Infrastructure and Capital Investment Committee

Meeting date: Wednesday, February 8, 2012

Official Report 451KB pdf

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Procurement (European Union Legislative Proposals)

Agenda item 5 is consideration of European Union legislative proposals. Under the terms of the Scottish Parliament’s European strategy, the committee will consider any EU directive or proposal that has raised subsidiarity concerns. In simple terms, this is about the appropriate level at which decisions should be made—at a local, national or EU level. The committee has received two EU legislative proposals regarding procurement about which the UK and Scottish Governments have raised subsidiarity concerns. I refer members to paper 5. I welcome Judith Morrison and Eileen Threlfall, from the Parliament’s legal team; and Ian Duncan, clerk to the European and External Relations Committee, who are here to respond to questions from members. I now invite Jamie Hepburn, who is the committee’s European reporter, to make a few opening remarks and explain what all this is about.

That is quite a challenge, convener; I shall do my level best.

I begin by thanking the clerks for their assistance in preparing the papers that we have in front of us, because this is not an entirely straightforward issue. The convener asked me to make a few remarks, but I am afraid that they will probably be more lengthy in nature than we might have hoped, because this is the first time that we have dealt with this process and so there is a bit of background to give. In a previous guise, I served on the European and External Relations Committee when we discussed the Scottish Parliament’s system for dealing with subsidiarity issues. We were told at that stage that it would be rare for subsidiarity issues to be brought to this Parliament, but I think that this is the third occasion—although the first in this committee—so we will need to see whether it is an initial glut or a regular feature of parliamentary life.

11:45

There is a lot of material for colleagues to look through, but I direct your attention to what I think are the key issues. First, as a bit of background, I should point out that the UK and Scottish Governments generally agree with the policy direction of the directives, but they have flagged up subsidiarity concerns about the establishment of a single UK oversight body that, as well as having a number of administrative duties, would be responsible for determining on disputes regarding compliance with procurement regulations. We are invited to consider whether there has been a breach of subsidiarity protocols. In essence, do we agree with the views of the Scottish and UK Governments that the proposal to establish this oversight body with its mix of judicial and non-judicial functions raises subsidiarity concerns?

The Scottish and UK Governments are concerned that establishing a national oversight body to determine on disputes with regard to compliance with procurement regulations would represent an unwarranted intrusion on member states’ functions. For a start, because the body would require to have judicial and non-judicial functions, it would pre-empt the jurisdiction of the courts. They also make the point that, in their opinion, previous directives, in particular directive 89/665/EEC—members will need to get used to these snappy titles—have adequately set out remedies for breaches of procurement rules and have given member states the flexibility to determine the best way of implementing them within their jurisdictions. I should also point out that, according to the Scottish and UK Governments, this particular proposal was not in the initial plans set out in the European Commission’s green paper.

However, the Commission justifies the need for action at an EU level on the grounds that member states do not consistently monitor the implementation and function of public procurement rules and that that compromises the efficient and uniform application of EU law. Although several member states have established a national central body to deal with public procurement issues, the tasks entrusted to such bodies have in the Commission’s view varied considerably. Nevertheless, I refer back to the earlier point that it is not clear why the proposal did not emerge early on with the publication of the green paper. Those are the opinions of the Scottish and UK Governments and the European Commission; of course, our own legal advisers can assist us in our deliberations.

In forming a view as to whether we agree with the UK and Scottish Governments that the proposal for a national oversight body raises a subsidiarity concern, we should consider whether we are satisfied that the objective of the proposal can be achieved or achieved to a sufficient extent only by action at EU level and would be better achieved and provide greater benefit than individual action by member states. If we agree that that is the case, there are no subsidiarity concerns as far as the committee is concerned. However, if we agree with the UK and Scottish Governments that the EU proposals raise subsidiarity concerns, we can, as suggested in paper ICI/S4/12/3/5, write to the House of Lords sub-committee conveying those concerns in time for its consideration of the proposal; write to the Scottish Government notifying it of the outcomes of the committee’s consideration and requesting updates in relation to the directives; and write to Scotland’s MEPs to bring to their attention any subsidiarity concerns. On the other hand, if we are of the view that the proposals do not raise subsidiarity concerns, no further action will be required.

