Chamber
Meeting of the Parliament 17 April 2013
17 Apr 2013 · S4 · Meeting of the Parliament
Item of business
Public Procurement Reform
Thank you for that reassurance, Presiding Officer.
I welcome the fact that procurement is on the agenda. Although we all accept that there is definitely room for improvement, we can also accept that progress has been made in recent years. For example, there has been an increase in the number of contracts being won by small businesses: 82 per cent of winning businesses were SMEs, and 68 per cent, which is up 12 per cent from 2010, were Scottish SMEs. I take Elaine Murray’s point that the definition of an SME can be quite wide. That is correct and we need to help some of those microbusinesses as well.
By contrast, the United Kingdom has not been doing so well, and is lagging behind the Netherlands, Germany and France in terms of procurement from the SME sector. Once again, we see that the UK has proved that it is being less than successful.
Of course, as has already been mentioned, the European Union is a factor in all that and we can expect some of the anti-Europe brigade to start complaining. However, we should remember that the EU aims for a level playing field and a small country such as Scotland stands to gain more than we would lose by our companies exporting more and working more overseas.
Again, as already has been mentioned, Jim and Margaret Cuthbert came to the Finance Committee and talked about how other countries are often better at breaking down contracts into smaller and more manageable pieces for social enterprises and SMEs. Perhaps there is scope for us to learn from some of our EU friends.
The concept of best value is good and I suspect that others will mention it. In my experience, best value meant that we were allowed to look at more considerations than just the price than we were when using the previous way, in which we looked only at the price. I note the reservations of Oxfam and the SCVO that there might be a tendency to slip back to looking only at the price; that is not a fair definition of best value and it is not what it is meant to do. As a councillor in Glasgow City Council, on a number of occasions I saw awards being made for contracts that were not at the lowest price. As opposition members, we questioned that, but there was often a good explanation as to why. We really wanted quality and that outweighed any saving, as is absolutely right.
Perhaps Oxfam is slightly naive if it thinks that we can forget about money and price altogether; we need to strike a balance. The SCVO is right to say that £9 billion is not just a honey pot for business. If a construction company that is building for the public sector is different from a construction company that is building for Morrisons or Tesco or any other supermarket, we should expect higher standards in all sorts of ways, and for there to be a benefit to the wider local community.
Of course, we do not want to chase such organisations away. Again, when I was a Glasgow councillor I saw that, in many cases, Glasgow was competing with Lanarkshire and if the city imposed too many onerous conditions, businesses would go to another local authority. As the cabinet secretary said in her speech, balance is needed. It must be advantageous to do business in Scotland, but when we look at the current balance, we sometimes feel that there is too much benefit to the private sector and not enough to the community.
We had a very good briefing from the Scottish Catholic International Aid Fund, which quotes from the Scottish Government’s 2009 sustainable procurement action plan, which says that procurement is
“A process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis and generates benefits not only to the organisation, but also to society, the economy and the environment”.
SCIAF also makes the point that ethically traded goods and services need not cost more and might provide better value for money. It referred to the European Court of Justice’s confirmation in 2012 that fair-trade criteria can be used in public procurement requests as long as the request refers to the criteria underlying the label and not to the label itself. It strikes me that there is something fundamentally wrong in our enforcing a minimum wage on producers in this country but not in respect of imports from elsewhere. That is not to say that a minimum wage level should be the same in every country around the world, but it should be appropriate for costs in that particular country. That is fundamentally what fair trade is all about.
Oxfam also referred to inequality in Scotland, the UK and overseas, and the socioeconomic duty, which is one of the characteristics of the Equality Act 2010.
I want to mention one or two examples in which there is room for improvement. A little two-person business in my constituency that made rubber stamps—the kind that are still quite widely used on paper—lost out on its contract to supply the local school because a big national contract came in. Another local business that I visited wrote to me to say:
“We carry out ... work on a regular basis with the NHS, Scottish Prison service, Clydesdale Bank, Mecca Bingo, to name a few but we don’t get an opportunity to cost any ... contracts whatsoever with Glasgow City Council. We have tried tirelessly to get on their Supplier list with no success and no feedback as to why we have been unsuccessful.”
In advice services the other year, Citizens Advice Scotland and others were competing throughout Glasgow, which was a big mistake. Finally, as Patrick Harvie has said in the past, here at Holyrood we are drinking foreign wine when we could be drinking Scottish beer.
