Last Friday, I attended a meeting at the Treasury about SME procurement. It was fascinating, memorable and useful, not least because I got to see David Cameron, our Prime Minister, in person for the first time.
This was the (first?) “SME Strategic Supplier Summit” and it was hosted by Francis Maude who is Minister for the Cabinet Office. The aim of the afternoon debate (which included about 100 representatives of small and medium sized suppliers to the government bodies, as well as press and senior members of the civil service) was to:
- Cover what the Government is currently doing to progress SME-friendly procurement practices;
- Report back on comments received from the SME feedback facility hosted on the No10 Downing Street website;
- Seek our views on what reforms and actions the Government should be prioritising to make the marketplace more attractive to SMEs
Seated in cabaret style, the meeting began with the PM and Francis Maude entering to open up the debate and make some initial speeches. Baroness Eaton, the LGA Chairman also gave a presentation. A number of key initiatives were announced (see here, here, here and here for Government and press reports of them). Also attached is the document we were given to help seed the debate.
The essential message from all the presentations is that the Government is thoroughly committed to making Government procurement more ‘SME friendly’. Their ambition is that around 25% of all government contracts will be with SME suppliers (although one person later questioned whether this was as a % of contracts or a % of value).
People who read my blog will know, I have some strong opinions about procurement! (My humorous rant against the excesses of procurement, my suggestion for what makes an excellent procurement function and the need for more commercial leadership can all be accessed from those hot links.) And so, it was a real pleasure to hear about the Government’s plans to make procurement less onerous and more effective. Moreover, it was great to hear that I am not alone in my views! I was also very impressed that the Minister stayed for the whole afternoon, engaging in the table debates that occurred.
Some selected comments from Francis Maude:
- “We will make it easier for SMEs to do business with government: that is an absolute commitment”
- “Hold our feet to the fire to make sure we follow through on this”
- “Demands for public services are as great if not greater than ever”
- “This is the end of the era of big state, this is now the era of the Big Society”
And very interestingly
- “We are not friends of the idea of framework contracts”
I am watching this space with interest and I have already subscribed to the new and free one stop shop for Government procurement (Contracts Finder). I would recommend all suppliers and buyers do likewise. I am happy to report that SMEs were involved in the development of this new service (we were told this at the event in answer to my question).
So what now? Naturally, I am a little sceptical, although I do not doubt the verve and commitment of David Cameron and Francis Maude. I am sceptical because I have seen much of this before with the Glover report which seems to have only had marginal impact. (As a small example, I am still sometimes asked to provide paper copies of tenders when this report specifically recommended doing away with this.)
I am also cautious in my optimism because I think there are a number of very big dilemmas the Government has to handle in driving forward on this strategy. They will need to find a way to balance:
- The economies of scale with the desire for localism (what might be called the “Sir Philip Green factor”)
- The desire by central government to control and direct with the desire to develop bottom up solutions from SMEs and third sector suppliers
- Big business interests (who currently hold many of the cards with some very large contracts) with the small business aspirations of SMEs who want to slice the marketplace in smaller chunks
- The interests of big third sector suppliers (such as NACRO and Age UK) with small local consortia of SMEs, small charitable bodies and the whole Big Society
- Procurement professionalism with procurement centralism (and what I perceive sometimes as their ‘control freakery’)
- Single client/customer focus with a multiple stakeholder ‘whole chain procurement’ approach (see below)
- Transparency with commercial confidentiality
- Supporting and developing progressive commercial practices (such as encouraging women owned business or ones that have visionary aspirations for health and safety) with making procurement too ‘politically correct’ and insufficiently concerned with bottom line VFM for the public purse
- Suspicion with openness, (or how not to see all commercial suppliers as smooth tongued snake oil sales people and more as partners with whom to collaborate openly, even when some commercial suppliers are...)
- The prevalent idea of submitting one final bid with the (often common in the commercial world) practice of negotiation over a number of iterative conversations
- Fixed and concrete specifications with ones that recognise complexity and change such that service contracts need to allow for emergent solutions rather than ones fixed in aspic
- Due probity and essential risk management with bureaucratic and unwieldy demands
- Methods to provide assurance against corruption with the institutionalising of risk averse and Byzantine processes (I noted that David Cameron mentioned the ‘nobody got fired for buying an IBM’ factor in procurement...)
I could go on (and already this blog post is probably far too long: so thanks for reading to here!) but I will end on one thought. And this picks up on a constant theme of my blog – the need to take a whole system perspective. One point I made at the event, which Francis Maude said was a good one, was the need to involve the end user in the procurement process. I used the example of a soldier sitting for the first time in a newly procured and sparkly tank: the soldier knows immediately that it will not work as well as it should and could have done.
- How many soldiers (and, of course, many other frontline public service officers) are still never involved with a procurement process?
- How many of their insights and ideas could contribute ££ millions in savings and other improvements if they were given the opportunity?
- And indeed, how much more could be achieved if the people who will be receiving the service (the citizens, clients and customers of public services) were also given the chance to offer their ideas?
What we need is (to coin a phrase) “whole chain procurement” that brings people together to co-design and thence procure the services we all need to create a civil society: one that is creative, ambitious and fair!
