The criminally neglected art that is vital to all our places
Whatever the stringencies of the next long-term finance settlement, we can guarantee that the public sector, en masse, will be spending upwards of £300bn in the next year buying goods and services – or one in every three pounds the public sector spends. It should be noted that the UK is only middling in terms of general government spend and proportion of GDP among developed nations.
In the context of heightened value for money, there is already an agenda, outlined late last year with publication of the green paper on public procurement reform, to promote value and transparency at the expense of red tape.
But the subject of how and to what end such unfathomable sums of money get parcelled out for, and sometimes prodigally spent in a national scale version of ‘Brewsters Millions’ before the end of March each year, only attracts attention when things get ugly.
The demise of Carillion all of four years ago is the unexpected earthquake whose tremors still echo across government. In recent days the Ministry of Defence’s bungled £5.5bn attempts to buy a light tank that doesn’t deafen and cripple its crew, can travel at more than 20 miles an hour, fire a gun and move at the same time and fit inside a transport aircraft have, if not added to the gaiety of the nation, confirmed the prejudices of those who observe the defence sector’s inability to buy anything fit for land, sea or air.
Another very newsworthy procurement story is that of HS2. Whether or not it gets beyond Birmingham, its price tag has gained a head of steam from initial estimates of £37.5bn in 2009 to around £110bn today. As Simon Jenkins noted, it is the same extra annual cost to 2040 as the social care scheme considered by the Treasury as unaffordable.
Aside from attracting heat for his role in certain emergency procurement exercises during his time as Number 10 strategy director, Dominic Cummings has been pouring out his views on the underappreciated role of procurement to improve government and public services. For Cummings procurement in the post-Brexit age, now that full OJEU procedures are in the rear view mirror, is much more important and strategic than trade deals and what he derides as ‘Global Britain’.
In one of his Substack rants, Cummings opined: “SW1 ignores cos they all want to prattle about ‘strategy’, not commercial and logistics issues that make a huge difference. Hence why Whitehall blundered into Covid with a procurement system that killed people, just as I said it would years ago.”
Local government has a pretty big darn dog in this fight – some £180.6bn was spent with third parties in the last three years and £63bn alone was spent on third parties in 2019-2020. The journey from the days of compulsory competitive tendering as a Thatcher government drive of the early 1980s has resulted in the UK having one of the more sophisticated public service markets in the world.
The trick for the next decade will be to not just boost the value of the local pound in delivering for people and places – whether better local wages, skills acquisition – but to ensure that large, complex and nationwide deals struck in SW1 also deliver benefits to local communities that are genuinely desired bottom up and can be seen and experienced.
We’re looking to see how we might generate a more ethical form of commercialism through three prisms: transparency and openness; ethos and values and finally local economic benefit – or levelling up as you’d have it.
Among the questions we want to answer are what evidence is there that the ‘good guys win’ and that ethical suppliers provide both higher quality local public services that in turn deliver sustainable long-term revenue streams?
Are providers of public services aligned to public service values and if so can we measure any tangible gains in things like performance or unseen virtues such as more local pride and reputational gain?
At the level of levelling up place, how possible is it for an open markets approach to sustain local economies as well as drive up skills levels and supply chains, boosting local jobs and businesses?
Procurement is very much a criminally neglected art, whose skills and potential impact are more vital now than ever post-Brexit. This is unglamorous, under the bonnet activity. The extent to which better public service commissioning can be harnessed to attain a marked increase in public efficiency and social benefit won’t attract the hullaballoo around say the levelling up white paper or the next housing bill. But it’s every bit as important as issues which attract louder concern, if not more so.
Jonathan Werran is chief executive, Localis
This article first appeared in the Local Government Chronicle