The Art of the Possible in Public Procurement Frank Villeneuve-Smith and Julian Blake 3
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The art of the possible in public procurement Frank Villeneuve-Smith and Julian Blake 3 About the authors Acknowledgements Frank Villeneuve-Smith is the Director Bates Wells Braithwaite, HCT Group of Communications at HCT Group – and E3M would like to thank Geetha a transport social enterprise. In addition to Rabindrakumar and her colleagues over 20 years’ senior marketing experience, at Big Society Capital, Adam Kybird at he specialises in bringing complex topics Bridges Ventures and Adam Swersky to life for a wide range of audiences. at Social Finance for their ideas and He is the author or co-author of a score introductions for case studies – as well of publications on subjects ranging from as all the colleagues at commissioning transport procurement to employability authorities and providers who gave Introduction skills, from CPD strategy in Further so generously of their time, providing Education colleges to the biennial State of feedback on content, telling their stories An end to pushing on Social Enterprise survey for SEUK. and contributing cases. The authors would also like to thank David Hunter, Dai Powell a piece of string Julian Blake is co-head of Social Enterprise and Jonathan Bland for their advice and and Charity at Bates Wells Braithwaite support during the project. public benefit lawyers. He has engaged with public service commissioning for 25 years, through: the ‘contract culture’; ‘fair contract’ and ‘full cost recovery’ campaigns; and the development of Social Enterprise, Social Finance and spin-out mutuals. He promotes the European Commission Social Business Initiative perspective on Public Procurement and State Aid, challenging misconceptions. He is on a Cabinet Office expert panel on Social Value, focussing particularly on Social Impact Measurement. 4 The art of the possible 5 After a half-decade and more of austerity, ‘If essential public Our focus is on commissioning ‘We believe that the basic efficiencies available through services are to be things innovatively, rather than on innovation in tendered competition have already been maintained or improved, commissioning innovative things. We believe procurement practice secured. That particular well is empty. that innovation in procurement practice If essential public services are to be we’re going to have is the most likely path to innovation in is the most likely maintained or improved, we’re going to to look at doing things service delivery. Even without seeking novel path to innovation in have to look at doing things another way. another way’ approaches, good commissioning that service delivery’ This is the message we hear every day makes use of the range of flexibilities in when we speak with the Commissioners the procurement rules would go a long way of public services. to resolving most issues. For all of this desire amongst We strongly believe that this is a matter Our focus is not the pure cost-saving The publication is in two parts. The first Commissioners to think afresh, there can of custom and practice and need not be imperative – most authorities are pretty discusses some of the implications of be a countervailing force – a barrier to the case. The Public Contracts Regulations good at that sort of thing anyway. Rather, the new Regulations and the options they change. That barrier is often perceived 2015 provide Commissioners with a this publication focuses on the role of provide for Commissioners. The second is to be procurement – with regulations and great deal of flexibility to achieve the commissioning in addressing complex a set of scenarios that seek to demonstrate iron-bound processes acting to stifle reform, outcomes they seek for their communities. social issues – and on how we can achieve the scope of what the Regulations allow hamper innovation and maintain the The purpose of this publication is to both genuine best value and broader you to do. status quo. Change often seems like highlight some of those flexibilities, how social benefits for our communities. This is This booklet does not claim to be pushing on a piece of string. to unlock them and some of the practical all possible when procurement is applied a definitive guide to the Regulations, things that can be achieved within the as a constructive tool in the service of that or to commissioning, or claim expertise scope of the law – the art of the possible commissioning, rather than a means of in the different conditions in which in public procurement. undermining it. Commissioners work. Rather its aim is to This publication is aimed at Commissioners challenge – to provoke debate, discussion and other change-makers in public and new thinking from its audience about authorities in England and Wales. the relationship between commissioning It is not intended to be one more guide to and procurement. If the reader can find procurement regulation (of which there are one new idea out of those presented that already plenty) and we assume that this will help them achieve their goals, then landscape will be at least broadly familiar – it will have succeeded in its objective. with the basic vocabulary of procurement known to you. It is intended to be a part of a Commissioner’s toolkit, providing supporting argument as you seek to drive change in your organisations. 