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Procurement is changing but we're keeping people at the heart of it

Alan Heron

Procurement in the public sector, is not about contracts. It is not about supply engagement. It is not about contract management. It is about beds in hospitals. It is about homes for people in desperate need of help. It is about desks in our children’s schools and that’s why we shouldn’t lose sight of the impact procurement can have on people’s lives.

A new way to procure goods and services is on its way. The new Procurement Bill will be the single biggest change to UK Public Sector in a generation. It’s a tsunami of change. Some good, some bad, and some ‘yet to be decided’.

Since Brexit, all UK public procurement is currently delivered under a piece of UK legislation known as the Public Contracts Regulations (2015). The UK Government is keen to move away from this model, and as such is now proposing the new Procurement Bill, which will introduce UK-drafted legislation that will supersede the current EU-influenced procurement laws.

Procurement professionals have the potential to change hundreds of thousands, if not millions of people’s lives for the better.

Why procurement matters

Alan Heron, our Director of Procurement for the Procurement Hub, part of Places for People, has been working with Government to provide insight into the positive impact this could have on our Customers, Communities and Society.  

There is a huge drive towards transparency of procurement in the new bill, which as a principle is sound – but in practice, will mean considerable additional administration and capacity requirements for organisations like Places for People and others.

There will be obligations to publish more contract notices than ever before, to publish contacts to a new (yet to be built) online portal for anyone to look at, to publish supplier performance metrics, payment information and much more.

There will be new procurement processes and procedures, new terminology, new timescales, new technology platforms.

However, all sectors need to be prepared for these changes. They won’t just impact procurement professionals; they will affect everyone. Internal stakeholders including finance, operations, IT and more. Entire supply chains will be impacted.

The Government has recognised the scale of the change and is planning to roll out a six-month training program for the entire public sector before the new legislation goes live.

The Integrity of Procurement

The new legislation will address some underlying issues in UK Public Sector Procurement and bring some much-needed improvements. However, more can be done. One of the biggest issues in UK Public Sector Procurement is the integrity of some private sector procurement providers.

Private sector organisations are not legally allowed to let or create public sector contracts. However, there is an increasing number of private sector organisations that are now piggybacking on the contracting authority status of some housing associations, healthcare trusts or local authorities to effectively own, operate and manage frameworks on their behalf, often without recognition or oversight from the contracting authority.

They then charge high fees (which they do not advertise, publicise, or disclose to buyers) to the supply chain, disproportionately inflating the prices the public sector pays for goods and services. They are effectively using the public sector as a cash cow to generate more than healthy revenue streams. This is unhealthy for the public sector and limits what can ultimately be delivered.

This is important for us to understand. This is public sector money. These are funds that we could use to change people’s lives, and it is important that we understand what is happening with that money.

Why is this relevant and what difference does it really make?

I was thinking recently about why it is important that we get ourselves as prepared as possible for services for the new Procurement legislation and the swathe of changes that are coming.

I was reminded of something that happened to me earlier in my procurement career…

In a previous role, I was the procurement manager for NHS (National Health Service) Scotland, and I used to get invited to all sorts of procedures, including open-heart surgeries, which was fascinating. One day, I was invited into an operation where a 70-year-old man was having cataracts removed - he had been 90% blind for ten years. The operation itself was only fifteen minutes long and the patient is awake throughout. It is one of the cleanest and quickest operations I have seen, but the results are instantaneous.

This man, in just 15 minutes could see properly for the first time in 10 years. And he just instantly started sobbing, saying that he could go home tonight and see his grandchildren for the first time. He had not seen their faces in five years.

As he was being wheeled out of the operating theatre, he insisted on shaking the hand of every person that was in the room to thank them for what they had done to him. I can remember he reached for my hand, I hesitated and said, “I’m just here to observe, I haven’t done anything”. But he insisted on shaking my hand.

Six months later I signed a contract for the ophthalmic surgery machines that were used in that operation, and I managed to save the NHS enough money to deliver another 450 of those operations a year. As I was signing the contract, the overwhelming thought that entered my head was ‘now I have earned that man’s handshake’.

We need to remember that procurement has to have a purpose, procurement without a purpose is hollow. It is fundamentally important to remind ourselves of why it exists in the first place. Public Sector procurement isn’t all about contracts, supplier management, negotiations. They’re simply the tools of the trade. Procurement is about people!

Alan Heron, recently spoke at the Procurement Reform Conference in London and Manchester, 2023.