The Confederation of British Industry and the Local Government Association are understandably calling for a major review and overhaul of the EU Public Sector Procurement Regulations.
For many years, the UK public and business sectors have argued that these regulations and in particular their application in the UK are ‘tortuous, convoluted and costly for both clients and bidders’, with the taxpayer having to pick up the costs. And it is notable that many in the third, voluntary, community and social enterprise sectors have expressed broadly similar views. So why has there not been much change?
In part, the reason is the nature of policy-making in the European Union – and in part, it is because the existing regulations which have evolved over the last few decades do actually have a sound purpose.
Fundamentally, they are designed to: ensure open competition across all member states in accordance with the principles of a ‘ European free market’; ensure competition that is fair to all bidders (although I fully accept that the reality of whether this is actually achieved is most certainly open to challenge); and ensure probity and transparency when significant sums of public money are potentially transferring to businesses and other non-public sector bodies.
The debate about whether the UK applies the regulations in precisely the same way as every other EU member state is one that emerges on almost every occasion that some EU regulation or legislation is mentioned, although it is probably of little consequence when compared with the quality and effectiveness of those involved in the procurement process – be they public sector, consultant advisers, lawyers, or bidders.
There are many examples of speedy and effective procurements for complex services and outcomes which have been secured within the current UK rules – and there are some horrendous examples of shoddy poor practice too. And I dare say the same is true in the other twenty-six member states.
When interested parties call for a review and overhaul of the public procurement regulations, it is vital that they both declare and are open about their vested interests. On more than one occasion, I have found myself having to gently remind senior business sector executives and third sector chief executives that the public sector does not exist simply to let contracts to them! The public rightly expects that public procurement is efficient and effective; delivers value for money; and is not corrupt or partial.
The public sector can and should rightly look for more than low-cost purchasing when it procures. The estimated value of UK publicly-procured services is over £80bn per annum. This is a significant proportion of non-welfare benefit public expenditure, and if goods are included in the total, it represents a much higher proportion.
Whilst public procurement should rightly be about value for money for the tax payer – both the costs of the procurement process itself and that which is procured – the critical issue is to be absolutely clear about what is meant by ‘value’ in the context of public services.
Let’s be clear. It most certainly should not be a euphemism for the cheapest. Bargain- basement procurement driven by bargain-basement so-called procurement professionals leads to poor quality, and often unfair treatment for public servants – whoever is employing them – resulting in longer-term additional costs. ‘Value’, as the recently enacted Social Value Act makes clear, should include social benefits for local communities and the wider economy and society. Many, including myself, argue that it should also include fair and reasonable rewards, terms and conditions for staff. It can and should also address issues of sustainability.
It follows that any fundamental reform of procurement regulations must enable greater opportunities to use public procurement as a means of enacting wider social, environmental and economic objectives.
Those with the greatest interest in public procurement are ultimately not those bidding or considering bidding for public sector contracts but those who use them and those who work in them. Therefore, any reform of the regulations should place a duty on clients to consult and involve these critical stakeholders in public procurements.
Of course, there are many reforms and revisions required to the regulations in order to make them easier to use; to remove barriers for new and small entrants to the market, whether they are SMEs or social organisations; and to make the process more transparent and those responsible more accountable.
My final comments on the LGA–CBI initiative are twofold:
- whilst reform at a UK and EU level is desirable, there is much that can just be done better – so how about a bit more honesty on this matter and an increased focus on sharing and extending good practice
- in the excitement and enthusiasm for public sector procurement reform, it is essential that no one forgets that the public sector does not have to procure or outsource everything and that it can often secure through its own delivery as good, if not better, outcomes and higher value than other sectors. In particular, it can grant-aid the voluntary and community sector and communities to secure outcomes and it can enter into partnerships with others in all sectors without actually contracting
By all means, let us have a debate and a campaign that has already been pursued for many years – but let’s never lose sight of the fundamental reasons for high quality, effective, value-driven and tax-funded public services. These are about securing social, environmental and economic well-being and opportunity – and are not just about necessarily making life easier for suppliers, whoever they may be.