“Please Procure Responsibly – The state of public service commissioning” by Joshua Pritchard and Rose Lasko-Skinner, March 2019.
A brief comment on Reform’s latest report
By DeNové LLP
No system is perfect; this is as true of public procurement as it is of anything else. Anyone who has worked in procurement for any length of time will be intimately acquainted with both the positive and negative aspects of the current processes. Equally, they will be aware of the collapse of Carillon in early 2018. This most public of failures suggests that the public procurement process is in dire need of a shake-up, and Reform’s recent report confirms this.
Reform, the leading think tank for public service reform, released a report in March 2019 laying out the many failings of the current system, as well as a substantive list of recommendations to improve the process for government, businesses and the public.
In the report, Reform lists ten recommendations that would benefit all parties involved. We aim to give a distilled overview of each in this post, and we highly recommend reading the full report for yourself. You can find it here.
- Objective ‘make or buy’ flowcharts to be created
Reform is highly critical of the current ‘make or buy’ process, which has resulted in a high frequency of outsourcing for the wrong services, and therefore an unnecessary increase in spending. Reform recommends considering whether a service “naturally lends itself to outsourcing”, as well as focusing on the characteristics of the service itself, not the market context. To provide guidance, they have laid out ten questions they believe commissioners should consider before making any ‘make or buy’ decisions. Find them on page 22 of the report.
- A national guidance framework and toolkit should be produced, with a focus on identifying and quantifying social value.
Commissioners need to ensure that public spending achieves the greatest possible value for society, not the smallest amount of expenditure for the procuring body. As the public’s money is being spent, it is only fair that it be on a solution which offers social value in return.
The splintered nature of current advice on how to ensure social value makes doing so difficult, and many commissioners feel they are “freestyling” due to the lack of concentrated guidance, hence Reform’s recommendation of a national guidance framework.
- The PSTA (Public Service Transformation Academy) should receive an annual funding grant of £60,000.
- A national training framework (a free digital course) should be implemented to those procuring over OJEU thresholds.
Reform combined recommendations 3 and 4, so we have done so too. Up to now, emphasis has been placed on upskilling central government departments, usually at the expense of local authorities. This has resulted in a disparity in the commercial expertise held by central and local procurement teams. Reform recommends implementing and increasing training and events for local authorities to level the playing field.
- Government Commercial Function should expand to include an advisory service.
A focus on commercial skills is an important part of the reforms needed in the public sector. Commercial expertise capacity building in local authorities does not go far enough and a huge pool of expertise is utilised only by central government to the detriment of local authorities. Furthermore, the high turnover of commissioner staff has an unfavourable effect, especially on local authorities. Therefore, Reform suggests the provision of Government Commercial’s advisory services through Public Service Transformation Academy’s regional hubs to provide support for commissioners and maximise bidding potential.
- A ‘statement of responsibility’ regime should be adopted by all government departments involved in commissioning, so that all involved in supply chains are aware of the responsibilities and accountabilities involved.
Firstly, Reform has noted the contract inflexibility that is currently common in procurement, the burden of which usually falls on service users. This increases risks, which recommendation 6 seeks to reduce. Reform suggests that contract flexibility should support service delivery innovation. This means shifting to Outcomes-Based Commissioning (OBC) and placing more onus on what citizens/service users want, rather than what services or works are being purchased. Secondly, Reform recommends using a common risk appraisal standards framework to encourage a less ‘aggressive’ transfer of risks to suppliers. Thirdly, accountability is a key concern, and a lack thereof has resulted in a loss of confidence in public sector procurement. Making the boundaries of accountability clearer places the focus of procurement back onto the beneficiary/service user. (Page 38-51)
- Updated guidance should be issued regarding publication of information on Contracts Finder, including a standard minimum requirement of information.
- Redaction/Non-publication may be permitted, but a case must be presented to the Cabinet Office.
- Lists of Authorities who do not meet obligations regarding Contracts Finder should be published, be accessible, and a three-strike system should require “black-listing” for non-compliance.
Recommendations 7 through 9 highlight the lack of transparency in public sector procurement. The frustration towards the lack of available information was touched on in the Institute for Government’s report ‘Government Procurement: The scale and nature of contracting in the UK’, published in December 2018. Recommendation 6 seeks accountability, while recommendations 7-9 seek to support and enforce this through transparency and compliance. It has been clearly recognised by many, both within and outside of government, that this is a much-needed step forward.
- An independent review of the current regulatory landscape of outsourcing in public services should be commissioned, ultimately to move towards standardisation, healthy competition, sustainability and social value.
Reform feels that the audits in place to ensure governance of the procurement system are not suitable, and that regulation needs to be stricter, especially regarding the management of public money and the value for money across public services. Some have suggested that a new regulator is need, one that is independent from government.
In short, all of Reform’s recommendations seek to increase transparency for both the government and the public, and, in doing so, allow both parties to hold commissioners to account. There are clear challenges, but should they be overcome, these changes will bolster the procurement process and allow for new and exciting competitions and developments in the future.
To grasp the full scope of Reform’s recommendations, the full report is available here.
DeNové LLP, Lauren McNeilage & Nancy Laidler
Reform is a registered charity and the leading Westminster think tank for public service reform. Its mission is to set out ideas that will improve public services for all and deliver value for money.
DeNové is a London based business development and copywriting agency. We work with clients across Europe, refining sales strategies, finding and winning new business.
DeNové was made aware of the report by diginomica, a media property designed to serve the interests of enterprise leaders in the digital era, please read the article here.