contract details once awarded. So we are getting sunlight and transparency.
Conflicts provisions also make a clear requirement in relation to conflicts assessments which are applicable to direct award. If a situation like Covid-19 were to occur again—I heartily hope it will not—pursuant to Clause 40, the Government could set out in advance what types of direct awards were required to address the situation, meaning advance transparency to the market and suppliers. Finally, the equal treatment obligation in Clauses 2 and 3 will ensure that VIP lanes cannot happen again.
The conflicts of interest provisions in the Bill are intentionally broad to capture any person who influences a decision made by or on behalf of a contracting authority, and cover direct and indirect interests. Furthermore, outside the Procurement Bill, the ministerial and Civil Service codes provide that conflicts of interest must be avoided in the exercise of official duties. Elected officials in local government also need to adhere to the rules around keeping a register of interests—as the noble Lord, Lord Moylan, said, this is also in relation to such things as corruption. As we know, parliamentarians also have to register all their interests.
5 pm
We take all this very seriously. In July 2022, the Cabinet Office published further guidance to Ministers on participation in commercial activity. It is very important to ensure a level playing field for suppliers, to ensure fair and open competition and protect against corruption. That is what the Bill and the associated transformation and training programme will do. The wider publication of notices for all direct awards to be made, including in emergencies, will bring further transparency into the system. I repeat the point only because it is important.
This demonstrates that highlighting this particular potential of parliamentarians, as Amendment 72 does, is not required. It might even be counterproductive, because it suggests that other potential conflicts such as connection with procurement officers, who may know unpublished details of contracts or contract prospects, are less significant to good governance or should be less of a focus, which is just not the case. Parliamentarians can bring helpful commercial insights,
expertise and experience of innovative business practices. It is important that we retain this while implementing a robust procurement framework to ensure that outside interests do not lead to suppliers receiving preferential treatment. I believe our Bill achieves this.
Amendment 113, tabled by the noble Lords, Lord Fox and Lord Scriven, seeks to broaden the range of people in respect of whom conflicts of interest should be identified and to prescribe further actions on suppliers in this area. The provisions in the Bill that specify the people in respect of whom conflicts of interest should be identified are broad. Clause 76 includes anyone acting for or on behalf of the contracting authority in relation to a procurement, including those who influence a decision made by a contracting authority related to the procurement. Therefore, all the persons listed in proposed new paragraphs (a) to (g) of this amendment who have influence in respect of the relevant procurement decision will already be caught by the current provision.
Nobody has raised this, so I will not go into detail, but we had two reports from Nigel Boardman into the circumstances around Covid and VIP lanes. We have accepted those recommendations and made changes, including in Procurement Policy Note 04/21. One point worth making is that a key theme in Boardman and the NAO reports mentioned was the lack of record-keeping and audit around decision-making. The Procurement Bill strengthens the requirements on conflicts of interest compared with the current law. A new duty has been introduced in Clause 78(5) to require contracting authorities to confirm that a “conflicts assessment” has been prepared and then reviewed and revised as necessary when publishing a procurement note. I remember speaking against this at an earlier juncture, but I now draw it to the attention of noble Lords.
As I said on Monday, the Covid inquiry will cover procurement, as the noble Lord, Lord Alton, mentioned, and the distribution of key equipment and supplies such as PPE. It will identify the lessons to be learned and inform future pandemics across the UK, reminding us all of the often tragic events of that period in our lives.
Amendment 97, tabled by the noble Lord, Lord Wallace, refers to the procurement review unit. We all agree that the oversight regime that will be provided by the unit is a critical aspect of the new procurement rules and will be critical to its success. Noble Lords should be assured—I think this is the assurance the noble Lord is seeking—that the Cabinet Office is committed to establishing an effective procurement review unit for this purpose and an advisory panel of sector experts to assist it. I previously gave this assurance in Committee and in the constructive meeting I chaired with noble Lords from across the House with Cabinet Office experts on 15 November.
The key objective of the PRU will be to oversee contracting authorities’ compliance with the new procurement Act. It will also investigate suppliers who may need to be added to the statutory debarment list. We will continue the work of the Public Procurement Review Service in investigating individual complaints.
The noble Lord, Lord Wallace, returned to the argument about the indivisibility of the Crown and why that means that powers are not needed to investigate government departments. This long-held legal principle
provides that the Crown is one legal entity, and it still applies. I have a long note, which I have already communicated to the noble Lord, Lord Wallace. Unless he feels that he will press his amendment, he may prefer that we continue the debate over a cup of tea, given his constitutional expertise—I very much look forward to that.
I have a little time to answer the noble Lord, Lord Aberdare, who has almost become a friend—