PARLIAMENTARY DEBATE
Public Procurement Reform - 5 December 2024 (Commons/Commons Chamber)

I spent the last few weeks meeting small and medium-sized enterprises, voluntary and community sector organisations, wider businesses and contracting authorities to discuss how we ensure that the approximately £300 billion that is spent each year on public sector procurement delivers for our communities. With this Government, procurement will deliver value for money, better public services and our national missions. The Procurement Act 2023 commences in February 2025, creating a simpler, more flexible procurement system under- pinned by a new mission-led national procurement policy statement to ensure that public procurement delivers on the Government’s missions.

Small businesses are a crucial part of the economy in Cumbernauld and Kirkintilloch. There are huge opportunities to help them further, and one way of doing that is to work across the public sector and with local authorities—in my case, North Lanarkshire and East Dunbartonshire councils, with contracts as big as the redevelopment of Cumbernauld town centre. Will the Minister work with local authorities and the Scottish Government to help more small businesses to bid successfully for contracts?

It is critical that we open up public procurement to small businesses. As I have said, £300 billion is a huge amount of public money, and the opportunity to ensure that small and medium-sized enterprises have access to that is also critical. As my hon. Friend said, SMEs are rooted in our communities, and provide local, often good-quality jobs.

We are taking action now to crack down on late payments that hit the cash flow of small businesses. The Chancellor announced recently that companies bidding for large Government contracts would be excluded from the procurement process if they did not pay their own suppliers within an average of 45 days.

The last Government promised to give more contracts through procurement to small businesses, but failed to do so for 14 years. Instead, they chose to use Government contracting to support their mates through covid. Will the Minister confirm that this Government will use the power of Government spending to contract directly with small businesses to support local companies and economies across the country, in stark contrast to the Conservative party’s enrichment of their mates?

As I have said, we will work hard to ensure that public contracts are supporting small businesses. I have spent a lot of time talking to them about how we can do that through the new public procurement policy and the measures in the policy statement. This week the Chancellor announced the appointment of a new covid corruption commissioner, who will be taking action to recover public money.

When our public services are facing so much strain and desperately need rebuilding, it is critical that we cut waste and deliver value for money. Under the last Government the procurement system too often failed to drive that efficiency, as was shown by the shocking levels of fraud and waste during the pandemic. We will bring new transparency to public sector procurement, along with a relentless focus on fraud.

Gross spending on public procurement was £400 billion last year. What is the Government’s precise target for delivering greater savings from that budget?

That £400 billion is an enormous amount of money, and we need to ensure that it is going into growth, delivering for our communities and SMEs, and delivering on our missions. We are determined to act on procurement and reduce inefficiency, and we will provide further information about that in February. We cannot take lessons from the Conservative party about cutting waste inefficiencies, given that they oversaw gross mismanagement—Lord Agnew himself referred to “schoolboy errors”—in the delivery of procurement for this country.

The focus on public procurement will be welcomed by SMEs in the cyber-security sector in my constituency. CyNam has thousands of members, and when I talk to its SMEs they tell me that there is a real risk of our losing talent in the start-ups community to cities abroad such as Lisbon and Toronto. Can the Minister confirm that the steps being taken by the Government are good news for SMEs and Cynam?

As I have said, I firmly believe that we need to support SMEs, and I should be more than happy to speak to those in the hon. Member’s constituency and discuss the opportunities that are available. There is so much innovation and talent in this country. We need to ensure that public sector money is supporting our growth mission, and supporting good businesses in communities such as those in his constituency.

I thank the Minister for her answers. I have a very simple question: what steps have been taken to ensure that we have better procurement measures domestically in the United Kingdom and the devolved nations, particularly Northern Ireland, as opposed to relying on international partners to provide or deliver goods?

Through our procurement regime, we are determined to support small businesses, which are often locally rooted. We will continue to do that, while taking account of our trade obligations.

I call the shadow Minister.

I am delighted to meet the Minister across the Dispatch Box. I have also been meeting many SMEs in the aftermath of the Budget. The impact of the Government’s decision to raise national insurance on many indirect providers of public services, such as GPs and hospices, appears not to have been fully factored into the Government’s workings at the time of the Budget. Now that the Government have had over a month to do the figures, what will be the impact of the national insurance job tax on the cost of public procurement, to the nearest, say, £1 billion?

I welcome the hon. Member to their place and look forward to meeting them across the Dispatch Box. Unfortunately, the last Government left this country in a terrible place, with public services in crisis. I was previously a council leader, and every single day I saw the absolute strain on our public services. People were waiting up to 12 hours for ambulances, which sometimes did not turn up. We have had to take action to invest in our public services in order to deliver growth. Through our procurement regime, we are already taking action to support SMEs, to ensure that money is not lost and to ensure that suppliers are paid quickly. I will set out more to the House in February—

Order. We have to get through the list. Give me a chance to get through it—we are only on question 6.