We shouldn’t waste the opportunity the reform of public procurement law presents to improve public services.

Last month, the Cabinet Office published a green paper outlining proposals for reforming public procurement law, now that we have left the European Union. Consultation on the proposals closes on 11th March.

This area has been an important strand of E3M’s work over the past 9 years. We had significant engagement with the European Commission, and some success in relation to the Social Business Initiative and the reform of the EU procurement directive. We have been active in challenging the way that public procurement law has been applied (very often misapplied) in the UK, for example through the publication of  “The Art of the Possible in Public Procurement”, and by providing practical support for progressive approaches to commissioning, working on the ground with E3M members in different parts of the country.

On initial reading of the Government’s proposals to replace the EU rules, there are some positive points, although we believe they do not identify the critical issues about public service provision, as distinct from general public sector purchasing, or that, as “The Art of the Possible” argued, the major procurement issues are about implementation, not the regulations. Outlined below is a summary of some over-arching initial comments on the Green Paper by Julian Blake of E3M partner Stone King, mainly about the issues of principle, rather than the detail of the proposals. (He has already aired some of these in two roundtables, with different stakeholder groups, eliciting significant agreement). 

1. There are proposals and principles, within the frame, which are positive. But the frame is narrow and blinkered.
2. There is a lack of recognition that procurement is a competition law, single market frame, not per se a “Best Value” frame. There is a refinement to it, that we know well – the Social Business Initiative and the 2014-15 reforms explicitly sought to make procurement additionally a social policy instrument, which is not how the Green Paper is written.
3. Public Services and public service market/non-market issues are fundamentally different to commercial purchasing issues and markets. The Light Touch Regime and the SBI allowed for that recognition. The generalising of the LTR, as the proposed new flexible process, loses that limited sense of distinction, when there is a chance to make it more explicit and meaningful.
4. Inherent Social Value (linked to Public Value economic theory) is part of the distinctiveness of Public Services. Additional value in commercial purchases and infrastructure contracts is different.
5. The rules are not the problem. The implementation and interpretation of the rules and the rigid over-cautious, risk-averse culture of following narrowly interpreted rules, rather than applying them to purpose is the problem. This is hardly mentioned. New rules alone won’t change the dysfunctional culture.
6. Flexibility is good, as long as a new purpose-driven professionalism is part of it. Otherwise, as with the Light Touch Regime, there will be flight to the rules, or rule-like interpretations, when not necessary.
7. Professional reasonable discretion (with publicly transparent reasoning) needs to be a touchstone. The EU principle of a decision being acceptable unless manifestly unreasonable could help. As could a clear mechanism for error correction within a process, as opposed to formalised challenge. Some of the proposed reforms are broadly consistent with this. Others are centralising and add red tape process, contrary to the declared intention to remove it.
8. The centralising/standardising tendency needs to be balanced with an emphasis on the purpose, desirability and facility to exercise reasonable discretion locally be reference to local and regional priorities.
9. There should be much more on pre-procurement assessment, consultation and analysis protocols and making contractual working relationships collaborative, so they actually work. The focus here is narrowly on contract award process.
10. Reference to non-transactional, relational, partnership approaches and wider commissioning methods is missing.
11. Reference to provider initiation of innovation is missing and could be a genuine advance.
12. Social Value Imperatives as conditions of public service delivery could be added as a genuine advance.
13. The concepts of procurement processes and contracts and challenges etc are based on transactional formality, rather than collaborative, facilitated best value relationships.
14. The wide definition of Contracting Authority, which catches any organisation more than 50% funded with public money at a particular time, could be reviewed, but is assumed.

We intend to submit an E3M response to the consultation, responding to the proposals and consultation question based on engagement with the E3M members and would urge others to make their voices heard.

We see this as inextricably linked to our wider E3M work on commissioning, and promoting partnership working between social enterprises and public authorities. We think this should be based on five fundamental correctives for practical public service reform and innovation:

• Professional Commissioning manages and shapes the local ecosystem, it does not simply purchase in a market
• Purpose must drive process
• “Social Value” is intrinsic not merely additional
• The Public Benefit sector should be central not peripheral
• Partnership should replace transaction

We will be sharing more of our thinking about this in the coming weeks and months and are keen to work with others who have similar views, so please do get in touch if you want to know more about what we are doing.

Jonathan Bland and Julian Blake