Consultation on changes to Public Procurement

The Procurement Act 2023 has been in place since 24th February 2025.  The government is now starting a consultation on proposed changes.  These are mostly fairly minor, and are about extending the requirements placed on Central government departments to cover all contracting authorities (and a bit more clarification on SMEs and Social Value).

The deadline for responses is 5th September 2025, so you have a couple of months to respond (but don't forget).  The link is here .

My first thoughts are (as above) nothing to significant.  But I'll have a think and share my responses when I submit them.

Always interested in hearing/reading other people's thoughts too.

New UK government best practices in procurement - Sourcing Playbook May 2021

 We are still waiting to hear what the new UK public procurement regulations will be - the Green Paper consultation finished in March 2021, and though I don't know any more than anyone else, I will be surprised if new legislation is in place much before the end of the year.

What is new though is the updated guides to some practical applications of procurement in UK government.  The Outsourcing Playbook has now become the Sourcing Playbook in its 3rd annual revision.  There are also good documents on bid evaluation, Should Cost modelling, and Competitive Dialogue.

All are at the link here.  Lots of good stuff for both public sector buyers, and those selling to the public sector.  And general procurement too, come to that.

I am less enamored of the recent Procurement Policy Note 5/21, which I don't think says much that is not obvious (Public Procurement should support public priorities. Really.)  But, there is nothing to really disagree with.

Power, Corruption and lies

CIPS in their ethics test describe Corruption as "the request, agreeing to or accepting a financial or other advantage intending that, in consequence a relevant function or activity is performed improperly"

This is the definition of Corruption that I am applying when I say that Deloitte deciding not to bid for UK Government contracts for 6 to 18 months in order to appease Ministers is corruption.  Ministers are agreeing to it for political and personal reasons rather than the good of the country.  There is no suggestion that they will benefit financially, though that is not the only definition of corruption.

SMEs and UK Public Procurement

SME's are constantly told that the government wants to increase the amount of business that it is doing with them.  This is an important issue, one very dear to my heart, and as Peter Smith of Spend Matters points out the government is not telling the truth about their failure to deliver on this.

Peter links to the latest report which is extremely misleading about some of the key points, and skips over what I think is actually vitally important news about payment terms, and some potentially good news about a revamp of the currently lame Contracts Finder.

Before I rant about the data, let me get to the good news story: from 25th February 2015 everyone in the supply chain to central government must comply with 30 day payment terms.  We can compare this to the Tesco/Sainsbury problems and see how vital this is for SMEs

The government has consistently remembered the importance of this issue, but not delivered - as signified by the changing language.  25% business central government business with SMEs has moved from a commitment to a target to an aim to an ambition and I think it is currently an aspiration.
The concept has suffered from an internal government clash between Mr. Eric Pickles' concept of piling things high (at sub-central level) to get economies of scale, and Mr Maude's more nuanced approach.  But the upshot is that once again support from SMEs has not delivered. 

I used to deliver programmes for BusinessLink operators, so I am probably biased but when these were cut SMEs lost an avenue for support (there are many valid discussions about whether it was the right support to the right businesses, but still).  Directing more procurement to them would have helped them during an incredibly difficult time for many SMEs.

SMEs have been facing a terrible situations with banks not wanting to lend, reduction in public spending programmes (suitable for SMEs), reduction in overall business spending, withdrawal of BusinessLink (ok, maybe not such a loss for many), increased competition (from the many new one man bands and SMEs set up during this time) and exploitation from big customers paying late (if at all).  The good think about Public Procurement is that it does pay, and relatively promptly. 

I think it is great to encourage these business- some of which will grow, and others of which will die with the ones in the middle providing a living for many people.  There are real problems in targeting government contracts to be appropriate for SMEs, and the government should not shy away from discussing that but it should also be honest.

The headline on the report says 25% business with SMEs.  The text says £11.4bn and 10.3% directly (with 15.8% indirectly).  Let us be clear - indirect does not count.  If I buy a sandwich, and the shop owner buys some cheese with the money to make my sandwich, I did not buy some cheese.  I did not say not stipulate where the shop owner bought the cheese, or how much he paid or when he paid, or who he bought it from.  I bought a sandwich. 

If we are going to include the supply chain the number should be a lot higher than 25%, because the shop owner might employ a cleaner - should that count as my spend because I bought a sandwich?  The 25% figure is a nonsense even before you get to the fact that the indirect spend is based on information provided by big suppliers without any actual evidence.  It is only been given so that the Cabinet Office can claim to have met a target (sorry an aspiration) ahead of the election - in doing so it degrades trust in public pronouncements.

