Public Accounts and Public Administration Committee

Bore da. Welcome back to this meeting of the Public Accounts and Public Administration Committee. On 12 July, the Business Committee agreed, in accordance with Standing Order 29.41, to invite the Public Accounts and Public Administration Committee and the Legislation, Justice and Constitution Committee to consider and report on the supplementary legislative consent memorandum on the Procurement Bill. As part of the committee's consideration of this legislative consent motion, or LCM, we agreed to write a joint letter, with the Legislation, Justice and Constitution Committee, to the Minister, to raise a number of queries regarding the LCM. We also agreed to hold an oral evidence session with the Minister for Finance and Local Government to these issues further before we need to report our views on the LCM by now the amended date of 24 November. So, croeso, welcome, witnesses, to the meeting. I'd be grateful if, for the record, you could begin by stating your names and roles.

Shall I start and then ask officials to introduce themselves? I'm Rebecca Evans, Minister for Finance and Local Government.

John Coyne, director of commercial and procurement.

Thank you.

Tracey Mayes, head of procurement reform, Welsh Government.

Diolch.

And Emma Cordingley, I'm a senior lawyer at Welsh Government.

Diolch. Thank you. I'll begin with the first question and then other committee members will take up the questioning following that. I'll begin by exploring the Welsh Government's decision not to bring forward a wider procurement Bill covering the scope of both the UK Procurement Bill and the Social Partnership and Public Procurement (Wales) Bill it itself is proposing. So, how were the benefits of pursuing a single Bill considered in the Minister's decision-making process? And could she please expand on why she felt that bringing forward a wider procurement Bill would have shifted the focus away from social partnerships?

Thank you for the question and the opportunity to speak to committee today. So, yes, I'm happy to address that particular question. I think that it comes down to a clear fact, really, that the two pieces of legislation are seeking to address two quite different things. The Procurement Bill focuses on the processes that underpin procurement, and they will help to have that practical consistency of approach across England, Wales and Northern Ireland, whereas our Social Partnership and Public Procurement (Wales) Bill focuses very much on our policy aims and what we want to achieve through the activities of procurement.

We have considered the impact of that choice and the choice not to go with one larger Bill on both buyers and suppliers, and in both cases, I think that there are clear benefits for having that wider UK approach, or UK Government-led approach, to the nuts and bolts, if you like, of procurement, whilst at the same time procuring ourselves in Wales for the values that we want to see driven through procurement. And I can assure committee that we wouldn't be looking to UK Government to legislate in the space of values, because our values are different in terms of what we would want to achieve through procurement. But we're very much looking at the practicalities, and we see clear benefits, I think, for both buyers and suppliers in that joined-up approach. And it's something that buyers and suppliers themselves actually told us that they wanted to achieve. So, when the UK Government originally published its Green Paper, we did some quite in-depth work with buyers and suppliers in order to understand their views of the Green Paper, what they wanted to achieve from the future of public procurement here in Wales, and their strong preference, which was confirmed, then, through a survey that we undertook afterwards, was that we should go with the UK Government on the nuts and bolts but then legislate ourselves in terms of the values that we want to achieve. I'll check if I've missed anything there. I know that officials were very closely involved with those discussions.

Yes. There was a general view that, if we could go with UK Government and have some consistency across the piece between Northern Ireland, England and Wales, that would be better, especially for cross-border procurement and for businesses where they are going to be working in England and in Wales, because there is such a lot of activity that goes across border, and we don't really want to make a different process. And Wales has only got about 5 per cent of the procurement spend of the whole of the UK, and we would be concerned that, if we had totally different process than the UK, that could adversely impact on the willingness of suppliers to actually work in Wales.

I think there's no difference, really, in what we would want to seek to achieve, and what the UK Government would want to seek to achieve in terms of how we do procurement. In terms of support for Welsh SMEs, for example, we see that very much reflected in the UK Government's piece of legislation, because there will be simplified bidding processes that will make it easier and more efficient for our Welsh suppliers to bid. We'll see improved transparency measures, meaning that suppliers will see all opportunities, including those pipelines of future opportunities, in one place. And we think that that will help innovative suppliers, particularly, to gear up to compete for future public contracts and for SMEs to form consortia if they see opportunities to do that, because SMEs often tell us that they feel too small to be bidding for contracts, but, actually, if they can see what's coming down in that transparent pipeline, they'll be able to work more collectively together. So, in terms of what the UK Government's seeking to achieve through the Bill, I think we're in the same place there.

Mike.

Yes. I think you're absolutely right that SMEs find it very difficult to bid for contracts, but that's because of the size of the contract. I think that one of the things that would make life easier for small and medium-sized enterprises is to make contracts smaller. That's why, when you put out those very large contracts from the Welsh Government, it's only very large organisations that are able to bid for it, and the others then end up being sub-contractors and the profit goes to places across Europe.

I think the increased transparency that the UK Government's Bill will bring will help in terms of that kind of ability of SMEs to work collaboratively, but I'll invite Tracey in to say a little bit more.

