Negotiating for the future

According to the Scottish Government, procurement is at the heart of Scotland’s economic recovery. The Public Procurement Reform Programme is an integral part of policy development and service delivery. It is a simple concept: business friendly and socially responsible, looking at outcomes not outputs. It uses the power of public spend to deliver genuine public value beyond simply cost/quality in purchasing.

The Procurement Reform (Scotland) Act builds on the work achieved so far in the reform of public procurement in Scotland. It will establish a national legislative framework for sustainable public procurement, ensuring that we maximise the economic benefit brought to Scotland from effective and efficient public procurement spend.

Writing in his latest newsletter to staff, Alastair Merrill, Director of Procurement and Commercial, Scottish Procurement, at the Scottish Government, said although views may differ about the extent to which the Bill, as passed, met its objectives of balancing the concept of business friendly with socially responsible, no one is seriously questioning the overall direction of the procurement reform agenda.  

He continued: “That support across the political (small p) spectrum is key to the enduring success of the Scottish model of procurement. Now, of course, the real work starts. The planning for the Bill’s enactment, the development of the statutory guidance and regulations that will drive reform forward and enforce standards, the synchronisation with the transposition of the EU Directives – all that is going to be a huge challenge in the months ahead.

“The noise of the Bill’s passage risked drowning out another important announcement in May – the Government’s response to the independent review of construction procurement. In response to a parliamentary question from Nigel Don, the Deputy First Minister endorsed the report and accepted all of its recommendations, with the exception of the appointment of a chief construction adviser, which will not be pursued for the time being. Implementation of the report will be overseen by the cross-sector Public Procurement Reform Board, and will be a major change programme across the public sector, challenging all parts of it to make improvements – as well as the industry itself.

“We are already developing a portfolio of activities to deliver the report’s recommendations, working with the Scottish Futures Trust and other key players. In the case of project bank accounts (PBAs), one of the first recommendations to be accepted by ministers, we have been co-ordinating trials over recent months involving a range of transport and health projects. Project bank accounts are ringfenced accounts from which payments can be made directly and simultaneously by a client to contractors and sub-contractors. This improves cash flow through the supply chain, improving liquidity and removing the uncertainty of late or extended payment to sub-contractors. Earlier this month an important milestone was reached, when contractors received the first PBA payment from NHS Lanarkshire on two work packages worth £1.4 million at Monklands Hospital.”

Earlier this month too, it was announced small and medium enterprises (SMEs) and third sector businesses will find it easier to bid for £10bn Scottish public sector contracts thanks to the roll-out of a digital procurement initiative. A £360,000 funding boost to the supplier development programme (SDP) will help an additional 2,200 businesses of all sizes, across all sectors, develop their digital capability and be more efficient in bidding and fulfilling public contracts.

SMEs will receive advice on attracting online trade and guidance on transacting electronically with the public sector through dozens of events, training opportunities and a new SDP website, set up by funding from the Scottish Government’s Digital Scotland Business Excellence Partnership. The roll-out of the programme will supplement existing services provided by Scottish Enterprise, Highlands and Islands Enterprise, Ready for Business and the Supplier Development Programme. The public sector currently spends around £10bn a year on contracts, with 46 per cent spent with SMEs.

Andy Willox, the Federation of Small Businesses’ Scottish policy convener, said: “The FSB wants more Scottish small businesses winning public work. Alongside moves to encourage a more proportional approach from buyers, we warmly welcome extra support to ensure small enterprises deliver polished bids.

“Further, by supporting small Scottish businesses to develop better digital skills, we give them the opportunity to capitalise on the investment the country is making in digital infrastructure. Scottish small businesses, no matter their size or sector, can use information technology to level the playing field with their much larger competitors.”

Merrill said: “The SDP has long enjoyed a reputation for developing capability in the SME and third sector supply base. The additional funding through the Digital Scotland Business Excellence Programme will provide national coverage supporting SMEs in the use of e-Commerce capability when tendering and trading with the public sector. This will provide a platform to more extensive use of electronic commerce in support of the digital economy strategy.”