Monday 8 February 2021 / 11:29 AM Rachel Reeves

Value and Values: Principles for procurement under a Labour Government – Rachel Reeves

Rachel Reeves MP, Labour’s Shadow Chancellor of the Duchy of Lancaster, delivering a speech on principles for procurement under a Labour Government, said:

The last year has tested our country our communities and those we care about in so many profound ways.

It is has held a mirror up to our country’s resilience and to this government’s priorities.

As the inspirational Captain Tom Moore embodies we have all seen so many extraordinary examples of fortitude, togetherness, bravery, and pride of people pulling together at this difficult time.

From care workers to teaching staff, delivery drivers and everyone working in our NHS, we owe them so much.

Yet we have also witnessed the Tory government mishandle this crisis: too slow to act, with the wrong priorities and a failure to learn vital lessons.

The Government’s own conduct has corroded so much trust. Their most trusted advisors not sticking to their own lockdown rules.

Standards and ethics dismissed. Taxpayer money irresponsibly and unforgivably wasted.

Rich donors given jobs for life in the House of Lords.

Dodgy contracts worth enormous sums of public money awarded to the friends and donors of the Tory party.

And the whole cabinet has gone along with all of it.

Look at the contrast with so many in our own communities, helping each other to get by and giving what they can.

As a country our people are so much better than this government.

Today, I want to set out Labour’s alternative approach based on experience and our values.

This goes beyond a conversation about cronyism and contracts.

But they are a big part of it. It is about how we view public services.

The choice of whether to build up our institutions and assets for the good of all or run them down, privatise and outsource them instead.

Billions has been spent on contracts outsourced to the private sector this last year.

This pandemic required an extraordinary response and particularly in the early months.

Many gave the Government the benefit of the doubt.

But the bad practices of February, March and April 2020 have increased over time.

This is not by accident but by choice.

Having allowed the country’s PPE stockpile to run down and then be dismissive of shortages, now the provision of PPE has become an unseemly gold rush.

How did it get to a point that our country – the sixth richest in the world that once led the world in textile industries, saw our health workers rely on makeshift PPE – even bin liners and donations of goggles from school chemistry labs?

What does that say about our preparedness and resilience as a country?

We should have never gone into the pandemic with such a large reduction in intensive care beds.

And we should never have run down our PPE stockpile. But should have been producing more PPE here in Britain.

Supporting manufacturing jobs, as well as our workers on the frontline. When this crisis came, the Government didn’t know how to protect our key workers.

But instead of turning to British industry, they turned to their contact lists.

Across the country, our amazing British businesses have responded so well to the pandemic, under such difficult circumstances.

But instead of using them, the Government chose to prioritise contracts for friends, donors and a handful of large companies with bad track records.

The list of failures is long:

While so many businesses have struggled to get by, Ayanda Capital was awarded £150 million without competitive tender on PPE that couldn’t even be used in the NHS because it doesn’t meet safety standards.

While this Tory government has denied key workers in our public services a pay rise, they paid 900 management consultants at Deloitte £1,000 a day to work on test and trace, with some elsewhere earning £7,000 per day.

When a US jeweller received £200 million as a middleman for a PPE contract – did no-one in government sit up and ask what on Earth was going on?

This is an unforgiveable waste.

Too many contracts have also gone to those who are friends or donors of the Conservative party.

A former Conservative minister lobbied for Randox, who provided 750,000 defective tests which had to be recalled, all while being paid £100,000 on top of his MP’s salary.

Globus Shetland, a business which has donated £400,000 to the Conservative Party since 2016, received £94 million of PPE contracts.

99% of the Government’s contracts in response to Covid have not gone out to competitive tender.

The taxpayer has paid well over the odds, even for defective stock.

Labour’s own analysis of government data today shows almost £2 billion of public contracts have been awarded to businesses with clear links to the Tory Party without any tender at all.

And it is completely unacceptable that the past performance of private companies delivering public services is not taken into account when awarding so many public contracts.

It hardly incentivizes success. Imagine applying for a job where the employer took no account of any references at all?

You wouldn’t run any other organisation like this.

