Chamber
Meeting of the Parliament 17 April 2013
17 Apr 2013 · S4 · Meeting of the Parliament
Item of business
Public Procurement Reform
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 seen as a panacea for all the challenges of a procurement system here in Scotland. No piece of legislation could do that. However, let me rise to the challenge put down by Gordon MacDonald in his opening remarks and offer some thoughts about areas that the Deputy First Minister may wish to consider, either for her bill or just in the form of Government procurement actions.
As the Deputy First Minister knows, the Government and Shetland Islands Council have recently commissioned, through the hub North Scotland Limited—or north hubco—joint venture, a new Anderson high school for Lerwick, which is a very welcome project. I thank her for the answer on the subject that she gave me some weeks ago at question time. The subject raises some fundamental questions about the process of procurement that is now undertaken by these enormous procurement systems in different parts of Scotland.
In the north, which covers my constituency, Miller Construction Services, one of the UK’s largest building companies, is part of the north hubco. It has three directors on the board. We still do not know—and it would be unrealistic and unfair to expect the Deputy First Minister to answer the question today—whether any other company was allowed to tender for the new school. We do not know the price of the school or indeed the other five schools that were procured as part of the same contract. We also do not know whether a number of other small businesses had an opportunity to provide a price and therefore help the value-for-money argument that the Deputy First Minister and other members have rightly made in the debate.
I hope, therefore, that in testing the current systems, never mind introducing new ones, the Government will give some thought to ensuring that there is transparency in the process that it currently operates through its hubco set-up throughout Scotland. I ask no more than that firms should have the chance to price for work.
On the point that many members made—with which I heartily agree—about small businesses merely getting the chance to tender for work, never mind winning it, it is worth pointing out that the north hubco’s architects are a Newcastle-based company called Ryder Architecture. I do not know whether Scottish firms—whether Aberdeen firms or a consortium of Scottish architectural businesses—had an opportunity to win that work or, indeed, even be on the first list. It strikes me that these are areas in which a transparent process would be welcome. That is an important principle, which I commend to the Deputy First Minister in her consideration of the bill.
Elaine Murray rightly raised a number of submissions that we have been given for this debate, a number of which made some important points. The FSB’s briefing points out that only one in six small firms—which it defines as those with a turnover lower than £500,000 a year and typically employing fewer than 10 people, not the 250 people that Elaine Murray rightly drew attention to earlier—had participated in a public tender in the preceding year, and that more than two thirds of small construction firms say that they have opted out of public procurement entirely over the past three years because the costs are prohibitively high. That seems to chime with the remarks of the Deputy First Minister and others about the need to approach the issue from a new angle. Chic Brodie made that point, and I had some sympathy with his observations.
The FSB points out that the overall value of work going to small firms has remained fairly constant for the past six years, which suggests that there is considerable room for improvement and considerable scope for the Government to come forward with some new measures.
The Government’s move towards a single standard PQQ is an important and positive step forward, but there are many other initiatives that could come forward in the procurement bill or by other means that would be welcomed by small businesses. We talk the talk on small businesses, but this bill, and other Government activities, should allow Parliament and the Government to walk the walk as well.
We should not forget the traditional forms of procurement. Dunfermline high school, which was mentioned in the RIAS briefing, has a beautiful new building. It is airy and bright, and the headteacher says that it achieves 98 per cent of what he wanted it to at the design stage. Good things can be done by traditional forms of procurement. That seems to be an important component in the overall argument about value for money.
I welcome the detailed work that the committee, led by Maureen Watt, is doing in this area, but I want to ensure that we do not view the bill as the be-all and end-all, and that the Government brings forward other initiatives that can further the work.
15:45
As the Deputy First Minister knows, the Government and Shetland Islands Council have recently commissioned, through the hub North Scotland Limited—or north hubco—joint venture, a new Anderson high school for Lerwick, which is a very welcome project. I thank her for the answer on the subject that she gave me some weeks ago at question time. The subject raises some fundamental questions about the process of procurement that is now undertaken by these enormous procurement systems in different parts of Scotland.
In the north, which covers my constituency, Miller Construction Services, one of the UK’s largest building companies, is part of the north hubco. It has three directors on the board. We still do not know—and it would be unrealistic and unfair to expect the Deputy First Minister to answer the question today—whether any other company was allowed to tender for the new school. We do not know the price of the school or indeed the other five schools that were procured as part of the same contract. We also do not know whether a number of other small businesses had an opportunity to provide a price and therefore help the value-for-money argument that the Deputy First Minister and other members have rightly made in the debate.
I hope, therefore, that in testing the current systems, never mind introducing new ones, the Government will give some thought to ensuring that there is transparency in the process that it currently operates through its hubco set-up throughout Scotland. I ask no more than that firms should have the chance to price for work.
On the point that many members made—with which I heartily agree—about small businesses merely getting the chance to tender for work, never mind winning it, it is worth pointing out that the north hubco’s architects are a Newcastle-based company called Ryder Architecture. I do not know whether Scottish firms—whether Aberdeen firms or a consortium of Scottish architectural businesses—had an opportunity to win that work or, indeed, even be on the first list. It strikes me that these are areas in which a transparent process would be welcome. That is an important principle, which I commend to the Deputy First Minister in her consideration of the bill.
Elaine Murray rightly raised a number of submissions that we have been given for this debate, a number of which made some important points. The FSB’s briefing points out that only one in six small firms—which it defines as those with a turnover lower than £500,000 a year and typically employing fewer than 10 people, not the 250 people that Elaine Murray rightly drew attention to earlier—had participated in a public tender in the preceding year, and that more than two thirds of small construction firms say that they have opted out of public procurement entirely over the past three years because the costs are prohibitively high. That seems to chime with the remarks of the Deputy First Minister and others about the need to approach the issue from a new angle. Chic Brodie made that point, and I had some sympathy with his observations.
The FSB points out that the overall value of work going to small firms has remained fairly constant for the past six years, which suggests that there is considerable room for improvement and considerable scope for the Government to come forward with some new measures.
The Government’s move towards a single standard PQQ is an important and positive step forward, but there are many other initiatives that could come forward in the procurement bill or by other means that would be welcomed by small businesses. We talk the talk on small businesses, but this bill, and other Government activities, should allow Parliament and the Government to walk the walk as well.
We should not forget the traditional forms of procurement. Dunfermline high school, which was mentioned in the RIAS briefing, has a beautiful new building. It is airy and bright, and the headteacher says that it achieves 98 per cent of what he wanted it to at the design stage. Good things can be done by traditional forms of procurement. That seems to be an important component in the overall argument about value for money.
I welcome the detailed work that the committee, led by Maureen Watt, is doing in this area, but I want to ensure that we do not view the bill as the be-all and end-all, and that the Government brings forward other initiatives that can further the work.
15:45
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...