Money talks

If money talks £1,200billion must make a hell of a noise right?

Yet until recent controversies about PPE purchases during covid and the purchase of Fujitsu software by the Post Office mention government procurement to people on the street and they probably didn’t really have much idea what it’s about.

The power of government spending is recognised in Westminster though and the upcoming Procurement Act aims to:

• create a simpler and more flexible commercial system that better meets our country’s needs while remaining compliant with our international obligations
• open up public procurement to new entrants such as small businesses and social enterprises so that they can compete for and win more public contracts.
• take tougher action on underperforming suppliers and excluding suppliers who pose unacceptable risks
• embed transparency throughout the commercial lifecycle so that the spending of taxpayers’ money can be properly scrutinised

(taken direct from gov.uk)

You can see the impact of the controversies in the aim on underperforming suppliers and the aim to open up public procurement to small businesses and social enterprises builds on previous initiatives by government.

With Small and Medium sized Enterprises (SMEs) constituting 99% of UK businesses and employing 61% of the working population helping them tap into government spending to help them grow is an obvious way for government to support growth in the economy. So will it work? Well there are a couple of things to think about.

• We often see growing companies reach a stage where a larger company’s support can really boost their growth. An arm around their shoulder, advice on processes and procedures, support from management systems they can’t afford to apply themselves can all make a big difference. So there is a part for larger companies with the right behaviours to play.
• Unfortunately what we’ve also sometimes seen is larger companies with the wrong behaviours follow the letter of the law rather than the spirit of the law to the detriment of the smaller companies so making sure the letter of the law is exactly right really matters.
• Using levers like this can also sometimes lead to smaller companies developing a sense of entitlement, “they should buy from us because we’re an SME” rather than “they should buy from us because we provide the best solution to their problem” is never a good approach and ultimately harms the smaller business more than anyone else.

Procurement professionals are going to be key to the success or failure of the aims of this act and only time will tell if it will work. Personally I think Westminster has really listened on this one and there are some key points that address concerns I heard a lot from smaller businesses so I’m hopeful it will make a difference.

If you’re interested in being part of a conversation about the Procurement Act why not join us for our “Let’s Talk About…the Procurement Act” online on 12^th September with The BidBase.

Photo by Josh Appel on Unsplash