Local Authority Tenders Bill
Written by Alex Hilton   
Thursday, 02 July 1998 17:00

Friday 3 July “As amended in committee, to be further considered”

 

Wed 18th March: Standing Cttee

 

LOCAL AUTHORITY TENDERS Ms Oona King

    B15)    Commons: (21,151) 1st Reading: 18.6.97 2nd Reading: 16.1.98* Comm(Standing Cttee C): 18.3.98 Rep: 27.3.98 (Deb adj)

                                            (dropped)

27 Mar 1998 : Column 867

Local Authority Tenders Bill

As amended (in the Standing Committee), considered.

Clause 1

Local and other public authority contracts: restriction of duty to exclude non-commercial considerations

2.24 pm

Mr. Eric Forth (Bromley and Chislehurst): I beg to move amendment No. 1, in page 2, leave out lines 8 to 12.

I hope that we can deal with this matter very quickly. The hon. Member for Bethnal Green and Bow (Ms King), the Bill's promoter, has gone to extraordinary lengths to deal with the questions raised by my amendments. I do not want to delay the House; I simply want to raise a matter that bothers me considerably.

The Bill states:

 

"If . . . an order under subsection (1) above would be treated for the purposes of the standing orders of either House of Parliament as a hybrid instrument, it shall proceed in that House as if it were not such an instrument."

Because of the diligence of the promoter of the Bill, it just so happens that the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Greenwich and Woolwich (Mr. Raynsford), wrote to try to reassure me that that would not necessarily happen. For the sake of completeness, I shall read out an extract from his letter so that the details are clear to all. I hope that that is an acceptable way of proceeding.

The letter says:

 

"Your first amendment would remove the provision in the Bill making it unnecessary for an order to follow the hybrid instrument procedure in the House of Lords. In fact, it is unlikely that the Secretary of State will make an order under the proposed power which would be subject to the hybrid instruments procedure. We envisage that any order would affect public authorities, their functions and contracts across the board. However, in the unlikely event that an order were made in respect of an individual local authority, I believe the provision in the Bill is necessary in order to avoid delay in its implementation. Moreover, the requirement in the Bill to obtain the approval of both Houses to a draft order is in itself a sufficient safeguard against any abuse of the power to make an order."

 

The Minister seemed to be saying that it was unlikely that the measure would need to be used. That is a matter of judgment. He then said that he still wanted the power to be available. The promoter explained to me that she thought that it would be necessary to allow the running of pilot schemes to demonstrate what the Bill is intended to do.

In the context, that makes some sense, but whether we should accept the last sentence in that passage from the letter--

 

"the requirement in the Bill to obtain the approval of both Houses to a draft order is in itself a sufficient safeguard against any abuse of the power to make an order"--

as the reassurance offered is a matter of judgment.

Mr. David Maclean (Penrith and The Border): I must confess that I had paid no attention to the point until I saw my right hon. Friend's amendments on the amendment paper, which forced me to read the Bill again.

27 Mar 1998 : Column 868

The provision seems extraordinary to me. In the extensive research that I am aware he conducts on such matters, has my right hon. Friend come across any other examples of clauses in Bills with words to the effect of "Notwithstanding the fact that the Bill", or order, "may be hybrid, it is given carte blanche to be treated as if it were not hybrid", thereby obviating the need to use the procedures of the House?

Mr. Forth: I am not aware of any precedent.

Ms Oona King (Bethnal Green and Bow): The provisions that the right hon. Gentleman seeks to amend are fairly normal in such cases. Recent examples include section 79(4) of the Airports Act 1986, section 34(4) of the Police Act 1996 and section 87(9) of the Environment Act 1995. I shall not continue, but there are several other examples.

Mr. Forth: I am grateful to the promoter of the Bill, who obviously does her homework, too--extraordinarily thoroughly, as my right hon. Friend the Member for Penrith and The Border (Mr. Maclean) can see.

I was about to conclude my remarks on the subject by saying that it is for right hon. and hon. Members to judge whether they should accept the safeguard that the Minister offers us--the need for the approval of both Houses for a draft order. From the Opposition Benches now, looking at the size of the Government's majority and the way in which they use it, at the attitude of Ministers and at the Government's proposals for the upper House, all I can say is that I leave it for others to judge whether the safeguard offered is sufficient.

Mr. Maclean: When a Bill or order is regarded as hybrid, is there not a special procedure whereby representatives of the private interests that may be affected can appear before a special Select Committee to put their case, as happens with private Bills? If the Bill goes ahead with the wording in the clause unchanged, that would not happen in some cases. We shall have to look at the precedents in the Acts that the hon. Member for Bethnal Green and Bow (Ms King) mentioned. I cannot recall their being brought to my attention when they went through the House.

Mr. Forth: I suspect that my right hon. Friend is right. I have received assurances and, thanks to the promoter of the Bill, I met someone from the private sector who assured me that he and the rest of the private sector were fully satisfied that the Bill would help them in tendering and contracting for local government. He did not seem unduly bothered about the provision.

