The Week 14 February 2025
Policy Director
It’s been a big week in international relations. Hot off the heels of the Paris AI Summit and policy-watchers have turned their attention straight to the Munich security summit and the future of Ukraine. The shadow of the new Trump Administration, still less than a month in, looms large across both.
But blink and you’ll miss some pretty big things happening at home in Westminster. In particular, the Government’s new National Procurement Policy Statement caught our eye. This fulfils their obligation to set out the Government’s policy position on procurement, as part of the Procurement Act which comes into force a week on Monday.
In summary, it isn’t radically different to what the Conservatives were previously planning. But under the surface, a lot of things which could go very right (and very wrong), depending on how the NPPS is put into practice.
The press coverage majors on the emphasis on procurement from SMEs, and the requirements that all government organisations set targets for their procurement spending with SMEs over the next three years. Now, procurement from SMEs can obviously be transformative for local economies, particularly outside of London and the South East. And it can also improve competition, because there are more SMEs to compete over contracts and provide better prices. But plenty of SMEs aren’t local businesses, they’re single traders and contractors, who often don’t benefit from the economies of scale of large suppliers and can drive up costs to the taxpayer by overuse.
“Social value” has been rebranded to “social and economic value”, and essentially means that contracts should help drive progress on government Missions. This might work, but the track record of trying to reshape the economy through public procurement suggests that it bakes in lots of inefficiency instead. I’ve written about the dangers of thinking we can add more duties to get suppliers delivering Mission-aligned outcomes, without trading off against the core purpose of public procurement — buying things at good value for money.
Finally, there’s a big focus on innovation in public procurement, particularly a new “procurement innovation hub” in DSIT which will get private companies to bid to solve problem statements, rather than specific contracts. This is great news, and mirrors recommendations we made in our paper on AI in government about using the new Competitive Flexible Procedure in the Act to allow providers to proactively pitch ideas, rather than bidding to work in the way the government expects.
So what should we take away? Success or failure will be found in the detail of how the Government puts the NPPS into practice. Stay tuned for more from us on this very subject.
Onto the Read of the Week…
The Guardian has the story this morning that Ministers are ‘mission-washing’ their spending plans in an attempt to avoid cuts in the Spending Review. Reports are that departments are in a rush to badge more and more of their budgets as essential to delivering the government’s Missions, and thereby avoid cuts in the Spending Review. I know from experience how painful this can be for the Treasury. By locking all ‘Mission’ spending into big business-as-usual budgets in Departments, it prevents genuine conversations about trade-offs on how to actually deliver those Missions, which might involve considerable reprioritisation from one department to another. It’s a version of something Louise Casey has called “initiativitis”, and we wrote about exactly this risk in our Mission control paper last year.