Creating effective public-private partnerships post-Brexit
The UK Government’s Industrial Strategy rightly highlights public procurement as one of the most important levers Government has for driving social and economic prosperity across the UK’s regions and nations.
But beyond this, effective collaboration across sectors is also at the heart of delivering the high-quality public services and infrastructure that are critical to the functioning of our daily lives. Over the last few decades, governments of all colours have recognised this, and today the public sector spends over a quarter of a trillion pounds a year with over 200,000 businesses in the UK and overseas. For some departments, over half of their departmental budget is spent with external companies, large and small, underlining the importance of Government developing effective partnerships with its suppliers.
Maximising the contribution of the private sector to public service delivery will, however, rely on a well-functioning government marketplace, and previous CBI research has shown that currently, the potential to improve services through contracting is not being fully realised. Just 5% of businesses believed that current procurement processes incentivised innovation, and almost two thirds of businesses stated that a focus on lowest initial bid cost continues to drive contract awards instead of long-term value for money, quality of service or social outcomes. In the wake of the collapse of Carillion, a large strategic supplier to government, growing political and media scrutiny has increased calls for services to be taken back in house and made operating in the public sector less attractive to businesses, generating further uncertainty in an already tough marketplace.
Brexit and the spotlight it is shining on our current regulatory environment provide both a risk and an opportunity here. Got right, our exit from the EU offers the opportunity to re-evaluate public procurement processes, shift behaviours and strip out unnecessary complexity in government contracting, with the ultimate aim of delivering greater value for citizens. Got wrong, not only could the health of the UK Government marketplace decline, but UK suppliers could lose the ability to compete fairly in the vast European market for public contracts.
By identifying some key areas for reform, this CBI/Browne Jacobson briefing paper aims to provide a useful tool for government, and its commissioners, as we enter a critical period for both public sector agencies and their suppliers.