The UK government should introduce performance-related pay (PRP) and a bonus scheme for procurement staff at all levels, according to a report.
The report, Buying Into The Future by the think tank Public, said PRP was offered to senior employees in the Government Commercial Function (GCF) but this should be expanded to junior staff because “there is lack of incentivisation for individual procurement officials to take risks and seek novel solutions to government challenges”.
“In general public sector buyers are not rewarded either financially or through career progression for procuring innovation,” said the report.
The report said bonuses should be “accompanied by a highly visible award ceremony for buyers who take risks and seek innovative solutions”, while the Treasury should provide the GCF with a budget to launch an annual Procurement Innovation Prize.
The report, covering how governments buy IT and innovation, said the UK should set a target that 10% of technology spend should go to startups by 2022 and a single online system for accessing and bidding for public sector contracts should be established because current arrangements are too diffuse.
The Cabinet Office should create a Procurement Innovation Team to “champion new models of procurement and market engagement” and establish itself as the “centre of government for understanding the key trends and developments in technology, science, and data analytics markets”.
“This would ensure that public authorities without the capacity to develop in-house innovation expertise would be able to work with the Procurement Innovation Team to deliver better and more innovative commissioning outcomes,” said Public.
Innovation Zones should be introduced for technology contracts in designated sectors where “new and innovative market entrants would be more strongly encouraged and incentivised to bid for technology contracts”.
“Many startups often perceive the whole tendering process as burdensome, and even biased, and so do not even explore the opportunity of public sector work,” said the report.
“This has to change. Procurement should not only adapt to these new suppliers of digital services: it should attract them, seduce them, and appeal to them. This would create more competition in a sector where efficiency and cost-effectiveness matter and ensure that governments – and ultimately citizens – benefit from innovation.”
The report added: “The biggest problem, unfortunately, is procurement. Simply put, procurement systems are not fit to allow the government to make the most out of new and innovative technologies. Staff are not generally sufficiently skilled to know what technology can do and what it cannot.”
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