I welcome the fact that procurement is on the agenda. Although we all accept that there is definitely room for improvement, we can also accept that progress has been made in recent years. For example, there has been an increase in the number of contracts being won by small businesses: 82 per cent of winning businesses were SMEs, and 68 per cent, which is up 12 per cent from 2010, were Scottish SMEs. I take Elaine Murray’s point that the definition of an SME can be quite wide. That is correct and we need to help some of those microbusinesses as well.
By contrast, the United Kingdom has not been doing so well, and is lagging behind the Netherlands, Germany and France in terms of procurement from the SME sector. Once again, we see that the UK has proved that it is being less than successful.
Of course, as has already been mentioned, the European Union is a factor in all that and we can expect some of the anti-Europe brigade to start complaining. However, we should remember that the EU aims for a level playing field and a small country such as Scotland stands to gain more than we would lose by our companies exporting more and working more overseas.
Again, as already has been mentioned, Jim and Margaret Cuthbert came to the Finance Committee and talked about how other countries are often better at breaking down contracts into smaller and more manageable pieces for social enterprises and SMEs. Perhaps there is scope for us to learn from some of our EU friends.
The concept of best value is good and I suspect that others will mention it. In my experience, best value meant that we were allowed to look at more considerations than just the price than we were when using the previous way, in which we looked only at the price. I note the reservations of Oxfam and the SCVO that there might be a tendency to slip back to looking only at the price; that is not a fair definition of best value and it is not what it is meant to do. As a councillor in Glasgow City Council, on a number of occasions I saw awards being made for contracts that were not at the lowest price. As opposition members, we questioned that, but there was often a good explanation as to why. We really wanted quality and that outweighed any saving, as is absolutely right.
Perhaps Oxfam is slightly naive if it thinks that we can forget about money and price altogether; we need to strike a balance. The SCVO is right to say that £9 billion is not just a honey pot for business. If a construction company that is building for the public sector is different from a construction company that is building for Morrisons or Tesco or any other supermarket, we should expect higher standards in all sorts of ways, and for there to be a benefit to the wider local community.
Of course, we do not want to chase such organisations away. Again, when I was a Glasgow councillor I saw that, in many cases, Glasgow was competing with Lanarkshire and if the city imposed too many onerous conditions, businesses would go to another local authority. As the cabinet secretary said in her speech, balance is needed. It must be advantageous to do business in Scotland, but when we look at the current balance, we sometimes feel that there is too much benefit to the private sector and not enough to the community.
We had a very good briefing from the Scottish Catholic International Aid Fund, which quotes from the Scottish Government’s 2009 sustainable procurement action plan, which says that procurement is
“A process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis and generates benefits not only to the organisation, but also to society, the economy and the environment”.
SCIAF also makes the point that ethically traded goods and services need not cost more and might provide better value for money. It referred to the European Court of Justice’s confirmation in 2012 that fair-trade criteria can be used in public procurement requests as long as the request refers to the criteria underlying the label and not to the label itself. It strikes me that there is something fundamentally wrong in our enforcing a minimum wage on producers in this country but not in respect of imports from elsewhere. That is not to say that a minimum wage level should be the same in every country around the world, but it should be appropriate for costs in that particular country. That is fundamentally what fair trade is all about.
Oxfam also referred to inequality in Scotland, the UK and overseas, and the socioeconomic duty, which is one of the characteristics of the Equality Act 2010.
I want to mention one or two examples in which there is room for improvement. A little two-person business in my constituency that made rubber stamps—the kind that are still quite widely used on paper—lost out on its contract to supply the local school because a big national contract came in. Another local business that I visited wrote to me to say:
“We carry out ... work on a regular basis with the NHS, Scottish Prison service, Clydesdale Bank, Mecca Bingo, to name a few but we don’t get an opportunity to cost any ... contracts whatsoever with Glasgow City Council. We have tried tirelessly to get on their Supplier list with no success and no feedback as to why we have been unsuccessful.”
In advice services the other year, Citizens Advice Scotland and others were competing throughout Glasgow, which was a big mistake. Finally, as Patrick Harvie has said in the past, here at Holyrood we are drinking foreign wine when we could be drinking Scottish beer.
In the same item of business
The Deputy Presiding Officer (John Scott)
Con
The next item of business is a debate on motion S4M-06153, in the name of Maureen Watt, on behalf of the Infrastructure and Capital Investment Committee, on ...
Gordon MacDonald (Edinburgh Pentlands) (SNP)
SNP
It is a pleasure to open this debate on public procurement on behalf of the Infrastructure and Capital Investment Committee. As members know, the Scottish Go...