The letter so kindly transmitted to me by the Minister at least attempts to answer the question about hybridity, and I thought that the House should be aware of what it said.

The Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson): My hon. Friend the Member for Bethnal Green and Bow (Ms King) pointed out the number of times that orders have been made. The right hon. Gentleman is obviously concerned that there should be no abuse of power. The Bill requires the approval of both Houses before a

27 Mar 1998 : Column 869

draft order can be made, so that is a sufficient safeguard against any abuse of power. I therefore ask the right hon. Gentleman not to press the amendment.

Mr. Forth: In view of the letter from the Under-Secretary and what the Minister has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2

Short title, commencement and extent

Mr. Forth: I beg to move amendment No. 2, in page 2, line 19, leave out 'two' and insert 'six'.

I tabled the amendment because I was uneasy about the two-month implementation period in the Bill--

It being half-past Two o'clock, further consideration of the Bill stood adjourned.

Bill to be further considered on Friday 24 April.

27 Mar 1998 : Column 870

 

 

Local Authority Tenders Bill


 

Standing Committee C

Wednesday 18 March 1998

[Mrs. Ray Michie in the Chair]

Local Authority Tenders Bill

10.30 am

The Chairman: I remind the Committee that adequate notice should be given of amendments. As a general rule, I do not intend to call starred amendments.

Clause 1

Local and other public authority contracts: restriction of duty to disregard non-commercial matters

Ms Oona King (Bethnal Green and Bow): I beg to move amendment No. 1, in page 1, line 5, leave out from beginning to end of line 8 on page 2 and insert

". (1) The Local Government Act 1988 is amended as follows.

(2) In section 17(9) (provisions to which duty to exclude non-commercial considerations in relation to public authority contracts is subject) after the word "below" there is inserted `and orders under section 19(1) below'.

(3) For section 19(1) to (3) (power to add to matters which are non-commercial matters for the purposes of section 17) there is substituted

`(1) The Secretary of State may, by order made by statutory instrument, provide for matters specified in the order to cease to be, or to be, non-commercial matters for the purposes of section 17 above or for the purposes of that section as it applies for particular purposes.

(2) An order under subsection (1) above may, in particular, provide for a matter specified in the order to cease to be, or to be, a non-commercial matter for the purposes of section 17 above as it applies in relation to public authorities, functions or contracts of a specified description or specified public authorities, functions or contracts.

(2A) No provision shall be made under subsection (1) above for a matter to be a non-commercial matter unless the matter appears to the Secretary of State to be irrelevant to the commercial purposes of public supply or works contracts of any description.

(2B) An order under subsection (1) above may make provision for the same purposes as section 17(6) and (7) above in relation to a matter which is to be a non-commercial matter by virtue of the order.

(3) An order under subsection (1) above may

(a) make different provision for different cases or descriptions of case (including different provision for different areas),

(b) include such supplementary, incidental, consequential or transitional provisions as appear to the Secretary of State to be necessary or expedient (including provisions amending, repealing or otherwise modifying any provision of this Part).'

(4) After section 19(4) there is inserted

`(4A) If, apart from this subsection, an order under subsection (1) above would be treated for the purposes of the standing orders of either House of Parliament as a hybrid instrument, it shall proceed in that House as if it were not such an instrument.'

(5) After section 19(9) there is inserted

`(9A) A public authority, in exercising any function whose exercise is affected by an order under subsection (1) above, shall have regard to any guidance issued by the Secretary of State in relation to the exercise of the function.'.".

The Bill relates substantially to securing high-quality public services. My deliberations on the matter were influenced significantly by the joint opinion of the private sector, local government and the trade unions. I wish first to acknowledge the remarkable amount of constructive dialogue that has been brought to the debate by the social partners. It centres on finding a new way forward, new politics and a new employment agenda that are based on a co-operative relationship between the private and public sectors.

The turf warfare of the 1980s has come to an end. It was not good for employees or business. I am delighted that we can now work together and pave the way for best value. The Bill represents an interim measure, one called for by the Confederation of British Industry, private contractors' associations, the trade unions and local government. A wide spectrum of problems has been identified with the current compulsory competitive tendering regime. Although consensus for change is clear, any changes must comply with the social partners' agreed criteria of being clear and workable, but not a barrier to business.

The Bill is an enabling measure. It amends on an interim basis part II of the Local Government Act 1988. It will permit the Secretary of State, where necessary, to allow local authorities to take proper account of quality, equality and work force matters in the tendering process. It represents a new, sensible approach to public procurement, which is based on the politics of partnership. I thank my colleagues on both sides of the Committee for their huge support. I am particularly grateful to the Government for having accepted the thrust of the Bill and for suggesting such a sensible amendment, which will allow us to move forward to the next stage.

The Minister for Local Government and Housing (Ms Hilary Armstrong): I congratulate my hon. Friend the Member for Bethnal Green and Bow (Ms King) on presenting the Bill. It concerns an issue that has been much discussed among the social partners long before they got together to see how they could move things on practically. It is an issue about which people have been concerned and the Government have been happy to co-operate to ensure that the Bill is a measure that we can support and one that can enable the social partners to work together to form a consensus on how to proceed.

