Previous SectionIndexHome Page

29 Nov 2005 : Column 59WH—continued

29 Nov 2005 : Column 60WH

Civil Service (Northern Ireland)

1 pm

Mark Durkan (Foyle) (SDLP): Civil service employment and procurement is probably not normally the most riveting of subjects; however, in Northern Ireland when there was devolution, probably the most frequent question that I faced as Minister for Finance and Personnel throughout constituencies, and across parties in the Assembly, was about how the Northern Ireland civil service would make moves to decentralisation. People across all parties recognised that there was a gross over-concentration of civil service employment in the greater Belfast area. In that context the Executive established an accommodation strategy review, which was aimed not just at getting a one-off round of decentralisation offers from Departments, although we asked for that, but at creating a permanent policy framework that would take long-term account of the changing strategic accommodation needs of the civil service and would build in a clear preference and possibility for decentralisation into that policy. That was the shared policy goal of the Executive and the Assembly.

Well over three quarters of civil service jobs in Northern Ireland are concentrated in Greater Belfast. Most of the jobs in other locations are there only because there is a need for local offices in those areas. The only attempt at decentralisation during the periods of direct rule—there were none during the life of the old Stormont regime—was in the early 1990s when a few hundred jobs were transferred or decentralised to Derry. That was sponsored by Richard Needham who was then a Northern Ireland Office Minister. It was meant to be the first wave of an ongoing policy of decentralisation, but basically the civil service shut up shop thereafter.

It is not just in terms of civil service employment that we face a picture of geographic inequality in Northern Ireland. It comes through in practically every sector of employment. Recently the Equality Commission produced "Fair Employment: A Generation On". Chapter 6 of that report contains several maps which show the distribution of economic inactivity across different districts in Northern Ireland, in terms of sickness, of jobs within a 5 km radius and a 15 km radius and the changes in job numbers. It shows the distribution of new employment as well as the distribution of employment and long-term unemployment. Map after map shows in a very graphic way a picture of inequality and disparity.

If we are to be true to the Government policy of trying to achieve balanced regional development in Northern Ireland and equality in Northern Ireland, those maps set out the depth and strength of the challenge. Anyone who claims that a strategy to deal with inequality and unacceptable disparities in Northern Ireland can be location blind cannot be serious about tackling and reversing the picture of inequality as it stands, where it happens and where it hurts.

It is for that reason that the statutory equality commitment is placed on all Departments under section 75 of the Northern Ireland Act 1998 as a result of the Good Friday agreement. It is for that reason that we have policies of targeting social need. The Government are meant to be committed to ensuring that in everything they do, in all that they spend and all that
29 Nov 2005 : Column 61WH
they set out to do, they think about equality and achieving equality outcomes. This is about thinking about social need, targeting social need and reducing social need where it bears down hardest on people. That is what those policies are meant to add up to. They are not just token declarations. The test of those policies comes when particular decisions are made in relation to public expenditure, public procurement and civil service employment.

I referred to some of my experiences as Minister of Finance and Personnel in Northern Ireland in the power-sharing Assembly under the Good Friday agreement. As well as setting up the office accommodation strategy review, the Executive agreed at my behest to set up a public procurement policy review. Among the issues that we tried to test and establish in the review was how far wider public policy factors could be considered in the context of the procurement process, and what latitude there was in standard Government guidelines and EU law to give some weight and consideration to policy commitments such as targeting areas of social need, targeting the long-term unemployed, and in respect of the environment and equality.

The advice that I as a Minister received from the civil service was that such matters could have no part in public procurement consideration. But the independent experts that we appointed to the review established that the civil service advice was nonsense, and that it was consistent with EU legislation to give due weight and consideration to such factors, provided that the outcome was not anti-competitive and that the way in which the issues were addressed did not of itself prevent firms or areas from making offers or being able to compete fairly. We established in that review that intelligent consideration could be given to wider Government policy commitments, and that we needed to be able to do that if Government policy commitments were, in fact, to mean anything.

However, I have since learned from various direct rule Ministers that they were never briefed on the review. The current Minister with responsibility for finance and personnel did not know what I was talking about when I asked him about it only a couple of weeks ago. He said that such matters are not for Ministers. If a public procurement review established by a power-sharing Executive is not a matter for Ministers, I do not know what is.