That’s why in the summer I called for the National Audit Office to investigate the Government’s contracting behaviour.

They lifted the lid on a series of fast-tracking processes which the Government had developed, based on who you know, not what you know, or what you have done.

The Government established a ‘VIP fast lane’ with even less scrutiny.

But despite many questions from Labour, there is no information about which businesses gained access to this fast track, and the Government are yet to reveal details of the companies in this lane, how they were selected, and how much they have benefited.

At the same time decent businesses with experience in their industry have been overlooked by this Tory government.

Proposals prepared, left unread.

While millions of others have struggled during this crisis, friends and donors of the Tory Party have prospered.

Serco didn’t see this pandemic as a crisis but as an opportunity to profit.

Their Chief Executive wrote in a leaked email:

“If it succeeds… it will go a long way in cementing the position of the private-sector companies in the public-sector supply chain.”

This is nothing short of shameful.

When so many have given so much, others were looking at the bottom line and to make a profit.

We know that Serco have received millions in taxpayers’ money but little about what that has been spent on.

What Labour have managed to prise out of government was that Serco had sub-contracted work to 29 companies responsible for 85 per cent of contact tracing.

The Government wouldn’t reveal the names of these subcontracted businesses because they want to defend the company’s commercial sensitivity.

It seems Serco decides what information can be published.

Exactly who is working for whom?

If there is any lesson to be learned look at the successful vaccination roll-out by our NHS and GPs.

Trusted by patients, vital experience, local knowledge and focused on the individual as well as public health.

Outsourced services are not integrated into the fabric of our communities.

Unlike our public services and providers, like charities, many of which offer vital frontline services, outsourced companies have not built up trust over time and lack the vital local knowledge and flexibility required.

Imagine what Test & Trace would have looked like if it was run by our NHS, or at a local level by our communities, rather than a profit maximizing centralised business like Serco.

I deeply regret that the Government didn’t do this like many councils were asking for and as the World Health Organisation recommended as best practice.

If ever there should have been a wake-up call, it was in September last year when SAGE met and reflected on the performance of the Government’s approach to test, track and isolate and said:

“The relatively low levels of engagement with the system coupled with testing delays and likely poor rates of adherence with self-isolation suggests that this system is having a marginal impact on transmission.”

A £22 billion budget.

All that money, only making a marginal difference. The Tory government lost control of spending just as they lost control of the virus.

As we see the Test & Trace shortfall enter the news this week yet again, it’s not too late for the Government to rethink their approach on this crucial tool in our fight against Covid.

It is lazy, wasteful and it makes me so angry.

I’ve seen this before. I co-chaired the inquiry into Carillion’s collapse. It was a house of cards.

The risk didn’t belong with the wealthy executives. The public sector and taxpayers picked up the pieces.

Carillion paid bonuses before they paid workers’ pension contributions, while KPMG signed off their accounts.

I met somebody who had struggled to find work but eventually got an apprenticeship with a subcontractor of Carillion’s.

The day Carillion collapsed, he lost his job and wondered if he ever would work again.

It wasn’t Carillion that paid for their mistakes when this house of cards tumbled but ordinary working people.

The London 2012 Olympic and Paralympic Games were a great success for our country.

They gave us a huge sense of pride in the achievements of our sporting heroes and everyone that made it happen.

I remember watching the Paralympic Games on one hot day in September 2012 with my mum, celebrating as Hannah Cockcroft brought home another gold.

Yet let’s not forget that at the last minute the UK Army had to take over from G4S who had been given a £284 million contract, but couldn’t provide the people they promised.

There is a litany of failures, short-termism from the outsourcing mentality.

And yet the Government carries on handing more and more money to the same companies.

It has come to a head in this crisis.

There is hardly a day that goes by where there isn’t a story about a disturbing government contract during this pandemic. It has caused real public outrage.

That is why last week I wrote to the ten largest beneficiaries of government contracts with links to the Conservative party, asking them to disclose their profits from the Covid contracts, which they were awarded by this government.

We deserve to know how and if friends and donors of the Tory Party have cashed in on a national emergency.

This is no way to run our country, and we need answers.

