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Public Procurement – a “procurement dozen” for the next government

Wednesday April 8th, 2015

PASS - UK Public Contracts Regulations 2015

Public procurement represents an ever-increasing proportion of public expenditure. Surprisingly, however (or perhaps not given its apparent ‘non-sexy’ nature), the topic has featured very little in the pre-General Election discourse or even the draft party manifestos.

Of course, there is ‘some’ political debate, which impacts on (and occasionally even mentions) procurement. Specifically, there is fierce public debate on the role of the business sector in public service delivery and, in particular, its growth in the NHS, the railways and some other public services.  The (often ill-informed yet fervent) debate about PFI rumbles on. And Labour has committed to capping profits in outsourced NHS services. However, the nature, the ethics, the impact and the practice of procurement of public services and goods plays fails to gain a mention. Why?

John Tizard

John Tizard

In part, I think this is because procurement is too often regarded as a technical matter, when in fact it can and should be a strategic political process, contributing to wider policy strategies and objectives. It seems to me, therefore, that there is a real need to lift the profile and status of procurement policy and its strategic importance.

This made me wonder what a ‘public procurement’” election manifesto might contain.  With that thought in mind, I have come up with a ‘hot dozen’ possible and positive/constructive commitments that a future government could adopt, specifically:

1.    A bold and unequivocal recognition of the strategic importance and contribution that effective public procurement can make to achieving wider social, economic and environmental goals; a commitment to ensure that public procurement does so; and a clarity about the desired scope/limits of competition and markets in public services

2.    A clear statement that commissioning and procurement are different; that the former is about determining need and aspiration, and ways of meeting these, with procurement being only one of these means; and a commitment to strengthening the quality and impact of both commissioning and procurement

3.    Strengthening the Social Value Act by giving it more bite; allowing for easier challenges to procuring bodies if it is thought that they have applied the Act improperly; extending it to goods as well as services, and including all the supply chain within the remit of the Act; and requiring public bodies to publish annual reports on their approach to and their use of the Act

4.    Introducing a duty for public sector procurement to place greater emphasis on genuine value for money, which takes into consideration the impact of any  contract terms on employment, local economies and other public sector budgets, and placing the quality of service/outcome before price

5.    Adopting procurement practices that do not discriminate against but positively enable small and medium-sized enterprises (SMEs), social enterprises and charities to bid for and deliver public service contracts; and indeed, introducing measures to facilitate SME, social enterprise and charity provision (including, for the latter, a greater use of collaborative grants)

6.    A recognition that public service outsourcing is not the same as ‘public service reform’ and that it should never be the default option; when it is being considered, that there will be a public consultation on the business and political case for the outsourcing option with clear alternatives (including comparative analysis) also included; and involving staff and service users in procurement and contract monitoring

7.    Requiring all providers of public contracts above a reasonable threshold to have to disclose their ownership, their business models, remuneration and tax policies and practices as well as operational and financial performance for their contracts; and requiring public sector client agreement for major changes in business models and change of ownership for significant contracts; and extending the Freedom of Information Act to clients and providers, and procurement; for both clients and providers to be subject to political scrutiny; and extending the powers and capacity of the National Audit Office

8.    Adopting standardised accountancy standards for major “open book” contracts which are subject to independent external audit and public publication

9.    Considering the practicalities and need for wider application of ‘profit capping‘ and ‘profit sharing’ beyond the NHS

10.    Commissioning an independent, evidence-based commission/review of the impact of public service outsourcing, when it has worked, where it has not, and the reasons for this; to recommend the limits to markets in different public services; and suggesting potential new models for business, social enterprise and charity involvement in the supply of public goods and services which retain a public service ethos and public value

11.    Reintroducing regulatory protection for staff engaged in public service contracts including the ‘Living Wage’, trade union rights, and TUPE protection for the lifetime of a contract and any future re-contracts

12.     Raising the political and Whitehall profile of procurement by strengthening the professional service and in particular, its commercial skills and acumen, and encouraging the wider public sector to do the same; and with a senior minister responsible

I see little reason why all the political parties could not consider adopting this ‘procurement dozen’. If the next government were to pursue such an approach, I am confident that there would be a benefit to public service provision and social, economic and environmental well-being.

Will any government have the imagination and political will to address these issues? I live in hope.

 

John Tizard
Online: www.johntizard.com
Twitter: @johntizard
Linked In: John Tizard

PASS - UK Public Contracts Regulations 2015

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