Andy Preston 19 December 2018

Social value revolution

As we move towards the end of an interesting but challenging year in local government, it’s plain to see that the focus has shifted in public sector procurement.

Since the June publication of the new National Procurement Strategy for Local Government in England, the emphasis on procurement with a social conscience has put community benefit at the centre of evolving strategies.

This was an evolution arguably set in motion back in 2013 with the enactment of the Public Service (Social Value) Act. The Act requires commissioners to consider the value added to society by each bidder in a tender; a requirement which was further expanded by the 2018 Strategy to specify that those wider values must not only exist but also be ‘explicitly evaluated’.

So, the pressure is on for local government procurement teams to get it right. Cabinet minister David Lidington’s announcement on 19 November that new social value contracts will ‘revolutionise government’ would certainly suggest a need for speed. His speech focused on the need to level the playing field for small businesses and social enterprises, lending further weight to the themes of the local strategy documents.

In turn, the procurement models already developed in the local arena will begin to shape central government’s processes for the years ahead. At first sight, it all adds up to a very different way of doing things – but what does it really mean for procurement teams on a practical level?

While the focus now rests heavily on community investment and social value, it’s important to recognise that cost and risk management cannot be left behind. Compliance too must be ‘delivered as a given’ according to Cllr Paul Betton’s foreword to the 2018 Strategy, and value for money remains front and centre. Although new policies recognise the broad societal impact of procurement practices, they also have financial common-sense and risk-awareness at their core, with the formulation of new measures to spread spending across a greater number of smaller businesses no doubt hastened by the collapse of Carillion at the start of this year.

The demands on procurement teams are greater and more diverse than ever before. Making supplier selections now requires teams to juggle all the traditional procurement considerations while also pushing for extra cost-savings in the face of austerity measures, making sure they have modern slavery policies and social value covered, and having one eye always on the ambition to spend £1 in every £3 with SMEs by 2020.

It’s not all bad news of course. While the transition to a different way of doing things will always present new obstacles to be overcome, the intention behind the updated procurement policy is strong and could create positive change for local government and local communities alike. The challenge rests with turning the spirit of the policy into tangible results.

On the most practical level, this means getting systems and processes in place that support the burgeoning relationships between small businesses and public procurement teams. SMEs need tender processes to be simplified and streamlined; procurement teams need compliance claims to be vetted and capabilities verified.

Increasingly popular, Dynamic Purchasing Systems may hold one key to SME engagement and more innovative procurement practices. Additionally, pre-qualification questionnaires and verification by trusted industry partners can reduce risk for procurement teams, as well as making it easier for them to reach SMEs, who in turn benefit from access to expert advice and a straightforward verification process that they complete just once - instead of once per tender.

Procurement platforms can be a significant support for procurement teams in helping them achieve their ambitions more easily. Access to prequalified suppliers and intuitive digital processes means that setting search criteria becomes easier, shortlisting becomes easier, compliance becomes easier and sourcing local suppliers becomes easier. And with internal resources ever-stretched, it’s more important than ever that industry adapts to support the ever-changing challenges of today’s procurement teams.

Andy Preston is head of public sector at Constructionline.

This feature first appeared in Local Government News magazine. Sign up here for your own free copy. 

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