PARLIAMENTARY DEBATE
Government Procurement Strategy - 22 April 2026 (Commons/Commons Chamber)
Debate Detail
This Government believe it matters where things are made and who makes them, so we will issue new guidance for all Government Departments to make use of the national security exemptions in the Procurement Act 2023 to direct procurement to serve the national interest. We will start with four sectors critical to our national security: steel, shipbuilding, energy independence and AI. That will give a clear sign that this Labour Government will back British business, and will use both the weight of our procurement budget and the powers in the Procurement Act to do so. We will also take two further steps to back British businesses. First, Government Departments will now be required to confirm whether prime contractors are using UK steel, and if they are not doing so, they will have to explain why. We will also develop a new shipbuilding framework to restrict Government contracts to British firms where this supports our national security interests.
The second principle of these reforms is that procurement should build a fairer economy, and the truth is that for decades, under successive Governments, we have had a policy that essentially adds up to outsourcing by default. Under this Labour Government, the age of outsourcing will end. We will, in line with our manifesto, introduce a public interest test, which will apply to all Government Departments. They will now be required to assess whether a service can be delivered more effectively in-house, and if it cannot, a clear explanation must be published. Departments will also for the first time be required to publish robust insourcing strategies, setting out how, over the medium term, they will build the capacity to make the biggest wave of insourcing in a generation a reality. This marks a step change in how and who our public services are run by and for, and I am proud that this Labour Government are delivering it.
We will also strengthen the role of social value in procurement. Too often, this has become a mere tick-box exercise and a barrier, not an opportunity, for SMEs and start-ups. Working with trade unions, businesses and others, we will create a new definition of social value that will underpin all Government procurement.
The third principle of these reforms is to make the procurement system simpler and fairer. I have heard too many times how the complexity, duplication and endless form-filling of the current system is among the biggest barriers to SMEs and charities, so we will undertake a rapid review of all existing requirements in the procurement system, and we will see which burdens and duplications can be removed. If they are not essential, we will scrap them. We will enforce a “tell us once” principle—
In conclusion, these reforms will back British businesses and workers, build a fair economy, and simplify and open up our Government procurement system. There is still much to do, but this is a big step forward and I am grateful to have had the chance to set it out to the House today.
The Government promised transparency through a new online register of commercial agreements. When precisely will that register be live, and will it be comprehensive from day one? Ministers often speak of backing small business. Will the Minister publish in a single, accessible place every Department’s SME target, its latest outturn and whether it is on or off track? On prompt payment, how many suppliers have actually been excluded from major contracts for failing to meet the required standards? If this strategy is truly about value for money, why have the Government still not resolved the fragmentation, poor-quality frameworks and poor use of data and technology that were identified by the National Audit Office?
On national security, contracting authorities are now required to assess risks not just from prime contractors, but from associated persons and subcontractors. How many procurements have been referred for national security consideration, and how many suppliers have been excluded or challenged as a result? What assurances can the Minister give that public contracts are not still flowing into supply chains with links to hostile states? What assessment has the Minister made of the EU’s emerging “Buy European” policies? Is that not a protectionist barrier by the European Union?
Finally, if social value is now mandatory at 10%, what assessment has been made of the risk that it adds cost and complexity, particularly for SMEs? I know that the House will want clear answers.
First, on SMEs and Department spend, as I say, part of the aim of this package is to support SMEs and ensure that they have a greater chance of winning contracts. We did publish the departmental spends the day before recess. I know that there was a lot going on, but we have published them; they are there. They show an ambitious step forward. I believe that around £7 billion of Government contracts will go to SMEs as a result of those changes. I am proud of what we are doing; it is the first time that the Government have done it. We have helped drive that through and have worked hard on that.
The hon. Member asked about “Buy European”. That is not in conflict with any of our international agreements or, obviously, with our negotiations with the EU that my right hon. Friend the Minister for the Cabinet Office is leading on, and we work closely on that. At the heart of this package is a recognition that we need to use our procurement budget within international law and international regulations to do more to support our industries. That is the right thing to do, and I hope that we can get cross-party support.
The hon. Member asked about social value. Again, I think he was implying that we are making this mandatory. It is already mandatory and it is already weighted at 10% within the contracting system. I am not changing that; what I am saying is that I am changing the definition of social value so that it does more to support communities and to ensure that it really works, so there is no change on that.
The hon. Member asked me a couple of specific questions about national security. I will get back to him if that is okay, but in general terms, I hope that we can get cross-party support on this. The Procurement Act 2023 was passed with cross-party support and was a step forward, but this is the next big step in trying to ensure that we do much more with that budget to support Britain.
On the right hon. Gentleman’s point about union recognition, I am sorry but I missed the very end of his question. There is nothing in the strategy that changes union recognition within the procurement system—that can already be weighted within the social value requirement—but it takes an important step on insourcing for Government Departments. I am incredibly proud that this Government are doing that and it is part of the manifesto on which we were elected.
In Newcastle-under-Lyme, we make excellent British bricks at Ibstock in Chesterton, and I draw the Minister’s attention to my ten-minute rule Bill on British bricks. Will he take the opportunity to confirm today that the changes he has outlined will result in a “British brick first” approach to public contracts as we build the homes, community centres, schools and hospitals that our communities desperately need?
I have a Fox’s Burton’s Companies UK biscuit factory in my constituency, which makes a delicacy known as the Jammie Dodger biscuit. Will this change make it more likely that when I next visit the Minister’s Department, Jammie Dodger biscuits will be available to me?
In response to other hon. Friends, the Minister mentioned food security. Sadly, we do not make Jammie Dodgers in Harlow—maybe we can have a conversation about that—but although it is important that we support our farming industry, I also draw to the Minister’s attention the Lea Valley growers in my constituency, who are glasshouse growers, and Wright’s Flour, which is our flour mill.
If you will permit me, Madam Deputy Speaker, I also want to point out that we should do more to support the voluntary sector. In my opinion, the charitable sector does not get a fair enough crack at this, and the system is weighted against it. In particular, I have in mind a visit I made to a women’s centre in my constituency, in Brighton, a fantastic charity that has been doing amazing work for a long time. It told me that it was spending £30,000 to £35,000 on a procurement process, having to divert resources that should be used to support people in real need in order to compete in a procurement process that is stacked against it because the big companies and the big providers have the money and expertise they need. We cannot defend that kind of status quo, and I will not do so, which is why we are trying to introduce this strategy.
“The Government’s social value model provides opportunities to reward suppliers that recognise a trade union”.—[Official Report, 4 December 2025; Vol. 776, c. 1144.]
Could I seek your guidance as to how I could ask the Minister to confirm those two points together?
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