We already encourage Welsh public sector organisations to divide their tenders, where possible, into smaller lots, so it is more feasible for SMEs to do it. I totally accept that we've got a long way to go, but I think we are encouraging the Welsh public sector to actually break stuff into lots. The Welsh public policy statement, the procurement policy statement, talks about engaging with SMEs and doing that sort of activity. At the moment, we have no legislative requirement for people to give due regard to the Welsh procurement policy statement, and in the new legislation we will have that policy. So, this legislation will give us some more teeth, which is more than we've got at the moment. So, it will help us to encourage the Welsh public sector to split big tenders into lots that are more suitable for SMEs. So, that will give us a bit more leverage, but I totally accept that we've got a way to go yet.

Perhaps just to add to that, I think it's clause 17 of the Bill that actually puts a duty now on contracting authorities to consider breaking contracts into lots, so they have to show that they've considered that before going out to tender.

Rhianon.

It may not seem particularly relevant, but it is directly connected, and I'm sure I'll get a response. It is pertaining to what Mike Hedges has stated in terms of breaking down lots into more accessible bids for SMEs across Wales. Is there anything here in the Bill that enables co-operatives and mutuals, or do you feel that there's anything within it that will assist in that regard?

So, the current procurement legislation gives reserve contracts for mutuals for three years. We've worked with the UK Government, and we asked them specifically to increase that period to five years. From feedback from our stakeholders, they thought three years wasn't long enough. So, as a direct result of our feedback to UK Government, that has now increased to five years, so that demonstrates how we've been working with the Cabinet Office to make sure that, where we have got concerns, those have been amended in the Bill. So, we have engaged really closely with the Cabinet Office to make sure that all our major concerns are resolved, and that is one example where it's been really successful.

Thank you.

I should probably have said at the start, Chair, that I think that working on this Bill has been a really good example of how the UK Government can engage constructively with the Welsh Government. I think it's been a really positive overall experience in terms of working through the development of the Bill. You'll know that we've had a couple of members of staff seconded to the Cabinet Office for six months before the publication of the Bill and so on, and engagement has been very frequent and very good, I think.

Thank you. On that note, in terms of breaking down the bids and enabling bids from a broader network of potential contractors, what consideration are you giving to providing training and support to enable them to bid individually or as consortia, where smaller organisations may lack the professional expertise to do that?

I think there will need to be a considerable amount of training and support provided, both to buyers and suppliers, as a result of the new legislation coming in to help them understand that, and I think that the role of guidance will also be really important. We will be ensuring that Business Wales is able to provide support for suppliers, particularly in terms of helping them understand how to bid for contracts within the new procurement system. That's going to include focused support for the changing requirements, so that they can understand what's going to be different in the future. At the same time, we'll have to ensure that procurement professionals themselves have a full range of support and training available to them. I know that the UK Government is already planning to have a range of support available. I think there will be videos, there will be training sessions and so on. What we'll need to do then, of course, is make sure that that is complemented by training on the Bill that we're bringing forward in Wales to help procurement professionals see the link-up across, really, and to ensure that they're able to operate in both senses.

I don't think it's going to be too much of a challenge for them in terms of having two pieces of legislation to work to and to consider, because they're already doing that in the sense that we already have the existing EU legislation, which has preceded where we're moving to in future, but also we've got the Well-being of Future Generations (Wales) Act 2015, which they need to be considering in their processes as well. So, they're used to looking at two pieces of legislation. What's important to us, I think, is that they have the training and support to be able to move forward with confidence. Alongside that, and it's probably not for today's committee, but we're doing an awful lot of work in terms of upskilling the procurement sector generally, through a range of support.

Thank you. As you indicated, there shouldn't be, in your view, confusion between the two Bills. However, how do you respond to concern expressed by, for example, Caerphilly council, that, and I quote,

'procurement within Wales may have long term confusion due to [the] process being covered by two Bills'?

In anticipation of your contesting that view, what evidence do you have to support your position?

Well, I suppose it goes back to that point about already working to two sets of legislation, and our commitment to ensure that we work constructively and collaboratively with the UK Government to ensure that any training and guidance that comes forward from them is very much able to dovetail with what else we'll be requiring from people here in Wales in terms of thinking about the social values that we want to see achieved through procurement.

Okay, and does that preparatory work, or will that preparatory work, include, for example, the Federation of Small Businesses, Social Business Wales, the co-op centre and other relevant agencies?

We will want to make sure that everybody who's captured under the definition of Welsh contracting authorities is fully aware of the responsibilities on them, and equally, we want to ensure that all suppliers are aware of the opportunities presented to them as well. So, we'll be working really hard to make sure that there is clarity and support available.

To what extent, if at all, do you acknowledge that a separate Welsh Bill would have overcome the need, and quoting a statement in your letter, to

'call out areas where the Bill’s proposed clauses did not align with Welsh policy objectives and would have resolved issues of concern that remain'?

I think that, given the fact that the Bill itself is quite large—116 clauses across 11 schedules—but that we've only had to call out, as it were, a handful of areas in which to have derogations made, it does demonstrate that we see the way in which the Bill is moving forward takes us on towards a joint vision, I think, of procurement in the future, and I think that that's helpful in the sense that it will avoid having two entirely different Bills relating to procurement across the England and Wales border. So, I think that we've taken a pragmatic approach, recognising that what UK Government is setting out to achieve is something that we would want to achieve ourselves. If they were going in a completely different direction, if there were things that we were incredibly concerned about that did not align with our policies and our values, then obviously this wouldn't be a route that we would have taken. But it's really a pragmatic approach to try to support procurement and ensure that it's smooth and transparent.

