National Audit Office Auditor General Keynote: A review and recommendations - Part 3

Procurement: Beyond buying

In our third blog focusing on the ways in which productivity improvements could release much needed funds for government priorities, as outlined by the Comptroller and Auditor General of the UK National Audit Office (NAO), Gareth Davies in his annual keynote speech to Parliament in January we tackle procurement and consider if they could be even more ambitious. 

Procurement shouldn’t just be about buying

Outdated ‘buy versus build’ dimensions to decision making present a false binary choice that’s too narrow, and fails to accommodate, for example, the dimension of reuse of open-source digital public goods (DPGs) and infrastructure (DPI).

This internet-era dimension to decision making, in addition to knowing what and how best to buy and build, could avoid huge sums of wasteful and duplicative expenditure.

We strongly believe, as do a growing movement of others, that what’s needed is for all levels of the public sector to support active reuse of DPGs and DPI and active contribution to open digital ecosystems.

Early market engagement is critical

Talking to suppliers before a procurement process commences is rarely done well. It’s not helpful if it’s just a ‘broadcast’, without really listening or changing anything based on feedback. This kind of engagement theatre doesn’t help anyone and doesn’t improve the relationship between the market and the public sector.

Early conversations with suppliers need to be open, honest, and real. And it’s important to listen carefully and play back what’s changed as a result. NHS England has good methods and examples for how to do this kind of early, real, and helpful engagement.

When looking at buying, building or reusing something, it’s important to focus on what people really need. Often, the process doesn’t start with understanding these needs, which means the eventual contract and service delivery might not:

• Solve actual problems experienced by users;

• Achieve the right outcomes; or

• Realise the expected social, cultural, environmental and economic benefits.

It’s encouraging to see that in December 2023 the UK National Action Plan for Open Government 2024-2025 makes commitments to increase transparency, accountability, and public participation in government.

Open data is critical

By publishing contract data as commercial pipelines at the pre-procurement planning stage, the market will have a better understanding of the opportunities to work with the public sector.

Combining open data with honest and genuine early engagement provides the market with the all-important understanding of future opportunities. This helps the market to prepare, adapt and respond, which could include diversifying products and services, or recruiting in different locations.

Actively managing contracts is critical

Contract management is often just seen as fixing issues when they occur, rather than proactively working to prevent them, or making things better. 

All good teams need both investment and skilled people, which are usually hard to find or being used for other things. Because of this, managing contracts properly often gets overlooked.

But it's vital to pay close attention to UK public contracts, with approximately £300 billion of taxpayers’ money spent on them each year.

Contracts need to be proactively checked and flexible, and good contract management keeps projects and supplier relationships on the right path.

Our views concur with the NAO’s recently published ‘Digital transformation in government: a guide for senior leaders and audit and risk committees’, which among other things states that:

• Organisations too often commit to contracts very early in the project lifecycle despite having an insufficient understanding of what is involved in the transformation;

• Initial agreements are often found to be inadequate when the detail and the related complexities emerge over the following months when research, design and development take place; and

• Contracts should support the flexibility to allow for the change and uncertainty typically found in the digital world.

The new Procurement Act is a good opportunity, but…

…this won’t fix outdated business processes, outdated funding approaches and inappropriate governance. Nor will the new regulations fix organisational culture or working practices, and it won’t change behaviours and attitudes.

Fixing these things requires an unwavering prioritisation of some less glamorous areas of public administration and bureaucracy, compared to the excitement and promise of other attention grabbing areas like artificial intelligence.

Fundamentally, reforming public procurement has to be about people; all officials (not just procurement practitioners) working within UK public sector organisations need to know how the new Procurement Act 2023 can and should be used to realise “the art of the possible”.

Excellent commentary on exactly this is provided in a report titled ‘The Art of the Possible in Public Procurement: New Horizons for Empowering Innovation’, which was published by the Innovation Procurement Empowerment Centre (a Connected Places Catapult initiative) in January 2024.