Taking one for the PM...

In the first of a two-part series, Peter Smith examines the Prime Minister's call for the public sector to take risks on innovative companies.

I’ve been thinking about innovation in the public sector, and in particular what procurement staff, lawyers and others in public organisations can do to encourage it in supply markets.

It seems self-evident that innovation is “a good thing” although like charisma it is easier to recognise than create or even explain. But suppliers who can provide innovation should help the public sector perform better (either through reduced costs or better service) and of course innovative companies can play an important part in UK economic recovery.

So David Cameron wants public sector staff to be positive, to take risks and engage suppliers who have a good idea, service or product but maybe don’t have the full track record, the solid balance sheet, or the skills in completing PQQs and tender documents. As he said on 11 February: “I want you to know that as long as you follow the right channels, I will stand by you if you take risks with young, new and dynamic companies”.

So what does this mean? Does this give public servants the ability to make value judgements about suppliers and bids and move away from the tedious bureaucracy of EU procurement? Unfortunately not (as we said on the Spend Matters website at the time). His get out clause there is the "as long as you follow the right channels". Because there are no “right channels” I’m aware of other than proper EU and UK legally compliant public procurement. So of course any organisation that does get challenged or loses a court case because of a procurement decision will, by definition, NOT have followed those right channels. Don’t expect the PM to show up at the Royal Courts of Justice when that unhappy supplier gets awarded their £5m damages.

And of course when another ‘innovative’ supplier turns out to be incompetent, run by an ex-fraudster, or owned by the Authority Chief Executive’s brother, then the cry that “they were innovative and the PM told us to take a risk” won’t hold much water with the press, rival politicians or the taxpayer.

But let’s be positive. We recently saw an announcement from the Cabinet Office about the Innovation Launch Pad:

“All SMEs are invited to submit their 500-word proposals for how their goods and services could help save the Government money or deliver better outcomes. Civil servants will have the opportunity to vote for those ideas with the greatest potential. The chosen business representatives will then present their ideas to a panel of senior government business officials, following coaching by the entrepreneurs”.

Now, there are still some questions around how these firms can actually be provided with a compliant route to market; how can my local authority easily take advantage of these wonderful ideas without running an entire EU tendering process. (I’m asking readers of my Blog to come up with ideas on that front). But it looks like a worthwhile initiative and something much more tangible than unrealistic exhortations from the top.

And in the second and final instalment of this short series next week, I’ll be looking at ways in which public sector organisations can encourage innovation, keep the PM happy, and stay within EU procurement regulations!

Peter Smith is an ex President of the Chartered Institute of Purchasing and Supply, a consultant to public and private sector organisations, and editor of Spend Matters UK / Europe, the leading procurement blog.