This government won’t address these issues and rebuild public confidence in how taxpayers’ money is spent, but Labour under Keir Starmer will.

I want to see value for money for every pound of taxpayers money spent.

It must not be wasted.

Our Shadow Chancellor Anneliese Dodds, has already committed the next Labour government to invite the NAO to report annually, on the value for money of government spending.

And she has made it clear that we would respond to that report with clear, tangible commitments to improve the quality of public spending.

The current Government should also accept and act on the National Audit Office’s findings and recommendations for their handling of public contracts during this pandemic.

Today I call on the Government to wind down the use of emergency procurement. Our country is no longer surprised by the presence of Covid-19.

Supply chains have been established, and while there remain challenges and responding with speed stays essential – including with securing our borders – there is not a case for the continued widespread use of emergency measures on procurement.

The Government must immediately commit to publish all outstanding contracts by the end of February.

The current 40 day deadline for publishing contracts should be returned to 30 days.

There should be an assumption against redactions and in favour of uploading all contract documents.

The Cabinet Office’s Contracts Finder should be developed with the interests of transparency and public scrutiny.

These are all ‘bread and butter’ measures which should be implemented now.

And let’s be really clear.

Where contracts do not adequately deliver against the requirements: money should be clawed back, so taxpayers are not out of pocket.

Yet the Cabinet Office doesn’t even have any record of any claw back.

If you deliver dodgy PPE or tests that don’t work we want our money back.

So much of this is about transparency or the lack of it.

The Freedom of Information Act turned 20 years old in November. A product of a Labour Government I am proud of.

It gives citizens the right to understand what is happening in the public institutions developed for and paid for by the people.

Open government and scrutiny leads to better government.

Yet the corporations running so many public services hide behind ‘commercial sensitivity’.

A shadow state has emerged and it is unaccountable to the people.

Even before the pandemic, the Government spent an extraordinary £292bn on outsourcing over a third of all public spending and that level is rising year on year.

The public pays for these contracts yet so often it cannot adequately scrutinise many of them.

This secrecy must stop.

Today I am calling for an expansion of the Freedom of Information Act to be applied to all new public service contracts delivered by private companies.

This should be just the start.

As well as handing out contracts to them the Tory government has also inserted so many friends of ministers and donors into key positions of influence.

This government’s philosophy is so often not appointing the best person for the job but the best friend for the job.

For example why is the Government’s Anti-Corruption champion a sitting Conservative MP?

This role needs to be made entirely independent of party politics right away.

And Labour will do that.

US President Joe Biden’s administration is introducing an integrity and ethics commission. It is time for something similar in the UK.

With the powers and resources to prevent corruption and remove conflicts of interest in all areas of government, outsourcing and appointments.

Improving processes matters but it can only take us so far.

In essence this is about a different vision for the future.

While this Tory government sees public services as a series of commercial opportunities.

Labour’s vision is different. The public service ethos is something to cherish, value and encourage.

It’s the things not written down in a contract which matter when no-one is looking.

I’ve seen this first-hand growing up.

My mum was a special needs teacher in Lewisham and then in Peckham and my father was the Headteacher of a primary school in Bromley.

The hours they devoted to improving the life chances of others remains an inspiration to me.

My sister and I would spend hours in Dad’s school office playing with toys when he was working long days and at weekends to give all children the best educational opportunities in life.

I saw the hours and the commitment my parents put in just as I see it now in schools in my constituency and throughout the country in so many other public services.

Most of all in our hospitals and GP surgeries or local health teams.

Too often this government has exploited goodwill – especially through underfunding.

Teachers and school support staff using their own money to buy equipment for children.

The PPE that was initially provided was so inadequate that healthcare workers were having to buy their own from DIY stores.

How did it come to this?

Doctors, nurses, teachers, school support staff, all of our key workers they deserve a better deal. They deserve a better government.

Labour is ambitious for the United Kingdom and that means being ambitious for all our public services that enhance our lives and provide essential support and services.

It was Nye Bevan who understood that socialism is the language of priorities.

Labour in Wales has put that into practice.

Labour in Government will build on the experiences of the Wellbeing of Future Generations Act passed by the Welsh Government.