The options are limitless, convener. Those are just my suggestions.

Thank you. I invite committee members to consider the proposal and whether they agree with the subsidiarity concerns raised by the UK and Scottish Governments.

I note that the Scottish Government’s opinion refers to directive 89/665/EEC. If the legal advisers are allowed to speak, perhaps they can tell us how that relates to the 2007 remedies directive. Given that very similar things are being said, I think that it is legitimate to conclude that there are subsidiarity issues. On my reading, member states have, in accordance with both directives, already been granted the right to determine their oversight of these issues as they think fit. In that respect—and if my reading of the situation is correct—there certainly seems to be a contradiction between the new directive and both previous directives. As we have been invited to home in on subsidiarity issues, that seems to be the main piece of evidence that we can invoke. However, there would be no problem with also pointing out that we think that the proposals to combine judicial and administrative functions raise more substantive policy problems. Of course, there is also a devolution issue, because any body proposed in the directive would be a UK body whereas procurement is devolved. I do not know whether, procedurally, such action would be appropriate, but I would prefer to highlight the whole gamut of objections, while highlighting the subsidiarity issue that we have been asked to concentrate on.

I realise that we are concentrating on our own ideas and those of the UK and Scottish Governments, but do we know what other member states think about this legislation? I guess that Ian Duncan is the best person to answer that.

At the moment, we are aware only of what the constituent parts of the UK think. Each has particular concerns. Broadly speaking, procurement is a troubling area because of the way in which the material is gathered, audited and assessed and there have been a number of examples of failure in different member states that have implemented the previous directives but have not followed up implementation with monitoring or anything that has allowed the EU to be certain that the directives have been brought in adequately. I do not think that this directive is aimed primarily at failings in the UK; instead, it is aimed at failings in other member states. Although those states have concerns about establishing a new body or entity, no one has expressed anything serious. Instead, there is a recognition that something has to be done. Only the UK recognises that the issue needs to be looked at in a more devolved way than might be the case in other member states.

Jamie Hepburn has set out a range of options, including writing to the House of Lords sub-committee to convey our concerns; writing to the Scottish Government to note the outcome of our consideration; and bringing the matter to the attention of our MEPs. On the other hand, we could simply say that the proposals raise no subsidiarity issues and agree to take no further action.

In preparing for this item, I have probably examined the issue in a bit more detail than other members have and, in my view, there is probably enough of a concern for us to flag it up. That said, I have to wonder aloud whether the process is far too convoluted and the timescale too short for us to properly consider the matter; indeed, I recall the same point being made when I was a member of the European and External Relations Committee. Although it is useful to hear from Ian Duncan and our legal advisers, it would have been very useful to have had a witness from the Scottish Government explain its position or to have taken evidence from others. No matter what we do, we have to reflect the fact that, ultimately, the process is determined by the EU, which restricts the amount of time available for consideration. We should certainly feed back concerns about that—and, hopefully, someone somewhere will hear us.

That is a separate issue that we should take up with the European and External Relations Committee.

At the outset of all this, Jamie Hepburn asked whether we would be inclined to agree with the Government. I did not dive in and say yes at that point, but it is more or less what I think. Perhaps if he had asked whether we were inclined to disagree with the Government, I would have been happier to say no in these circumstances.

A bit of semantics there, Alex.

I think that we should back the Government’s current position while, to a certain extent, retaining an open mind.

Do members agree to write to the House of Lords sub-committee to convey our concerns in time for its consideration of the proposal? We do not have a long time, so members will have to agree to delegate to me responsibility for writing the letter.

Members indicated agreement.

Do members also agree to write to the Scottish Government and MEPs with our concerns?

Members indicated agreement.

We now move into private session.

11:55 Meeting continued in private until 12:07.