I want to come on to a particular procurement project, but first I note that this team of Ministers recently made announcements about an exercise called Workplace 2010. I know that some other parties, and certainly some other party leaders, have expressed misgivings about selling various Government properties and leasing them back, which is the Government's intention so far. Those properties accommodate the bulk of the civil service. My point to the Government and the current Minister with responsibility for finance and personnel is that those buildings should not be sold on the basis of leaseback. Instead, the Government should tell the market that they will sell them on the basis of leasing accommodation elsewhere if the people who come in with bids for them can either directly provide accommodation elsewhere or can broker provision through somebody else.
29 Nov 2005 : Column 62WH

Such an initiative would open up potential for decentralisation. Areas in and around Belfast would benefit if buildings that are locked up with civil service occupants were occupied instead by people who could bring other multipliers to the premises, and other areas would be able to compete. The property market across Northern Ireland would be stimulated and challenged to come up with offers to accommodate civil service jobs. Only something like that will open up the real potential of decentralisation.

When I discuss decentralisation in that context, clearly I am talking not just about my own constituency but about the whole of the north. Decentralisation does not have to be at Belfast's expense. The alternative uses that those buildings could be put to would, obviously, bring benefits to Belfast as well.

The procurement project that I wanted to touch on is the Government electronic human resources contract for the Northern Ireland civil service. That project has been running for a long time. Indeed, it was meant to be at best and final offer stage in the second half of 2004, but it did not get there until summer this year. There have been various delays in and around the process.

Recent interest in the matter followed publication of a peculiar statement from the Department of Finance and Personnel on 19 October, which indicated not that it had appointed a preferred bidder from the two remaining bidders but that it would talk to one bidder, Fujitsu Services Ltd., on the basis that it hoped to bring it forward as the preferred bidder, leaving aside the other bidder, Accenture. There has been a lot of public interest since then and a lot of misinformation, some private and some public.

The Fujitsu Services bid included itself, PricewaterhouseCoopers and Capita. The procurement process, which has a history, had a pre-qualification stage back in September 2003. The companies that came through that were Logica with PricewaterhouseCoopers, Accenture with BT and Oracle, and Fujitsu with Capita and Baxter Neumann. Logica withdrew and before that PricewaterhouseCoopers had to withdraw from the Logica bid because Government sources suggested that it was inappropriate for PwC, as Logica's auditor, to be in the bid with Logica. After pre-qualification—if pre-qualification means anything, surely it means that recognition is given to companies as they are at the time—PwC asked to join Accenture's bid. Accenture sounded out the Government on whether that would be appropriate and was advised by a Government official that it would be problematic for a number of reasons. PwC is now part of Fujitsu's bid and Baxter Neumann has left the bid. It creates a strange impression of exactly what pre-qualification was all about if bidders could chop and change, rejig and hop between beds. Were the new consortiums subject to any re-qualification criteria?

That is not the only question arising from PwC's role. I am not hostile to PwC and recognise the quality of its work for many good firms and Departments and the good public money that it receives for that work. However, PwC has been advising a number of Departments on their e-business strategies and that work continued during the procurement process. Its advice to seven Departments has included reference to their e-HR requirements. PwC is an adviser to Departments on e-business requirements and e-HR at the same time that it is bidding for an e-HR contract. We
29 Nov 2005 : Column 63WH
are told that we can rely on Chinese walls. I have never believed in Chinese walls. It is not enough when dealing with a major public procurement contract—a pathfinder, the like of which has not been done before in Northern Ireland or elsewhere—to rely on the flimsy assurance of Chinese walls. It can be seen in documents that PwC has been involved in helping to anticipate budgets for e-HR for the civil service.

The assurances that we are being given now—that any advice provided by PwC to the Department of Finance and Personnel was provided before the contract came up—do not stand up. We are told that it could be coincidence that PwC won all the contracts with Departments, but many of the civil servants with whom it is dealing on the e-business strategy contracts are also on the project board for the e-HR contract. It is working directly with and has the confidence of the civil servants in those Departments who are sitting on the project board.

I cannot accept that there are no prima facie issues of conflict of interest. When I was a Minister in Northern Ireland the ministerial code was clear about conflict of interest and that action should be taken not just when there was a conflict of interest but when there might be a perception of a conflict of interest. The civil service has not acted in that way in this regard.