And we will learn lessons from around the world – including New Zealand to best ensure our public services can play their full role in shared social missions of our age, such as creating good jobs in every corner of our United Kingdom, ending poverty and stopping climate breakdown.

Public services from schools to hospitals to libraries and parks – they make up the fabric of our nation.

The Tory government’s savage cuts to those services and to councils aren’t just an attack on many of the services which people use the most they are an attack on some of the most accountable public services we have.

Our GPs, neighbourhood police officers, community nurses, as well as voluntary services like tenant groups, youth clubs and nurseries have deep roots in our communities but they need protecting from the Tory axe.

The beating heart of our country is the people who have kept us going through this last year.

That’s why we applauded them.

We weren’t cheering for outsourcing companies. Children weren’t banging pots and pans for management consultants.

They were clapping our key workers.

What our public services mean to our communities runs deep.

But the Government seems indifferent to that.

How do you express the complex value of a public service in a tender against a giant corporation?

You can’t.

And you shouldn’t have to either.

That is why under Keir Starmer’s Labour government we will see the biggest wave of insourcing of public services for a generation.

It is the common-sense conclusion after the failed experiments of outsourcing.

It will save money and ensure better, more responsive, more resilient, accountable local services for all.

From day one of a Labour government we will give public services and local authorities the support they need to bring contracts back in-house as soon as they can.

We will build up the resource, the capacity and expertise of our public services along the way.

Let me give you a clear example.

Take free school meals.

Many of us will have been horrified to recently see the appalling food hampers from companies such as Chartwells meant for children on free school meals.

They were unrecognisable to children in Leeds whose food hampers are produced by the council’s in-house catering services.

They were made for the children of Leeds not as another opportunity for someone to profit from someone else’s poverty.

The challenges facing our country in 2024 will be different from those we face today.

But what is absolutely clear is that we are an over-centralised country with a model which does not work well for everyone.

Our local public services from Bath to Bolton, from Darlington to Dagenham, should be run with our local communities – the families, children, older people using the services around the table.

We need a local first approach and to build up capacity to respond to the issues that matter and prevent crises.

We’ve been trailing this in New Wortley in my constituency.

Bringing together public services, from policing, social work and benefits.

Matching them with the amazing resource and knowledge in our community.

From tenants and residence groups, to the jobs club, to the churches, to the fitness groups, pharmacies and the local care home.

Working alongside each other to transform our local communities and the places that we live.

Just as important is the use of data to drive those innovation and improvements.

Instead of underfunding public services we need to bring them up to date, including harnessing technologies for the way we access our GP Surgeries, university lectures and our libraries.

We are a country of innovators and problem solvers.

If we are to ensure a fair economic recovery beyond this crisis we need to do things differently.

It’s time to take back control of public services.

The pandemic has thrown up huge challenges in terms of our ability to respond as a country.

The Tories have hollowed out so many of our public services while squandering billions on mismanaged private contracts.

They have wasted money and they have wasted potential.

The Tory approach to Covid speaks volumes about their wider attitude.

The public should not be regarded as the problem, but the solution.

Johnson’s Tory government is holding us all back.

It is possible that with the right leadership, vision and values we could come out of this crisis stronger not weaker.

Public services are going to be vital to rebuilding our society and economy.

They will help make Britain the best place to grow up in and grow old in.

Over the years the Tories have sold off so many of our national assets.

Labour wants to rebuild them.

This crisis has been an opportunity for the friends of the Tory Party to profit.

There is no respect for public money which needs to be used for the public good.

We are all paying a high price for their mismanagement and waste.

This current Tory Party is rife with conflicts of interest.

It’s all cheques and no balances.

People expect all of us seeking government to spend their money with care and respect.

And Labour will.

Labour in government will clean up cronyism in contracting through greater transparency, accountability and citizens’ rights.

After years and years of cuts we want to mend and redesign public services facing new challenges.

By cutting down waste from outsourcing we can rebuild their foundations to last.

Our resilience in our community and our country will be strengthened not hollowed.

Public services can help us achieve the big missions we share as a country…. and enhance our everyday lives.

Labour is rebuilding confidence and trust.

That is the new leadership our country needs.