The UK government published its Industrial Strategy this week, intended to help prepare the UK economy for leaving the European Union. It sets out a plan to “boost the productivity and earning power of people” and describes four “grand challenges” (which sounds a little Stalinist …) the government wants to address, including the rise of artificial intelligence, clean growth, the future of mobility and an ageing society.
Some were critical of the report. Peter Holbrook, CEO of Social Enterprise UK, a trade body which supports and represents the UK’s social enterprises (organisations that have social value motives beyond profit), welcomed the paper but described it as a “step forward when what is needed is a step change”. He said: “It is bewildering that the government has chosen not to address procurement and particularly social value in the industrial strategy given the support for this across the business community.”
There are actually quite a few mentions of procurement, although often in passing rather than with any real detail. It crops up in the section on infrastructure: “We will maximise the contribution that such investments can make to growth and productivity by strengthening consideration of broad strategic outcomes at the earliest stage of policy and programme design, and then carrying them through all subsequent parts of the design and procurement process”.
Perhaps more interesting is this comment, which comes under the broad heading of “Investing in R&D to transform our economy”:
“We will improve public procurement as an important source of finance for innovative businesses that does not dilute their equity and gives an endorsement for others to invest”.
That seems a slightly odd way of describing public procurement – as a “source of finance” – but we can see what is meant. The proposal goes on:
“The United States is particularly effective at promoting innovation in this way through its Small Business Innovation Research programme. David Connell … has reviewed the UK’s Small Business Research Initiative (SBRI) programme. Informed by this review, and recognising the value of the programme, we will refocus the SBRI to increase its impact for innovative businesses, aligning it with Grand Challenges and building capability in the public sector to drive productivity by adopting SBRI solutions. As a first step, this month we announced a new GovTech Catalyst with a GovTech Fund of up to £20m over three years, which will use SBRI to support tech firms to provide the government with innovative solutions for more efficient public services”.
This GovTech fund sounds interesting but it is not clear how the £20 million (not a lot over 3 years, it should be said) will be distributed. Will it be as “grants” or will there be some sort of public procurement process? The fund will apparently be run by a new GovTech Catalyst team, which will work with public sector bodies and help them to identify areas where they can use tech developed by the private sector.
There is also some comfort for Peter Holbrook (see above) in this, which recognises the wider value of public procurement, again under the “infrastructure” heading.
“We have already improved our approach to procurement through the ‘balanced scorecard’, which requires procurers to consider relevant social and economic objectives, such as skills development, diverse supply chains and sustainability, alongside cost-effectiveness. We will embed this approach on all major construction and capital investment projects”.
There are a few other mentions of procurement which we may come back to in a future article, and perhaps comment also on the wider issues discussed in the strategy. Is it enough to make the UK thrive post-Brexit? Probably not, but it does at least show some thought is going into what needs to be done by government before and after the split.