Transforming public procurement

Flexibility to deliver better social outcomes 

We recognise that the government’s aim in the Green Paper is largely to reform the UK’s procurement legislation. We have debated the extent to which our comments on social outcomes can be incorporated into rules in legislation intended for public procurement more generally. Many of us believe it is entirely possible to have special rules for social services. The current rules allow “light touch” flexibilities for certain social procurements. The Green Paper aims to introduce more flexibility by making all procurement rules as flexible as the current “light touch” rules. Many of us would like to see the distinction between social and other procurements maintained and social procurement to shift towards even more flexible rules. 

We also recognise that there are limits to what can be achieved through legislative reform. Changing the law does not necessarily change the ‘culture’: how people behave in practice. Many of us believe that success in the procurement of social services and the achievement of better social outcomes requires more of a culture of collaboration and relational working with service providers, including voluntary, community and social enterprise (VCSE) organisations. We suggest this way of working should be better reflected in the government’s proposed principles of public procurement, where we suggest the addition of principles of collaborative working and respect for officials’ reasonable exercises of discretion. Our submission emphasises the importance of producing carefully-drafted guidance and effective training to accompany the new laws in order to empower local procurement officials to use the new flexibilities they are to be given. Careful thought will also need to be given to the various mechanisms of oversight and challenge set out in the consultation to ensure that they do not make officials unduly risk-averse.  

A second area of focus in our response is around outcomes. We suggest the new rules should allow for more flexibility and longer-term contracts for social outcomes. These suggestions include a Social Outcomes Framework or Dynamic Purchasing System (like an umbrella contract set up at a central level) that would allow local authorities to more easily make call-off orders (second stage awards under the umbrella contract) for procurements based on social outcomes. These outcomes-based contracts and orders would be for longer periods because outcomes take more time to happen and verify. Our comments are based on the insights of some of us who study social impact bonds and other results-based mechanisms.  

Transparency and learning 

Transparency is a significant feature of the Green Paper and a salient topic for the public at the present time. Our comments are very supportive of the transparency reforms and emphasise that greater flexibility should be accompanied by greater transparency. However, we also recognise the burden the transparency reforms may place on contracting authorities. We provide some explanation of this issue and make some suggestions aimed at easing this burden including technical support from central government, a programme of fellows embedded in local authorities, and a period of adjustment, co-design, and flexibility.  

Our fourth theme relates to improved learning about and throughout the procurement regime, strengthening the capacity and voice of procurement professionals within their organisations and across the system. We suggest the “oversight function” proposed in the Green Paper should be a “shared accountability and learning” function. A learning function could include assessment of the procurement system, surveying the actors in the procurement system, monitoring and reporting on the use of procedures and dispute mechanisms, and supporting interpretation of results. The learning function should not confine itself to improving officials’ commercial skills. Where relevant, it should also work to improve their capacity to secure good social outcomes.  

Procurement for pandemic recovery 

We offer these comments in a time of emergency and upheaval at international, national, and subnational and local levels. The last twelve months have been dominated by the COVID-19 pandemic and associated lockdowns. At all levels of government, public spending through procurement is a highly salient issue. The global pandemic has caused serious fundamental disruption to the delivery of social services and significant changes in peoples’ needs. Many people are looking to public spending through procurement to help our recovery from the pandemic. In this challenging and momentous context, we encourage the government to be thoughtful about procurement of social services and social outcomes.

The Oxford Procurement of Government Outcomes (POGO) Club is a diverse group of academics, lawyers and procurement practitioners who are interested in ways of improving public procurement in order to achieve better social outcomes.

We meet regularly to share ideas and learn from each other. Many of our members thought that the consultation was overly focused on the ‘transactional’ procurement of basic goods and services in a competitive market. So a group of us submitted a response to the consultation suggesting how the government might develop its proposals so that they work better for the procurement of public services as well. In this blog, we highlight some key themes from the response. Our full response is available here.