Pensions Bill

moved Amendment No. 134C: 134C: After Clause 110, insert the following new Clause— ““Delegation of powers by the Regulator (1) The Pensions Act 2004 (c. 35) is amended as follows. (2) In paragraph 21 of Schedule 1 (regulations relating to delegation of the Pensions Regulator’s functions), for sub-paragraph (e) substitute— ““(e) permitting the Regulator to authorise prescribed functions to be exercised on behalf of the Regulator by such persons, in such circumstances, and under such arrangements as the Regulator may determine.”” (3) Omit paragraph 28 of Schedule 1 to that Act (payment of expenses).”” The noble Lord said: I shall speak also to government Amendments Nos. 141 and 141D. These amendments relate to the regulator’s ability to contract out its functions. The Government are committed to ensuring value for money when planning and delivering large-scale public sector projects and to using the skills, expertise and capacity of the private sector where appropriate. The regulator currently has the ability to contract out functions under the Pensions Act 2004, which states that the Secretary of State may make regulations for the regulator to delegate prescribed functions to prescribed persons. The purpose of these amendments is to ensure that the Pensions Regulator has the flexibility to secure the best value for money if it decides to contract out any compliance functions. As the legislation currently stands, the regulator would have to identify preferred suppliers—the prescribed persons—to include in regulations before finalising contracts. In reality, the process of choosing the best functions to contract out, exploring the market for suppliers, identifying preferred bidders and then making a choice of supplier, requires careful planning. Amendments Nos. 134C and 141D will therefore place the emphasis on the prescribed functions that the regulator can contract out and remove the need to name the provider in the regulations. In practice, that will mean that the regulator can undertake a more flexible procurement process with potential suppliers, and therefore be better placed to identify the best value-for-money approach. Over time, it will also make it easier and simpler for the regulator to change suppliers, again making it more likely that the regulator will secure the best value for money. In addition, under Section 6 of the 2004 Act, the Pensions Regulator currently has the power to do anything which is, "““calculated to facilitate the exercise of its functions””," or is, "““incidental or conducive to their exercise””." That is subject to the provisions of Schedule 1 to the Act. Paragraph 28 of the schedule makes specific provision for the regulator to make payments for expenses and fees for advice, as the Secretary of State may determine. This provision was originally intended to enable the Secretary of State to set the limits within which the regulator would work. This power has never been used. We are therefore proposing, via Amendment No. 141, a repeal of this unnecessary provision, to ensure that there is no confusion about the regulator’s ability to spend money on contracting out. As I said, we are committed to enabling the regulator to ensure value for money and to use private sector expertise where appropriate. I hope that noble Lords will feel able to support the amendments. On Question, amendment agreed to. Clause 111 agreed to. [Amendment No. 135 had been withdrawn from the Marshalled List.] [Amendment No. 136 not moved.] [Amendment No. 136ZA had been withdrawn from the Marshalled List.]