In your letter to us, you referred to the need for consistency in procurement practice. The UK Bill, as you know, provides Welsh Ministers with powers to make secondary legislation. How, therefore, do you believe that consistency can be achieved through separate secondary legislation being implemented in Wales and England but not separate primary legislation, or will that be covered by other issues such as frameworks?

I think that the approach we've taken with this Bill is very much consistent with our overall principles for recommending consent to UK Bills, and obviously you'll be familiar with that document, which has been shared with the Senedd. Essential to those principles is the fact that we will always seek equivalent regulation-making and regulatory powers to UK Government Ministers, and we're working closely with UK Government officials to ensure that there is consistency in that sense. So, those equivalent powers will allow us to make changes in due course, but they're unlikely to be a sea change of changes; there might be changes to one or two aspects where there are the equivalent powers, rather than anything more wholesale. And obviously, they would still be subject to the common framework for procurement as well. So, I think that we can be confident that there won't be a great deal of confusion; I don't envisage a great deal of divergence, either.

Again in that context, how do you respond to concern expressed that the reduced scale and scope of scrutiny involved in the legislative consent process contrasts with the much greater scope and scale of scrutiny that there would have been with a Welsh Government Bill?

Well, obviously, we're undertaking scrutiny today and I obviously want to make myself and officials available to this committee and to the Legislation, Justice and Constitution Committee at your convenience in terms of answering questions. And just to think, really, of the role that Welsh stakeholders have played in the development of the Bill, it has been quite significant, both in terms of helping us understand their aspirations and their concerns, but then also through the work that we've been doing through the round-tables, through the survey and so on, that then has gone on to directly impact on the UK Government's approach. Because of the excellent working relationship that officials have had with the UK Government, we've been able to influence the Bill and to make changes to the Bill. And that is very much based on what our stakeholders have been telling us. So, I think that there has been an opportunity to influence. I might ask Tracey just to reflect on some of the particular areas where we've been able to use what our stakeholders have been telling us and then to influence the UK Government and provide that level of challenge to it.

Yes. An example was the mutuals that I was talking about earlier, and there was also an area where there was going to be a standstill period if there were any changes to a construction project. Now, to Welsh procurement professionals, that didn't make any sense, and we spoke to our stakeholders and they all agreed that it didn't make any sense, So, we worked really hard to demonstrate to UK Government what the issues would be, and, as a result, the Bill has been changed. So, we have been listening to our stakeholders, we have been engaging with them, and where we have felt there have been issues or there have been concerns, we have discussed those and then gone back to UK Government. And, in a lot of instances, those changes have been made, which is really positive. So, there has been thorough engagement with both policy officials within UK Government and legal colleagues. So, it's been a really good relationship and they have listened—UK Government have listened and have made the changes where we have been able to convince them that what they're doing is not quite right or where there were areas that would cause concern to the profession. And to be fair, Cabinet Office has really appreciated the feedback from us, which has been really good.

So, I think from a stakeholder perspective, there's definitely been that opportunity to challenge and to influence and to scrutinise, in that sense, and having our officials working so closely with the UK Government, we've been able to scrutinise there. And I know that, obviously, the Senedd will want to play its part in terms of scrutinising, which is why this process is so important in terms of the LCM. I think it's the first time a Minister has come to one of your committee meetings, and I think that demonstrates our keenness to be open and transparent and to provide as much information as we possibly can for you to take your views to the next steps and so on.

Okay, thank you. Rhys ab Owen will take up the questions.

Diolch, Gadeirydd. Gweinidog, your officials said earlier on that two different procurement practices within England and Wales might put businesses off working in Wales. Do you really believe that?

I think that, we in Wales represent such a small fraction—around 5 per cent, I think—of the entire public procurement opportunities available that we would want to have our businesses having access to the maximum opportunities, which is why we've taken the approach that a joint approach across the England and Wales border and, of course, across to Northern Ireland as well would be beneficial to our businesses.

But the suggestion was that even in the current economic climate, even though we would say that our procurement practices would be better in Wales, that businesses would not want to work in Wales if we had a separate procurement practice here. That sounds like an argument against devolution to me.

I think we want to make things as simple and straightforward as we can for businesses to operate and take opportunities both in Wales and outside of Wales as well. And some of the work that has been undertaken in terms of wider procurement, the general—. You'll have to remind me of the—. GPO?

The—. You've got me now as well. The Government procurement agreement.

The GPA. So, the work that we've done in terms of making sure that Welsh businesses are able to access through the GPA a much wider range of opportunities is important because we want Welsh suppliers to be able to supply in Wales, of course, but we also want Welsh suppliers to take opportunities to grow and expand and supply elsewhere as well.

And with some training, they probably would be able to do that, wouldn't they? But there we are, that's another matter.

But section 1 of the Legislation (Wales) Act 2019 puts a duty on the Counsel General, and through that the Welsh Government, to make sure that Welsh law is accessible and Welsh law is bilingual. How does using a UK Bill comply with that duty?

So, I'll ask, perhaps, Emma to come in on that particular question.

The duty is to consider whether or not to do so, and I suppose that has been considered in this case and a decision has been made, for the reasons you've set out on a practical basis, to make this a UK-wide Bill. But I think it's been a large consideration in terms of deciding to then take as many equivalent stand-alone powers as possible, so that we will be making our own bilingual regulations with a lot of the underlining detail as to how the procedures and processes will work, and have the ability to update those and move as Welsh policy objectives may change.

