The UK Government will have a million and one things to do over the next two years or more to try to come to terms with what just over half of the population has voted for. The last thing it will want to do is change successful processes and policies that it has developed with our European partners over the years. One of those processes is that of Public Sector Procurement.
14% of GDP across Europe and 20% of UK GDP is spent on Public Procurement
It has been estimated that 14% of GDP across Europe and 20% of UK GDP is spent on Public Procurement. It therefore seems reasonable to use that expenditure wisely to obtain benefits for businesses and communities alike.
This has always been the basis of Public Procurement Regulation. The EU made some initial attempts at legislating for public procurement in the Treaty of Rome 1957, before United Kingdom were involved. But through the 1960s, 70s and 80s, as UK had more of a say in the EU, the Directives that were introduced were largely ineffective. They were prohibitive, non-regulatory and contained no rules. Who wants to be prohibited from doing something if there are no rules or regulations to back it up?
To get more EU teeth, the 2004 Public Sector Directive did set out common rules and did replace national regulations, which in the UK was the Public Contracts Regulations 2006. As public sector organisations began to misuse, misapply and ignore the Regulations, a new Directive on “Remedies”, more accurately called “penalties for non-compliance”, was introduced and enacted in the UK Public Contracts Regulations 2009.
What happens to Public Contracts Regulations 2015
Whilst open, fair, transparent and non-discriminatory, they were also long-winded, complicated, litigious, Anti-SME, Anti-local and prone to inadvertent or deliberate errors. After a long consultation period, to which the UK contributed extensively, a new Public Procurement Directive led to the UK enthusiastically enacting the Public Contracts Regulations 2015.
These were still open, fair, transparent, non-discriminatory and also now proportionate, but they were also less long-winded, less complicated, possibly less litigious, Pro-SME and Pro-local. They reduced timescales, and were less complicated and less litigious by reducing uncertainty and providing greater clarity.
However, more important, they were pro-SME by reducing ‘red tape’, breaking down contracts into lots, introducing mandatory 30 day payment terms, abandoning PQQs for lower threshold procurements and providing for greater competition thus greater savings but without compromising quality.
The Regulations also set out the ability to allow community benefits, by the inclusion of apprenticeships, local employment, training, community services and community facilities. Public procurement can now unlock the Added £ Social Value.
A new lighter non-PQQ regime was also introduced by the UK for lower threshold procurements and centralised purchasing bodies, such as LHC, were not only referred to and encouraged, allowing savings through collaboration, but they were also allowed to offer related purchasing activities, such as specification-development, mini-tendering and contract management.
In the short term, the UK public sector will still be required to comply with the Public Contracts Regulations 2015 and not only will be obliged to, but will still want to advertise contracts in accordance with the EU Directive. In the long term the UK Government will want to improve those regulations for the benefit of businesses and communities alike. Moreover, if UK negotiates continued membership of the European Economic Area (EEA), European Free Trade Association (EFTA) and/or Government Procurement Agreement, it will still be required to comply with procurement rules covering openness, fairness, transparency and non-discrimination, rules that already exist in the Public Contracts Regulations 2015.