Now everybody is back to work after the Christmas and New Year break, we can start to think seriously about what 2015 might bring for everybody in the procurement business, from practitioners to solution providers, academics to consultants – and of course our political masters and the citizens who depend on the goods and services that public procurement provides. So what are the big public procurement priorities we will face in 2015?
The good news for a New Year is that the importance of public procurement is understood better than ever before. There is a wider realisation that something approaching 20% of the Continent’s GDP (gross domestic product) is accounted for by public sector expenditure with suppliers. Just that fact makes public procurement vitally important for the continent.
Yet with that importance come many issues and challenges. We really hope that in 2015 Spend Matters can help those facing the challenges in some small way, by providing advice, spreading best practice, (particularly where we see it in one organisation or country and it could be useful more widely), and generally promoting the cause of effective public procurement.
Here are six of the likely issues that are going to occupy the time and effort of executives though the year. And we will come back to each of these during early January and look in more detail at the challenges ahead.
Challenge no.1: Implementation of New Directives
The new EU Procurement Directives published in late 2013 must be implemented by April 2016. In practice this means that most European countries are in the process of transposing the directives now into national law. Contracting authorities will be implementing the new local regulations during 2015 in most countries, and procurement professionals will need to make sure they understand just what this means.
Challenge no. 2: Austerity continues
Whatever happens with the Euro, and as we write this the situation in Greece is leading to some real fears about the future of the currency, we can be sure that governments will not have money to throw around. “Austerity”, reduced budgets and pressure on costs is going to continue for the vast majority of public sector organisations across Europe. That clearly brings challenges to those organisations and the procurement people within them.
Challenge no. 3: Social issues
With less money to spend, and continuing economic issues, we expect politicians to become even more interested in how public expenditure can be used to help achieve social goals, as well as simply providing good value for money. We expect more talk about using procurement to drive economic growth and employment at local and national level, as well as continued interest in sustainability issues around carbon reduction in particular.
Challenge no. 4: Value and Innovation
The temptation with austerity (see point two) is to focus public procurement simply on cost reduction. But we can only drive down the price of many goods and services so far, however effective procurement processes might be. So with less money available, what European public organisations really need is innovative solutions, ways of delivering services and achieving policy objectives in new ways – obviously those need to provide value for money, but cannot just be repeating what has been done for years before. Procurement – and suppliers of course – potentially have a huge role to play in this.
Challenge no. 5: Fight against corruption
Again, with less public money around, and with the new regulations increasing flexibility somewhat in the procurement process, we believe there is a danger that corruption in public procurement could increase through 2015. Everyone involved must be on their guard and take the right steps to reduce the risk of such activities.
Challenge no. 6: Capability and competence
And finally, to succeed in these challenges, public procurement must address capability and competence amongst staff. And that is not just professional procurement staff, but our colleagues who are budget holders, specifiers or users of what is being bought. That will be a challenge when the public sector may be seen as a less attractive place to work as salaries are held down and overall numbers drop. Will we see the best people leaving the sector?
So, a lot to look forward to, and quite a lot to worry about. But more to follow shortly from us on all these issues.