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Public Sector Procurement

By The Drum | Administrator

November 2, 2006 | 6 min read

Businesses seeking to sell to Scotland’s public sector describe the process as cumbersome and overly-bureaucratic. Companies cite a lack of information about available tendering opportunities, inconsistencies and artificial barriers, with accreditation as a supplier to one part often not portable to another part of this diverse sector. Bidders who lose out often complain about the absence of feedback, despite being entitled to it.

Firms tell us too that civil servants often have insufficient skills or relevant experience, and can be unclear about what they want to buy at the outset. This manifests itself in shifting sands during contract negotiations and delivery, delays, and extra costs for taxpayers and suppliers alike.

With the public sector accounting for over half of the Scottish economy, this is not just an issue of value for money and efficiency in public services (though as a major taxpayer, business certainly wants to see value for money!). It goes to the heart of the debate about growing our economy.

Selling to the public sector ought to be a great opportunity for Scots firms to win orders and grow their business. After all, the state sector in Scotland and its diverse array of departments, quangos and public bodies, is thought to spend £8 billion each year. Yet fewer than one in four Scottish firms express an interest in doing so. Many believe it is simpler, less time-consuming and costly to obtain private sector work, and that the rewards are greater too.

The Executive’s recent welcome moves to widen the advertising of procurement opportunities, and improve consistency through standardised pre-qualification questionnaires, builds on recommendations from CBI Scotland. This is beginning to bear fruit, to the benefit of taxpayers, public and private sector organisations as well as to small indigenous firms.

We recognise the need for the public sector to extract value and innovation from procurement and not simply to manage cost. This requires skillful management of demand to access the best from firms of all sizes.

The changes already initiated are a good start, but there is no room for complacency. This is why CBI Scotland’s new policy manifesto, published last month and available on our website, sets out the further reforms and investments the next Executive must make if it is to maximise the value to our economy from public procurement.

Whichever ministers form the new Executive after May’s elections, they should champion the business opportunities for Scotland’s small and medium sized firms right across the public sector.

CBI Scotland strongly supports the McClelland Review proposals for public sector procurement, believing these to be sensible, practical and achievable in delivering the desired shift in attitudes and procedures. The new framework for delivering and driving this agenda, particularly the Public Procurement Reform Board, requires business input and continued ministerial support.

Best practice examples of high standards and professionalism must become common practice throughout the public sector. Political will is central to the success of these reforms, as is the recruitment of a new cadre of high quality public sector procurers, the lack of whom is a barrier to achieving value for money and innovation.

The Executive must be prepared to enforce change if necessary, particularly in autonomous parts of the public sector such as quangos and councils. The effectiveness of the reforms must also be monitored and evaluated within a suitable timeframe.

The proposal for an online national procurement portal, as in Ireland and Norway, is welcome. This will provide potential suppliers with better information about available opportunities right across the public sector, and should itself be contracted out to the private sector. This will be a challenge for some suppliers, with recent research finding that only a minority of SMEs have experience of online tendering.

CBI Scotland believes these changes are crucial in their own right. However they should form part of a much wider reform of public services, with far greater effort made to involve business in the delivery of public services. The sheer size and scope of its public sector provides our country with an opportunity to be world class in this area of public policy, as well as providing new opportunities for the growth-oriented businesses Scotland so badly needs.

David Lonsdale, assistant director, CBI Scotland

www.cbi.org.uk/scotland

Richard Marsham

managing partner of The Leith Agency

“Procurement has certainly got a lot better since the Executive’s framework contract was developed. Now at least we only have to go through the full process once every few years, but it’s pretty tortuous when you have to go through it. Sometimes public bodies don’t really understand what they’re looking to appoint.”

Will Holt, managing director, Consolidated PR

“Procurement is pretty rigorous already. It’s certainly not a walk in the park securing public sector business and with good procurement you know where you stand. The more departments understand the creative industry, and the added value agencies bring, the better.”

Nick Ramshaw, Elmwood

“In my experience, it is usually very rigorous and unnecessarily thorough in parts.

“What really needs to happen is for the procurement departments to better understand what we all can offer. This way, they can approach a much smaller number of agencies with the confidence that all will have the experience and skills to do the job and they will not get ripped-off. They can then build relationships, work together, measure success properly and get much better value for money. After all, isn’t this what they want to achieve?”

Ian McAteer, managing director, The Union

“The public sector procurement procedures, driven by the mandarins of Brussels, are becoming more and more Kafkaesque. The intention, which is fairness and transparency, so we can all see how our taxpayers money is being spent, is a noble one. However, does the system work? It causes as much time and hassle for the clients as it does for the suppliers. I don’t think you’ll find anyone on agency or client side who wants the procedures tightened. ‘Less is more’ is the mantra for our industry – if only the same were true for procurement.”

Graeme Atha, director, Frame

I think it is a can of worms, and often it can be a lot of hard work. Sometimes the end doesn’t often justify the means. The amount of time, effor and expense smaller agencies have to go through is terrible, and the process can be unwieldy and a lot of hard work.

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