Ivan Lewis – 2019 Speech on NHS Procurement

Below is the text of the speech made by Ivan Lewis, the Independent MP for Bury South, in the House of Commons on 4 July 2019.

I requested this debate this afternoon not only to put right a wrong that has been done to a long-established business in my constituency, but to highlight wider issues about Government procurement policy, particularly in relation to the national health service. The Government rightly talk about delivering a Brexit that supports UK businesses, jobs and our standard of living. However, this sorry story illustrates how, even before Brexit, we are unable to create a level playing field for our companies, let alone back them up. In this case, the EU cannot be blamed for a lack of transparency or fair competition, or for the exclusion of a UK company from an NHS preferred supplier list.

Under NHS ProCure22, the Department of Health and Social Care appointed Kier as a tier 1 provider to decide who should be the preferred providers for floor covering in NHS facilities. In May 2018, without any competitive tendering or other transparent process, it was announced that three overseas companies would be on the preferred supplier list—two French companies, Tarkett and Gerflor, and a Swiss company, Forbo. James Halstead, a UK plc from my constituency with a 50-year track record of supplying NHS institutions was not on the list or even given the opportunity to tender or participate in dialogue with Kier.

Halstead is highly successful global business that we are proud of in Radcliffe, with a global turnover of £250 million and a UK turnover of £83 million. The NHS currently accounts for approximately 15% of that UK turnover. A significant proportion of that is now at risk, and there is the also potential reputational damage of being excluded from the list for unstated reasons. Many NHS organisations are understandably asking Halstead why it is not on the list. That would be bad enough in any circumstances, but things have been made worse by the recent track record of the three overseas companies.

In October 2017, the three companies were found guilty of price fixing over a 23-year period in France, and the French competition authority fined them a total of £302 million. They were found to have discussed minimum prices, price increases, sales policy and other sensitive information, such as their trading volumes. The French regulators discovered that the companies had also exchanged confidential, recent and detailed information on their sales volumes and commercial forecasts. That information was exchanged through the SFEC, a sectoral trade union in France, which was in charge of collecting the information and sharing it with manufacturers. It is surprising—some would stay staggering —that seven months later these same companies were given a monopoly as preferred suppliers for the NHS. In addition, it is worth noting that Tarkett pays no UK taxes whatsoever. To be clear, it is not breaking any laws in doing so, but that does not mean that there are no ethical and fairness issues.

I have several questions for the Minister, and if he is unable to answer them today, I would be grateful if he would write to me in detail. What criteria did Kier use ​to draw up the preferred supplier list? In the absence of competitive tendering, what process did it use? Why were Halstead and other suppliers not included on the list or given the opportunity to put their case? What consideration was given to the probity of the three overseas companies in view of the sanctions imposed on them in France?

Will the Minister assure me—this is incredibly important—that Kier will be instructed to add Halstead, and any other appropriate company, to the list as a matter of urgency? Will the Minister initiate a review of all such NHS contractor lists with a view to identifying how many are drawn up without a competitive tendering or transparent process? Finally, will the Minister issue an instruction in due course that NHS staff and third parties, such as tier 1 providers, appointed on the NHS’s behalf to commission goods and services should have a duty to be proactive in encouraging UK companies to apply or bid, depending on the relevant process?

I believe that this case has wider implications for UK Government and NHS procurement policy than simply the effects on the business in my constituency. I want to make it clear that this is not about saying that, in an unlawful manner, the NHS or the Government should favour UK companies over foreign companies. That is not the case whatsoever, so officials should not try to deflect us away from the substantive issues here. The issue is that a UK company with a good track record, a history of financial probity, and quality goods and services should be on this list. It has never been sanctioned by any regulatory authority. In contrast, these three overseas companies were significantly sanctioned, less than a year before the NHS’s decision, for price fixing—basically operating a cartel in France—over a 23-year period.

Clearly this is not a matter of direct ministerial responsibility and, having been a Health Minister, I do not hold the Minister personally responsible for individual procurement and tendering decisions, but Ministers are responsible for policy and oversight in this area. There has either been incompetence by those charged with these responsibilities or, frankly, something stinks in Kier’s decision-making process in this case.

I would be incredibly grateful if the Minister responded to my substantive points, considered the wider implications for UK Government and NHS procurement and put right, as a matter of urgency, the wrong done to Halstead plc in my constituency.