Thank you for your letter of 11 May 2022 regarding the Procurement Bill, which was introduced in the House of Lords that same day.
Whilst our respective officials were able to discuss the principles which underpin the Bill, it is disappointing and concerning that a draft Bill was not shared with the Scottish Government in advance of its introduction, and that drafting of key elements of clauses relating to cross border procurement, which directly engage the legislative consent process, were not shared with the Scottish Government until the day before introduction. This meant that there was no meaningful opportunity for the Scottish Government to engage on the specific drafting of these provisions before their introduction. This continued disregard for devolved competences and for the role of Scottish Ministers on such matters no longer surprises, however, it is not conducive to the making of good law which serves all interests.
As required by the Standing Orders of the Scottish Parliament, the Cabinet Secretary for Finance and Economy has lodged a legislative consent memorandum setting out the Scottish Ministers’ view on this Bill. I have enclosed a copy of this memorandum.
The Scottish Ministers do not recommend that the Scottish Parliament consents to the Bill as it is drafted. Whilst the Bill’s approach to scope and extent may be reasonable, and it mirrors the approach taken by the Scottish Parliament to the Procurement Reform (Scotland) Act 2014, that has to be seen in the context of the Bill as a whole, and the significant concerns which need to be resolved in order for it to be acceptable.
The issues of cross-border procurement and implementation of international agreements relating to procurement are issues which must be addressed. Consideration could be given to addressing these in a UK Bill with the consent of the Scottish Parliament. The approach taken in the Bill to the drafting of powers to address these issues, however, is problematic. In relation to cross-border procurement, clause 103 confers powers on UK Ministers to amend the Scottish procurement legislation in order to facilitate cross-border procurement. The drafting of these powers is broad and deep – significantly moreso than is necessary to achieve the policy aim of facilitating cross-border procurement – and would entail real and significant policy choices. The Scottish Parliament is likely to have a reasonable expectation of being able to scrutinise Regulations made under these powers, which should therefore properly sit solely with the Scottish Ministers. We are also concerned that some of the drafting in relation to these powers is technically deficient.
While it may not be unreasonable to confer powers to address the issues related to cross border procurement in secondary legislation, the complexity of drafting such provisions adequately points to this being an area where the technical fix which is needed to the legislation should more appropriately be made on the face of the Bill, without the need for further delegated powers. This would allow the Scottish Parliament to understand the effect of the Bill in relation to this area as it considers the question of consent.
In relation to the implementation of international agreements, I note the discrepancy in the way in which powers are conferred in relation to Scotland and the rest of the UK. That is troubling.
In both the Scottish procurement Regulations and this Bill, the affording of equal treatment to suppliers from states with which there is a relevant international agreement is achieved by an explicit requirement on contracting authorities to treat suppliers from states with which there is a relevant agreement (a list of which is contained in Schedules to the Regulations and Bill) the same as suppliers from the UK. This Bill confers a power on UK Ministers to add new agreements to the list in its Schedule, or to remove or amend references to existing agreements. In relation to Scotland, however, the Bill confers, in clause 83, a broader power on both UK Ministers and the Scottish Ministers to “make provision for the purpose of ensuring that treaty state suppliers are not discriminated against in the carrying out of devolved procurements”. This power is drafted as a Henry VIII power, meaning that it may be used to modify primary legislation.
Although the agreement of international trade arrangements is a reserved matter, their implementation in devolved areas, such as procurement, is a devolved matter. Whilst we agree that there is a practical need for a power to update the list in the Schedule to the Scottish Regulations, this appears to be a significantly broader power than is necessary. This is particularly the case given that it is drafted as a concurrently exercisable power – meaning that the UK Ministers could use this power without further consent being required. That is unacceptable.
We see no current need for this power to be drafted as a Henry VIII power, given that this is an area governed by Regulations in Scotland. It is explained in the Delegated Powers Memorandum that this is because it is seen as likely that at some point in the future the Scottish Parliament will need to pass primary legislation in this field, and that this aspect ensures that this power can continue to be used to ensure the full implementation of the UK’s procurement obligations. Our view is that, should the Scottish Parliament elect to amend the Scottish procurement Regulations by primary legislation in the future, then that would be the appropriate moment for the Scottish Parliament to consider whether a Henry VIII power should be delegated to the Scottish Ministers for this purpose.
Whilst we will not, in view of these concerns, be lodging a legislative consent motion in respect of the Bill as it is currently drafted, as you observe we have a shared interest in ensuring that these issues are resolved satisfactorily. I remain keen, therefore, that our officials work together to explore what can be done to amend these provisions.
My officials will liaise with your officials to set out our concerns with the drafting of these clauses in more detail, and stand ready to help inform the drafting of appropriate amendments.
More generally, I hope you might recognise that adopting a different approach to engagement and to drafting important legislation like this that respects and provides for devolved competences might lead to a different outcome with regard to recommendations relating to consent. The issues we have set out are not insurmountable, should the UK Government choose to act differently and accord the Scottish Government and the Scottish Parliament the respect and consideration to which it is entitled and deserves.
I am copying this letter to the Secretary of State for Scotland, the Welsh Government Minister for Finance and Local Government and Northern Ireland Finance Minister.
Telephone: 0300 244 4000
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