The government has failed to do enough to improve the access of social enterprises and small businesses to public contracts, according to a new report from the Public Administration Select Committee.
The report is highly critical of both the Cabinet Office (pictured) and the civil service and says it is “intolerable” that public procurement here still takes 50 per cent longer than it does in France or Germany. “The Cabinet Office does not seem to know why this is the case,” the Committee said.
The PASC acknowledges that the government has initiated steps to improve the efficiency and effectiveness of its procurement processes, by improving its data, aggregating demand across government departments, and renegotiating relationships with major suppliers.
However, it adds that the “stream of procurement and contract management failures continues unabated”, citing the G4S and Serco contracts with the Ministry of Justice, where payments were made regardless of the service delivered, as recent examples.
“The civil service shows a consistent lack of understanding about how to gather requirements, evaluate supplier capabilities, evaluate relationships or specify outcomes.”
'Painfully slow' progress
It says that progress so far on centralising procurement has been painfully slow and sporadic and blames a lack of co-operation between the Cabinet Office and other Whitehall departments. “We find it astonishing that a department should be able to cite legal restrictions as a barrier to collaboration with the Cabinet Office on initiatives that could save the taxpayer money,” the report said. “The government is a single customer and should behave as such.
“The present paralysis raises questions about the role of the Cabinet Office and its relationship with other departments.”
And it said: “The government has failed to set out a clear strategy for public procurement. The Cabinet Office needs urgently to address this, setting out clear procurement objectives and timescales for their achievement.” Progress on gathering good-quality data from across Whitehall, which has been “unacceptable slow” to date, must be significantly improved.
Social enterprises and SMEs still excluded
And it declares: “Not enough has been done to improve the access of SMEs and social enterprises to government contracts.”
Despite the removal of pre-qualification questionnaires, the introduction of the Public Services (Social Value) Act and Contracts Finder, and the appointment of Michael O’Toole as Crown Representative for the sector, large contracts still exclude most voluntary sector providers.
However, the Committee did note that the government’s chief operating officer has expressed confidence that small business will win a "much greater share of government business over the next two years".
Social Enterprise UK: 'current practice not working'
Peter Holbrook, CEO at Social Enterprise UK, welcomed the report. He said: "The Committee has said it is ‘astonished’ at some of its findings, but it’s unlikely that the general public will be astonished. They have heard too many stories about delivery failure, about the way that G4S and Serco and other giant businesses are treating taxpayers’ money.
"This report is to be welcomed. In its current form, national and local government buying practice is not working. A lot of money is wasted, and an unfair playing field has been created."
