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John Tizard: Seasonal thoughts for public procurement officials

Monday December 16th, 2019

The New Year celebrations will be followed closely by an awakening as dramatic as a bucket of iced water. Instead of cold water we are going to be rudely awakened by the realisation that austerity is set to continue for many years.

John Tizard

John Tizard

Apart some modest real terms growth in NHS, policing, school and housing expenditure, the continuity Conservative Government will continue austerity. The Institute for Fiscal Studies commented that the Conservative manifesto and economic plans embedded austerity. This is particularly the case for local government and even for those service areas which are been offered some increases in expenditure as the additional money will be too little to meet increasing demand and far too little to compensate for the cuts over the last nine years.

The public sector and public services are going to be squished further and deeper.

I am sure that the government will promote further outsourcing of public services and will expect public bodies to contract principally on lowest priced bids even though there will be many rhetorical warm words about social value and service quality.

The combination of tight often falling budgets and an ideological encouragement of outsourcing will put public procurement officials under much pressure to perform miracles.

I have previously used slots on the Government Opportunities blog site to cajole the public sector procurement profession to stand up to undue and unrealistic demands from politicians and senior executives.

As Christmas approaches and the New Year beckons it would be timely to offer some further thoughts. These are simple and straightforward. It may be easier for me to share my thoughts than it might always be for procurement officials to adopt them. However, here they are:

  • make the case strongly that buying cheap often leads to poorer quality, less sustainability and long-term costs
  • explain and advise that outsourcing public services does not automatically lead to cost reductions or to improved quality – and when costs and cost benefits are being considered prior to any outsourcing decision, as they should be, there should be a holistic assessment of the financial, economic and social costs in the short and long term – e.g. costs of less local spending or increased costs to other services including the social security system
  • resist inappropriate public service outsourcing and explain the risks and potential costs of this service model
  • press your public body to instigate a review of all existing significant public service outsourcing contracts with a view to insourcing via contract termination or at the end of the contract period or to renegotiating contracts to protect the public interest
  • make the case for socially based procurement of goods and services to take into account local economic and social benefits for local communities and the local place, environmental and climate emergency considerations, and employment terms and security for staff; and also make the case for local purchasing and contracting with local small companies, social enterprises and the voluntary and community sector

In respect of local purchasing, procurement officials should consider how they might promote the concept of Community Wealth Building about which I recently wrote – http://www.govopps.co.uk/john-tizard-community-wealth-building-offers-the-hope-of-real-progressive-change/

At a macro-level, as Brexit advances. there will be those who will argue that it offers an opportunity for a comprehensive overhaul of public procurement regulations. Of course, everything that I have argued for above is possible under the existing EU public procurement regulations.

I suspect that any trade deal with the EU will require the UK to follow the EU regulations or something closely akin to them, and state aid rules will certainly apply – as they would do if the UK only traded on WTO terms. Trade deals with other nations beyond the EU will undoubtedly require similar conditions.

The EU procurement regulations have served us well and do not constrain most public policy objectives so why spend time and energy on revising them with the risk of ending up with regulations that are no better and potentially worse. Any review and change will take a great deal of time and to rush this would be dangerous.

Public sector procurement professionals should make their views known to government ministers, senior Whitehall officials, the devolved national administrations, Local Government Association and others.

There is a responsibility of the profession to speak up and, of course, if government does decide however unwisely to review and/or revise the public sector procurement rules to contribute to the development of new legislation.

The profession should make the reasoned case for investment in public procurement capacity and capability, and a reversal of the cuts which the service has endured for nine years in almost every part of the public sector. Under resourcing adds to pressure and limits innovative practice. It is not in the public interest.

There can be little doubt that 2020 will inevitably be another challenging year for public procurement officials.

In wishing those involved in public procurement seasonal greetings and best wishes for 2020 I would encourage them to take the festive period to think about the upcoming challenges and to adopt strategic responses at the local and the national level.

Best wishes for happy and successful procuring in 2020!

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