In the breakdown there are good news stories: BIS is 34% direct, DCLG is 24%, DFID is 30%.  Why not trumpet those successes and explain why the DWP is only 4%?  And how you mean to address the overall spend?

Remember though that central government procurement at about £100bn is only half the total with the other half spend by sub-central bodies who may be better at engaging with SMEs.

And the last point, which I again I need to declare an interest on, is Contracts Finder.  The revamp is very necessary, as on the old version the search engine did not work on the front page which is a pretty serious flaw (it works on the new version).  More importantly awareness of it was low - one courses rarely did more than half of the delegates know about it before I told them.  It cannot bring in SMEs if they do not know about it.  In the press release Lord Young says that it is unique "in terms of scale and ambition" - well the old Supply2gov (run by BIP Solutions, who [full disclosure] I do work for) had pretty much the same function, the same ambition, a larger scale, and much higher brand recognition.  (Note BIP Solutions now run Competefor which does a similar job on a smaller scale).

OK, what I've been ranting - what do I want?  Honest data about the situation, a renewed commitment to increasing direct SME spend from 10% to 25% (or even 20%) over the next parliament, and a plan for doing so outlining the problems for particular departments and the potential costs (reduced economies of scale) and benefits (innovation, flexibility etc.).  Not too much to ask I hope.

BTW, a year ago I discussed this with a senior Labour politician and they seemed to have no more recognition of this than the current government, so this is not a politically focused rant (and Mr. Pickles and Mr Maude are members of the same party).

UK government procurement review

The National Audit Office has issued a new review of UK Government Procurement - see here.  (Thanks to Peter Smith and Spend Matters for pointing it out).

I've not read it is detail but a couple of quick points - the number of government procurement posts is down 17% (from 3900 to 3200).  That suggests a wages bill cutting approach to cost savings, though the number of CIPS qualified staff is up (which indicates a more professional approach).

The report states that there is £45bn of central government procurement each year, only £3bn of which goes through central contracts (about 7%).  From those they have saved £426m, or about 1% of total spend but a remarkable 14% of spend through those contracts.  Obviously not all central spend can go through central contracts, but the opportunity for savings is clearly significant.  Assuming those ratios could be maintained if we got say 20% of procurement under central contracts we could save £1bn.  Which is worth having.

Spend with SME is estimated at 10% in 2011/2, with a target of 25% by 2015.  I might be accused of negativity, but that is not going to happen.  The benefits arising from SMEs is real but diffuse and difficult to measure.  If it is difficult to get government departments to sign up to something that would save £1bn, then how much harder is it to get them to sign up to a programme of using SMEs?

The tension between centralisation and encouring SMEs is set to continue.

The UK Public Procurement Opportunity

About a year ago the government came up with some large numbers about the potential savings for councils by improved procurement.  The number was widely publicised as over £400 off each council tax bill, about £10bn which is about 20% of UK local authority spend.

These claims have been investigated by Private Eye, and are skewered by Ben Goldacre in his Bad Science blog and column on the Guardian (last year), and by the Local Government Chronicle here yesterday.

The initial piece of research by Opera Solutions was based on just 3 categories at 3 councils, and really is nothing more than a promotional piece pointing out that savings can be possible.  The 20% headline figure was derived from mobile phone rates (and the other 2 categories were only 10% savings).

Now we are probably going to get the political process here saying some combination of;
- the research was valid (no it's not)
- it was only presented as indicative (no it wasn't)
- it is a long time ago and things have moved on (well yes and no).
- this is political point scoring (well, yes but on both sides)
- let's forget about it.

It is not the only set of government promoted data that is under scrutiny  - see Peter Smith of Spend Matters, on the role of SMEs in supplying government.

My point in dragging these things up from other blogs is that this is important.  There are clearly savings to be made in local authority procurement, but they are unlikely to be as easy to realise as is being suggested.  Likewise there are benefits from engaging SMEs in public sector procurement processes, but they take time to delivery value. 

The first victim of the political process (from either side) is truth, in the form of accurate data.  But without accurate data we cannot make good procurement decisions and set appropriate strategies.  I hope (probably in vain) that all sides will recognise the need for good, clear, accurate data about public procurment.  It will take time and money to gather, but it should pay back the costs many times over in savings.  Just not £10 bn worth.  Probably.  I don't know.  I'd have to look at the data.

£6n government spend with SMEs - follow up in Yorkshire Post

There was a follow up article in the Yorkshire Post on Sunday building on what was said at the Public Procurement Briefing held in London on 9th March 2012.  It used a few more comments from my interview with the YP, and can be seen here.http://www.yorkshirepost.co.uk/business/business-news/6bn-of-government-business-going-to-smes-says-cabinet-1-4331965