My Lords, procurement by the Government and public sector bodies represents a significant part of the UK economy. It is essential to the day-to-day running of government and should be appropriately regulated. The Government are committed to ensuring the continued functioning of this important marketplace when we leave the EU.
This statutory instrument will ensure that the UK will meet the requirements of the withdrawal agreement and the Northern Ireland protocol and replaces the earlier statutory instruments that did not take these matters into consideration. This legislation is essential to provide legal clarity for public procurement and certainty going forward, as we look at the possibilities for wider procurement reforms, which may be brought into domestic legislation.
The majority of this SI is unchanged from the Public Procurement (Amendment etc.) (EU Exit) Regulations 2019, as amended by a second SI made in 2019, instruments that were debated in both Houses before being signed. Those instruments however, addressed deficiencies in a no-deal scenario. This instrument consolidates the first 2019 SI as already amended, incorporating further changes and new provisions, where relevant. The amendments made by this instrument do not amount to a material change in procurement policy. They will ensure that the UK’s procurement system continues to function as intended at the end of the transition period. UK contracting authorities will be able to continue to procure goods and services without substantial changes in the process. In that way, the Government are ensuring that those entities can continue to be able to obtain value for money for UK taxpayers.
The instrument makes amendments to the three sets of regulations that implement the EU directives on awarding contracts and concessions in the public and utilities sectors outside the field of defence and security. Your Lordships debated a separate instrument amending the Defence and Security Public Contracts Regulations last week. Where this instrument differs substantially from the 2019 instrument is that it seeks to provide a level of continuity for procurement procedures which began before the end of the transition period. Procurements that fall within this category, including orders from ongoing contracts, will continue in substance to follow the unamended procurement regulations. We do not expect that there will be many procurements which fall into this category; however, it would be difficult to measure these exactly. A number of new technical amendments have also been included in this instrument.
This instrument makes it clear that specifications with an information and communication technology component can continue to refer to the common technical specifications recognised by the EU Commission. This is an extremely dynamic area of technical specifications, and the EU’s process for recognising them is based on accepted best practice that the UK Government have been instrumental in developing. We have decided that, pending a mechanism to identify these domestically, retaining the reference to the EU’s standardisation process is deemed the best solution.
The thresholds that govern the award of public contracts came into effect in the UK on 1 January 2020, and the sterling figures in this instrument reflect those updated figures. The procurement of certain legal services by a lawyer as defined by the lawyers’ services directive are excluded from the procurement regulations. So that EU lawyers do not receive preferential treatment over those from third countries, this instrument amends the definition of lawyer to mean a person practising as an advocate, barrister or solicitor in any part of the UK or in Gibraltar. That includes those Swiss lawyers entitled to practise under their domestic designation in accordance with the Swiss citizens’ rights separation agreement.
This instrument also makes various amendments to the procurement regulations to reflect recent amendments made to other domestic and retained direct EU legislation —for example, in relation to the acceptable formats for advanced electronic signatures, and the applicable
rules for determining the origin of products. To enable the procurement regulations to reflect technological developments and full and ongoing interoperability in electronic invoicing, a power has been conferred on the Minister for the Cabinet Office to make regulations to substitute a different e-invoicing standard, a different reference from the same standard or make changes to specific syntaxes for e-invoices.
The instrument disapplies rights derived from Article 18 of the Treaty on the Functioning of the European Union and parallel provisions in other agreements, to the extent that they are not disapplied in other domestic regulations. Retaining these rights would leave a lack of clarity as to whether EU parties within the scope of Article 18 of TFEU would have additional rights in the UK compared to non-EU countries. For example, suppliers from the EU may be provided with additional rights compared to third-country suppliers.
The UK has been invited to accede to the government procurement agreement, or GPA, in its own right. This instrument repeats the contingency arrangements set out in the 2019 EU exit statutory instrument, in case we are unable to legislate for GPA accession, resulting from any delay to the Trade Bill. One of the amendments ensures continued guaranteed access, rights and remedies on current terms for suppliers from existing GPA parties who would no longer have the guaranteed access, rights and remedies that they currently enjoy. This will mitigate the risks of a short gap in GPA membership by facilitating continued market access. Due to delays to the Trade Bill, we have also included a similar measure to this in relation to certain bilateral trade agreements between the EU and third countries to which the UK is currently party via its membership of the EU. This will keep alive the existing obligations towards suppliers from countries with which the EU has, before the end of the transition period, entered into a trade agreement with provisions relating to public procurement by which it is bound. The period in the 2019 EU exit SI was set to 18 months. This has been reduced to 12 months in this instrument to reflect the progress made in the Trade Bill.
In summary, this instrument seeks to ensure that the current public procurement regimes will continue to function after the end of the transition period, and to implement the relevant sections of the withdrawal agreement. It does not seek to make major policy changes or introduce new frameworks; instead, it makes largely technical changes to correct the deficiencies that will naturally emerge within our legislation at the end of the transition period. Left unamended, the existing regulations would not work as intended, and the EU exit regulations made last year in the context of a no-deal scenario would come into force. This would amount to a breach of our international obligations as well as a cause of confusion and uncertainty for procurers and suppliers, hampering the public sector’s ability to obtain value for money from procurement. I commend the regulations to the Committee and beg to move.
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