Build Back Better: how Government purchases is as crucial as what it chooses to invest in

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The 2020 party conference season will perhaps be even more remarkable than last year’s. Twelve months ago, delegates took their seats against a backdrop of party infighting and prorogation. Fast forward one year and the conference halls are empty whilst Brexit may not even make it to the top of the agenda.

This autumn, politicians and policymakers are wrestling how to respond to a second wave of COVID-19 whilst simultaneously laying the foundations for an economic recovery.

One of the more startling aspects of how things have changed in 2020 has been the convergence across the political divide that public investment has a central role to play in driving economic recovery. And, whilst questions have been raised on the levels of investment that may actually be possible if spending on COVID-19 has to continue, it seems – for now at least – that austerity is not about to return.

Adopted at the Conservative Party Conference, “Build Back Better” is a refrain that we have heard from business and city leaders who see an opportunity for us to use the pandemic to reshape the economy in a form that is cleaner, fairer, smarter and more resilient.

So what role is there for public procurement in achieving this?

The UK government’s first phase of procurement activity in the pandemic focused on addressing the crisis in healthcare provision and immediate economic damage. Procurement teams quickly had to get to grips quickly with how emergency procedures applied to existing and new procurement needs.

As we look forward, what can we learn from the experience we have gained over the past six months? Or will we see a return to business as usual?

Here are four areas that could shape where we go next:

  • Engaging in new ways with the market: the pandemic has radically reshaped the purchasing environment, with governments looking to source new solutions at speed. The OECD has highlighted new, tech-enabled practices to connect purchasers and suppliers at an early stage and stimulate supply. Canada’s government set up a new webpage to solicit interest from suppliers and support them to rapidly up-scale new products to fight COVID-19. Meanwhile Luxembourg’s national innovation agency established an online platform to connect purchasers and suppliers of PPE. How could these practices be adapted as governments look to achieve broader policy outcomes?
  • Adapting contractual provisions to reach new suppliers: market conditions are volatile – purchasers may be subject to sudden budgetary changes whilst suppliers remain exposed to disruption in their supply chains. In an environment where the risks of bidding could outweigh the rewards, governments need to be alive to how attractive opportunities may be to suppliers and how COVID-19 impacts their balance sheets.Enhanced prompt payment provisions have been introduced in a number of countries to help maintain cashflow during the pandemic. If governments see procurement as an opportunity to rebuild the economy by supporting a more diverse group of suppliers, what reliefs and incentives might suppliers need and, conversely, what protections should governments seek?
  • Co-ordinating procurement: there have been efforts to co-ordinate public procurement across government bodies through the pandemic. A closer understanding of where public spending goes and what impact it has can enable procurement to deliver wider economic benefits.  As we look to rebuild, what scope is there to co-ordinate procurement more routinely – for example across the UK’s city regions – to reduce duplication, better understand the supplier base and purchase in a way that strengthens supply chains and creates new jobs?
  • Asking about how suppliers operate and not just what they deliver: green infrastructure, new homebuilding and carbon capture initiatives can, by their nature, help to achieve the goal of “building back better”. But how do suppliers reflect the ambition for a better future through their own practice? It is significant that the UK Government has recently released a new PPN on measuring social value for all new procurements from January 2021, recognising the value that suppliers can deliver in assisting with COVID-19 recovery. So how can new procurements ensure that suppliers’ operations deliver value to the economy as well as the focus of spending itself?

We can expect to hear a lot about what we should do next to rebuild the economy in the coming weeks. With government spending likely to be a central plank in the UK government’s strategy, we should also spend time reflecting on how we will achieve this via more effective public procurement.


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