Government is introducing new measures that it says will reform how it procures public services in the wake of the Carillion collapse, with a new focus on ensuring appropriate risk allocation and increased visibility on spending plans.
The reforms have been hailed as a sea change by some suppliers consulted in developing the new measures. A promise that risk will be mitigated, reduced and only allocated to the party best placed to manage it under a new generation of contracts certainly has an appeal – but will it actually be applied?
Despite the ‘sea change’ claims, initial reactions that it’s just another raft of promises that have all been heard before and won’t be lived up to would be excused in the court of experience. Even the title of the document the measures are contained in – The Outsourcing Playbook – won’t exactly inspire confidence in most people.
The new measures will apply to all outsourcing projects and while they are not mandatory for building, civil engineering or equipment projects, the guidelines, rules and principles are being held up as good practice for any procurement project. New contracts are to be piloted before being rolled out across all central government work.
‘These new ways of working will place a stronger focus on establishing partnerships based on mutual trust and a joint focus on positive outcomes,’ a Cabinet Office press release says. ‘This is fundamental to the successful procurement and delivery of public sector contracts,’ it adds.
The 56 page Outsourcing Playbook lists eleven policy changes said to be key to improving how government works with industry and delivering better public services. It is clearly not expected to be a panacea as one of the intentions of the reforms is to ensure that government is ready for ‘the rare occasions when things go wrong’. There are Guidance Notes detailing the reforms and the thinking behind them for each of the areas of policy change.
Departments are to regularly update and publish their upcoming plans – something we seem to have heard before – to help suppliers plan ahead. Departments are also to identify when it is best to deliver public services in-house or use the private sector.
The pricing and payment mechanism is recognised as going hand in hand with risk allocation and will be subject to greater consideration and scrutiny to ensure it incentivises desired behaviours or outcomes. This change is said to be fundamental to making the outsourcing sector a ‘thriving and dynamic market that is sustainable in the long‐term’.
Other measures in the Playbook were announced earlier, including having suppliers draw up plans – Resolution Plans, or Living Wills – for how services they are contracted to deliver can be maintained in the event of their business collapsing.
It all sounds good, but it has all sounded good all of the times the industry has heard these sorts of promises. The flippant sounding Playbook title is all the more odd given that it is said to be aimed at Commercial, Finance and Project Delivery professionals across central government departments who are responsible for the planning and delivery of outsourcing projects. The Cabinet Office told CL that the name is ‘industry standard language’ and reflects the direction they are moving in. That direction remains uncertain to most observers.
Nick Barrett
Editor