The Public Procurement Reform Programme 2006-2016: achievements and impacts

This report reflects on the overall progress of the Public Procurement Reform Programme from 2006 to 2016.

Maximising efficiency and collaboration

The Scottish Government is focused on using procurement as a lever for economic growth, streamlining the public sector's dealings with business, and adopting more efficient procurement practices that encourage competition and secure best value.

Efficient procurement is open procurement. As well as being good for business, transparency in procurement is an important tool in the fight against fraud and corruption. The Scottish Government place great value on sharing information, reporting performance and holding up our processes to public scrutiny.

The Public Procurement Reform Programme has provided consistency in its tools and processes, to deliver efficiency benefits to public sector buying organisations and private sector suppliers, and support collaborative working across a wide range of procurement activities across the public sector. Through collaborative working and sharing experiences and expertise from across the Scottish public sector, significant progress has been made in the area of people and capability.

The reform programme has delivered efficiency benefits to public sector buying organisations and private sector suppliers.

The programme's joined up suite of electronic procurement solutions, reinforced by legislation that enshrines the Scottish Model of Procurement in statute, promote good, transparent and consistent practice in procurement to improve economic, social, and environmental wellbeing. They have maximised efficiency and collaboration through:

  • Realised efficiency savings;
  • A range of payment options;
  • Stronger communication links between buyers and suppliers;
  • Identification of opportunities where efficiencies could be made;
  • Enabled buyers to create consistent tender documentation more easily;
  • Standardised best practice approach to public sector procurement;
  • Supported adherence to legislation, policy and procurement procedures;
  • Supported growth and increased capability; and
  • Supported greater levels of compliance.

Collaborative contracts maximising economic impact and supporting access

The Public sector are developing collaborative strategies taking in to account potential economic impact and ease of access for SMEs and Third Sector organisations. Collaborative contracts are increasingly being designed to deliver wider benefits. This includes procuring contracts, in a size which maximises competition whilst maintaining economies of scale and offers winners an opportunity for growth; encouraging training, with the contract period sufficient to allow pay back on investments (maximum duration of a framework is four years); assisting the development of an indigenous supply chain; and enhancing the characteristics of growth, for example inclusion of workforce related matters criteria and community benefit clauses.

Lotting strategies and additional frameworks are deployed where appropriate to enhance opportunities for smaller companies and those operating niche markets
and local areas, and the scope to encourage consortia bidding also assessed.

Collaborative Spend

Collaborative working delivers the benefits of combined purchasing power and greater efficiency. The Public Procurement Reform Programme has seen a significant increase in collaborative contract spend. Nationally, collaborative spend has risen from around £1.2 billion in 2011/12 to £2.3 billion in 2015/16 (see diagram below).

Collaborative Spend

Collaborative Spend

The below table illustrates aggregated collaborative spend across the sectors.

Phase/Sector Health Local Authority Higher and Further Education*** Central Government (Cat A and B) Total
2006-2009 n/a n/a £86m* £200m^ £286m
2010-2014~ £3,200m £1,899.2m £868m £633.1m £6,600.3m
2014 - 2016 £2,458m £1,472.2m £430m** £490m £4,850.2m
Total Spend £5,658m £3,371.4m £1,384m £1,323.1m £11,736.5m

Source: Figures provided by each Centre of Expertise

~ 2010/11-2013/14 Figures provided for Transforming Procurement, Accelerating Delivery Report
* 2007/08 and 2008/09
** 2014/15 actual and minimum estimate for 2015/16 as academic year-end is later (data still being compiled)
*** This is based on academic years - note that some past reports were compiled based on fiscal years so may be reported slightly differently
^ Figures from 2008/9

Scottish Government-led collaborative procurement

Scottish Procurement lets and manages a suite of around 50 collaborative agreements across ICT, Utilities and Corporate and Professional Services. Most of these can be utilised across the wider public sector, and typically enjoy very good take up (for example Electricity and Gas are used by over 99% of the public sector by demand). Since 2008, value for money benefits of £616m have been achieved, with significant sustainability benefits also achieved, spanning social, environmental and economic aspects.

Tools supporting improved efficiency and collaboration

A range of collaborative tools have been introduced that make it easier to do business with the public sector, as well as making it more efficient for the public sector to procure. From Public Contracts Scotland, through to Catalogue Content Management (CCM) and eInvoicing, every step of the procurement process in Scotland can happen electronically.

The national purchase to pay solution PECOS P2P provides a consistent interface to suppliers. In 2015/16, it captured over 2.5 million purchase orders with a combined value of approximately £5 billion - just under half the total public procurement spend per annum. eInvoicing capability is delivered through PECOS P2P. At August 2016, over 75,500 invoices had been captured by the service, with efficiency savings of approximately £1 million secured.

Working with business and the third sector

Public procurement in Scotland is a truly collaborative affair. Representatives from business and the third sector have been central to - and remain fully engaged with - the implementation of McClelland's recommendations and the continuous improvement of public sector procurement.

The public sector continues to actively work with the Scottish business community to standardise processes and reduce bureaucracy. The supply chains that deliver goods and services supporting our publicly funded services are being designed, competed, awarded and delivered to maximise economic impact and deliver wider benefits. This increases opportunities for collaboration, promotes inclusive growth, and improves access for SMEs, while delivering public services that meet the needs of local people.

Workforce Matters

In August 2013, Scotland Excel developed a national framework for social and care agency workers.

The social care sector has a high proportion of hard-to-fill vacancies and council's demands are often reactive and urgent as they respond to unexpected absences and failed recruitment drives. Scotland Excel created a technical working group to identify the core requirements of councils. The group identified agreed specifications for the 14 most common social and care agency worker roles, for which suppliers submitted a range of hourly rates. This provided flexibility and choice for councils depending on their requirements.

The framework sought to exceed expectations by achieving a real advancement for the sector through the inclusion of innovative Living Wage provisions. In 2013, the Living Wage Foundation launched its Social Care Campaign which specifically called for a better deal for care workers. In support, Scotland Excel recognised that the strategy taken would need to legally accommodate current and future policy in this area, but also reflect the substantial employment market variances across Scotland. The tender was structured so that suppliers would not be penalised for offering a fair rate of pay to agency workers. This was achieved by only commercially evaluating the Supplier's Fee. This creative approach meant that suppliers were under no pressure to reduce pay rates in order to be "competitive". Suppliers submitted minimum and maximum rates, which incorporated the Living Wage, allowing councils to engage agency workers at the Living Wage.

One of the suppliers, commented on this innovative approach: "By taking this approach Scotland Excel allowed us to remain competitive in our tender. We were able to focus on the value we could deliver to councils without compromising the rates paid to agency workers."

Scotland Excel engaged with the Living Wage Foundation to encourage suppliers on the framework to pay the Living Wage, while also being compliant with the EU Procurement rules. Of the 13 suppliers on the framework, one supplier has become Living Wage Employer/Service Provider accredited, while the vast majority of others are committed to, and progressing towards, achieving accreditation.


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