UK Government Plans to Transform Procurement

New plans from the UK Government are set to overhaul the procurement rules, cutting red tape and making it easier for small businesses to win public sector contracts.

The measures, which were launched last month, have been developed over the last 14 months by a team of specialists in international procurement and set out in a Green Paper. The aim is to take advantage of new powers the UK now has due to the country leaving the European Union.

Each year, government in the UK buys £292 billion of services from the private sector. These new measures will transform the current procurement regime to put value for money at the heart of the procurement approach, allowing greater flexibility for buyers and enabling government to be more strategic in order to save taxpayers’ money.

The measures will also drive increased competition through simpler procurement procedures.

The changes to the UK procurement rules will make them more modern, flexible, innovative and diverse, by allowing government to consider wider social value when picking suppliers. This will also ensure that taxpayers’ money goes further and brings wider benefits for society.

Proposed changes to the rules include:

• Removing over 300 complex regulations, to create a single uniform rulebook.
• Overhauling inflexible and complex procedures, replacing them with three simple modern procedures. This will allow more freedom for suppliers and the public sector to work together and innovate.
• Allowing buyers to include the wider social benefit considerations of potential suppliers, such as economic, social and environmental factors, when assessing who to award a contract to, while also still considering value for money.
• Giving buyers the power to properly take account of a bidder’s past performance, allowing them to exclude suppliers who have failed to deliver in the past.
• A new unit to oversee public procurement, with powers to improve the commercial skills of public sector contractors.
• A single digital platform for registering contracts, improving transparency and making life significantly simpler for business.

Cabinet Office Minister Lord Agnew commented:

“The measures outlined will transform the current outdated system with new rules, providing flexibility to the public sector and less burden on business.

“These long-standing plans have been developed with international procurement specialists and will help unleash innovation across the country and provide a fairer system for small businesses.”

The plans will also make procurement more transparent and effective during times of crisis when government needs to act quickly to ensure vital goods and services are bought. Throughout the COVID-19 pandemic, the UK, along with many other countries internationally, has relied on direct awards to ensure that vital supplies, such as life-saving PPE, can be bought quickly and to high standards.

The new measures will bring more competition into this process, by changing the rules to encourage more competitive buying in a quick timeframe. This will allow for multiple companies to bid for emergency work, without slowing the process down in times of emergency.

While suppliers of all sizes will benefit from the changes, SMEs – who feel the effects of long, bureaucratic and costly processes more – will benefit in particular. One tangible example is providing registration information on a ‘tell us once’ basis, which will help small firms by saving them time and resources.

The Green Paper will also bring forward extra measures on transparency, meaning taxpayers will be better informed about how their money is spent; as well as the ability to exclude poorly performing companies from winning valuable contracts and preventing spurious legal challenges from unsuccessful bidders, which all too often delay public sector projects and lead to spiralling costs.

Awarding authorities will also be encouraged to consider how public contracts can support social or environmental issues or promote local communities, small businesses and charities. The rules will also provide more flexibility to allow contractors to take account of wider government priorities and support work to build back better from the pandemic.

When public bodies are considering how social value benefits can be delivered through their contracts, the new rules will make it possible for them to consider the full value to society and not just the public body undertaking the procurement. This means more and wider opportunities to deliver social value through public contracts.

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