Another revolution in government procurement has been launched, this time by the Cabinet Office. There have been a few over the years. The view that UK central government procurement is a shambles is by now strongly entrenched throughout the industries that have to rely to any extent on public sector work. Scepticism can be excused in response to this latest move.
Cabinet Office Minister David Lidington, Chancellor of the Duchy of Lancaster, announced the revolution, as it is called on the Cabinet Office’s own website, promising that contracts will be used in future as a ‘force for good’, supporting small businesses, providing employment for the disadvantaged and reducing adverse environmental impacts.
Public services should be delivered ‘with values at their heart’, Mr Lidington says, and government’s purchasing power should be used to ‘benefit society’ – which is pretty much what we had hoped our taxes were being used for all this time, but it’s good to hear a government minister confirm it.
This follows a package of measures launched in June to promote ‘a healthy and diverse marketplace of companies bidding for government contracts, including small businesses, mutuals, charities, co-operatives and social enterprises’. The Cabinet Office certainly seems to have got its social conscience hat on.
The headlines following Mr Lidington’s speech were captured by the announcement that ‘living wills’ are to be drawn up by major suppliers to the public sector, spelling out what would be done to ensure smooth continuation of service delivery in the event of them going bust, possibly as a result of winning contracts at too small a margin to survive, as they are encouraged to do by government procurement procedures. Some readers might think they recognise this idea as what is more commonly called contingency planning, but it might surprise few that the idea seems to be new to public sector procurement.
Several key suppliers are to complete their living wills within weeks and others are expected soon. The details of how these living wills work will be fascinating to hear. Other suppliers are to be named as on stand-by to pick up the reins should the company originally awarded the contract falter; how willing will others be to shoulder the burden of fulfilling contracts that have just played a part in the downfall of a major rival? It is unlikely that they will be able to promise to take on major projects at the same rates, so how will new contract entitlements be calculated?
The government is also to improve the design of outsourcing projects and from next year new, complex outsourcing projects are to be piloted before decisions are made to roll the service out fully.
By engaging earlier with the market on the design of outsourcing projects and by requiring pilots for new services, the public sector hopes to learn from experience.
The government also plans to publish new data, ‘not seen before’, about the performance of critical contracts. The government’s Supplier Code of Conduct is to be ‘reviewed and enhanced’.
Clearly there is much to be revealed about this revolution. Revolutions are always struggles between the past and the future; given the history of public sector procurement it should be easy to pick sides in this one. CL
Nick Barrett
Editor