The state of government procurement

As I relax in Paris on holiday I have creatively swiped an article posted on the NCVO website and shamelessly plagiarised it to the extent that I would be drummed out of any academic institution. My apologies Paul Winyard for stealing your article but why write it myself when you have done such a good job (sorry Paul but I changed a few bits so it’s OK if you would rather I take the credit).

When the Public Administration Select Committee reported in July 2013 on its enquiry into government procurement, it made little mention of charities in particular, however many of the problems highlighted have a direct impact on the voluntary sector.

The public sector spends £227 billion each year buying goods, services and works. As the committee pointed out, making these procurement processes as efficient and effective as possible is essential for reducing public expenditure and for stimulating economic growth.

Inefficient

The report highlights firstly that procurement processes are inefficient. Because of a ‘process-orientated, risk-averse culture’ the way in which government bodies apply procurement regulations is often too slow and bureaucratic, making us 50 per cent slower than some of our European counterparts. Something described by the committee as ‘intolerable’.

The committee highlighted how the Government has failed to develop a clear strategy for public procurement and underlines a lack of access for SMEs and social enterprises (a category that charities fall within). The committee clearly is of the view that many government contracts are just far too big for smaller organisations to bid for.

I believe many contracts are too big to ensure a healthy competitive market and too big to enable the sacking of the provider when they fail even when the mess is of Olympic standards in poor performance.

Failure of Contract Management

While acknowledging that government has made some improvements regarding the efficiency and effectiveness of procurement processes, the committee raises serious concerns about contract management failures, such as the recent Serco and G4S debacle. It also criticises the civil service for its ‘lack of understanding about how to gather requirements, evaluate supplier capabilities, evaluate relationships or specify outcomes’.

Wider social benefits are a bit scary let’s focus on price not values

On the issue of where and how the Government spends taxpayers’ money on purchasing goods, services and works, the report also considers how government procurement achieves wider social and economic objectives. While welcoming EU reform proposals and the Public Services (Social Value) Act 2012 which encourage public bodies to use procurement for wider social and environmental purposes, the committee sympathises with the Minister for the Cabinet Office, Francis Maude’s concerns about loading ‘procurement with values and requirements other than getting what you want at the best price.’

At Blenheim we know that price is the driving consideration behind many procurement decisions at present (although there are recent exceptions from which we have benefited). But it is a missed opportunity for government not to consider the quality of services, and the added social and economic benefits that they could achieve with their purchasing power. For example, SEUK’s Shadow State report highlights the issue of zero-hour contracts for social care staff, and how the resultant low wages can have negative ramifications for residents and other benefit departments within a local authority. Again the issue is important but like many charities and social care organisations Blenheim does have sessional staff on technically zero hour contracts.

Lacking in its commitment to value driven commissioning this Government has no plans to promote the Social Value Act, arguing “[it] is a permissive rather than a mandatory regime, so it is very much for public contracting authorities themselves to see how they want to use this, rather than for us to require it”. While the Minister adds the caveat that where it does not interfere with price, other factors can be considered, his remarks raise serious doubts about the Government’s overall commitment to the social value agenda and indeed securing value for money in public sector procurement. At a time when economic growth and cuts to public spending are top of the agenda, it is somewhat surprising that the Government is not more supportive of legislation that can help stimulate job creation and reduce pressures on other services.

According to the committee the Government is still not doing enough to use its procurement spending to achieve wider social and economic benefits for the UK, and suggests the use of wider contract performance measures to help achieve this. Given the glaring omission of any such requirements in the Social Value Act this is certainly a welcome recommendation.

Working with organisations like Drugscope and NCVO, Blenheim will be continuing to work with our partners across the voluntary sector and government to ensure the charity sector’s ‘added value’ and value for money is accounted for in procurement, and that measures are taken to monitor and report on the implementation of the Social Value Act.

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