PROCUREMENT AND FINANCE
The UK economy The
EU directives represent a
national
programme of restructuring of public sector procurement and outsourcing that will allow for cost savings and for businesses to benefi t from the economies of scale offered by the sector; this point was also made by the Institute of Directors in a recent report that revealed that at least £25bn of annual effi ciencies can be made in the UK public sector. These new changes will support UK government priorities of securing sustainable economic growth and defi cit reduction by reducing the lengthy and burdensome procurement processes that add cost to business and barriers to market competition. This will provide more fl exibility and remove the barriers of entry for SMEs who will be able to participate in the market and at the same time stimulate the development of public-private partnerships.
Closer co-operation and a legal framework will also provide safeguards that will limit the risk of fraud and corruption in public procurement, which still has disastrous and long-term implications, causing signifi cant losses to the taxpayer. The recent fraud scandal with G4S and Serco over electronic tagging is just one example, highlighting a lack of accountability and the need for greater scrutiny not only in business, but also at local
and national government levels. Setting out new rules, regulations and adjudication will allow for more control and transparency in the supply chain, increasing the understanding and mitigation against risk, and reduce the impact of events such as the tsunami in Japan and the fl oods in Thailand.
At the same time, the proposed reform also aims to facilitate a qualitative improvement in the use of public procurement by ensuring greater consideration for social and environmental criteria such as life-cycle costs or the integration of vulnerable and disadvantaged persons. Following the tragic collapse of a factory complex in Bangladesh earlier this year, which cost more than 1,100 lives, social and governance standards have rightly been at the top of the agenda. CIPS is particularly supportive of this and has revised its own code of ethics, through which members are
encouraged to adopt an ethical procurement and supply policy and to avoid poor decisions being made.
Conclusion
The new EU Directives on public procurement are a positive step towards securing better value for money, create more fl exible procedures and secure social and environmental benefi ts. Modernising the process of public procurement should become a gateway in helping the UK economy to return to a period of robust growth, and we are working to help increase the understanding of the true economic value good procurement and supply management can bring.
Even better, however, is the fact that the EU directives represent an overall programme, with scrutiny at a national level, and setting out the ‘rules of the game’.
Benchmarking performance and standards against the best of the best and enabling public bodies to purchase effectively, effi ciently and sustainably will creates success for us all.
David Noble
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opinion@publicsectorexecutive.com
Public sector procurement changes to help SMEs win business
What is the best way to open up the public sector to small businesses? Adam Hewitt reports on a new Cabinet Offi ce consultation.
T
he Government has published its consultation on
making public sector
procurement more accessible to SMEs – which could mean every public sector organisation having to use the same pre-qualifi cation questionnaire as central Government.
The consultation document says: “SMEs have historically been shut out of government business and have found bidding for public sector contracts excessively, and sometimes prohibitively, bureaucratic, time-consuming and expensive.”
But in future, there will be a “simple and consistent approach to procurement across all public sector authorities so that SMEs can gain better and more direct access”.
The report praises action already being taken, and notes that the Federation of Small Businesses has found that 90% of councils are already helping SMEs. There are case studies about the good work done by Halton and Norfolk councils.
But it says the new reforms are aimed
at bringing about a set of ‘single market’ principles, with the main changes being:
• Pre-Qualifi cation: eliminating the use of PQQs for low value contracts, mandating a core PQQ with standard questions for high value contracts, and allowing suppliers to provide PQQ data only once.
• Transparency: ensuring all new contract opportunities and contract awards are advertised online and the public sector
The central Government ‘core PQQ’, which it is proposing to use as the standard document for the whole public sector, can be seen at Annex B of the consultation, from page 20.
The new procurement guidelines do not apply to the commissioning of clinical services by healthcare commissioners. FOR MORE INFORMATION
The deadline for responses to servicedesk@ cabinet-offi
ce.gsi.gov.uk is October 17, 2013.
public sector executive Sep/Oct 13 | 59
reports its performance on spend with SMEs and centrally negotiated deals.
• Payment and fi nance: ensuring contractors pay their suppliers on time; consideration of whether performance bonds can be an unnecessary barrier for SMEs, and encouraging the use of e-invoicing in the public sector.
The proposed reforms follow on from
recommendations made in reports by Lord Young and Lord Heseltine earlier this year.
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