In March, Reform, a Westminster based think tank, published a report into the state of public sector procurement (read it here). The report provides some interesting insight, identifies a few key problem areas (spoilers – it’s all problematic), and makes 10 recommendations for improvement.
Public sector procurement can be overly complex, poorly managed, and frequently, less intended to actually deliver good quality services, than it is to provide a paper trail for commissioning bodies. It impacts the voluntary sector particularly badly, taking up huge amounts of time and sucking already limited resources away from day to day delivery.
The Reform report strongly emphasises the need for improvement in the skills of public sector commissioners, particularly the importance of commercial awareness. They also stress the importance of social value, and how it could be better applied when commissioning services.
However, commercial awareness whilst useful, is not a magic wand. A model of commerciality entirely drawn from the private sector, doesn’t necessarily help; especially if the commissioner genuinely wants to commission the voluntary sector. Social value risks being pushed to the back, seen as an afterthought.
Instead, commissioners need to understand why the voluntary sector does what it does. As Reform say, commissioners need to better understand, and to spend more time developing their markets. This includes understanding motivation. For the voluntary sector, motivation is different, mechanisms are different, and outcomes are different. Essentially, as long as there is a need, a voluntary group will probably exist to try and meet the need, and normal market forces don’t necessarily apply. The voluntary sector are needs led, not consumer led. Commercial awareness is a by-product drawn from the desire to work for their beneficiaries. To somewhat paraphrase the Reform report, for the voluntary sector, the three key recommendations are:
1. Do some market engagement. Just do it. Talk to people, listen to them. Understand what they need and why they exist, “…government contracts are still regularly put out to tender before commissioners have engaged with the market. This means that they might not know if the market has what they want to offer, or whether there are enough suppliers in the market with healthy finances.” (Reform, page 19)
2. Don’t procure simply to offload risk. Commissioners are often guilty of trying to push too much risk onto providers (Reform, page 43), which is particularly problematic for the third sector. The report uses the example of Carrillion, a huge service provider which went under. The potential impact on smaller providers is far more significant, although far less noticed – everything from seemingly innocuous things like insurance requirements can effectively rule out a sizeable chunk of the market, and worst case, smaller organisations and charities have gone under as a result, the victims of excessive payment by results mechanisms or possibly even a simple lack of market understanding from commissioners.
3. Challenge the status quo. Work together, collaborate, #Disrupt. The voluntary sector may struggle financially, but they often punch above their weight politically. Use it, make noise. Don’t be afraid to challenge poor commissioning practice. Speak to local councillors, hold procurement awareness sessions. If you are a commissioner, question decisions, push to engage local people.
Lastly, possibly implied in the Reform report, but not an explicit recommendation is the need for commissioners to think about proportionality. Who is your market? What is its capacity? How can you help them to prepare? Above all, how much information do you really need?
Once more – how much information do you really need? Really? Truly? Do you need a 10,000 word bid for a £50,000 contract? Do you need a turnover threshold of £2m to deliver a local youth project? The need for public sector commissioners to cover their backs by asking for reams of information is understandable, but for most smaller organisations, there may only be one person available to write a bid, and bid writing may only be part of their job.
Every minute spent completing pages of questions is time taken away from beneficiaries. Every day a charity spends trying to understand what commissioners might be asking for, is a day of funding taken away from vulnerable people.
Commissioners have an obligation, a moral duty, to find the right balance between gathering the information they need to enable appropriate due diligence, and minimising the amount of resource sucked away from vulnerable people and their communities.
This will almost always start with a decent conversation.