Advanced Procurement Agency at heart of call for reform

Science, technology and innovation are at the heart of the UK’s future and procurement and infrastructure policies have key roles to play in producing the necessary conditions for fostering them, say former Prime Minister Tony Blair and former Conservative Party leader William Hague in a joint report.

In A New National Purpose: Innovation Can Power the Future of Britain they jointly push for procurement reform, part of their broader demand for improving innovation in the UK public services. Procurement reform is no doubt needed, as it has been for many years, but does this Blair-Hague blueprint provide any new answers? 

One new thing is their call for creating a new Advanced Procurement Agency (APA) with a mandate to find opportunities for public-sector innovation, procure promising solutions and manage their deployment and testing. Public procurement has been restrained too much by using only tried and tested methods that place little trust in suppliers and needs a “significant cultural change towards risk tolerance”, they say.

Paths for small and medium enterprises (SMEs) into winning public sector work should be smoothed: “The government should strongly reduce friction to encourage risk-taking and reduce administrative requirements that favour incumbent players rather than SMEs.”

The APA would provide small-scale procurements of “high-risk innovative products” to trial in public services, which could be used more widely if successful. It should deploy programme managers made responsible for a particular area of public service and have a mandate to exercise judgement for tech innovation, within a flat hierarchy. They say the government should leverage its procurement budget towards directly supporting research and development efforts that drive efficiency and greatly improve the quality of public service. 

Inspiration should be taken from the United States where government’s willingness to act as a “buyer of first resort” had created environments for early stage innovation and “consistently accelerated progress for technologies that benefit the whole world”.

The report rejects what it calls a heavily state-based approach: “Instead, we must focus on creating and facilitating strong tech-enabled markets, infrastructure and incentives that will allow industry, local actors and consumers to drive the change.”

Blair and Hague admit that the challenges facing the UK’s path to this future are significant. To meet the challenge of decarbonising the UK economy, for example, they say the infrastructure related action needed will include: the second-largest reduction in gas demand across Europe and the third-largest drop in oil demand; an extensive buildout of nuclear power and an increase in the pace of renewables deployment by three and a half times; an unprecedented expansion of the electricity grid, building seven times more capacity by 2030 than has been added over the past 32 years. 

A significant ramp-up in zero-carbon heat solutions in homes and businesses, with heat pumps increasing from 280,000 to 13 million by 2035 to meet our domestic carbon budgets, would also be needed, and industry would have to to decarbonise through significant electrification of core industrial processes and the increased use of carbon capture, usage and storage (CCUS).

Agree or disagree with the main thrusts of their argument, it is clear that delivering all of that would demand the most radical transformation of public procurement seen in the UK. We can only wish them well, but won’t be holding our breath.  

Nick Barrett