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Public sector procurement reform

Mark Robinson, the EU representative in Brussels on UK public sector procurement and enterprise matters, and chief executive of Scape, a local authority controlled company that tries to cut the cost of public sector construction procurement, gives his reaction to the recent CBI report showing that SMEs are unhappy with the pace of public sector procurement reform.

This survey provides an interesting snapshot from a private sector perspective, and I’m sure if the public sector was surveyed, we’d get a different take on the matter!

Everyone seems to agree that it’s in all our interests to make the public procurement process more efficient; taxpayer’s money will go further, businesses will benefit by winning tangible contracts that contribute to economic growth, and authorities will get much-needed schemes off the ground far more quickly.

However, a big barrier for many is the complex set of rules that govern how goods or services are purchased so as to ensure a competitive market. Therein lies the first challenge. The Government is bound by EU legislation which, to a degree, diminishes the UK’s autonomy in the procurement arena.

However, a new Directive is close to being agreed which will reduce red tape and make procurement processes more manageable. There’s likely to be greater flexibility in the rules, which means it will be easier to negotiate around complex issues arising during tender processes. We’re also expecting an endorsement of public sector shared services, which means more organisations will be able to achieve economies of scale.

But that in itself could compound an existing problem; the proliferation of public sector frameworks that already exist. Many authorities have already set these up in recent years to avoid lengthy EU procurement rules each time they need to outsource.

Some frameworks, like those offered by Scape, are very successfully operated. Others aren’t, are often too small, and have generally been established without the right expertise or business case to deliver effectively.

That’s the second challenge the Government is facing. We’d like to see the failing frameworks be weeded out before the new EU procurement legislation kicks in and encourages more authorities to set these up.

It’s simply not fair for the public sector to expect private firms to tender for their contracts and then never actually gain any work because there simply isn’t the volume available. Similarly, I believe it’s also not acceptable for a framework to operate without any client support during the delivery process. This latter point is important. In our experience, one of the reasons why public sector organisations use our frameworks is because they see Scape as a trusted partner; one which will support them not just in the initial procurement stages, but throughout the duration of a scheme. Many of the smaller frameworks simply don’t offer this service, and that’s part of the reason why only 50% of public sector projects come in on time and budget.*

In ‘A Better Deal For Public Building’,** this was put down to the lack of public sector commercial expertise. This is the third challenge for Government. Budget cuts have led to redundancies, meaning there are fewer staff who know what they want out of a building, how much it will cost, and how to choose the best delivery team. Filling that skills gap is a challenge, but there are solutions available.

Scape works with nearly 180 clients across the UK, and is able to offer that missing expertise. We understand the nature of the public sector from an operational, political and cultural perspective.

That’s why we’re leading the way in providing cost effective and simple procurement solutions to help clients to deliver successful schemes in their communities.

We hope to be able to play an even bigger role in future to enable the Government to deliver its procurement reforms so the long term benefits can be reaped by both the public and private sectors, as well as the taxpayer.

Scape is a local authority controlled company, based in Nottingham, whose shareholders are Derby City, Derbyshire County, Gateshead, Nottingham City, Nottinghamshire County and Warwickshire County councils. The company’s objectives are to bring economy and efficiency to the whole building process – including for new buildings and refurbishment projects. It achieves this through the development of standard designs and strategic procurement arrangements.

References *Wolstenhome Report 2009 ** Published September 2009 by the All Party Group for Excellence in the Build Environment

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