You mentioned the two Welsh Government officials being seconded to the UK Cabinet Office. What level of seniority were those officials?

They were SEOs. I'm not sure what grade they are, but they're a relatively senior part of my team. They were reporting back to me and my direct reports on a regular basis. They were getting really involved in all the engagements. So, they were relatively senior.

So, in practice, what were they doing for those three days in the Cabinet Office?

So, they were working on policy. They were trying to develop the policy for parts of the Bill where we would have significant interests and they were engaging in the critique of the other areas of policy as part of the Cabinet Office team, and it was really, really beneficial. We found that we were told a lot more information and it was like somebody was—we were joined at the table all the time. So, although we have regular meetings with the Cabinet Office—it is once a week—you cannot cover everything in that meeting, whereas having the people in the actual meetings, stuff that the Cabinet Office would either have forgotten to tell us or weren't considered to be important enough to tell us were coming back to us, and we were having a significant impact on the way the policy was being developed. So, it was a really good engagement and they had total access to everything in the Cabinet Office—all the legal advisers, everything—they were considered for those three days a week as UK Government officials, and the engagement between them and the wider team was really, really good. So, there was no hiding anything. And to be fair, the Cabinet Office have not tried to hide anything. It's just, sometimes, stuff that they thought was not important enough to tell us wasn't mentioned, but because those secondees were there, they would give us the warts and all.

And except for those secondees, how many other Welsh Government officials have been working on this UK Bill?

I have a team of 11, plus we've got Legal Services.

Has consideration been given to how that compares to the resources needed to draft a Welsh Bill? Has an analysis been done of the difference?

No, I don't think we've done an analysis of the difference, but if a decision had been made to go for the Welsh Bill, then we would have put a bid in for more resources, because we would have needed more resources. But, as the decision was made to go with the UK Government, that wasn't in place.

Just to stress that resourcing and capacity wasn't a consideration in the decision to move forward with the UK Government. It was taken following the engagement that we had with stakeholders, both on the buyer and supplier side, which had a strong preference for that consistent legislation across England, Wales and Northern Ireland.

Okay. You mentioned earlier about Welsh Government being very influential in the drafting of the Act. What about the 341 amendments? Was Welsh Government actually drafting these amendments, and how many of them did you manage to persuade them to introduce?

Okay, so we have seen all the amendments that UK Government have asked for, and we have no concerns with those. There have been amendments that have been suggested that we have questioned and some of those have been pulled, but in terms of the numbers, I don't know how many there are, but we have been really engaged, and we are aware of all the amendments. I think that a lot of the amendments, we were aware of before they became amendments.

Will we have further LCMs?

Yes.

Do you know how many, and when?

We're waiting for the House of Lords to finish their scrutiny. The next committee sessions aren't likely to start until the middle of October, so we're expecting the House of Lords to commit their reports sort of November, middle of November time. We would expect to do another supplementary LCM when we get to that stage.

So, at least one more?

At least one more.

There were two committee sessions scheduled for the Lords last week, but for obvious reasons, they've been pushed forward. So, there's a slight delay there.

My final question: with regard to disapplying the healthcare provisions from this Bill, how are you going to do that and when?

We're exploring doing that through primary legislation and officials are looking at a range of options at the moment to provide the health Minister with advice on that, because she will be taking that forward.

And just to confirm, really, that I met Jacob Rees-Mogg in his previous role, alongside Eluned Morgan, to stress our concerns about this particular aspect of the Bill. But having looked at the various options, we think that primary legislation is the best way in which to deal with it, and I think advice is forthcoming to the health Minister shortly.

Diolch yn fawr, Weinidog. Diolch, Cadeirydd.

Would 'SEO' be 'senior executive officer'?

Yes.

Thank you. Mike, do you want to take up the questions, please?

On engagement with Welsh stakeholders, is the Minister satisfied that Welsh stakeholders have had sufficient opportunity to inform the process of drafting the Procurement Bill?

Welsh local government, like most things in Wales, are about 5 per cent of the England and Wales total. Were there differences in what the Welsh local government and Welsh councils put forward as opposed to that being put forward by the English Local Government Association, the LGA, or the English and Welsh local government association, the LGA, and by individual local authorities and groups of local authorities?

I will ask Tracey, perhaps, to come in on some of the reflections about the evidence that we received and that went forward to the UK Government overall. But have Welsh contracting authorities and suppliers been able to influence the Bill? Absolutely they have, because of the close working relationship that we've had, and Tracey gave a couple of examples earlier on about the things that we heard from those stakeholders that have directly led to changes in the UK Government's approach and particular parts of the Bill. So, I think that they have had particular influence. I think that influence goes well beyond their submission to the consultation, because it was very much at the heart of our arguments that we were making then to UK Government.

I think, in response to the consultation, the Welsh Local Government Association and the LGA's views were very similar. I don't think there was much of a divergence, but I would have to confirm that value, but I'm pretty sure there was not much of a divergence.

Just for the sake of completion for this committee, would it be possible for you to drop us a note saying, if there was, what differences there were?

Yes.

Moving on to the impact of the Procurement Bill, the Minister has decided that you didn't want a clause-by-clause analysis. That's your decision, and I'm not going to challenge that. How have you satisfied yourself that the Procurement Bill represents an improvement for Wales on the current regulations without having a clause-by-clause analysis?

