15.01.24 LONDON, Connected Places Catapult, the UK’s innovation accelerator for cities, transport, and place leadership, today published ‘The Art of the Possible in Public Procurement’ – a new report from the Innovation Procurement Empowerment Centre (IPEC). The report is co-authored by an expert team with experience in innovative legal and procurement processes and was unveiled at a House of Lords reception. It encourages council leaders, innovative teams in public authorities and ambitious businesses to take advantage of the new possibilities – reinforced by the Procurement Act 2023 – that can be used to drive innovation.
With approximately £300bn a year being spent on UK public procurement, public sector organisations have an indispensable role in fostering innovation and supporting ambitious small businesses. Local Government alone accounts for approximately £70bn of that spending which has huge potential to level-up economic growth and productivity in the UK.
The Procurement Act 2023 received royal assent on 26 October. In November, the Cabinet Office produced a guidance note ‘Transforming public procurement: our innovation ambition’ which outlined the intent that, ‘over time these developments will make public procurement into one of the most powerful levers to drive innovation nationally’. The authors of ‘The Art of the Possible’ set out ways in which this ambition can be achieved and how the new rules encourage more ways of engaging innovative companies during procurement processes. They highlight the importance of attracting innovative suppliers; cementing partnerships; ensuring transparency and value sharing; and transformative collaboration.
The report brings principles to life through case studies of procurement best practice, including:
- how TfL developed and incentivised a three-way partnership between carriers, innovators and themselves to reduce the adverse impact of freight with Freightlab;
- how Leicestershire Children’s Services used an innovative two-tier contractual framework to procure solutions that helped to achieve ambitious social and environmental goals;
- and how Staffordshire County Council used a joint tendering arrangement with neighbouring councils to increase their purchasing power and overcome their struggle securing a new sexual health service provider.
The report points to the introduction of the ‘competitive flexible procedure’ as the single biggest change implemented through the 2023 Act. The new procedure gives creative contractors a ‘wider palette of colours’ with which they can design procurement solutions. The authors also highlight the importance of assessment criteria favouring the ‘most advantageous tender’. They point to wording from the National Procurement Policy Statement, which is included in the Act. ‘All contracting authorities should consider the following national priority outcomes alongside any additional local priorities in their procurement activities:
- creating new businesses, new jobs, and new skills.
- tackling climate change and reducing waste, and
- improving supplier diversity, innovation, and resilience.’