UK should learn intelligent buying lessons from Germany

20 January 2012

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20 January 2012 | Angeline Albert

The UK public sector lacks the smart purchasing practices used to boost the economy on display in other European countries such as Germany.

According to Christopher Bovis, a professor at the University of Hull and a lead advisor to the Cabinet Office on growth and strategic procurement, some European nations use public buying to support economic growth. The comments follow a report by the Trade Union Congress (TUC), which said other countries make better use of public money to boost their own industries.

“There are ways for the UK to get smarter procurement which we see in Germany, France, Italy and Sweden,” he told SM. “One way is by creating a policy that allocated certain sectors or contracts of certain sizes to SMEs. This is something that Germany does best. The country has specific requirements that allow contracting authorities to give preference to SMEs, promoting industrial capacity, innovation, and R&D to help SMEs become more capable.”

The TUC report - German Lessons: Developing industrial policy in the UK  - recommended a smarter approach to public sector procurement “where every pound of public money in the UK” should be “spent encouraging the development of a modern, highly-skilled economy”.

The review did not propose what action could be taken to achieve this, simply stating “that it cannot be beyond the wit of government that procurement policy... is made to work for the UK economy”.

Colin Cram, managing director of purchasing consultancy Marc1 said: “One useful step forward would be for the Government Procurement Service (GPS) to include a requirement to ensure that each one of its procurements and framework agreements contribute significantly to the development of the UK economy.”

He added public purchasing could be used to develop those industries that will drive future growth and to support particular regions and apprenticeships.

“One hindrance would seem to be that the government is doubtful that supporting the UK economy is consistent with lowest cost. The government has to have both the will and the means to be able to achieve these objectives.”

Last November Cabinet Office minister Francis Maude said in a speech: "We will follow the example of our EU neighbours and indeed best practice in the private sector. By making it easier for our suppliers to do business with us."

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