How the National Procurement Policy Statement Will Help Transform Public Procurement
The National Procurement Policy Statement this month applies to all contracting authorities who are subject to the procurement rules. Whilst broadly welcomed it raises a number of practical challenges for local authorities and the wider public sector.
Although it applies with immediate effect, it has been introduced to underpin the new procurement regime. The Procurement Bill on transforming public procurement in England and Wales is expected to be published in the autumn.
One of the core aims of the EU procurement regime was to 'level the playing field' for public sector procurement across the Member States. The UK Government is now able to set its own agenda for public procurement and this is reflected in the policy statement.
What Does the National Procurement Policy Statement Say?
Contracting authorities are required to have regard to three national priority outcomes in designing their procurement strategies:
- Creating new businesses, new jobs and new skills
- Tackling climate change and reducing waste
- Improving supplier diversity, innovation and resilience
None of these national priorities should come as a surprise. Many local authorities, universities and other public sector bodies will already be taking steps to design contract specifications, and introduce social value award criteria with these areas in mind.
The policy statement also includes two other themes:
- Making sure contracting authorities have the right policies and processes in place to manage the key stages of commercial delivery.
- Making sure contracting authorities have the right organisation capability and capacity.
Much of the guidance around having appropriate policies and processes is not new and represents best practice. For example, contracting authorities should:
- assess the economic and financial standing of suppliers
- set up project review panels for complex projects
- include key performance indicators around service levels
- improve contract management after the contract has been entered into.
However there are a number of requirements which will raise practical challenges - by increasing the administration burden on contracting authorities and requiring a change in culture in how departments interact with their procurement teams. A good example of this is the greater focus on publication of procurement pipelines with the Procurement Bill likely to include sanctions for non-compliance. The policy statement states that these should be published annually, looking forward 18 months but ideally three to five years ahead. This will require additional resource and planning.
The policy statement also recommends that contracting authorities carry out an internal review to assess their procurement and contract management capability and benchmark themselves annually against relevant commercial and procurement operating standards, such as the National Procurement Strategy Toolkit produced by the Local Government Association.
The risk is that all this additional workload may detract from the ability of procurement teams to deliver the simplified, faster and more flexible forms of procurement promised by the procurement reforms.