John Mason (Glasgow Shettleston) (SNP)
SNP
We sometimes hear criticism of the EU, for a variety of reasons. Will the member confirm what I think that he just said, which is that the EU gives Scottish ...
Gordon MacDonald
SNP
I agree on that point. The EU-wide framework opens up opportunities for Scottish companies, because the scale of procurement by the public sector across the ...
The Deputy Presiding Officer
Con
We are extraordinarily tight for time today. I call on Nicola Sturgeon, who has up to 10 minutes.14:50
The Deputy First Minister and Cabinet Secretary for Infrastructure, Investment and Cities (Nicola Sturgeon)
SNP
As Gordon MacDonald has just said, Scottish public bodies spend more than £9 billion of taxpayers’ money every year, so it stands to reason that the decision...
Patrick Harvie (Glasgow) (Green)
Green
On a question of timing, does the minister intend to wait until the EU process of reform is further down the line before introducing a bill here, or does she...
Nicola Sturgeon
SNP
We hope to introduce the procurement reform bill before the summer recess. We require to give ourselves comfort that what we propose in that bill will be wit...
Elaine Murray (Dumfriesshire) (Lab)
Lab
I suspect that procurement as a topic for debate may not have set many members’ pulses racing, but I am encouraged to hear that the debate is tightly subscri...
John Mason
SNP
Will Elaine Murray give way on that point?
Elaine Murray
Lab
Sorry, I have only 10 seconds.We should not subsidise low pay in other sectors. I know that my colleague Kezia Dugdale is considering taking forward John Par...
The Deputy Presiding Officer
Con
You must close, please.
Elaine Murray
Lab
Workers’ rights must be respected. The cabinet secretary also made some good points about the use of community benefit clauses.I look forward to the introduc...
Mary Scanlon (Highlands and Islands) (Con)
Con
The Conservatives, too, welcome today’s debate, which provides an opportunity to bring forward some ideas.The motion in the name of Maureen Watt states that ...
John Mason
SNP
Does Mary Scanlon accept that one reason why we have limited resources is that we have tied up funds in private finance initiative projects, which have ended...
Mary Scanlon
Con
I am not sure that that was a positive contribution, which I am hoping to make.More recently, we received the report “Improving community planning in Scotlan...
The Deputy Presiding Officer
Con
That is much appreciated. We move to the open debate.15:13
Chic Brodie (South Scotland) (SNP)
SNP
I am delighted to speak in the debate, and my speech is built on the foundations that were laid by the Christie commission report to which Mary Scanlon has j...
Kevin Stewart (Aberdeen Central) (SNP)
SNP
I agree that there should be encouragement, but currently, the European Union legislation and a test case—Dirk Rüffert v Land Niedersachsen—show that we cann...
Chic Brodie
SNP
Of course, I agree with the latter point. I will come to the former in a minute.On the living wage and public sector contracts, it is anathema to me that we ...
The Deputy Presiding Officer
Con
The member’s keeping to time is much appreciated.15:19
Margaret McCulloch (Central Scotland) (Lab)
Lab
I welcome the opportunity to debate the proposed procurement reform bill and the wider procurement agenda, which is—I am glad to say—at last being given the ...
Linda Fabiani (East Kilbride) (SNP)
SNP
I thank the Infrastructure and Capital Investment Committee for holding this debate. It is an excellent idea to ask—as the motion states—for“members’ views o...
The Deputy Presiding Officer (Elaine Smith)
Lab
Thank you. Before I call John Mason, I just want to say that the building work is not supposed to be taking place while Parliament is sitting, so we are havi...
John Mason (Glasgow Shettleston) (SNP)
SNP
Thank you for that reassurance, Presiding Officer.I welcome the fact that procurement is on the agenda. Although we all accept that there is definitely room ...
The Deputy Presiding Officer
Lab
We are very tight for time.15:37
Tavish Scott (Shetland Islands) (LD)
LD
I, too, declare an interest as an honorary fellow of RIAS. I very much agree with Linda Fabiani’s point that the Deputy First Minister’s bill should not be s...
Kevin Stewart (Aberdeen Central) (SNP)
SNP
I thank the Infrastructure and Capital Investment Committee for giving us this opportunity to debate this important issue today. For many, this issue is not ...
Anne McTaggart (Glasgow) (Lab)
Lab
In these tough economic circumstances, it is right that the Parliament takes time to scrutinise how Scotland uses its buying power to promote social and econ...
Nicola Sturgeon
SNP
In the interests of fairness, will the member acknowledge that it is not that we do not support legislation for a living wage but that EU legislation does no...