A chance for change.

Very rarely does a chance to fundamentally change something come, and when it does, considered thinking needs to be applied, risks assessed, and opportunity carefully weighed to understand the value of the choices that follow.

We are now at such a time, and we must not fall short.

I refer to the opportunity to change how the UK public sector procures its goods and its services. It may not be front page news, but it is of pivotal importance to maintain a competitive and thriving UK for the decade or more ahead.

It’s inevitable that the end of 2020 macro-change is coming, not only are we leaving the EU trading bloc, setting our own course, but we are also leaving behind a number of regulations, processes, legal frameworks and rulebooks. We have enshrined into UK law much of the EU’s legal framework to smoothly exit our EU relationships, but to maintain the procurement rules, defacto, would be a dereliction of duty and a genuine opportunity wasted. Discussions are already underway and a working party, led by very capable civil servants are articulating the challenge, soon to be presented in the form of a ‘Green Paper’, followed by the usual 12 weeks window for consultation.

However,

Will this go far or fast enough to achieve the change we need?

If not, we are at risk of only delivering adventurous incrementalism, tinkering with the way things work, and missing the opportunity to radically re-think what good looks like and how it can be delivered. The opportunity to transform should not be missed due to lack of ambition or lack of vision.

But we are at real risk of simply adopting what’s worked and already running it ‘as is’. If so, we will collectively fail in our joint obligations to the taxpayer but more importantly to our future generations. This is a once-in-a-generation opportunity to build a new way of working.

Moving forward…

Initiatives such as multi-year budgeting, outcome-based contracts, deeper partnerships, a new approach to joint ventures and sharing risk and reward (properly), to name a few, must all be fully explored. Simply taking what we have now, rolling on into 2021 and then slowly adopting incremental change will not deliver the pace much needed, and much desired.

Even exploring at ideas such as pre-qualified suppliers (as per many framework agreements), and dare I say, short shortlists from the outset, will deliver value faster as well as greater consistency.

Of course there will be winners and losers, as inevitably there always will be in a competitive environment, but raising the bar pre-procurement and creating  a scheme of supplier accreditation, a type of ‘kite mark’, built upon value delivered to date, relationship quality over time and a commitment to delivering many of the social value outcomes government is seeking, surely will lead to a step change in public service outcomes for the better.

I’m aware many will say that this could skew the market in favour of more established suppliers, but why should it? There should be full commitment from the start not to repeat the same processes and errors of the past, we should be looking at a blank canvas and a process that revaluates suppliers’ fitness for purpose and for the future.

Next Steps

Importantly in all of this is the ability to hold suppliers to account and to achieve this a re-thinking of the relationship management process could prove worthwhile. This has come a long way in the last decade, but more can be done, especially when it comes to building a deeper understanding of each other’s businesses and needs. This in reality has been an underinvested area for too long. Much as an Investment Bank will have dedicated analysts monitoring firms and markets, so should Government. The Governments’ Outsourcing Playbook is a good start, but more can and should be done.

In terms of commerciality and contracts, then ideas such as gain-share could become the defacto ‘norm’ for all contracts. But to do this there has to be a deeper understanding of the accounting processes and real costs of the supplier firms. This shouldn’t be treated as a ‘fund’ at the end of the year to renegotiate or put pressure on suppliers to step up and do more for lower future margins.

Many things could be achieved, if we are ‘brave’ in our outlook and ambition. Brave, however jointly, together and in the spirit of partnership. Firms are in the main looking to make a reasonable return on capital invested, to satisfy shareholders and stakeholders, to pay the correct amount of tax and to support (by their own actions) the development of a thriving UK, across the regions and four nations.

We must use the opportunity afforded to us now not to simply undertake a ‘quick and dirty’ consultation resulting only in incrementalism, no matter how ambitious. We must grasp the opportunity, work collaboratively, private and public sectors together, making the change really stick and ultimately delivering the value so desperately needed for our country.