British Government’s plans for procurement overhaul post-Brexit set to become law next year

Derek du Preez Profile picture for user ddpreez May 30, 2022 Audio mode
Summary:
Britain’s exit from the EU is allowing it to overhaul its approach to procurement - something it has long said it wanted to do. But procurement in Whitehall is not an easy problem to solve…

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The British Government has long lamented the EU’s procurement requirements, claiming that they held back the public sector from implementing innovative approaches to buying. Whether that’s true, or whether it was a useful way to throw blame across the Channel, remains to be seen. However, the British Government is forging ahead with new procurement legislation, which is set to become law next year, and claims to replace 350 EU rules with a “more flexible and transparent” procurement system. 

It’s worth noting that the UK did actually implement some truly innovative approaches to procurement whilst operating within the EU’s framework - most notably G-Cloud, a model that opened up access to government spending for thousands of SMEs, and which has been replicated in other countries around the world. 

G-Cloud essentially created an open catalogue for government to buy pre-approved services and products from a range of companies, without having to navigate lengthy procurement frameworks. This put SMEs and larger companies on an equal footing, which proved to be a game changer for the amount of money that was put in the hands of smaller companies that had previously been locked out of expensive processes. 

This is all relevant because it provides context for what the government might do next. How will it improve on systems that are already in place and what will the new procurement regime mean for innovative tools, such as G-Cloud? 

And whilst some are crying out for a deregulated approach to procurement, even though the UK is no longer tied to what the EU does, it won’t have complete free reign. It will still have to comply with the international obligations set out by the World Trade Organization’s Agreement on Government Procurement, which gives Britain access to opportunities overseas. 

Given the criticism the government has faced for how it handled spending and distribution of contracts during COVID-19, that may come as somewhat of a relief to those that are calling for greater transparency and accountability. 

Commenting on the procurement overhaul, Chancellor of the Duchy of Lancaster, Steve Barclay said:

We are introducing reforms through our Procurement Bill that will do-away with bureaucratic rules that are both complicated and time-consuming for firms to navigate.

Our departure from the European Union means we are free to streamline these rules on who wins taxpayer contracts.

This will give small businesses a better chance of landing public sector contracts and allow the Government wider access to the first-class skills, innovation and ideas that many agile, creative smaller firms offer. In turn this will allow us to improve the services we provide to the public.

What’s planned? 

The government has said that the new procurement rules will ‘level the playing field for SMEs’ and ‘drive economic growth across the UK’. The new Procurement Bill was debated at Second Reading in the House of Lords last week and is expected to become law next year. 

Hundreds of EU rules will be replaced with a “single, simple and flexible framework for securing public sector contracts”. The government has said that the reforms will cut costs and make it easier for businesses bidding for contracts, which it hopes will make it easier for smaller companies with less resources, and less experience, to navigate the procurement process. 

According to the latest figures, public sector spending with small businesses rose to £19.3 billion in 2021/22, which accounts for 26.9% of government spending. This is still shy of the government’s official target of £1 in every £3 being spent with SMEs, and most of the SME spend (14.2%) is indirect, which means it is contracted via a larger supplier. Only 12.7% of government spend directly goes to SMEs. 

The government is planning ‘new digital infrastructure’, where it will create a single platform that holds all of a supplier’s credentials (which already sounds very reminiscent of the G-Cloud approach). The government will also publish pipelines of procurement opportunities, with the hope that this will allow small companies to make more competitive bids, including forming consortia. 

This single central platform for contract data will give everyone access to procurement information, strengthening the new Procurement Review Unit’s ability to investigate concerns around both awards and transparency.

The new bill also claims to allow the government to take tougher action on underperforming suppliers, enabling it to exclude them from other contracts. A ‘debarment register’ will also be created, and be accessible to all public sector organizations, which will list companies that should be excluded from contracts. 

Liz Crowhurst, CBI Deputy Director for Policy, said:

Businesses are excited to seize the opportunities presented by this once-in-a-generation Procurement Bill.

From the streamlining of complex procurement processes, to the new digital supplier registration system that will slash the administrative burden facing suppliers, the Bill sets out proposals to cut red-tape, promote transparency, and encourage great public-private collaborations.

The new regulations will make working with government easier and more attractive to businesses of all sizes, and industry stands ready to help translate the benefits from paper into practice.

My take

Having a single digital platform for all of the government's procurement needs is a compelling proposition. In fact, close to a decade ago those behind the G-Cloud used to tell me of their dreams to create a platform that included everything from cloud services to paper clips. Effectively, the aim back then was to prove the G-Cloud’s worth and build an Amazon-like platform for government buying. 

So, in theory, this procurement overhaul could be quite an innovative project. Procurement is notoriously difficult and I think many would agree that the process to supply the government with services/products is indeed bureaucratic at times. 

That being said, I get cautious when what’s being pitched is an idea doused in political rhetoric. Having done some research, I’m struggling to get any substantial detail about how this will work in practice, what this will mean for existing frameworks, how they will be incorporated, or what the process will mean for buyers. Perhaps it’s still too early days, but bundling all of government buying onto one platform is no small task. This work needs to be made transparent and the government needs to engage with smaller suppliers to find out what they need to make this possible. 

We’ve been here before. And when the excitement dies down it’s all too easy for the government to go back to old ways of working. Some controls need to be implemented to ensure standards for how the public sector engages with the private sector are met. We will be watching closely to see how this develops. 

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