Contribution
My Lords, I am very grateful to Spotlight on Corruption for its briefing. Amendment 21 is in the name of my noble friend Lord Marks of Henley-on-Thames, who cannot be in his place today, and I have also signed it. We both mentioned at Second Reading our concerns that the Bill, as drafted, might not include all the different levels of subcontractors that are frequently found in today’s public authority organisations. All the other amendments in this group—Amendments 22, 49, 142 and 143—are in our names and build on Amendment 21 to ensure that subcontractors of all types will be caught by the Bill.
In Clause 4(3)(b), the Bill says:
“a person carried out activities as a ‘service provider’ to a public authority if the activities were carried out under a direct contractual relationship with the public authority”.
The Bill is a very welcome step towards implementing the recommendations from the Law Commission to place the misconduct in public office offence in statute. Reflecting widespread criticism of the common law offence, the Law Commission found serious shortcomings in its effectiveness for prosecuting wrongdoing in the public sector and recommended specific statutory provisions to update the offence.
The Law Commission specifically recommended that contractors who exercise functions or perform work for the Government should be covered by the offence. With private goods and services representing 30%, or around £326 billion, of government spending, it is critical that private contractors are covered to ensure meaningful accountability where misconduct occurs while performing public services. The Law Commission recommended that, to achieve this, the list of public officeholders should clearly include
“contractors who exercise functions or perform work for the government”.
This language is not included in Schedule 4 to the Bill, despite the Government’s impact assessment specifically stating that the definition of the public officeholders includes
“private contractors providing public services for any of the public bodies listed”.
The current formulation of Clause 21 risks introducing too narrow a formula and lacks legal clarity as to when private contractors and subcontractors are included.
In addition, the language in the Bill is directed clearly at individuals, and there is no explicit corporate liability provision within it. If private contractors are to be clearly caught by the Bill, it should be beyond doubt that the offence in Clause 12 can be committed corporately, with accompanying consent and connivance liability for company officers as in the Bribery Act.
Current practice in many public authorities is to contract out services, but the services may also be contracted out further beyond the initial tier. One example that springs to my mind is that of the current practice among local authorities to have a principal director contractor for repairs to roads and highways. It is not uncommon for elements of the contract to be sublet a number of times, so that the highways organisation may not even be aware of the companies right at the roadside, because they are five, six or even further layers of contract below the initial direct contractual company which had the contract with, in this case, the local authority. To be clear, on this example about public authorities’ subcontracting practices, I am not aware of any particular problems with highway agencies, whether there are some or not. However, we know that these hierarchies of contract have happened in PFI contracts too, which means that the NHS should be covered.
That is where these amendments come from. The hour is late, and I suspect that we cannot do the issue the justice we want to. But it is important that the layers of subcontractors are caught by this, because if there is a hospital porter who is subcontracted for down the line and does not have any responsibility or whistleblowing duty in their organisation, we could end up with parts of the Bill not being able to work properly, purely because of the contractual arrangements. I beg to move.