Clive Feeney, interim group director of not-for-profit construction framework provider LHC Procurement Group, discusses key things for public sector organisations and construction leaders to be aware of in advance of the Procurement Bill
Each year, the public sector spends in the region of £300bn through public procurement
– accounting for around one-third of all public expenditure, making it the largest area of
public spending. Regulations that govern how that money is spent are set to change in England, Wales and Northern Ireland.
The four existing sets of regulations – Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016 and Defence & Security Public Contracts Regulations 2011 – will all be replaced by a single, new regulatory framework.
The Procurement Bill, which at the time of writing is in the House of Commons and about to undergo its third reading, will introduce the most significant changes to the way public sector organisations buy goods and services for a generation.
It followed the government’s Transforming Public Procurement (TPP) Green Paper consultation response, published at the end of 2021, which demonstrated determination to
put alternative assessment scoring front-and centre over price to drive both equity and
economic improvement.
Now, by improving the way public procurement is regulated, the government seeks to not only save the taxpayer money but also spread opportunity, improve public services, empower communities and restore local pride across every region of the country.
The Procurement Bill is designed to introduce simpler rules following Brexit, as well as
strengthen contracting authorities’ ability to exclude suppliers who may have previously
underperformed when delivering services to the public sector.
The bill started in the House of Lords, where it went through two reading stages, followed
by the committee stage, report stage and its final reading.
Amendments made so far
After much debate during the second reading, it was agreed across parties that certain procurement principles and objectives should be explicitly reflected in the Procurement Bill.
These were:
- Providing more opportunities for SMEs and local businesses through procurement.
- Including utilities procurement.
- The significance of social value.
- Offering rewards for suppliers who demonstrated potential for innovation and offered climate-positive and nature-positive sustainable products.
At committee stage, a total of 161 of 205 proposed amendments were agreed to. This included government amendments clarifying definitions and introducing higher reporting thresholds.
Next steps for the Procurement Bill
At the time of writing, the Procurement Bill is nearing the end of its time in the House of Commons before amendments will be considered in final stages and the bill achieves Royal Assent.
And while the new regulations won’t come into force until spring 2024 at the earliest, they will bring a step-change in how public goods and services are bought and commissioned. There will therefore be a six-month advance preparation period in which buyers and suppliers can ready themselves for the impending changes.
There is no time like the present, and contracting authorities can start planning now to ensure they are ready to take advantage of the new regime.
An overview of the Transforming Public Procurement checklist
To help contracting authorities prepare for the upcoming bill, the Transforming Public Procurement checklist suggests initial actions in four key areas as follows:
1. Processes and policies
Make sure your current processes and procedures are robust in areas such as early market engagement and supplier evaluation/assessment, with governance documents that record key decisions.
2. Systems
Familiarise yourself with the document Transforming Public Procurement – Our Transparency Ambition which outlines the government’s proposals to improve transparency of UK public contracts and spending.
Consider the readiness of your organisation to meet the new data requirements, including where data currently resides in your existing e-procurement systems.
3. People
The Cabinet Office will be providing a comprehensive learning and development programme to support everyone operating within the new regime and help you to understand what is changing from the current system.
Funded public sector places on the learning and development courses are being made available, so they are free at the point of delivery. There will be other training available for supply chain, too.
Think about who in your organisation should attend the training. If you would like to become an L&D super-user, contact your departmental or sectoral lead for Transforming Public Procurement or email procreformspocs@cabinetoffice.gov.uk
Beyond this, consider the procurement and contract management capability across your organisation and whether there is any refresher training required. Think about benchmarking your organisation against relevant commercial and procurement operating standards and other comparable organisations, in line with the National Procurement Policy Statement.
4. Transition
Ensure contract registers and details are up to date and conduct a review of pipelines to identify planned procurement activity over the next 18 months.
Engage with your key supply chain about the new regime. Direct them to the Transforming Public Procurement landing page at gov.uk for further information.
The complete overhauling of public procurement in the UK may seem daunting at first, but the four steps outlined above should provide clear direction on how your organisation can prepare now so that you are ready when the changes come into effect.
What the bill demonstrates is the need for well-run, not-for-profit frameworks such as LHC. As a contracting authority, LHC develops and operates frameworks across England, Scotland and Wales through its five business units: London and South East (LSE) – across the capital and the south east as well as Home Counties of Bedfordshire, Hertfordshire and Essex; Consortium Procurement Construction (CPC) – covering the Midlands, Suffolk, Norfolk and North of England; South West Procurement Alliance (SWPA) – covering the South West of England; Scottish Procurement Alliance (SPA); and Welsh Procurement Alliance (WPA).
Procurement expertise and experience will be vital in the coming months to help unravel the complexities of a new regulatory regime, while ensuring consistent, social value-led framework development and management.
For more information on LHC Procurement Group, visit www.lhcprocure.org.uk.
Clive Feeney
Group director
LHC
Tel: (+44) 01895 274 800
clive.feeney@lhc.gov.uk
