Social value a procurement challenge

Little attention has been given to the proposed legislative shake up of the UK’s public sector procurement that went before the House of Lords for second reading in late May. This is surprising because public sector procurement accounts for over £350Bn a year, at least some of which is regularly accompanied by inefficiencies of legendary proportions.

Procurement hits the headlines mostly when when something goes obviously wrong – the press having a field day with allegations of cronyism in procuring vital protective equipment during the height of the Covid pandemic for example. The fact that many millions of taxpayers pounds were paid over the odds for equipment that failed to do its job rightly attracted intense scrutiny and criticism, but the press focus inevitable swung towards focussing on the ‘guilty men’, while largely ignoring the process that allows decisions like these to be taken.

It is that obviously flawed process that the new Procurement Bill aims to reform. New legislation was needed anyway because of the UK’s withdrawal from the EU, whose procurement performance always left a lot to be desired. Part of the post Brexit promise was that now the UK could have a bespoke procurement regime that would be ‘simpler and more transparent’ than the systems imposed by Brussels.

The UK’s procurement problems however can’t all be laid at the door of the EU – we have always managed to screw up large procurements all on our own, without any interference from elsewhere. Things aren’t getting any faster since leaving the EU – the Conservative Party manifesto at the 2019 election promised to build and fund 40 new hospitals over the coming ten years. The UK left the EU in January 2020 but the procurement process has not so far even started.

Reform plans were published in a Green Paper back in December 2020, and a public consultation ended in March 2021. Legislation was expected by Autumn last year but, as with all things procurement related, was delayed. Key changes are to establish a single digital platform for suppliers and would be public sector suppliers to register on, which should eliminate at least some of the tedium of the process of registering interest. Changes to the operation of frameworks were announced earlier this year and are enshrined in the new legislation.

Also previously published was the National Procurement Policy Statement, which brings consideration of a range of factors other than price into assessment of tenders. Tackling climate change, reducing waste, improving skills, encouraging smaller suppliers – all these and more are now to be looked at when considering tenders. Is introducing all these new factors into the process going to speed things up, or ensure that any of the failures of the past won’t be repeated?

Expect much confusion and debate over the increased emphasis on these ‘social value’ factors in the Bill. A major change is that bids will be evaluated on the basis of ‘most advantageous tender (MAT)’, rather than ‘most economically advantageous tender’ (MEAT). Removing the term economically clears space for procuring authorities to include all of these social value factors in their assessments.

Contractors are expected to be encouraged by the changes to include social value in their tenders. Recruitment of people with knowledge of these sorts of social value factors seems to be underway at the larger contractors. How procuring authorities are to recruit and pay for the extra staff that will have to undertake bid assessments is something we can expect to hear more about soon.

Nick Barrett