The policy statement says contracting authorities should collaborate to deliver value ©  Morsa Images/Getty Images
The policy statement says contracting authorities should collaborate to deliver value © Morsa Images/Getty Images

Four takeaways from the National Procurement Policy Statement

11 June 2021

The UK government’s National Procurement Policy Statement (NPPS) outlines how social value outcomes should be considered in public buying as well as value for money.

Through the statement, the government said it wanted to send “a clear message that commercial and procurement teams across the public sector do not have to select the lowest price bid… and should take a broad view of value or money that includes the improvement of social welfare or wellbeing”.

The strategic priorities outlined by the NPPS included creating new businesses, jobs and skills, tackling climate change and reducing waste, and improving supplier diversity, innovation and resilience.

Here are four key takeaways from the statement:

1. Social value outcomes must be considered

The statement said public procurement must be “leveraged to support priority national and local outcomes for the public benefit”.

Creating new businesses, jobs and skills could be achieved through increasing opportunities for entrepreneurship and helping small businesses to grow, increasing employment opportunities particularly for those who face high barriers to employment and extending training opportunities, particularly for people in industries with known skills shortages.

To tackle climate change and reduce waste, the NPPS proposes suppliers should be contributing to the UK government’s target to reduce emissions to net zero by 2050. It also proposes reducing waste through improved resource efficiency, identifying and prioritising opportunities in sustainable procurement to deliver additional environmental benefits through the delivery of the contract. 

Public procurement must also create a more diverse supply chain to better support start-ups, SMEs and voluntary, community, and social enterprise organisations in doing business on public sector contracts. The statement also called for increased innovation and the use of disruptive technologies and business models throughout the supply chain, to deliver lower cost and higher quality goods and services.

2. Consider your processes

“All contracting authorities should consider whether they have the right policies and processes in place to manage the key stages of commercial delivery identified in this statement, where they are relevant to their procurement portfolio,” the statement said.

Procurement should examine how a range of different principles, practices and guidance could be applied within their organisation including the publication of procurement pipelines, market health and capability assessments, should cost models, pilots, key performance indicators and risk allocation.

“Contracting authorities should also take measures to identify and mitigate modern slavery risks in their contracts. Contracting authorities should work in partnership with suppliers to improve labour standards in their operations and supply chains, and be transparent about the steps they have taken,” the statement said. 

3. Collaborate for best value

Contracting authorities should also consider opportunities for working with each other to deliver best value for money both at national and local levels, the statement added.

“By collaborating on procurement and on contract and supplier management, contracting authorities can: make best use of commercial and procurement skills; benefit from economies of scale; achieve efficiencies in the use of resources and realise savings and wider community benefits,” it said. 

“Collaboration and place-based procurement can deliver significant benefits and contracting authorities should work in partnership to secure value for money.”

4. Ensuring capacity and capability

Contracting authorities should consider the procurement and contract management capability across their organisation. 

The statement said: “They should be confident they have sufficient capacity and capability to ensure taxpayers’ money is spent effectively and efficiently. The specific capability will vary depending on the scale and complexity of each authority’s portfolio.

Where gaps in capability are identified, contracting authorities should plan now how to fill these, whether “through developing their own team’s capacity and capability, through collaboration with other contracting authorities or through making use of shared services and professional buying organisations,” it added.

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