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Erika Szyszczak28 April 2020

Ian Clarke is CEO of Excalibur Managed Services Limited and Professor Erika Szyszczak is a Fellow of UKTPO.

The COVID-19 pandemic has highlighted the importance of global supply chains and the need for robust public procurement policy and procedures.

PPE and ventilators

Recent events suggest that the current UK healthcare procurement system may not be agile enough to meet UK COVID-19 responses.  Media reports indicate that the UK participated in a number of EU health security committee meetings dedicated to COVID-19 as the magnitude of the epidemic in China emerged. Both the muddled response from the UK government on its reasons for not participating in the EU scheme for PPE and ventilators, and Michael Gove’s comment on the Andrew Marr Show on 29 March 2020, that the UK was now an “independent nation” reveal an implicit and explicit attempt for the UK to go it alone in healthcare procurement. But in the same interview Gove also suggested that the procurement of PPE equipment had not been as efficient as it could have been.

The murky waters were muddied on 21 April 2020 when Sir Simon McDonald told the House of Commons Foreign Affairs Committee that Ministers had made a “political decision” not to participate in the EU procurement scheme. This was denied by the Secretary of State for Health, Matt Hancock, and later in the day Sir Simon McDonald wrote to Tom Tugendhat, the Chair of the Foreign Affairs Committee, clarifying his evidence to say that the UK did not receive an invitation to join the four EU procurement schemes due to a miscommunication. The European Commission found this statement baffling.

Supplies of vital PPE equipment remain a significant problem with evidence that the government is either not being fully briefed on the progress of its PPE supplies or is not being transparent on its sourcing activities.

The government was aware that the initial shortage of PPE and ventilators exacerbated the COVID-19 crisis in hospitals in Italy and Spain. It should have prioritised the sourcing of this equipment to ensure sufficient quantities were available to the NHS to limit the spread of the virus and improve the chances of survival for the most serious cases in hospital Intensive Care Units. The decision not to collaborate with the EU is likely to have been a political one. Any senior procurement professional would have welcomed the opportunity to collaborate, especially where cross border leverage could be applied. Collaboration is particularly important where there is a global crisis such as the COVID-19 pandemic as it naturally fosters a collective responsibility to ensure supply chain security and shares procurement expertise. The decision not to participate in the EU scheme is not a logical procurement decision and suggests that either nationalist political ideology was the driver or NHS England simply did not have the procurement capabilities at a strategic level.

The UK government’s “go it alone” procurement policy creates risk. Any wrong decision may impact on NHS clinical capabilities or reduced survival rates. The UK is likely to continue to struggle with sourcing enough vital equipment. The sensible option would have been to tap into the EU scheme and push for an even earlier start of the UN Supply Chain Task Force initiative launched on 9 April 2020. This initiative coordinates the manufacture and shipment of up to 30% of the world’s PPE requirements and together with the EU scheme may have helped to mitigate what is now, a UK equipment sourcing crisis.

Public procurement post Brexit

The COVID-19 crisis has highlighted the current weaknesses in the functioning of the UK’s public procurement system. There is an urgent need for a review on where procurement sits within government and what procurement policy should look like in an independent UK.

The EU has included procurement as part of its level playing field in any future post-Brexit trade agreement and the UK will not necessarily be a totally independent nation if it is obliged to continue to implement some core EU rules and principles.

Many on the right of the government advocate a complete break with the EU procurement regulations by adopting WTO rules. However, a gradual transition from EU regulations to a simplified procurement regime would be the preferred option. The UK is recognised as an innovator in the development and testing of procurement regulations and any sensible UK government would not wish to jeopardise this reputation by precipitate action.

The UK cannot ignore the need for a rigorous application of procurement rules. Public procurement is a necessary part of any domestic economic policy, to ensure public money is spent efficiently and that there is transparency and accountability to the tax payer, as much as it is also a necessary part of international trade regulation.

The COVID-19 crisis has shown that public procurement in the UK, whilst adequate to deliver regulated or transactional based purchasing functions, is not agile enough, or sufficiently independent, to meet any future strategic challenges.

In an independent UK, facing unprecedented economic challenges, public procurement should be elevated in strategic importance so that Chief Procurement Officers are directly accountable to Ministers, have experience in complex trading environments, can assure supply chain security, proactively develop cross boarder markets and deliver agile sourcing strategies.

New trading partners want to see UK public sector procurement as a bastion of innovative sourcing professionalism that is both flexible and exhibits the necessary robust sourcing governance required in healthy trading relationships.

The opinions expressed in this blog are those of the author alone and do not necessarily represent the opinions of the University of Sussex or UK Trade Policy Observatory.

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One Comment

  • David Roberts says:

    We may never know whether the Government made a conscious and ill advised, or accidental, decision not to participate in the EU Covid-19 procurement scheme but, even if it was accidental, the accident must have happened because British officials were instructed or simply sensed that they should keep the EU at arms length.

    This is consistent with the reckless line it is taking over the decision whether or not to extend the implementation period. If the Government really wants the negotiations on a future trade relationship with the EU to be concluded by the end of the year, then it needs to show more flexibility in the negotiations themselves. If it wants to hang tough in the negotiations, then it needs to be ready to have these tough negotiations when both the government and the EU have emerged from their preoccupations with Covid to make a considered judgement on the terms of the deal they can accept.

    Goverment Ministes seem to beleive that an international negotiation can be compared to buying a house and that all that is needed to get a good deal is to be ready to walk away without one. In fact, international negotiations are more nuanced than that but even in buying a house the utility of a threat to walk away depends on the circumstances. If the purchaser has no deadline to move house and there are several properties on the market that would fully meet his needs and are close enough to his budget for there to be a chance his buying them, then the threat to walk away is credible, stands a chance of succeeding and is not unduly risky. But if there is only one property on the market in the location he wants to move to which is both within his budget and meets his needs and he has a real deadline to meet, threatening to walk away is either not credible or, if he really means it, incredibly stupid.

    In fact, in current circumstances even ending the transitional period with a “Canada style” FTA would be an irresponsible thing to do. Covid-19 of itself poses a risk to the supplies of fresh food from the EU because of its impact on roll on roll off ferries whose economy depends carrying both lorries and passenger cars. To add to this risk the extra delays at UK and EU ports that will be the inevitable consequence of leaving the EU single market would be reckless in th extreme – all the more so because the collapse of passenger numbers on aircraft will put at risk a lot of airfreight from third countries that is now carried on passenger planes.

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