By Marcus Leach
Ask businesses in the UK to characterise their experiences of trying to sell to the Government and the chances are you’ll be left with a sense of frustration about a procurement system that is beset with delays and complexity.
That’s why the Confederation of British Industry (CBI) has been working closely with its members to put together a seven-point plan to help the difficult process of procurement reform across the public sector.
We’re pleased that so much of what we’ve been saying to the Government was present in the Cabinet Secretary’s recent speech and the Chancellor’s autumn statement, but we need to ensure that these commitments are translated into action.
Better procurement doesn’t just mean lower costs for the Government. It is fundamental to improving quality and raising efficiency across the public sector.
Our proposals set out the key themes that the Government will need to address: a focus on outcomes; better engagement between procurement officials and suppliers before, during, and after procurement; and simplification of the regulations and processes that make procurement in the UK slower and more expensive than almost anywhere else in the EU.
Our key recommendation is that tangible outcomes, whether they relate to cost, efficiency or quality need to be the basis of public procurement. We need a system which rewards whichever bid will best deliver the required results, not the bid that ticks unnecessarily rigid process requirements. Commissioners know their organisations and the communities they serve and are best placed to determine what they need, but this doesn’t mean that they are best placed to design the solutions.
Government departments such as the Department for Work and Pensions and the Ministry of Justice are setting a good example by focusing on outcomes rather than processes and allowing greater innovation from their providers.
The Government also needs to rethink how it engages with its suppliers. Better relationships mean better mutual understanding between commissioner and supplier of the problem and potential solutions on offer. The appointment of Crown Commercial Representatives to manage the relationship between businesses and the Government is a great first step, but this can’t just be a high-level process.
Businesses know the value of having long-term productive relationships with suppliers and subcontractors. The Government should learn from the private sector’s experience and become a better and more informed customer, able to articulate its demands more effectively, so that firms are better placed to meet them. The CBI warmly welcomes Francis Maude’s focus on developing these longer-term relationships. By ensuring that procurement decisions are more market-informed, procurement can help improve services and strengthen the wider economy.
Improving relationships with suppliers and potential suppliers will also help simplify procurement processes. At a UK and EU level, there is much that can and should be done to speed up and streamline procurement processes. Government procurement in the UK takes almost 50% longer and costs more than twice as much than the EU average. The announcement of a 120 day completion target for all but the most complex procurements is a great step forward, but even then, procurement in the UK would still take more than 20% longer than it does in Germany.
We need a fundamental change in culture in public procurement in this country. It’s currently risk-averse and does little to reward good results, asking unnecessary questions and erecting barriers to entry which discourage new bidders and smaller companies in particular.
Ultimately what we really need is for the positive announcements of recent weeks to be matched with progress on the ground.
Businesses are eager to play their part. A secondment programme is already underway placing staff from the public sector in private companies, and vice versa, to help foster better understanding. CBI members are ready to get involved in schemes which improve the skills of public sector commissioners. All this is crucial to the success of the lean procurement process being rolled out from the 1st of January 2012.
The way forward has been identified. It’s now down to the politicians and procurement officials to grasp the nettle and make it happen.
Join us on