The amendment would not affect the purpose of the Bill, which is to enable the Secretary of State to specify by order matters that would cease to be non-commercial matters for the purposes of section 17 of the Local Government Act 1988. It would make the proposed new powers sit more easily with the provisions of that Act. That will be done by placing the amendment at section 19 of the Act, where there is already provision for the Secretary of State to add to the categories of non-commercial matters. I am therefore happy to support the amendment.

The Bill is a timely and welcome contribution to the Government's work in updating the statutory framework within which local government has to operate. Part II of the Local Government Act 1988 was intended to prevent local authorities from introducing political or other irrelevant considerations into the contractual process. Few could argue with the intent, but the practice has often strained good tendering procedures rather than eased them. The Government believe that value for money in procurement should always be the paramount consideration, but best procurement practice has moved on since the 1980s. We want to ensure that local authorities can work with the best of the private sector, but some have argued that part II of the 1988 Act is an obstacle to that.

The Government are embarking on a radical programme of reform. We recently published our proposals on best value, and I assure the Committee that we shall use the Bill's provisions in the furtherance of best value. If, through the best-value review process, local authorities succeed in interesting others in alternative ways of providing services, they may seek to provide services on a partnership basis.

Part II of the 1988 Act is sometimes seen as an obstacle to achieving more effective collaboration between local authorities and the private sector. If a consensus emerges on how part II of the 1988 Act might be changed to facilitate better working arrangements, we would consider it. If the case on best value was made by the pilot authorities, there might be merit in relaxing the provisions of part II to assist us in deciding what might be the ultimate best-value framework.

Representatives of the private sector, local government and trade unions have been working together to secure a consensus on what needs to be done. It is an important way of moving forward, which the Government are seeking to develop in many areas. It is sensible to enable changes to be made to legislation once agreement is reached on the way forward. We would wish to build on consensus when proceeding with draft orders made under section 19 of the 1988 Act as it would be amended by the Bill. Indeed, we shall not propose such orders unless and until we are sure that the key players are agreed on what needs to be done and that the proposed changes will promote an efficient and effective tendering process.

Mrs. Margaret Ewing (Moray): I had not intended to speak, but as I am the only Member on the Opposition Benches, I feel that I should comment.

I welcome the Bill because of the flexibility that it would achieve. We all see the problems that our localauthorities sometimes face in providing facilities. The Bill will be a good enabling factor. For instance, Moray has been complimented on the fact that it has involved in child care both the private sector and the voluntary sector. We are all looking at that particular phase of development in the provision and delivery of services in our own areas.

I congratulate the hon. Member for Bethnal Green and Bow on her Bill and for the very positive way in which it was moved. I feel sure that the whole Committee will accept it.

Amendment agreed to.

Clause 1, as amended, ordered to stand part of the Bill.

Clause 2

Short title and extent

Amendment made: No. 2, in page 2, line 9, at end insert

"() This Act comes into force at the end of the period of two months beginning with the day on which it is passed.". [Ms Oona King.]

Clause 2, as amended, ordered to stand part of the Bill.

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Ms Oona King: Thank you, Mrs. Michie, for chairing the Committee and for guiding me through the procedure. Once again, I thank hon. Members on both sides for their support, which I appreciate. I also thank the London Housing Unit, which first brought the matter to my attention; the Government officials who helped; and my assistant for all his hard work.

The Chairman: I add my congratulations to the hon. Lady for bringing forward the Bill in such a cordial and pleasant manner.

Question put and agreed to.

Bill, as amended, to be reported.

Committee rose at nineteen minutes to Eleven o'clock.

The following Members attended the Committee:
Michie, Mrs. Ray (Chairman)
Armstrong, Hilary
Cryer, Mr. John
Davies, Mr. Geraint
Ewing, Mrs.
Fitzpatrick, Mr.
King, Ms Oona
Kirkbride, Miss
Laing, Mrs.
Merron, Gillian
Pike, Mr.
Sawford, Mr.
Twigg, Mr. Stephen
Woolas, Mr.

 

 

LOCAL AUTHORITY TENDERS BILL

3rd July 1998

Order read for consideration (as amended in the Standing Committee).

Hon. Members: Object.

Mr. Deputy Speaker: Further consideration what day?

Ms Oona King (Bethnal Green and Bow): On a point of order, Mr. Deputy Speaker. In the light of the history of the Bill, which was previously objected to accidentally by the right hon. Members for Bromley and Chislehurst (Mr. Forth) and for Penrith and The Border (Mr. Maclean), who were gracious enough to acknowledge the fact, and given that the former put it in Hansard that I had gone to extraordinary lengths to deal with the questions raised, would it be in order to ask whether the objection was a mistake, especially as the Bill has the full backing of the Confederation of British Industry?

Mr. Deputy Speaker: Order. I regret to say to the hon. Lady that an objection has been taken. Further consideration what day?

Ms King: Friday 6 November.

Further consideration deferred till Friday 6 November.

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