Government publishes National Procurement Policy Statement
This week, Government set out its strategic priorities for public procurement in its National Procurement Policy Statement (NPPS), along with PPN 05/21 which contains further information and guidance for contracting authorities* on the NPPS and how they can support the delivery of the priorities.
In light of the major legislative reforms for public procurement that Government is developing, contracting authorities are being asked to ensure they have the procurement capability and capacity in place in order to benefit from the changes, which are intended to deliver regulation that better meets the UK’s needs.
When Parliamentary time allows, Government plans to bring forward this legislation to ensure that all contracting authorities consider the NPPS when undertaking procurements; paying careful attention to the national priorities it specifies relating to social value; commercial and procurement delivery; and skills and capability for procurement.
3 key areas of focus
The NPPS highlights that contracting authorities should leverage their procurement activity – ‘where it is relevant to the subject matter of the contract and it is proportionate to do so’ – to support the following social value outcomes for the public benefit, alongside any additional local priorities in procurement activities:
- Creating new businesses, new jobs and new skills
- Tackling climate change and reducing waste
- Improving supplier diversity, innovation and resilience
The latter outcome is focused on creating a more diverse supply chain to support SMEs to do business on public sector contracts; increasing and encouraging the wider adoption of innovation; and contributing to the development of scalable and sustainable new methods to modernise delivery and increase productivity.
Commercial and procurement delivery
The NPPS also states that all contracting authorities should consider whether they have the right policies and processes in place to manage the key stages of commercial delivery, where they’re relevant to their procurement portfolio. These stages include:
- Publication of procurement pipelines
- Market health and capability assessments
- Project validation review
- Delivery model assessments (Make vs Buy)
- Should Cost Model
- Key Performance Indicators
- Risk allocation
- Pricing and payment mechanism
- Assessing economic and financial standing of suppliers
- Resolution planning
Furthermore, the NPPS encourages contracting authorities to consider opportunities to work together to make best use of commercial and procurement skills, benefit from economies of scale, achieve efficiencies and realise savings/wider community benefits.
Skills and capability for procurement
The final priority set out in the NPPS is that all contracting authorities should consider their organisational capability and capacity with regard to the procurement skills and resources required to deliver value for money.
Where there are capability gaps, contracting authorities must now plan how they’re going to fill these. And they should also benchmark themselves annually against relevant professional commercial and procurement standards to inform whether they have the appropriate skills and capability to deliver value for money and benefit from future regulatory reforms.
* Contracting authorities here includes central Government departments, executive agencies, non-departmental public bodies, local authorities, NHS bodies and the wider public sector.