Calls for post-Brexit public procurement reform
In August the Local Government Association (LGA) called on the Government to create an efficient “lighter touch” system when we leave the EU, which would enable councils to procure locally and stipulate a minimum local living wage. Meanwhile, the Federation of Small Businesses has unveiled its own research that suggests the only way to open up access to small and medium sized enterprises (SMEs) is to reduce the barriers to entry by simplifying the process.
Clearly with Brexit comes a break with OJEU and the UK Government needs to establish how to create a simpler and more flexible system that prioritises local spend to the benefit of local people. Our own research, set out in our Better Procurement report,, found that an additional £14bn could be invested in local economies if procurement rules were reformed to include a 20% commitment to Social Value on contracts over £10m.
Scape Group recognises that ensuring value for money to the taxpayer, while delivering quality, is a top priority and both should continue to be the primary focus when allocating public sector contracts. However public sector organisations should also be seeking to deliver the maximum benefits to their local economies, which they can achieve through the use of local labour and the local supply chain. This way public money is reinvested into the community. There is a huge opportunity here to define the system and set the rules. If we want to support the local supply chain by committing to a minimum 20% Social Value, we will now have the ability to do that. If we want to give procuring authorities the power to stipulate the use of a local living wage, as suggested by the LGA, we can do that too.
Increased support for local businesses and SMEs
The Government’s Industrial Strategy for a post-Brexit world signposts the need to ensure SMEs are given more exposure to public contracts, and proposes taking steps to remove unnecessarily bureaucratic, repetitive and expensive tendering requirements within the procurement process. Scape Group would like to see the Government go further and champion a “local first” approach to unlock value for the local economy.
With the clock ticking on the UK’s departure from the European Union the Government needs to establish what a UK version of OJEU looks like and how to make it fair, transparent and accessible. Scape Group is already working with the BSI and local government to streamline the tendering process for public sector work, including the standardisation of Pre-Qualification Questionnaires reducing the time and resource required from SMEs to get that first foot in the door.
How to embed Social Value into delivery
However while important, standardising and streamlining processes does assume that SMEs have the expertise to effectively bid for contracts, when in reality these firms may not have the experience to understand how to weight their responses or how these responses are being measured. This is especially the case around Social Value, which is open to interpretation and its assessment inconsistent across public sector bodies. A simple Government-led Best Practice Guide would be an easy remedy to this, setting out clear requirements and recommendations on social value delivery.
Brexit presents the Government with a series of challenges and while the effective reform of procurement will in itself be a huge challenge, it is also an opportunity to break down the bureaucracy and ensure that we get the best deal for the UK. The industry must continue to collaborate to ensure that the process is simplified and streamlined, prioritising local labour, unlocking the potential of SMEs and seeking maximum value for local economies. Meanwhile, the Government must, in creating a UK version of OJEU, establish how to free public sector organisations and SMEs from the layers of bureaucracy they currently have to navigate while ensuring that the process is fair and transparent. Good intentions are not enough when an opportunity to overhaul the system presents itself. The Government must take a proactive stance and maintain momentum in delivering a procurement process that delivers value for the UK economy.
Mark RobinsonGroup Chief Executive
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