A Brief History
This report reflects on the achievements, impacts and overall progress of the Public Procurement Reform Programme for its whole lifecycle from 2006 to 2016. It follows Audit Scotland's Improving Public Purchasing 2009 report that took stock of the first period of procurement reform, and the Transforming Procurement, Accelerating Delivery report, that reviewed procurement reform progress to 2014.
The McClelland Report
In 2006, John McClelland CBE published Review of Public Procurement in Scotland: Report and Recommendations, in which a number of critical success factors were identified to get the best value from public procurement in Scotland.
First phase of the Public Procurement Reform Programme
In response to the report, the Public Procurement Reform Programme was established, with a Public Procurement Reform Board (PPRB), consisting of representatives from across the public sector.
Four Procurement Centres of Expertise (CoEs) were established, charged with promoting collaboration and developing capability. Spend on goods and services was categorised at a national, sectoral and local level and programmes of collaboration were developed.
There was investment in data collection and digital methods with the Procurement Information Hub, the e-Procurement System (now e-Commerce) and in 2008 the Public Contracts Scotland portal advertising procurement opportunities. By 2009 substantial savings were being delivered locally and nationally through a programme of collaboration.
Audit Scotland's Improving Public Sector Purchasing report recognised the progress that had been made over the first three years of the reform programme, estimating it had directly delivered £327 million worth of savings by the end of 2007/08. Scottish Government annual efficiency figures show that, by 2009-10 the level of savings and other cashable benefits was almost £800 million.
Transforming Procurement, Accelerating Delivery
In January 2010, the Public Procurement Reform Board endorsed the second phase of the Public Procurement Reform Programme - Transforming Procurement, Accelerating Delivery. This placed emphasis on quickening the pace of change, delivering benefits, and embedding initiatives into "business as usual".
The Scottish Model of Procurement was introduced, to consolidate the early gains of the first phase of reform and introduce a fundamental challenge to change the culture of how we buy. A "government led, public sector owned" ethos was adopted. As well as influencing significant changes in culture, approach and practice, it was estimated that the programme had captured over £1.5 billion in savings and other benefits between 2006 and 2014.
Legislation framing a new landscape
The programme evolved into a truly collaborative partnership between public sector, business and the third sector to transform the public sector landscape in Scotland.
The Procurement Reform (Scotland) Act 2014 built on the work achieved in the reform of public procurement. Its Sustainable Procurement Duty requires public bodies to consider how, through their procurement activities, they can improve economic, social and environmental wellbeing; reduce inequality; promote innovation; and involve SMEs, the third sector and supported businesses.
In February 2014, the Council of the European Union adopted three new EU directives on public procurement, which will make the award of contracts more flexible, make it easier for SMEs to bid for contracts and promote the achievement of wider social and environmental benefits. These new pieces of legislation were in place by 2016, establishing a national framework for sustainable public procurement that supports Scotland's economic growth through improved procurement practice.
The Act will maximise the impact of the circa £11 billion annual procurement spend and ensure that public procurement in Scotland delivers environmentally sustainable, socially responsible and innovative goods, services and works.
Julie Welsh, Director, Scotland Excel
"We are now in a new era for public procurement. The reform programme kick-started by McClelland's report has transformed the very foundations of procurement across the public sector. We have moved far beyond the view of procurement as a 'back office' purchasing function, to one where teams of dedicated procurement professionals work alongside their peers to support the delivery of better and more efficient public services.
"It is this strategic and collaborative approach that has underpinned everything that has been achieved by the programme. We have found the savings; we have found the efficiencies; and now we are expanding our horizons to see what more we can do. Procurement delivers so much more than savings in the local government sector. With our minds firmly rooted in serving our communities, the benefits supported by procurement in our sector have made a real difference to the lives of people using local services across Scotland.
"We have made real headway in using procurement as a driver of social policy and value. There is still room to achieve more and to help drive policies that make Scotland a better place to live
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