Procurement as a Hidden Powerhouse for Innovation

Quite often, when people think about procurement in the public sector, they often picture a process focused only on compliance and cost control. My experience, first at Transport for London (TfL) and now at Connected Places Catapult, has taught me something very different. Procurement can be one of the most powerful tools we have to unlock innovation, deliver better services and improve outcomes for citizens.

Changing the mindset

Public bodies are naturally cautious. We are entrusted with public money and must use it wisely. Yet, this does not always mean avoiding risk. We have so many hard to solve problems, so we have to take some controlled risk with the right safeguards in place. Instead of searching for the one safe solution, we should try several promising ones. Even if some do not succeed, the wins can transform how we serve the public.

At TfL, one of the most impactful steps we took was to open our data. This simple act unleashed creativity from thousands of developers. From travel apps that save passengers time to tools that help people with accessibility needs, the benefits went far beyond what we could have built ourselves. By sharing data, we invited innovators of all sizes, from large firms to individuals working at their kitchen tables, to help solve problems for Londoners.

From small steps to system change

Innovation will not succeed unless everyone is on board. That means working closely with colleagues in finance, legal, operations and leadership from the very start. It also means building trust with the service teams who deliver daily operations. Without their support, even the best ideas struggle to take root. Culture change does not happen overnight. Initially at TfL, we focused on small, visible projects that could deliver quick wins. Each success built confidence and encouraged more people to experiment.

Traditional processes that rely on producing free, proof of concepts followed by a full tender often discourage start-ups. By the time a tender goes live, large incumbents usually have the advantage. At TfL, we were one of the first organisations in Europe to effectively use the Innovative Procurement Procedure by combining research and development phases with commercial scaling in a single process. This allowed us to award contracts directly to innovators who had shown their ideas worked. It also gave smaller players a fairer chance to compete and it helped us move faster from idea to delivery.

Through the Innovation Procurement Empowerment Centre (IPEC), hosted by Connected Places Catapult, we are seeing strong examples of local authorities across the UK – from Dorset to Glasgow – use procurement to bring in new innovative solutions from different types of suppliers to deliver better outcomes. We have worked closely with Westminster, Somerset, Bristol and central Government on mission focused challenges in recent months. 

Innovation starts with asking the right questions. Problem statements should be clear enough to focus efforts, but broad enough to invite creativity. It is also important to provide safe spaces to test new ideas without risking core services. I have found that when you frame challenges well, innovators rise to meet them.

Perhaps the most important lesson is simply to pause and ask what is possible. Public sector leaders are deeply committed to serving their communities. By opening themselves up to new ideas (including from the community), they can find better and smarter ways of achieving their goals.

Procurement is not just about contracts and compliance. It can be the engine that powers innovation across the public sector if we are bold enough to use it that way.

Find out more about IPEC.