Angela Rayner announced a National Procurement Plan © Ian Forsyth/Getty Images
Angela Rayner announced a National Procurement Plan © Ian Forsyth/Getty Images

Labour condemns 'Tory procurement racket' as it unveils five-point plan

26 September 2022

The Labour Party has accused the Conservative Party of being “sleaze merchants” over public procurement during the pandemic.

Angela Rayner, deputy leader of the Labour Party, said the government had “poured money into the pockets of cronies” as she unveiled a five-point National Procurement Plan.

Rayner's comments come as data shows one in six public procurement contracts between 2014-19 went to companies with links to tax havens.

Speaking at Labour's conference in Liverpool, Rayner said: “The next Labour government will pump money back into the pockets of local communities – the people who built Britain.

“Consider this. A third of all government spending goes on procurement. More than the NHS. Double the education budget. Labour will unleash the power of procurement to drive up standards.  

“Today I am announcing our Value for Money Guarantee. Our pledge to ensure that every single penny of taxpayer’s money provides the best possible value to the public. We will turn the Tory procurement racket on its head – so it serves the national interest, not the vested interests.”

The National Procurement Plan will:

  • Reward businesses and enterprises who pay their taxes and their workers properly, creating opportunities for new jobs and skills. This includes partnering with businesses to improve green growth.
  • Give small enterprises a level playing field for winning contracts. Cutting red tape, streamlining the bidding process, and replacing the Tory “VIP lane” with a fast track for local businesses who create wealth in communities and contribute to a fairer society.
  • Raise standards across the economy by striking off failed providers. Money would be “clawed back” from those who failed to deliver and reinvested into “dynamic, ethical local enterprise”.
  • Guarantee transparency about how taxpayers’ money is spent. Implementing a public dashboard of government contracts aims to prevent corruption.
  • Increase insourcing of public procurement contracts. Before any service is contracted out, public bodies must show the work could not be done better in-house. Labour also announced they would “end the scandal” of outsourced workers getting second-class pay and conditions. 

Meanwhile, data from the Fair Tax Foundation shows one in six (17.5%) of UK public contracts, with a combined value of £37.5bn, were won by companies linked to tax havens between 2014-19. The Fair Tax Foundation, a non-profit social enterprise, said this was “likely the highest rate in Europe”. Research from the University of California, Berkeley and the University of Copenhagen estimated the UK loses £17bn per year as a result of companies shifting profits to tax havens. 

Rayner added: “Where the Tories handed billions of pounds to their cronies with links to tax havens, we will ensure local businesses are no longer shunted to the back of the queue behind giant corporations with more form fillers than they have workers.”

Referring to the troubled procurement of personal protective equipment (PPE) during the pandemic, Rayner said: “Never again can we see a repeat of the scandal that has seen Tory ministers write off £10bn on unusable PPE they bought with our money. Defective. Substandard. Unfit for use. We’ll give the Tory sleaze merchants their marching orders. Instead, we will use the power of procurement to boost local businesses that work for Britain.”

Watchdog the Public Accounts Committee has said PPE procurement “exposed weaknesses” in the Department of Health and Social Care’s (DHSC) contracting capabilities. DHSC “lost” 75% of the £12bn it spent on PPE in the first year of the pandemic, including £4bn of PPE that needed to be disposed of.

A government spokesperson said: “The government has high standards and expects that public sector suppliers will pay the tax they are obliged to. Non-payment of taxes is already an exclusion ground and this feature is maintained in the Procurement Bill

“We’ve led the world in tackling tax avoidance and evasion and in improving tax transparency, spearheading global initiatives to help tax authorities uncover income and assets held by their taxpayers.”

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