Eighteen years ago two men died whose combined story can explain why government procurement practices must be open and transparent. Few people today will recall the name and stories of T. Dan Smith and John Poulson with any great certainty, but the annals of Local Government history (and Wikipedia) show how they profited at the expense of the rebuilding of postwar  Newcastle Upon Tyne. Smith was the leader of the Council and Poulson an Architect and Property developer. After 5 decades procurement practices have become much more robust and often rigid, and EU procurement rules can all too often leave small businesses and social enterprises at a disadvantage as they spend large amounts of time (and money) bidding for contracts which they rarely win, as the process favours organisations with experienced and professional bid writers. It is therefore very encouraging to read that the Cabinet Office has recommended a lifting of these rules in certain settings (http://bit.ly/mSZ4ig). However they need to ensure that in doing this (I am not arguing for retaining rigid rules) they prove that this is not simply a classic case of ‘jobs for the boys’ in a manner that would have made Poulson and Smith proud. 

Inappropriate procurement practices can create huge unintended consequences and as well as having the capacity to generate unpaid fruitless work for small businesses and charities, they can also keep civil servants occupied simply assessing the bids. However the loser can also be the community:

A Skatepark in Brighton which has its funding agreed and its design complete is subject to a delay that will lead to the young skateboarders who were first consulted on its design, having grown up and left the area before it is complete. The majority funder made it clear that EU procurement processes need to be followed, in part because the community must be part of the process (despite the years committed to the process of applying for funding, the design cycle, and the work to persuade the Council to honour their funding promises). The landowner and minority funder prevaricated over a range of issues and realised late on that just as the Summer weather is retreating (along with the construction window for such projects) that they failed to include this project in an open bidding process which they went through for two other skateparks in the city. The majority funder is refusing to relent on the need to go through the procurement process for this skatepark, rather than agree to the contract going to the company that is in town building the other parks. Meanwhile the time allowed to spend the main funding has also passed.

So there are cases where EU procurement processes can get in the way of community development and indeed can oblige companies to go through unnecessary processes simply to be one of three bids for small pieces of work.

The challenge for the Cabinet office is that they want to introduce flexibility into procurement in order to assist ex-civil servants who already know their way round Government decision-making much better than the SMEs and Charities. If this commitment to help Spin Outs (a new term for me – where Government Departments are set up as social enterprises) is followed through, the risk is that SMEs and existing social enterprises or charities will discover that instead of going through a complex process and losing out to large corporates, that they will be left unable to match the knowledge and contact books of these new spin outs. 

The cabinet office need to re-think their decision and the reasons for it. The barriers to procurement must be removed but for the right reasons and in a way that does not give real or apparent advantage to ex-colleagues. They also need to explain to SMEs and the charitable/social enterprise sector why they have suddenly ‘discovered’ these problems when these organisations have been asking for change for many years.