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Government aims to ‘unleash innovation’ with procurement overhaul

A government greenpaper sets out changes to simplify buying in the public sector and to benefit small and medium businesses

New rules set out by the UK government will introduce changes to the public sector procurement regime, with the aim of simplifying the process, removing bureaucracy and enabling smaller businesses to win more contracts.

The plan, which has been devised with the UK’s departure from the European Union, proposes a transformation in how the government buys £292bn worth of products and services annually from the private sector.

The measures announced by the Cabinet Office have been set out in a greenpaper, developed over the past 14 months by international procurement experts.

The framework with simpler procurement procedures focuses on allowing more flexibility and ensuring value for money for buyers, while driving increased competition.

“The measures will transform the current outdated system with new rules, providing flexibility to the public sector and less burden on business,” said Cabinet Office minister Theodore Agnew.

“These long-standing plans have been developed with international procurement specialists and will help unleash innovation across the country and provide a fairer system for small businesses,” he added.

Specific changes to the rules include the removal of more than 300 complex regulations, replacing them with three simple procedures. The changes also enables buyers to take account of a bidder’s past performance, allowing them to exclude suppliers who have failed to deliver in the past.

Suppliers will be providing registration information on a ‘tell us once’ basis, which will be particularly helpful to smaller firms which are more affected by long, bureaucratic and costly procurement processes.

“These reforms will result in more SMEs [small and medium-sized enterprises] being able to access public sector contracts, and ultimately put in place a new procurement framework that delivers better value for taxpayers and greater benefits for society,” said Elizabeth Vega, group chief executive of Informed Solutions and member of the Cabinet Office’s Procurement Transformation and Advisory Panel.

In addition, a new government unit will oversee public procurement with powers to improve commercial skills of public sector contractors, and a single digital platform will be used for registering contracts. This is expected to improve transparency and “make life significantly simpler” when it comes to doing business with government.

The government also announced that it will allow the public sector to “buy British” for contracts not subject to international trade rules, by allowing competitions for government contracts under £4.7m for public works and £122,000 for goods and services to be limited to small businesses, voluntary, community and social enterprises, or to a certain geographical area.

According to the Cabinet Office, the procurement overhaul is also intended to enable he government to act quickly in times of crisis such as the Covid-19 pandemic, and purchase key items such as PPE in short timescales and allowing for multiple companies to bid for emergency work, without slowing the process down.

“We’ve all seen how old school procurement has struggled during the pandemic. These proposals will digitise and transform how contracts are planned, awarded and delivered in the UK with open data and public transparency at their heart,” said the executive director of the Open Contracting Partnership, Gavin Hayman.

The announcement follows the government's announcement of guidance for public sector buyers on how to publish procurement notices after the Brexit transition period ends. From 1 January 2021 onwards, any public sector contracting authority will need to use the Find a Tender e-notification service to publish tenders.

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