Public procurement as a tool to stimulate innovation - Science and Technology Committee Contents


SUMMARY


  

In 2009-10, the public sector spent over £236 billion on procurement. The Government is the single largest purchaser in the United Kingdom. This magnitude of expenditure provides enormous potential to influence the development of innovative solutions, to improve delivery of public policy and services and to encourage economic growth. Yet that potential is not being realised.

During the course of this inquiry we have been left with the impression that the overarching problem lies at the very heart of government. Despite the efforts that have been made to make government procurement more effective, there remains a culture within government departments and other public sector organisations which inhibits—or may even be antithetical to—the adoption of innovative solutions. It appears to us that when procurement decisions are being taken, either insufficient or, worse, no consideration is being given to whether an innovative solution would be preferable, not only in terms of achieving better value for money but also in terms of wider benefits such as the potential to promote economic growth through stimulating new and commercially significant ideas in industry or encouraging the translation of scientific research into innovative goods and services.

This state of affairs has been made worse by the current economic climate. There is a wide-spread perception of a tension between the need to save money on the one hand and adopting innovative solutions on the other—that innovation is seen as risky and potentially expensive compared to the supposedly safer option of tried and tested solutions. This is disappointing. We were therefore pleased that Francis Maude MP, Minister for the Cabinet Office, acknowledged that this perception was a misunderstanding and that efficiency and innovation could be complementary. In this report, we invite the Government to demonstrate how they intend to spread this message to ministers and officials across all departments.

In addition, we identify a number of areas where we think that the Government can take steps to integrate imaginative, innovative thinking into the procurement process and we make recommendations to support this. We recommend, for example, that a single Minister should be made responsible for both procurement and innovation across government and that, further, a Minister should be appointed in each government department with specific responsibility for procurement and innovation within their departments. We also recommend that departmental Chief Scientific Advisers should have a greater role in ensuring the procurement of innovative ideas by their departments, encouraging engagement with industry and academic communities and assisting departments in the formulation of their long-term planning through horizon-scanning activities. Other areas for improvement involve developing the capacity of departments to act as "intelligent customers", more strategic planning of longer-term procurement and more challenging specification of departmental procurement plans.

In this short inquiry, we looked at government generally and at the Department for Transport in particular. We have touched on a range of issues which we recognise would warrant further investigation. Unusually, a number of our recommendations ask the Government to offer solutions to the problems we have detected, rather than suggesting solutions ourselves. Given that we have concluded that the main difficulty is deep-seated and cultural, we do not think it unreasonable, on this occasion, to expect the Government to use their knowledge of the fundamental workings of government to provide solutions. Our intention is to follow-up this report during the next session (2012-13), in about 12 to 18 months' time, in order to see what progress has been made against the findings of this report and what plans have been put in place to ensure that improvements are set to continue.

 
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