Last week saw the release of yet another Procurement Policy Note - PPN 05/21: National Procurement Policy Statement.
But before you reach for the ‘oh no, more red tape’ button, let me tell you that this procurement policy note is both major and significant, and represents another shift towards placing Social Value at the very heart of government procurement. It will also more than likely impact how the private sector goes about its own business of buying.
What does PPN 05/21 say?
PPN 05/21 was issued by Lord Agnew, Minister of State (Minister for Efficiency and Transformation) at the Cabinet Office, who is responsible for public value, planning and performance, and supporting procurement and other government functional activity relating to COVID-19.
The Note follows a path of strengthening a commitment to Social Value - going beyond price and doing more to deliver wider benefits to society via government commercial activities. It is seen as a crucial part of the COVID-19 recovery.
There is also a clear golden thread linking the Note to:
- The Public Services (Social Value) Act 2012
- PPN 06/20, which required the awarding of central government contracts to take account of Social Value
- Efforts to foster a level-playing field for SMEs and VCSEs to bid for public sector opportunities
The briefing note focuses on three national public policy priorities:
1. Social Value
The government requires all contracting authorities to consider these three 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
- Improving supplier diversity, innovation, and resilience
2. Commercial and procurement delivery
All contracting authorities must now consider whether they have the right policies and processes in place to manage the key stages of commercial delivery in order to secure value for money, including delivery of Social Value outcomes.
Authorities must also have a solid foundation for continuously improving their procurement practices. This includes a focus on place-based procurement to secure value for money.
3. Skills and capability for procurement
All contracting authorities should consider their organisational capability and capacity with regard to the procurement skills and resources required to deliver value for money, and consider benchmarking themselves annually against relevant commercial and procurement operating standards.
They should also complete a Social Value Statement, such as those developed by Social Value Portal and the Local Government Association and supported by the National Social Value Taskforce.
The key takeaway
In reading this Note, it seems very clear that the government wants to double down on the message that contracting authorities do not have to select the lowest priced bid, and that they should take a broader view of value that includes social, economic and environmental wellbeing of our communities.
Commercial and procurement teams should see their activities as a means of delivering policy (so much more than ‘just buying’) with the specific aim of helping our communities recover and renew themselves as they emerge from the pandemic.
I guess that if you are a business reading this, you are likely thinking that this guidance does not apply to you.
Well, I urge you to think again. It is my experience of matters of social and green that where government leads, the private sector often follows, whether they like it or not…
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