The Procurement Green Paper sets out how the UK Government proposes to replace the EU procurement rules. While it talks about the importance of transparency, and the openness and accountability that underpins it – which is of course vitally important – we still have grave concerns.
Procurement rules set out how government ‘buys’ public services and affects the services we can access. Ultimately they determine how we access support and who provides it. For decades, EU procurement rules have been identified as the root cause of restrictive and bureaucratic processes that have negatively impacted upon public service.
While these rules were designed to provide flexibility for public services delivered for people, in the UK they were narrowly interpreted to the detriment of services and commissioning teams. Rather than adopting approaches that reflect the nature and scale of the service, procurement and competitive tendering have become the norm. It has prompted a drive to competition over collaboration, scale over specialism and process over purpose. The challenges have been widely reported, such as in reports from Locality[1] and Lloyds Bank Foundation for England & Wales[2].
In leaving the EU, the UK has the chance to set its own procurement rules. This is an opportunity to overcome the challenges that have dominated public service commissioning. At a time of rising demand for services and increasingly stretched budgets, it is an opportunity to make sure that purpose triumphs over process and proportionate approaches enable person-centred support to be at the heart of public services.
The Green Paper doesn’t address existing problems – and could make them worse
- There is no distinction between public services delivered for people and purchasing in a commercial market
Delivering public services for people is vastly different to supplying products or infrastructure contracts for example – a domestic abuse service in Middlesbrough cannot be compared to a stationery contract in Whitehall so neither should the processes to decide and pay for them.
Many public services for people are delivered by organisations set up for public benefit, not for profit – organisations like charities and social enterprises. Their services are often set up to meet unmet needs because the market has failed, and they support people facing some of the toughest problems. For these types of service, a competitive tendering process is destructive. It stifles collaboration and too often focuses on lowest short term unit cost rather than the ability of a service to meet a need. In doing so, it pushes out the very service that could best help people to overcome the complex problems they face.
Purchasing other services or products where there is an established commercial market is wholly different. Whether that is buying missiles, large scale infrastructure contracts, IT software or pencils, the considerations needed to make decisions are very different. Where local understanding, expertise and relationships are critical to effective service delivery, decision making cannot be undertaken on the same basis as purchasing standardised products at lowest unit cost.
The procurement rules need to recognise that public services for people and purchasing products are different, with different approaches that recognise this distinction.
- The Green Paper does not address the problem of interpretation
The Green Paper sets out intentions to encourage flexibility, through a new ‘flexible procedure’ but evidence shows flexibility is not used unless explicitly set out by Government. Confidence among risk averse contracting authorities to take more collaborative approaches is low – flexibility to adopt more collaborative approaches already exists in the current rules but more often than not these rules have been narrowly or wrongly interpreted to the detriment of the service commissioned. Use of more creative approaches like Innovation Partnerships has been low because there are too few examples of where they have been used to give authorities confidence to adopt them. Getting rid of them, as set out in the Green Paper, will not improve practice.
In dealing only with procurement, the Green Paper is necessarily blind to the importance of the whole commissioning process, and the role of local partnership, community action and the grants that support this. While the Green Paper acknowledges the need for training, it does nothing to improve the pre-procurement process or generate the culture shift needed. It does not take on learning to date which has shown flexibility is only taken up where Government is explicit about how processes may be run differently – such as during the pandemic when public procurement notes explicitly encouraged contracting authorities to work more collaboratively[3]. The lack of detail about how more creative approaches can be adopted will likely lead to contracting authorities reverting to type, adopting open competitive procedures that stymie collaboration and innovation.
In reality procurement should only be used where it is necessary. To understand if it is necessary, emphasis must be placed on the pre-procurement process. That is, understanding the services that are needed and who can provide them, co-designing services and adopting processes which are proportionate to that service: placing purpose before process. Involving those who access services and specialists who deliver services means the service is much more likely to effectively meet needs – driving down a revolving door of long-term demand.
The new approach needs to place more emphasis on the culture shift needed to affect change. More focus is needed on pre-procurement processes, with Government explicitly setting out how contracting authorities can work more collaboratively and flexibly.
- Proportionality is overlooked
Proportionality, a key principle underpinning existing procurement rules, is excluded as a principle for the new approach set out in the Green Paper. Removing proportionality as a principle makes it harder again to distinguish between the process needed for local, public services for people and large-scale commercial purchases, instead encouraging the same approach and level of complexity irrespective of the service being commissioned.
Proportionality should be reinstated as an underlying principle in the new approach. A proportionate approach would allow public services for people to be commissioned in a way that recognises the nature of the service and the scale at which it is delivered. It would reflect the purpose of the service and ensure that the local context is able to shape the commissioning and procurement approach – so that it is proportionate to the needs of the local area. It would also help to ensure that contracting authorities themselves also do not waste resources on overly complex and resource-intensive procurement processes.
- Social value is diminished
Social value recognises the wider benefits that can be generated when paying for products and services. Social value is inherent in what charities delivering person-centred public services do and how they do it. Added social value from companies taking more ethical approaches to how they work is, while still important, different. In failing to acknowledge the difference between the delivery of public services for people and commercial products, the social value generated by both is conflated and the inherent value of organisations established for public benefit is overlooked.
There should be a greater focus on social value within the new approach, but recognising that social value for person-centred public services is inherent in what public benefit organisations like charities do and how they do it.
Now is the time to influence change
The new procurement approach will define what public services are delivered and how they are delivered for years to come. It is essential that the fundamental principles underlying this approach reflect the distinction between public services for people and buying commercial products and other services. If they don’t, resources will be wasted and the services people need will suffer.
Now is the time to discuss how a different approach could improve the innovation and delivery of public services – with MPs, Metro Mayors, councillors, commissioners and right across contracting authorities – to raise concerns with Cabinet Office, the central government department responsible for the new rules.
If you have felt the effects of a poor procurement process and seen the impact it can have on services, tell your story – you can use it to demonstrate how the changes in the Green Paper won’t help and how they need to change – and, critically, why it’s so important for the services you deliver.
[1] https://locality.org.uk/wp-content/uploads/2018/03/Locality-Report-Diseconomies-updated-single-pages-Jan-2017.pdf
[2] https://www.lloydsbankfoundation.org.uk/media/ulrkbf1f/commissioning-in-crisis-full-report.pdf
[3] https://locality.org.uk/wp-content/uploads/2020/06/We-were-built-for-this-Locality-2020.06.13.pdf