Introduction of Electronic Invoicing in Public Procurement
Closes 24 October 2018
Public Procurement in Scotland
There is a clear vision in Scotland to focus Government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. The public sector spends over £12 billion each year on goods, works and services. This means that public procurement and the efficiencies and simplifications that can be made to improve supplier access to public contracts as well how they do business with the public sector is a significant lever at the Scottish Government's disposal to help support economic growth.
This consultation is concerned with the Government's proposal to implement a further change to the public procurement rules in Scotland in relation to electronic invoicing (eInvoicing).
This change is in response to a new European Directive on Electronic Invoicing in Public Procurement ( EU Directive 2014/55/EU). It should be noted that the effective and timely implementation of EU legislation remains a priority for the Scottish Government during the remainder of our EU membership and during any period of transition. Despite the UK's decision to withdraw from the EU, Scotland remains a committed, responsible and proactive EU partner.
This consultation document describes, and seeks views on, the Scottish Government's plan to implement a change to the public procurement rules in Scotland. While the specific nature of Brexit arrangements may impact on obligations to implement this Directive, the Scottish Government is consulting on its implementation based on the business efficiencies and benefits eInvoicing is expected to provide to public sector bodies and suppliers.
The change being introduced by the Directive will be implemented by 18 April 2019 through amendment to the Public Contracts (Scotland) Regulations 2015.
Public procurement is the term we use to describe how the government, councils and other public sector organisations create contracts to buy or lease things. This can include goods like books and computers, services like legal advice and accountancy, and works like building roads and hospitals.
The public procurement rules describe how the public sector buys these things. The European Union sets rules for all Member States. Each Member State has to make these rules the law in their own country.
The Scottish Parliament is responsible for making these laws in Scotland. The UK Parliament is responsible for making these laws in England, Wales and Northern Ireland.
In Scotland, public procurement is governed by the Public Contracts (Scotland) Regulations 2015. In this document, we call this "the Regulations".
Throughout this document, we refer to 'public bodies' as short-hand for all organisations which are subject to public procurement laws. This includes government, councils, universities and colleges, the NHS and registered social landlords.
We also refer throughout this document to 'suppliers' as short-hand for all organisations which might bid for and win public work. This includes public corporations, private companies, sole traders, the third sector and supported businesses.
EU Directive on Electronic Invoicing in Public Procurement
EU Directive 2014/55/EU of the European Parliament and of the Council of 16 April 2014 on Electronic Invoicing came into force on 26 May 2014. This Directive requires public bodies to be in a position to automatically receive, process and pay eInvoices for contracts that are regulated by the European Public Procurement Directives and advertised in the Official Journal of the European Union ( OJEU).
The Directive does not require suppliers to comply with the requirements. Suppliers may continue with current invoicing processes. However, due to the business efficiencies and benefits that could be achieved, it may make sense for suppliers to consider the move to eInvoicing.
Public bodies (that are named in Schedule 1 of the Public Contracts (Scotland) Regulations 2015), must comply with the requirements of the Directive no later than 18 April 2019. All other public bodies may have a further twelve months to comply with the Directive (no later than 18 April 2020).
To support the consultation a Business Regulation Impact Assessment ( BRIA) has been created. Please open the link to view further information.
The Scottish Government will be implementing this Directive into Scots Law through amendment to the Public Contracts (Scotland) Regulations 2015. A draft copy of the amendment showing the proposed wording can be viewed here.
Why We Are Consulting
It is generally accepted that the implementation of eInvoicing will make it much easier to do business with, as well as facilitate more efficient payment processes to suppliers, including SME's, which in turn will bring cost savings and liquidity benefits.
Some of the benefits of introducing eInvoicing to the public procurement process would include reduced costs, increased accuracy and processing efficiencies, faster processing and payment cycles, improved controls and compliance, increased visibility and transparency, focus on higher value activities and improved customer satisfaction.
Although in depth stakeholder engagement has taken place and is continuing, this consultation is formally seeking views and comments from a broad range of stakeholders (including public bodies and suppliers) that the introduction of eInvoicing would be a positive and progressive step for the Scottish public sector.