Just to confirm, really, that officials have considered every single clause, so they've done that work themselves in terms of interrogating every clause of the Bill, so it's not as if we've just accepted sections of the Bill without giving it deep consideration. In terms of what's been published, then that's for the UK Government to do in terms of providing that explanation, if you like, of the Bill. But we've been really clear that it has to include the implications for us here in Wales.

I know that, where it was deemed appropriate by officials, they did undertake a comparison against the current regulations as part of their internal review of the clauses, but, again, perhaps I'll ask officials to expand on that.

Part of our work has been looking at all the policy instructions, the legal instructions and the draft clauses that have come from UK Government, because the Procurement Bill has been written in a different legal language—it's more English than European. Some of the clauses, the wording has changed, but the actual meaning has stayed the same as some of the procurement regulations, but trying to compare the new regulations versus the three sets of regulations that are in place would have been very time-consuming, and you can't really do a clause-by-clause comparison against other clauses—it's really difficult; you have to look at the Bill as a whole, and that's what we've done. So, we've looked at the clauses in detail. Legal Services have been involved in analysing the clauses with us. We've looked at the policy instructions to understand what the policy intent is for the clauses and then to understand what the actual clauses themselves are. So, we have done a detailed analysis of the clauses; it's just we haven't looked at, 'This clause is equivalent to this clause in the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, and the Concession Contracts Regulations 2016', because it's nigh on impossible to do it because of the complexity of the Bill and differences in language.

I also think, though, that that work that we've done in terms of interrogating the clauses then led directly on to the areas where we have the derogations. So, the Chair referred to the areas that we'd called out, if you like, in the Bill, and that's around us being able to publish the stand-alone Wales procurement policy statement that relevant contracting authorities have to have regard to. That's important to us. A separate pre-qualification stage for procurements below World Trade Organization agreement on the GPA thresholds can still be used, so there are a number of areas where, because of that detailed work in terms of scrutinising the clauses, we've been able to identify areas where we would need a different approach in Wales. And those areas—or a number of areas, then—have been agreed.

And finally from me, what do you think the specific impacts of the Bill may be in Wales as compared to across England and Wales?

Can you repeat the question, sorry?

What do you think the impacts of this Bill will be in Wales, different to that in England and Wales—i.e. is there anything in there that would have either a beneficial or non-beneficial effect on Wales in there that it won't have in England?

So, I don't think that there's anything in the Bill that would have a particular negative impact on us here in Wales. I think that it's important as well that we will undertake those impact assessments for the things that we introduce through regulations. I think that that's where we can set out in great detail in terms of the particular impacts, both negative and positive, on Wales, buyers and suppliers, in terms of the choices we make through those regulations. But I'll again check with Tracey if there's anything to add there.

I think there are some positives from some of the derogations we've had. The UK Government Bill is very focused on transparency, and we've moved towards transparency, which is very good. But, in some areas where they've asked for—. If there are contract awards that are over £2 million, they want all the evidence and all the details. We don't believe it's appropriate for that to happen. Not because we want to hide anything, but because we believe that all that detail is available. So, that would remove an administrative burden on Welsh contracting authorities. So, there is a positive there that's not in England. So, Welsh contracting authorities won't have to publish all of the contract details above £2 million, whereas in England they will have to. So, that's a positive for Wales.

Thank you.

Thank you. Will Natasha Asghar take up the questions?

Thank you so much, Chair. A number of organisations, including the WLGA, have expressed concerns that the UK Government's timelines for implementing the Procurement Bill are actually looking increasingly ambitious day by day. So, I'd just like to know, Minister: do you share this view, and, if not, why so?

I think they are ambitious, and of course things have been pushed back ever so slightly because of recent events. But I think that we are still confident that things will move ahead as planned in terms of the timetable. We also have to remember that there's going to be an awful lot of work for us to do in terms of the regulations and so on. So, again, that's something that we'll need to make sure that we develop in good speed, as it were, in terms of having everything in place before that 'go live' date.

And is there a specific deadline that your team is working on at the moment, or until?

The implementation date is scheduled for early 2024 at the moment. Whether that is achievable or whether all of the implementation will be achievable by that date is still under discussion.

Okay, that's fine. Thank you. One of the councils in my region of South East Wales has actually stated that, in relation to the UK Procurement Bill and Welsh Government social partnership, it represents a fundamental change in mindset and culture, which is going to be necessary. But what they're more concerned about is the required support under the circumstances for the buyer and supplier side. So, I'd like to know what support will that entail for the Welsh Government to be providing to local councils when it comes to actually bringing this Bill into fruition.

So, I would definitely agree that we are looking at quite a fundamental shift in terms of mindsets, but it's a journey we've been on for some time in terms of trying to enable procurement professionals to think differently about procurement. I think that perhaps it goes back to some of the answers I gave—I think it was to the Chair—earlier on in terms of the training and support that we'll make available. We will be looking to use Business Wales particularly to support the suppliers, but then also to have that engagement with the UK Government to ensure that its training programmes are relevant to our contracting authorities, but then also to augment and supplement that so that we're able to take into account the social partnership and procurement Bill and the duties and responsibilities under that. So, absolutely, training is going to be very important.

