Regulaton & Policy
Theresa May’s New Direction and What It Might Mean for Public Procurement

Apologies to our readers outside the UK, but today we are looking at the new direction that the ruling Conservative party appear to be taking following the trauma of the Brexit vote and the appointment of Theresa May as our new Prime Minister. Actually, perhaps it is important for people outside the UK to think about this too. There will be implications certainly for the rest of Europe and consequences which we can’t possible foresee yet.

On a personal note, I feel I share a certain amount of background with our new PM. She is slightly older than me but not by much. Her father was a clergyman – the local vicar – mine was the local junior school headmaster, a similar figure in the community in the 1960s in some ways. She went to the local grammar school – as I did although mine went comprehensive while I was there. She went from there to Oxford, I got into Cambridge.

So I recognise some of her evident distaste for the easy superiority of the largely private school “metropolitan elite” as she puts it. It is easy to share her negative feelings too about the excesses of big business, firms and individuals that don’t pay their taxes and bosses who don’t care about their staff.  We should understand why people voted for Brexit and how many people feel that the modern world just is not working for them these days.

But some of her comments at the recent Conservative Party Conference were quite shocking coming from a Tory leader, being so close to many of the things that the Labour Party were saying under their previous leader, Ed Miliband. The best comment I read on her speech was that “it was the Labour manifesto but without the bits that Labour voters don’t like” – which would be immigration and the EU, where the official Labour policy is out of step with the majority of their traditional supporters.

So the new Tory (Conservative) approach seems to be not exactly socialist, but certainly favours government intervention, and is on the side of the worker, the consumer, rather than “big business”. So whilst she is not rejecting capitalism as a true socialist would (Jeremy Corbyn), she is pointing out that it is often imperfect, and the government can play a positive role in making it work better for the citizen

However, she will find that it is virtually impossible for a national politician to stop large multi-national firms paying their top people exactly what they want to pay them, or taking advantage of tax laws to minimise their payments. And some ideas – the Home Secretary suggested that firms should have to tell us how many “foreigners” they employ – were simply dangerous and pretty daft at the same time. (Amber Rudd backtracked pretty quickly when business leaders told her that).

But May makes good points about monopolies and industries that don’t appear to act in the best interests of taxpayers or consumers, and that (finally) takes us into the world of public procurement. If we take her comments at face value, what might this mean for public procurement policy and focus?  So where industries don’t work well, procurement spend might be one of the levers that could be used to spark more competition. Use government energy buying to help smaller firms; aim to put fewer broadband contracts BT’s way perhaps?

One obvious issue is whether there will be a drive to consider some of these “corporate behavioural” issues more strongly in public procurement decisions. We have already seen guidance intended to ensure that firms who don’t adhere to tax regulations don’ win contracts. But might that go further if the UK defines its own procurement regime? However, we have the basic problem that if tax behaviour is fundamentally legal, it seems difficult to see how they could be punished in procurement terms. We could certainly see even more emphasis on the social value elements of tenders, with more focus on suppliers providing employment, apprenticeships and so on.

Given May’s attack on high-earning business leaders, could there be some procurement actions linked to that issue? Would it be feasible to “mark down” bidders for contracts if they pay their bosses too much? But immediately we can see problems with that. How do we define “too much”? How do you get into the detail of complex remuneration packages?

So many questions and issues around what could actually be done, but the direction of the new government seems to be firmly on the side of the consumer and the citizen rather than big business. In some way, that may start impacting on what we see as procurement priorities and goals.

First Voice

  1. Phoenix says:

    I’m also expecting more from UK public procurement to reinforce Mrs May’s fight against modern slavery and human trafficking.

    There is already a Private Member’s Bill that seeks to impose the Modern Slavery Act’s supply chain transparency obligations on public authorities – presently limited to 12,000 UK businesses turning over £36m+. Perhaps this will get her support. I’ve heard of some local authorities already publishing annual Slavery and Human Trafficking Statements, which is great.

    An “imminent” ninth Procurement Policy Note for 2016 promises something to help the cause – a mandatory exclusion, perhaps?