UK public procurement: The cost of poor quality data
The UK Government is unable to demonstrate value for money across billions of taxpayer pounds of public procurement. The Government spent £259bn procuring goods and services in 2021-22, but a Public Accounts Committee (PAC) report has found that it is unable to demonstrate that it is achieving value for money in public procurement, due to significant issues with the quality and completeness of data on contracts.
The importance of data for procurement
Public bodies are required to publish large amounts of data on prospective and awarded contracts. Based on recent National Audit Office analysis showing incomplete, tardily published or inconsistent information on a significant minority of contracts, the PAC is calling on the Cabinet Office to set out clear directions and guidance for contracting authorities.
These data issues also mean Government is unable to evaluate competitive trends in markets. Of 235 large contracts recorded on Find a Tender between January 2021 and January 2023, 20% of contracts using open competition received only one bid. Around a third of the total contract value of more than £100bn awarded by major departments during 2021-22 were not subject to competition, though estimates suggest Government could achieve savings of up to £7.7bn per year through increased competition.
“The Government’s purchase of goods and services is equivalent to the cost of building multiple HS2 rail lines every year. It is therefore clear that public procurement is deserving of the most thorough oversight to ensure value for taxpayers’ money. The Cabinet Office needs to act swiftly to dispel any continuing lack of transparency around publicly funded contracts, so that taxpayers are able to see clearly how their money is being spent and not find this hard to discover. Departments are also not doing enough to ensure robust competition for their contracts, leaving untold billions in savings every year on the table,” said Dame Meg Hillier MP, Chair of the Committee.
“Given the change-making impact that public procurement can have, the Government’s approach here is disappointing. Be it in tackling climate change, reducing waste, creating new businesses, jobs and skills, or improving supplier diversity, innovation and resilience, we found no evidence that Government is consistently using its purchasing power to shift the dial. We hope with the help of the recommendations in our report the Government works swiftly to successfully implement the Procurement Act to achieve far-reaching changes in the public procurement landscape.”
Purchasing power in public procurement
The PAC’s inquiry also found no evidence that Government is consistently using its purchasing power to create new businesses, new jobs, and new skills, to tackle climate change and reduce waste, and to improve supplier diversity, innovation, and resilience. The way that social value requirements in contracts are implemented can create artificial constraints that can create barriers to entry especially for smaller businesses from bidding on public contracts, and the report calls for more details on how the Government will revise its approach in this area.
The Procurement Act, which received Royal Assent in October 2023, offers opportunities for improvements to the procurement process, including in the collection of public procurement data, but the report raises concerns that the Government may not be prepared to successfully implement the Act. The report found no clear plan for the investment required, or a timeline of necessary steps to ensure that the wider public sector has the critical commercial skills required to achieve the intended far-reaching changes to the public procurement landscape.
Read more about the UK Procurement Act
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