Having sat in a lot of committee meetings here over the last year and a bit since I've been a Member, one thing is we've met with a number of organisations and they've often said that signposting can be quite awkward in certain organisations. Actually, organisations, councils et cetera, want to live up to the best of their abilities and provide great support to their residents. I know you've mentioned that you're going to work with different organisations, and you're going to rely on the UK Government as well to provide support, but, in relation to what we as a Welsh Government are going to do, what specifically are you going to ensure that we do here in Wales? Because I know 5 per cent perhaps sounds very small to the United Kingdom as a whole when it comes to procurement, but, still, for those people who work in various organisations who are independent suppliers, for example, where and what are you going to ensure that we as a Welsh Government are going to be able to provide them, whether it be on our website, whether it be leaflets, brochures, e-mails, whatever, so that they have a clear flowchart? Because often miscommunication can happen, and, obviously, I don't, and I'm sure none of my colleagues, want that to happen when that time and day comes.

So, the UK Government is already planning a range of learning and development programmes for stakeholders. They range from the broadcast presentations, which give that high-level overview of the changes that will be coming, to more focused and interactive courses for people who do need that more comprehensive knowledge and understanding of the new legislation. And again, we'll be working to make sure that that's relevant to us here in Wales, and that it's supplemented by the work that we do. And as I said, we'll be using Business Wales on the supplier side to ensure that they're able to access the support that they need. Obviously, we already work really closely with business organisations, the Confederation of British Industry, the Federation of Small Businesses and others, so we'll be engaging with them to make sure that they're aware of the new responsibilities and opportunities available. At the same time, we'll be looking to make the most of the kind of rich network that we have of procurement professionals here in Wales. We have a range of professional organisations and other groups that we can be looking to use to share information and advice.

Minister, you mentioned that you'd spoken with UK Ministers, such as Jacob Rees-Mogg, you've had numerous conversations, you've provided us with comments of staff from here to there, but I'd like to know, obviously—. And I'm going to put my hands up and say I know we've had a slight change in Government in the last few weeks, but can you give us an indication of or perhaps some insights into some of the discussions that you have had or are planning to have going forward with the Cabinet Office to ensure that we have a consistent approach moving forward with the Government we have got in place?

Yes, so, as of the start of committee at least, there's not a UK Government Minister in place yet who's responsible for taking forward the Bill, but, as soon as there is, obviously I'd be keen to meet with them to outline and reinforce the outstanding areas of concern. There is a small number of areas of concern that we still have, and obviously they will need to be discussed with the UK Government. So, I'll be looking to reach out to that Minister. And also, early on, before the Bill was even introduced, I had good engagement with Julia Lopez, who was responsible for the Bill in the Cabinet Office at the time, and again that led to the letter that we provided to the UK Government, which set out the kind of conditions upon which we would go forward and have the joint approach to the legislation with them. And again, that's something—. There are a couple of outstanding items in here that we need to continue to resolve. So, as soon as the new Minister is in place, we'll be looking to have that engagement. But none of this stops because there's not a Minister in charge, as it were, because the engagement still goes on at official level.

Okay. That's great. In relation to the amendments being sought with regard to the secondary legislation, there was a term or a definition I'd like to ask you about: Welsh contracting authorities. Can you explain some of the amendments that are specifically being sought in relation to this, please?

Yes. So, the starting point for the definition of a Welsh contracting authority is that which is in the Government of Wales Act 2006, but the definition within the UK Government's Bill goes wider than this, meaning that a greater number of contracting authorities in Wales will follow the Welsh provisions within the Bill than would be the case if we just used the provisions applying to contracting authorities that met the GOWA definition. But there are concerns about authorities that undertake that cross-border procurement and how they would be considered, essentially. So, this is one of the areas of outstanding concern—probably the main, I think, or one of the main areas, that we have yet to resolve. And again, I'll ask Tracey to say a bit more about that.

Yes. So, the devolved Welsh authorities, as defined by GOWA, are the main authorities that will be covered by this Bill, but there are additional ones, as the Minister says. The additional ones, if they're doing cross-border activities, currently, as the Bill is drafted, they would have to follow the English rules if they're doing cross-border activities, even if it was only a very small proportion of their spend. So, if they were doing a housing contract between England and Wales and there was only 5 per cent that was in England, they would still have to follow the English rules for the whole of that contract. We think it should be on a proportionality basis, and we are working with the UK Government to see if we can get that amended.

Discussions are ongoing with officials and we are working on it. I think it's probably something that will be resolved, but, obviously, officials in UK Government at the moment, because they have no Minister, cannot get formal approval for any changes that are made at the moment. And because, as Mr Hedges has said, there are a lot of amendments in this Bill, the appetite for making a lot more amendments at this point in time is quite low, but we think there will be more chance to make amendments when it goes to the House of Commons. So, there are a lot of changes that we could do, and engagement is continuing, and we're hoping that we'll be able to get the changes made that we need.

Great. Thank you so much. Thank you, Chair.

Thank you. Can I hand over to Rhianon Passmore for some questions?

Thank you so much, Chair. Apologies for my intermittent coughing. Firstly, it's very encouraging to hear that there's been such good collaboration and co-operation in regard to this Bill, and I hope that this sets a standing precedent for the future. In light of the—. I'll turn to the regulation powers granted to the Welsh Ministers and Minister of the Crown in the Bill. In light of the Delegated Powers and Regulatory Reform Committee report, what is the latest position on the choice of procedure for regulations for Welsh Ministers, please?