Some people in the recent controversy surrounding these issues have suggested that my interest in the matter is as MP for Foyle, representing the city of Derry, and that Accenture, the company that has not been currently negotiating with an eye to going into preferred bidder status, had indicated that it would locate the jobs in Derry. Fujitsu indicated that it would locate in Belfast. The Government said that the process had to happen in a location-blind way. If so, why do the best and final offer requirements include that people have to say where the jobs are to be located? If it is location-blind, why do firms have to provide security assessments and guarantees in respect of their sites and locations? That was taking place back in June.

There is a Derry interest in the matter, and not just because Accenture was proposing to take the contract, if it wins it, to Derry. As I indicated earlier, Derry benefited from a small decentralisation effort in the early 1990s, which included the recruitment service of the Department of Finance and Personnel. That service will, in effect, disappear, with the out-sourcing that will result from e-HR, so Derry will lose those jobs. Other out-sourcing initiatives and other changes—some are being pursued by Government as a result of a review of public administration—will also threaten the other jobs that were decentralised to Derry in the early 1990s. That was recognised, yet the Department of Finance and Personnel claims now that there are no issues about location. In its equality impact assessment document—the consultation document; it never produced a final document—the Department said:

29 Nov 2005 : Column 64WH

It goes on to say what the impacts might be on other groups:

the human resources out-sourcing policy—

There we have, in that consultation document, the Government telling us, "Be assured, we recognise the potential impact this has on Derry. Be assured, Government, in the context of the potential jobs that could come from England in the Lyons review, are particularly trying to favour Derry." However, we are being told, in relation to Northern Ireland civil service procurement, that there can be absolutely no indication of a preference or allowances made for any particular locations. As I said, we never got a final analysis of that equality impact assessment. However, what we got recently in a letter to Derry city council from the Permanent Secretary of the Department of Finance and Personnel, in response to questions about why there has been no outcome to the equality impact assessment and why the contract is now proceeding apace and is about to be allocated, was:

And this is a contract that is about to be offered, possibly tomorrow. It goes on:

That is an insult in terms of the public confidence issues involved, which involve civil servants taking decisions on the project work and their relationship with some of the companies that are bidding. I am not going to go into the issues that have already been brought to the Department's attention, such as the fact that people in PwC were able to quote the price difference and all sorts of other figures that they should not be in possession of.

A senior figure at PwC said that Fujitsu was not committed to putting the jobs in Belfast and that it would talk to me about putting them in Derry. He said that he would get back to me. I have never received such a telephone call. It was clear to me, however, that the idea of Chinese walls inside PwC is not robust, when one of its senior figures was making approaches to me about something in which he was not supposed to be involved.

This major contract has not been subject to an independent peer review. A Gateway review has been conducted at several stages, but I do not regard that as having the status of an independent peer review. A Gateway review is due in December. I have asked the Minister of Finance and Personnel to change the Gateway review into an independent peer review of the
29 Nov 2005 : Column 65WH
entire process. There is a smell and that smell should not only affect people who are on the end of the cold wind that is blowing into the north-west.

None of us, no matter where we are located in Northern Ireland, want major procurement exercises conducted in a shambolic way, with equality impact assessments hidden where people do not accept scrutiny. Yes, it can all be put down to the coincidences of a small society, but since the controversy started on 19 October, another coincidence is that a series of documents that were available on websites have now disappeared. The Department of Education's e-business strategy has disappeared from the website. Department of Enterprise, Trade and Investment documents have been altered. Parts of the Department of Finance and Personnel's equality impact assessment, from which I quoted, have been removed from its website. The Northern Ireland civil service information system strategy appendices have been dropped. That all may be a coincidence, but such matters only corroborate the many suspicions that people have something to hide. Ministers should challenge such matters and not hide behind the assumption that the civil service can be trusted and relied on for everything that it does.

1.22 pm

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Shaun Woodward) : I congratulate the hon. Member for Foyle (Mark Durkan) on securing the debate. In the barely more than six minutes that remains to me in the debate, I shall cover as many points as it is realistic to cover. Having taken the bulk of time available to us, I am sure that the hon. Gentleman will understand that it will be impossible for me to deal with every one of the issues that he raised. He will therefore have to accept the fact that I shall write to him about such matters.

The new Northern Ireland policy on procurement was announced at the Northern Ireland Assembly in May 2002. Its primary objective is to achieve best value for money over the lifetime of a contract. It means securing a procurement that meets the user's needs and achieves a balance between quality and costs throughout the life of the asset. However, as the hon. Gentleman knows, that must comply with the United Kingdom's European Union and international obligations. However, the procurement process must not discriminate directly or indirectly against tenderers from other member states.

