29 August 2007
Public procurement is failing to get the maximum value for taxpayers because purchasers often lack the skills and incentives to drive new ideas among suppliers and "purchase innovative solutions", according to a report.
"Most UK public procurement practices neither foster business-led innovation nor allow government to maximise long-term value from its investments," says the manufacturers' organisation EEF in its study, Innovation and public procurement.
"Public-sector procurement should be used much more extensively as a driver for technology and innovation," it adds.
The report, which looks at the medical and defence equipment markets, recommends an enhanced role for the Technology Strategy Board (TSB) to push the adoption of new technologies and support projects through feasibility studies to development.
The TSB should have a remit to take on high-risk projects and carry a £625 million annual budget "to make its actions meaningful".
The beefed-up board should be used to improve public-sector purchasers' skills in risk management, commercial best practice, technical skills and how to recognise long-term value.
The EEF also recommends developing and communicating long-term strategy and, lastly, keeping both procurement policy and guidance from the OGC simple.