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by Mark Neild
4th March 2021

The Government’s Transforming public procurement Green Paper is full of good intentions. What is not to like about reducing bureaucracy, simplifying processes and encouraging innovation? The question, however, is whether the proposed legislative changes will bring these about. It is not the law we need to change, but the culture that implements it.

We need to recognise that public service provision is poles apart from purchasing paperclips. Policies and processes that conflate the two inevitably lead to disappointment. While the latter can be procured through market transactions, the former requires partnership based on a common purpose and shared values.

Values not value

Public service commissioning should reflect the public’s values, not economic value. Those values motivated massive volunteering for those most vulnerable to Coronavirus and revering key workers underserved by economic value. Economics Nobel Laureate Amartya Sen proposes that the ‘capability of people to choose lives they have reason to value’ trumps those inflicted on them by paternalistic neoliberal service provision whose main macro ‘achievement’ has been to widen the gap between rich and poor. The Local Government Act 1999 Section 3 agrees, defining ‘best value’ to include service user interests. But competitive procurement processes are having none of it. Social value cannot be reduced to some minor tick box on a tender evaluation scorecard. Instead, suppliers should be required to demonstrate how their proposals deliver it, ideally rooted in the lived experiences of the beneficiaries of those services.

The tragedy is how many commissioning bodies feel the current system prevents them from procuring social value, particularly given mounting evidence showing it often costs less to deliver. Social Value was included in the ‘Most Economically Advantageous Tender’ (MEAT) definition in 1988. The ‘duty to consider’ introduced by the Social Value Act 2012 should have been superfluous. How can further tinkering with legislation really make the blindest bit of difference?

Motivation not enforcement

If the Government is serious in its intent, we need intrinsic motivation rather than enforcement. Innovation succeeds when clear and achievable benefits motivate its adoption; insufficient motivation manifests as change resistance. Studies show that desire is far more powerful than obligation – witness the public’s response to the pandemic mentioned above. Our challenge, then, is to harness that intrinsic motivation rather than persisting with extrinsic transactional arrangements that favour tangible activity over the intangible outcomes we seek. We need to stop rewarding those skilled at ‘playing the procurement game’ and instead empower those motivated by the right values to do the right thing. Thus, we dispense with combative, defensive and risk-averse change resistance and embrace the art of the possible, paving the way for real transformation.

Purpose and partnership, not transactional process

Social value cannot be measured with elegant formulae because its beauty lies in the eye of the beholder. So, transacting for social value is almost impossible in practice. The workaround, measuring proxy activities, is a poor substitute for progress towards our desired social outcomes. A better alternative is shared purpose. Purpose gets to the root cause of problems rather than merely measuring symptom relief, while preventing problems delivers far better value for money than dealing with their consequences. Transacting makes such opportunities ‘too difficult’. Far from being fantastic and fluffy, commissioners typically share purpose with many potential providers, but the transactional process gets in the way. Innovative small businesses and voluntary and community (VCSE) organisations are highly motivated by great outcomes; their survival depends on it, but they are hopeless at playing the procurement game.

So, let us play a different game.

Innovation really flourishes through co-creation partnerships where commissioners’ unexpressed challenges meet suppliers’ untapped potential to inform highly effective services that neither party could conceive on its own. My own research shows the conditions for co-creation to flourish include:

  1. Real power symmetry between parties with neither dominant or controlling
  2. Motivation driven by intrinsic goals rather than financial carrot and stick
  3. A focus on mutual abundance rather than sharing out scarcity
  4. Embracing subjectivity rather than the reductionism of objectivity
  5. Valuing the long-term relationship over short-term transactions

Trading affordable loss for invaluable learning should be encouraged; it is how entrepreneurs develop new products and markets, risking their own resources. Transactional procurement inhibits such creativity, but the 2015 Light Touch Regime Innovation Partnership serves exactly this purpose. Sadly, precious few people use it.

The response to the pandemic shows how shared purpose can mobilise huge swathes of the community when command and control paralyses big organisations. Suggesting the community lacks scale and impact is more rooted in bias than evidence. Of course, not every microentity has the process maturity to deliver high-quality public services, but if we never give them the chance, they never will have, depriving us of future choice. Besides, capacity building at grassroots level adds huge social value.

Radical innovation isn’t tinkering with the as-is; it is achieving better outcomes through thinking differently.

Mark Neild is a senior lecturer at the University of Bristol’s Centre for Innovation and Entrepreneurship and runs two growing businesses battling daily with current procurement practice.

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