6 The art of the possible 7 The ‘what’ and the ‘how’ The Public Contracts Regulations 2015 can help with this restoration. They enable Too many procurement guides and textbooks Commissioners to shape a procurement will tell you that the first step in the process that can actually deliver on strategy – procurement process is the OJEU Notice. reconnecting the procurement task with This is wildly unhelpful. The first step in the commissioning. The new Regulations: procurement process is to take any such guide or textbook out into the car park ■■ explicitly allow for market consultation and set it on fire. with suppliers, service users and other stakeholders prior to tender – not just on Whilst such an incendiary reaction may the specification but on the process as well Part 1 seem over the top,1 the message itself could Issues in procurement not be clearer. Most of the opportunities ■■ provide a much wider choice of process to ensure innovation and change are only so procurement can deliver on strategy – available at the commissioning stage and in the case of Light Touch procurement, beforehand – the stage where you the development of entirely bespoke make strategic choices around what you processes (subject to general Treaty are trying to achieve, the outcomes Principles2) so that Commissioners can you are trying to secure. It is vital that be confident of procuring something which the commissioning process has begun really meets communities’ needs a long time before the advertisement ■■ enable commissioning in situations where and that commissioning has also directly the answer is not yet known using the new informed the procurement process itself. Innovation Partnership This will come as no surprise to many ■■ engage with the social sector through Commissioners – it is hardly a new idea. Reserved Contracts Yet Commissioners have told us that procurement has, through excessive caution ■■ go beyond the Social Value Act to invite and lack of imagination, too often become social value considerations in all relevant the tail wagging the commissioning dog – procurements often in an unholy alliance with equally ■■ encourage the use of social impact cautious legal advice. Process has taken measurement methods. over purpose. We believe that the primary focus on purpose needs to be restored to commissioning. 1 2 Particularly as it is, technically speaking, true that Or just slightly tweaked versions of existing processes the OJEU Notice starts the procurement process. if that’s what’s appropriate. The Light Touch Regime’s flexibility is a feature in line with the underemphasised general Treaty Principle of ‘proportionality’ giving Commissioners the ability to design a process that is proportionate. 8 The art of the possible 9 As a consequence, it has never been more Justifiably, the principle of transparency As a consequence, we see changes to: A light touch important to articulate what you are trying (contract procedures must be transparent ■■ the application of the Most Economically The most startling freedoms in the new to achieve – the ‘what’. This then leads and contract opportunities should Advantageous Tender criteria4 to reflect this Regulations are in the areas that arguably naturally to designing a procurement generally be publicised) and the principles have the greatest potential for social change process for its delivery using the new of equal treatment/non-discrimination ■■ a clarifying of the limited requirements and innovation – social, health and flexibilities – the ‘how’. Each should be (potential suppliers must be treated applicable in the commissioning of education services.5 These are governed a complement to the other – and both are equally) are always likely to be at the social, health and education services by the new Light Touch Regime. worth spending time on to achieve the heart of regulation, but the regulators with a view to fostering social innovation outcomes needed for our communities. feel that everybody gets this now (the Light Touch Regime) ‘Regime’ is probably a poor choice of words to describe these arrangements. to a greater or lesser degree. As a ■■ the introduction of Innovation Partnerships As long as the principles of transparency consequence, the areas of interest have to allow Commissioners to develop solutions A change in intent and equal treatment are adhered to, you changed and broadened over time – with the market where they do not yet exist. We’re often asked whether the flexibilities explicitly focussing on the wider social can design pretty much any procurement 3 process you like. in the Regulations are mere loopholes – and benefits of procurement. Put simply, the intent of the new regulation whether Commissioners would be better off The 2015 Regulations reflect this is to make your freedoms clear, promoting If you think elements of competitive sticking with tried and tested ways rather significant change in intent.