So, officials are currently considering the findings of the report, and are currently in discussions with their counterparts in UK Government, but I don't know if there's anything further we can add on that today.

No, that's fine. That's fine. So, notwithstanding and subject to the 341 amendments going forward, what now—you've mentioned areas of small concern in the Bill—are the critical differences between UK and Welsh Government on the committee conclusions? And if you could briefly elaborate on the small areas of concern that you've mentioned that are still adjunct.

So, there are three powers that we would like to be amended, and the definitions and how the Welsh contracting authority would work across border. Those are the four areas that are still outstanding, as detailed in the supplementary LCM.

Okay. Thank you.

I can just run through the powers quickly. So, one is the power to add international agreements to the list in Schedule 9. Given the UK Government's close interest in international agreements, it's likely that we would have found ourselves having discussions around that, and that's something that we would want to see amended so that we can make those changes. And then there are some other concerns around commencement powers and the power to make consequential, et cetera, provisions. So, there are a few remaining areas of concern, and obviously I'm more than happy to—

I think it would be quite useful for the committee if we had something outlined to us, perhaps in writing, as to what needs to be further amended or referred to from our perspective. I think that would be very useful for us. Thank you, Minister.

The reasons for the Wales procurement policy statement being subject to the negative procedure, obviously in terms of it being more a code of practice, how would you refer to that being treated in such a procedure?

The WPPS is aimed, really, at influencing the behaviour of Welsh contracting authorities. So, it doesn't bind private utilities or bodies that are not devolved Welsh authorities. So, it's really about being a document that influences. So, in that sense, we think that the procedure is the correct one, because it's there to influence rather than to control behaviours.

Okay. Thank you. Specifically, if I can turn to clause 110(10) on the regulations being amended, will it be amended to include any reference to clause 70 around the draft affirmative procedure pertaining to Welsh Ministers?

So, as introduced, clause 70 of the Bill provides for the Minister of the Crown-only powers to amend the value thresholds in subsection 2, and these are the thresholds for publishing a contract change notice, and also the financial threshold in subsection 7, and that's the threshold for publication of a modified contract. So, essentially, the requirement to publish a modified contract under subsection 6 doesn't apply to Welsh contracting authorities, and that's why consequently we don't require powers to amend the financial threshold in subsection 7. But the requirement to publish contract change notices does apply to Welsh contracting authorities, and that's why officials have notified the Cabinet Office that we require equivalent powers to that of a Minister of the Crown in relation to amending the value thresholds in subsection 2, and I'm pleased that a Government amendment has now been tabled to provide the Welsh Ministers with stand-alone equivalent powers in relation to subsection 2. And it's also expected a consequential amendment will be made to clause 110 of the Bill to ensure parity with the UK Government in terms of the parliamentary procedure attaching to regulations made by Welsh Ministers under section 70. So, I think that that second part demonstrates some good working as well.

So, there is definitive movement. Thank you. What is the latest position, then, on amendments to clause 101(5) being sought by your officials? Is it the Welsh Government's intention, then, that this amendment or such an amendment would have the effect of giving the Welsh Ministers equivalence of powers under clauses 81 and 113 in relation to devolved areas?

I'll ask Emma to come in on this one.

This links to the areas the Minister was just outlining in terms of outstanding disparity in the Bill between Welsh Ministers' powers and Minister of the Crown issues. So, clause 81 is the one that relates to international trade agreements, and, as things stand, Welsh Ministers only have a concurrent power in that area, and as a matter of principle we're arguing that we need more than that and there is ongoing discussions on that one. So, assuming that there was movement on that, there would then need to be an amendment made to both section 81 and 101 to reflect that in terms of the powers that we then had.

So, in terms of the tone around that particular amendment—obviously, you've mentioned the areas of concern in regard to what still needs to shift—that is definitively one of those areas that you feel would need to move.

Yes, and there's been a similar issue faced in relation to the Australia-New Zealand trade Bill that's also being considered as part of the LCM process at the moment, so it seems to be a Department for International Trade clause rather than a Cabinet Office clause, and so there are discussions taking place at that level as well.

Okay. And I would presume that we're having reciprocal relations with that department as well. You don't need to comment on that. That was an aside. I'm going to move to my final questions.

Shall I just add, before you do, that this is an area where it's a point of principle for us, rather than envisaging there being major practical implications? It's about Welsh Ministers' powers, respecting devolution and so on.

And similarly, with the two others, there's clause 115, which relates to commencement powers, and at the moment that's a Minister of the Crown-only power, so we don't have any power there, so there are, again, ongoing discussions there. And then clause 113, which is the consequential provisions, where at the moment we've only got concurrent powers. So, again the conversation is ongoing.

Which moves me on to my next question. In terms of these being points of principle, when we mention that these are small areas of concern, they're also very, very important areas for us, aren't they, in terms of our devolved Government and where we need to be. So, all power to the elbow there. What is the latest position on concurrent plus powers in the Bill that you've just mentioned?

We've chosen to take one concurrent plus power in the Bill. I think that's at clause 82, in relation to electronic invoicing. So, that was kind of a conscious choice to maintain consistency, that we'd take a concurrent plus power there. The rest that we're comfortable with are all stand-alone equivalent, and then the only others are these that we've just highlighted in terms of where we're still in a concurrent position or no powers.

