Re-shaping public procurement to deliver key social and economic objectives

A Labour Prime Minister entering Downing Street in just over a year’s time will not have any more money to spend.  Three years of stagnating growth has robbed us of any chance of being able to increase expenditure. But we will have to do more, because quite frankly this Government is wasting the talents and capabilities of far too many of our citizens, and businesses.

We will use procurement to help achieve that golden goal of more for less. We want to see Government spending with a wide range of companies, small, medium and large.

 A number of large companies have come to see me with their own proposals for working more effectively with small businesses. And small businesses have also spoken to me of their many concerns. Just yesterday I held a procurement ‘deepdive’ with small ICT businesses in TechUK – some of the stories and concerns were really frightening, including that large companies are trying to put them up as primary contractor to help skew Government figures.

We must ensure that targets for small business are not gamed.

We want to help establish an ecosystem where small, medium and large companies can thrive, providing they offer value for money. In Government we introduced the Small Business Research Initiative – which this Government has expanded. We need to make it more relevant.

We also need to help procurement people have the skills to assess the true long term value for money that contracts can deliver. We know that there are challenges in Government recruiting, retaining and upskilling the right kind of procurement skills. Sometimes it seems Government departments are outsourcing the procurement process without realising they cannot outsource the risk.

So we need to work to strengthen those skills, through recruitment but also through continuous professional development, so that the public sector can be better partners with the private sector in procurement. That’s why we are considering proposals from Labour’s small business taskforce to professionalise procurement across the public sector.

We must create a professional career path for procurement, if necessary creating shared service capabilities and using the private sector.  Having generalist colleagues executing procurements worth billions of pounds does not deliver value and will never harness small business talent for the good of the public sector and the wider economy.

Now I am often told – we can’t change anything about procurement because it’s run by Europe. So I went to Brussels to tell them what I thought of that. And in my meeting with the Commission I was told that anyone who cites Europe to me as a reason for not being able to procure what is best for the public sector should be asked to explain why that was directly to the Commissioner.

So I have said that on a number of occasions so far and it’s very effective. I haven’t had to pass on one name so far.

As my colleague Chuka Umunna, the shadow business secretary has said:

“On procurement more generally, we will take account of the impact on jobs in contract criteria when making procurement decisions and deciding to whom we award contracts.  The French, Dutch and the German governments do this within EU law; so will we.”

And we need to change procurement not only to deliver better value for money but also to deliver co-production. I know that is a trendy term which some people use to mean not very much. This means making sure that those who use the service have a hand in designing and creating it.

And we want procurement to drive positive change in other areas, too.

We need to change procurement not only to deliver better value for money but also to deliver co-production.

I know that is a trendy term which some people use to mean not very much. But it means something quite specific – making sure that those who use the service have a hand in designing and creating it.

And as I’ve indicated, particularly where it comes to local government, this is a growing movement.

We want to procure services based on the assets in our communities as well as their needs.

Labour has called on the government to require suppliers to offer apprenticeship opportunities on public contracts worth over £1 million alongside changes to ensure that the apprenticeship brand remains a high quality symbol of achievement.

Ed Miliband spoke recently of public sector reform – people powered services, co-produced by citizens using the assets of our communities to provide better services for less. Procurement needs to change to support that. And it needs to change to support the vibrant, digital economy working for the many, not the few, which we intend to build in Government.

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