Professor Robert Barrington of the Centre for the Study of Corruption and member of the government’s Procurement Transformation Advisory Panel, looks at the UK’s new proposals for post-Brexit procurement reform – and concludes that, if they are implemented, the UK will have a world-class system
The UK Government has this morning published a Green Paper (ideas for what a new law could include) on how it will reform public procurement post-Brexit. Leaving the EU has created a once-in-a-generation opportunity to reform procurement laws, and the Covid crisis has demonstrated how badly things can go wrong if good rules are not in place.
The UK spends £292 billion each year on buying goods and services; the Financial Times has noted that granting access to this pot of government money is one of the few significant cards the UK holds in striking new trade deals. Moreover, in a recovering economy, there will rightly be pressure to strike the correct balance between bureaucracy, efficiency, value for money and anti-fraud and corruption safeguards.
The good news is that other countries have already made progress in this field, notably South Korea and Ukraine – both of which were represented on the government’s procurement Transformation Advisory Panel, along with the OECD, which monitors and promotes best practice in this field.
So what does the Green Paper actually propose? My focus is naturally on corruption, and it is genuinely encouraging that this is incorporated into the paper, acknowledged as a risk, and addressed as such. I am not an expert in public procurement, so my analysis should be taken with a pinch of salt until the real experts have had a look. But at first glance, pretty much all the boxes I would have wanted to see ticked are there. These include:
Transparency by default (para 6) – a key principle that needs to underpin any genuine exercise of this nature
Beneficial Ownership Transparency (para 112) – ‘a new mandatory exclusion ground relating to the non-disclosure of beneficial ownership meaning that bidders who do not state their beneficial owner(s) will be automatically excluded’
Open contracting (Chapter 6) – and specifically the adoption of the Open Contracting Data Standard (OCDS) advocated by the Open Contracting Partnership
Debarment (para 116) – a bundle of reforms that will reward greater scrutiny, but at first glance look like a step-change from where we are today, including a recognition that companies under Deferred Prosecutions Agreements (DPAs) can be debarred
Social value (para 101) – ‘including social value as part of the quality assessment’ – in other words, not always awarding contracts to the lowest bidder when that might have negative social consequences. This will need some checks and balances to ensure it is not ‘gamed’ but is a very sound principle.
Three areas that need more work:
Tax: it is there – a search reveals 11 matches – but does not resolve the critical tension…should companies that do not pay into the public purse be allowed to take out from it? Much of the paper follows the thread of being fair on SMEs: but how is it fair if they are paying tax, and a giant supplier like Amazon is (allegedly) not paying its fair share?
Emergency response: the paper asks the right questions but will almost certainly need to do more to cover off all the loopholes exposed by the Covid procurement.
Freedom of information: companies often retreat into secrecy by default, arguing that almost everything they do is commercially sensitive. But if they are delivering public services, there is a legitimate expectation that they should operate under – and not block or evade – Freedom of Information rules. This is acknowledged in the paper, but as far as I can tell the paper does not make a proposal to apply FoI fully to the private sector when providing or operating public services.
There is lots more to digest- not least the proposal for a new independent monitoring arrangement, which also looks a very positive development, except perhaps in its non-receptiveness to corruption complaints that are at contract level and not at systemic level.
My conclusion – and again, I may stand to be corrected once the experts have had a look: it is big, and bold, and would give the UK a world class system. There is a risk that the best parts will be watered down in the consultation; and, as we have seen with Covid procurement, there is a risk that even if the rules are good they will not be followed. But whether you are for or against Brexit, my take is that – if implemented – these reforms will deliver some of the things that have been long promised for a post-Brexit Britain. The civil servants and minister responsible, while hoping that the inevitable backlash from vested interests can be seen off, should be quietly patting themselves on the back.