Securing value for money from your procurement

The public procurement market in the UK was worth more than £230 billion last year, making the public sector a big economic player. When public procurement is deployed effectively, the power of purchase can secure value for money in the broadest sense. Europe’s public procurement regulations are currently under review, with implications for the way the public sector buys goods and services. The European Commission wants to simplify the rules to ensure that public procurement can play its part in meeting the goals of Europe 2020, with its commitment to “smart, sustainable and inclusive” growth. The review will introduce three important new changes:

• make it easier for small and medium-sized enterprises to participate in and benefit from public procurement contracts
• promote the concept of whole-life costing, allowing contracting authorities to take account of social and environmental factors when weighing up the costs and benefits of competing offers
• extend the special measures already in place for sheltered workshops/employment programmes to embrace a broader range of beneficiaries

All of these provisions will make it easier for creative public sector managers to use the power of purchase to secure value for money. Two examples of where creative public procurement has helped to meet the challenge of value for money are the Can Do Toolkit, a good practice guide to positive procurement, and Arbed, the first pro-poor green energy scheme in the UK. These two initiatives hold valuable lessons for creativity/innovation in the public sector. The Can Do Toolkit The Can Do Toolkit was designed to secure more community benefits from public contracts, beginning with targeted recruitment and training to bring unemployed/economically inactive people back into the labour market, and broadening out to help local firms win a greater share of public sector business. The most distinctive feature of i2i was that its members, all dedicated housing professionals, were in government but they were also working for the social housing sector. This semi-official status gave i2i access to government without the constraints of being in government, a relative autonomy that it used to good effect. The Arbed Programme Arbed, a partnership between the Welsh Government and the social housing sector, is another example of successful public sector innovation. It aims to eradicate fuel poverty, reduce the carbon footprint of energy consumption and boost economic development by making Welsh homes more energy efficient. A distinctive aspect of the Arbed programme is that it is a pro-poor green energy programme, the first of its kind in the UK. Working with social housing providers, the Welsh Government targeted the most deprived parts of Wales to ensure that the poorest households could benefit from energy efficient investment. An initial sum of £30 million from the Welsh Government was used to leverage an additional £31 million, primarily from energy suppliers, housing associations, and local councils, making a total investment of £61 million. Over 6000 homes were improved, the majority of which were in the social housing sector. You can find out more information here. Arbed and the Can Do Toolkit are successful examples of public sector innovation. The key challenge for the foreseeable future is how to secure sustainability in an age of austerity. Creative public procurement can help to meet this challenge of value for money. Thornton & Lowe has a wealth of experience in Public Sector Procurement. We believe client engagement and communication is key, that’s why all of our projects are managed in line with PRINCE2 project management. With specialist knowledge of value for money assessments, spend analyses, asset management and procurement best practice, the value of Thornton & Lowe is easily measurable across your organisation. Thornton & Lowe have supplied procurement assistance on projects worth over £400m since 2011. We support low and high value contracts working in line with best practice and EU procedures. Our EU procurement support includes but not limited to:

• Housing Associations
• Local Authorities
• MOD
• NHS

For more information, see our procurement page or contact a member of our bid-management team at one of our offices across the UK. Greater Manchester – 01204 238 096, Midlands – 0121 523 1051, Central Scotland – 01334 208 312, North East – 0191 510 5054, London – 203 405 1850