In that context, European law obliges the Government to recognise beneficiaries only in general terms, such as unemployed people, trainees or young people. The objectives in respect of location can be linked only to the product, service or subject matter of the contract. There is scope to take wider policy objectives into account when defining the requirements of a contract, but the requirement must be relevant to the subject matter of the contract. It must be non-discriminatory to tenderers from other member states, and transparent and consistent with the rules governing each stage of the procurement process.

The hon. Gentleman referred to the need for fair play. He is right, but to ensure fair play demands regulations. While I have complete understanding of the case that he makes, he must understand that it is also an obligation on the Government to ensure that fair play meets the
29 Nov 2005 : Column 66WH
regulations that are laid down to ensure that it can take place. As for the specific issue of the particular project of the e-HR procurement process involving Fujitsu and Accenture, I shall deal with one or two of the points he made. However, as I said, he has left me little time to cover them in detail. I hope that he will understand why I shall have to write to him to answer all his questions.

The contract procurement process has some history. It dates not from September 2003, but January 2003 when the requisite notice was first published in the Official Journal of the European Union. Let me remind the hon. Gentleman that such criteria can be lawfully included only if they are linked to the subject matter of the contract, do not confer an unrestricted freedom of choice on the authority, are expressly mentioned in the tender documentation or the tender notice, and comply with all the fundamental principles of community law, in particular the principle of non-discrimination. Location was a matter solely for the bidders in determining the most economically advantageous solution.

Best and final offer responses from the two bidders, Accenture (UK) Ltd. and Fujitsu Services Ltd., were evaluated using objective qualitative and quantitative criteria, which were made known to the bidders. On 19 October, it was announced that the evaluation was complete, and as a result the DFP intended to enter into further discussions with Fujitsu Services Ltd. with a view to it being selected as preferred bidder.I should like to emphasise to the hon. Gentleman that the procurement process has been extremely robust and has followed best practice as recommended by the Office of Government Commerce and the DFP, including gateway reviews.

On the role of PricewaterhouseCoopers, which has been mentioned in this debate and elsewhere in the media, I should like to state clearly that PwC has not provided any consultancy or other role in respect of the e-HR programme since its initiation. I am assured that the question of a conflict of interest does not arise.

On the issue of equality, I can confirm that an equality impact assessment has been carried out on the policy of e-HR which relates to the provision of human resource services for the Northern Ireland civil service and the Northern Ireland Office. An equality impact assessment consultation document was circulated for consultation in 2004, and the process of finalising the report continues. The DFP is satisfied that it has fully discharged its legal obligations in relation to the Northern Ireland Act 1998 and its statutory equality scheme.

Finally, I can confirm that the discussions with Fujitsu Services Ltd. are continuing and at this stage no preferred bidder has been selected and the contract has not yet been awarded. The hon. Gentleman will appreciate, therefore, that any procurement process in Northern Ireland must adhere to, and be consistent with, European law.

Taking all those factors together—I remind the hon. Gentleman that we have considered them carefully—while it may disappoint him, the Department is entirely satisfied that the procurement process for this significant project was robust and adhered to EU requirements.

On the wider question of the location of civil service jobs that was raised, Ministers are fully committed to considering the dispersal of civil service jobs where
29 Nov 2005 : Column 67WH
opportunities arise and where value for money can be demonstrated. Current dispersal policy is that it should be linked to accommodation planning, but that it should also have regard to other policy imperatives, such as the new targeting of social needs and the regional development strategy.

I appreciate the concerns that the hon. Gentleman raises about the relocation of jobs. While some 65 per cent. of NICS staff in the 11 Departments—nearly 18,000 civil servants—are located in the Greater Belfast and North Down area, nearly 35 per cent., or about 10,500 staff, are located elsewhere in the Province.

The outcome of the review of public administration, to which the hon. Gentleman referred and which was announced by the Secretary of State last week, will clearly have an impact on the wider distribution of public sector jobs. I expect significantly more jobs to move out across the Province as a result of the changes, not least within the new health and education authorities.

In conclusion, we take the hon. Gentleman's concerns and demands seriously. We are concerned about any question of whether or not a robust procedure applied throughout this, in particular the specific issue that he raised. I would simply say that the Department is satisfied that we have met our obligations. We take them and the issue of equality extremely seriously and we are determined that, where possible, more jobs will move out from Belfast across the Province, ensuring greater equality and addressing the issues of inequality in employment.

Next Section IndexHome Page