The new procurement reforms – an update from government

Last October I wrote about the Government’s failure to open up public services for charities, and how a suite of reforms which come into force on 26 February 2015 have the potential to partly address this shortcoming.

The Government consulted on how best to implement the new rules last September and has now published its response. Here’s a quick summary of their plans.

The new ‘light touch’ regime for ‘services to the person’

In our response to the consultation we urged the Government to provide adequate training and guidance alongside the new ‘light touch’ regime to ensure it delivers its potential for better designed public services and a less bureaucratic tender process.

The Government says it has developed a learning package including face-to-face training for 4,000 procurement practitioners; a handbook covering the main rule changes; a Q&A briefing; and detailed training slides. However the ‘learning package’ pays scant attention to the new ‘light touch’ regime. In fact the guidance it provides commissioners on the new rules more generally is insufficient (the ‘face-to-face’ session that I attended only involved six other people, including the two presenters who read from the ‘detailed training slides’).

Perhaps more encouragingly, the Government is planning to produce an e-learning package and ‘subject specific materials’ which will ‘consider’ covering some of the feedback gathered from the consultation. We’ll be meeting with Cabinet Office in the coming weeks to discuss this and our offer to provide feedback on any guidance produced.

Quality vs Lowest Price

The Government has said there is not a sufficiently strong evidence base to justify banning lowest price or cost alone for the evaluation of public service contracts. This is disappointing because we believe quality should always be considered where public services are concerned (it also highlights once again the need for hard evidence, so if you’ve seen a service contract without a quality weighting please get in touch).

However, the Government says that there’s ‘sufficient opinion’ to warrant guidance for public bodies on the matter. A small but potentially significant win for the sector, although the content and status of this guidance will be key. Again, we’ll discuss this with Cabinet Office in the coming weeks.

Reserving contracts for mutuals and social enterprises

Soon public bodies will be able to reserve certain ‘services to the person’ for organisations that have a public service mission; who reinvest profits to achieve their objective; and whose structure is based on participatory principles.

We’ve called for guidance on this new rule to avoid it being ‘gamed’ by unscrupulous organisations and to clearly communicate that charities be included within its scope. However the Government did not mention guidance in its response, but we’ll continue to push for clarification in the coming weeks.

Using smaller contracts

Public bodies will soon have to explain their reasons when they choose not to split large contracts into smaller lots. We supported the Government’s position that it shouldn’t be mandatory to split up contracts as value for money (an optimum balance of quality, cost and social value) should always be the primary consideration.

However we highlighted the need for guidance to ensure procurers understand the benefits of using smaller contracts and how best to support smaller organisations to form consortia so they can deliver larger contracts. The Government says it will consider in due course the possibility of guidance. We’ll keep our eye on how this develops, and again, raise the issue with Cabinet Office.

Issues not mentioned in the Government’s response…

The Government did not respond to our call for statutory guidance requiring public bodies to ask bidders to indicate what share of a contract they intend to subcontract (to help avoid charities being used as ‘bid candy’ as seen with the Work Programme).

Nor is there any mention of our call for guidance around the significantly shorter minimum time limits to respond to adverts and tenders, which if abused, could pose a significant problem for some smaller charities.

The new ‘innovation partnership’ procedure which allows public bodies to engage with suppliers to procure services that are not available on the market place isn’t mentioned either. The new procedure seems to offer significant potential for better designed public services but it is essential public bodies understand what is permissible under the new rule.

These are vitally important issues for our members so we’ll continue to push the Government for clarification – keep an eye on my blog for updates. In the meantime let us know what you think about the new reforms below.

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Paul joined NCVO over seven years ago after working for a leading public affairs agency. Since then he’s led our policy work on a variety of issues, including welfare-to-work reforms, volunteering, the Compact, public service commissioning and procurement regulations. He now leads our work on funding and finance with a particular focus on charity tax relief and safeguarding EU funding post-Brexit.

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