Okay. Finally, in regard to you as the Minister, would you commit to providing the Senedd with notice if it's the Welsh Government's intention to give consent to a Minister of the Crown making regulations under concurrent plus powers?

Yes, I'm more than happy to commit to providing any information that the committee or the Senedd requires.

Thank you. And, to conclude, on the latest position on amendments—you mentioned clause 115—to provide the Welsh Ministers with powers to commence the provisions of the Act in relation to Wales, have we got any further light on that? Do you want me to repeat it?

Yes, please.

So, what is the latest position with regard to amendment to 115 around commencement powers?

So, this is one of the ones that we were just discussing. We're in a position at the moment where it's a Minister of the Crown-only power. As we understand it from official-level discussions, UK Government's concern with giving Welsh Ministers power here is around timing for commencement, and if we were to commence at different times, that would cause practical difficulties. Our concern is, as you've outlined, the principle of the matter and the fact that we should have powers in that area. So, discussions are very much ongoing.

Again, it's the practical effect. We would see a benefit, obviously, in commencing at the same time, but it's the point of principle.

Thank you, Chair.

Thank you very much. Can I just clarify one of the responses you gave to Rhianon Passmore's questions that I might have missed or didn't fully grasp, as to whether clause 110(10) regulations will be amended to ensure that regulations made by Welsh Ministers under clause 70 are subject to the draft affirmative procedure, as is the case with the power of a Minister of the Crown?

This is something that Tracey touched on. They've brought forward an amendment to give us equivalent powers under clause 70, but, as things stand, there is not an amendment being tabled to change the Welsh Ministers' procedure to affirmative. But it appears that that is an oversight and there should be parity between the two procedures. That's something where we're having those conversations with them and would expect a further technical amendment to be tabled.

Thank you very much. We'll move to the final, very short set of questions from me, so we should finish bang on time. Thank you for your concise responses. Will the Minister commit to ensuring that any future supplementary LCM sets out clearly the Senedd procedure where a provision confers power on Welsh Ministers to make subordinate legislation? And, similarly, will the Minister commit to ensuring that any future supplementary LCM explains how it differs from any previous memorandums?

Yes, I'm happy to agree to both of those.

Thank you. My final question: from your letter to committee and your answers to us, does that mean that there remains the option of using an inter-governmental agreement with the UK Government as a mechanism to resolve outstanding concerns? And, if not, what mechanism do you anticipate might be introduced to address that?

We hope it wouldn't need to be escalated to that point and that we can work to have a pragmatic response from the UK Government on these areas of outstanding concern, which, again, they don't have a practical impact as such, but they are important points of principle. So, we'll continue those discussions with the UK Government in that regard. I've got a list as long as my arm in terms of things I'd like to have a dispute with the UK Government on, but we're not at that point on this yet.

So, how would you seek to resolve any hypothetical outstanding concerns that could arise at any point in the future with any Government, here or in London?

There is a formal dispute mechanism now in place with the UK Government. I think that, as far as I'm aware, Northern Ireland is the only part that has yet taken anything through or started that formal dispute mechanism. We also have the new inter-ministerial standing committees now in place. So, I think that when these things and this infrastructure were developed, I think they were welcomed as a step forward, as long as these things are used appropriately and as long as there's proper engagement from all partners. So, it remains to be seen if the new UK Government pays respect to the systems that we've collectively put in place. But, that system does remain available should disputes be necessary.

Okay. And otherwise it's the Supreme Court, potentially.

I hope it doesn't get to the point of being a matter of dispute and that we can just come to agreed solutions to the outstanding concerns, because we have had significant numbers of changes made to the approach so far, so there's a good track record, I think, on that, but, as I say, there are some outstanding areas—the four that colleagues have referred to.

Okay, thank you for that. That does bring the process—

If I could ask, very briefly—

Sorry. Rhianon.

Sorry to finish, when you were about to conclude, but just very, very briefly in regard to the engagement that you've had with the Treasury, will that engagement carry forward from your understanding with DTI—is there reciprocal engagement?

So, the majority of the engagement that we've had on the Bill has been through the UK Government Cabinet Office because that's where they've based themselves. I haven't personally had an awful lot of engagement with the Department for Business, Energy and Industrial Strategy, for example—that engagement's normally led by Vaughan Gething. I know that he engages quite frequently, but I'll check what's happening at official level.

I think we're engaging with DIT—the Department for International Trade.

Yes, sorry.

So, the trade team is doing it on the Australian and New Zealand Bill and the intention is that whatever is agreed on that area will be reflected in the Cabinet Office Bill—in the Procurement Bill. So, the discussions are on the New Zealand-Australia Bill because that one is a bigger element and if, and when, we get an agreement with DIT on that area, then whatever's affected will be reflected in the Procurement Bill and that's the intention. We are carrying on engaging with our trade colleagues to make sure that they keep us informed of all the details of those engagements.

Okay. Thank you.

Okay, well, that brings our questions to a conclusion. A transcript of today's meeting will be published in draft form and sent to you for you to check for accuracy before publication of the final version. So, my final act is to thank you all for being with us today, and I hope that the rest of your day goes smoothly.

Thank you.

I propose, in accordance with Standing Order 17.42(ix), that the committee resolves to meet in private for the remainder of today's meeting. Are all Members content? I see all Members are content.