Michael Ellis – 2021 Statement on Public Procurement

The statement made by Michael Ellis, the Paymaster General, in the House of Commons on 6 December 2021.

My noble Friend the Minister of State for Efficiency and Transformation, Lord Agnew Kt, has today made the following written statement:

Public procurement accounts for around a third of all public expenditure. Now that we have left the EU we have a huge opportunity to reform how this money is spent so that it better meets the needs of this country. We can create a new, simpler procurement regime that will reduce costs for business and the public sector by reducing bureaucracy and improving commercial outcomes. Such a huge amount of Government spending must be leveraged to play its part in the UK’s economic recovery from the pandemic and unleash opportunities for small businesses and social enterprises to innovate in public service delivery.

This Government intend to put in place a new regime that will ensure we remain compliant with our international obligations. This includes the World Trade Organisation’s Agreement on Government Procurement which gives British businesses access to £1.3 trillion in public procurement opportunities overseas. This two-way street allows us to maximise value for money for UK taxpayers, whilst ensuring that UK companies are able to compete abroad.

In December 2020 we published the Green Paper on Transforming Public Procurement which set out the proposed new regime. We received over 600 responses with feedback from procurement professionals in central and local government, the education and health sectors, small, medium and large businesses, the charity and social enterprise sectors, academics and procurement lawyers. This, in addition to feedback from a series of workshops attended by almost 1000 stakeholders, provided us with a range of views and insight from contracting authorities, suppliers to the public sector and other interested parties.

The analysis of feedback has been completed and I am now announcing the publication of a detailed document that summarises responses received to the consultation and provides the Government’s response to each individual question. We have considered carefully all of the comments received. Overall, levels of support for the proposed reforms were high and many responses recognised the ambition and breadth of the package of proposals. The majority of answers to individual questions were positive. In many instances, there is no change to the proposals set out in the Green Paper, however in others the Cabinet Office has clarified or amended the proposals based on the consultation feedback. I am grateful for all those who took the time to respond.

In summary the proposals will:

Simplify and consolidate the current legislation as far as possible into a single, uniform regulatory framework, which will remove duplication and make procurement more agile and flexible;

provide a number of sector-specific features where necessary, including tailored rules to better suit defence and security procurement in order to protect our national interests;

ensure that procurement supports local and national priorities, allowing public sector buyers to give more weight to bids that create jobs and opportunities for communities, and support action on climate change;

strengthen the approach to the exclusion of suppliers from procurements, making it simpler, clearer and more focused on suppliers who pose an unacceptable risk;

give much greater transparency throughout the procurement lifecycle;

give new rights for subcontractors experiencing payment delays in public sector supply chains;

put in place a new Procurement Review Unit to oversee the integrity of the public procurement system.

We are working closely with all the devolved Administrations on the development of the new regime. On 18 August 2021, the Welsh Government published a written statement confirming that provision for Welsh contracting authorities is to be made within the UK Government’s Bill.

The publication of the consultation response is a key milestone in delivering the ambition to create a procurement regime that better meets the needs of our country. We are currently finalising the Bill to implement these proposals and intend to introduce it as soon as parliamentary time allows.