A new era of procurement: how the government is changing the rules post-Brexit

While the sector backs the transparency, it is wary that meeting it may increase the burden on procurement staff.

“It takes us away from the real value of [doing things that] procurement can do, such as achieving value for money, supply improvement, increasing social value and focusing on sustainability,” says John Wallace, procurement director at Clarion, a member of the G15 group of large London housing associations that is lobbying the government on its procurement regime.

“We think the administrative burden we already have is significant,” he says. “We are challenging the [green paper’s] requirement for a [procurement] oversight unit in the Cabinet Office and/or would like an opt-out from its control, because we feel that the controls we already have around audit, risk and other regulatory requirements should give enough assurance.”

“Everyone needs to look at the green paper as a fait accompli. My gut feel is that the majority of it will be implemented”

The National Housing Federation (NHF) expressed similar concerns in its green paper consultation response, arguing for changes that would reflect
the complexities of procurement for housing associations, which can find themselves simultaneously being a contracting authority, bidder and conduit between the various parties involved.

Whether or not such wishes will be heard remains to be seen. Ms Rees from Trowers & Hamlins advises associations to get on top of their data in anticipation of the increased reporting requirements making it onto the statute books. Overall, however, she says she has found officials to be “now taking a proactive approach to liaising with the housing sector”.

Indeed, a Cabinet Office spokesperson says: “The feedback we received has been invaluable in helping us to develop our thinking in several areas.”

Greater Whitehall control

Whatever tweaks are made to the proposals, John Simons, head of procurement and audit at Scape, the public sector procurement consultancy, argues that social landlords must prepare for greater Whitehall control.

“The housing sector has not seen this level of [procurement] direction before,” he says.

He advises housing associations to familiarise themselves with several new “principles of procurement” in the green paper, which he says mark a decisive shift away from awarding contracts based primarily on price – a move welcomed by the NHF in its consultation response. They include value for money, the public good, transparency, integrity, efficiency, fair treatment of suppliers and non-discrimination.

“That is something housing associations do need to get their heads around,” he says.

With the final details of the new regime unknown, opinion is split as to what housing providers should be doing now to prepare.

For Procurement for Housing’s Ms Brighouse, “It’s difficult at the moment to say ‘you should be preparing x, y and z’. But I think understanding what might be coming and what the reforms might be is a good place to start.”

John Simons, head of procurement and audit at Scape, the consultancy, suggests social landlords should ask themselves the following questions about the proposed procurement changes now:

• Are your procurement processes and procedures robust?
• If not, will it be much work to change them to make sure they are robust?
• Is it worth delaying a procurement because there is something you like [in the green paper], such as the new Dynamic Purchasing System (DPS+)? It may be worth putting in a short-term solution in order to be able use
  the thing you like at a later date.
• Where are the opportunities, where are the threats and how are you going to deal with these in the interim if they do land?
• Have you understood the new procurement principles? Can you build them into your procurement processes?
• Have you noted the change in emphasis from tendering based on price to tendering based on quality?

Clarion’s Mr Wallace concurs. “It’s a bit early to make structural changes based on the green paper. But if the green paper is implemented as it stands, then the likelihood is that there will be a need to move some of the [procurement team’s] strategic resource to the tactical and administrative side.”

Mr Simons from Scape argues that “everyone needs to look at the green paper as a fait accompli. My gut feel is that the majority of it will be implemented.” As such, he offers a checklist to help landlords get ‘oven ready’ for the changes when they come (see box).

Ms Rees says: “Housing sector procurement officers are going to have to get to grips with what the rules say, but also navigate and understand the flexibilities of the new regime, rather than just falling back on the way we’ve always done things or try and match existing practices with the new rules.”

She adds: “There is a definite assumption that a large learning and development programme is going to be offered by central government.”

In the meantime, she says: “It’s always wise for people to know how to procure well and understand what a good procurement looks like, regardless of the legal constraints around it, for example by taking a Chartered Institute of Procurement and Supply qualification.”

Time will tell whether public sector procurement will indeed be transformed by the historic opportunity promised by ministers.

But, as Ms Brighouse puts it, whatever regulation emerges once the Is are dotted and Ts crossed, “This is the opportunity to reform procurement from the bottom up. It will be a significant change.”

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