Transparency data

20 September 2022: Transforming Public Procurement Accounting Officer assessment

Published 29 September 2022

Accounting Officer Memorandum: Transforming Public Procurement Programme

An Accounting Officer assessment for the Transforming Public Procurement Programme was conducted in line with the Cabinet Office commitment to publish Accounting Officer Assessments for Government’s Major Projects. This Accounting Officer assessment considers the four standards of regularity, propriety, value for money and feasibility.

Background and context

The objective of the Transforming Public Procurement Programme is to implement legislative reforms to the UK’s public procurement regime, making it quicker, simpler and better able to meet the UK’s needs while remaining compliant with our international obligations.

The proposed new legal regime builds on a range of principles (non-discrimination and fair treatment) and objectives (value for money, maximising public benefit, transparency and integrity). It also creates a set of more flexible procurement rules, with a greater emphasis on transparency in the procurement process. It will regulate procurements from inception to termination, meaning from the point at which a covered body (referred to as a “contracting authority”) is considering whether and what to procure, through the process of procurement and contract signature, up to the point at which the resulting contract ends.

The programme includes three main projects: delivering primary and secondary legislation; training public sector buyers in the new legal regime, and developing a new digital platform for commercial data to support transparency and compliance with the regime.

Regularity

Legal Authority is provided for within the Cabinet Office’s common law powers and funding is from the Estimates, with Parliamentary Authority conveyed through the Supply and Appropriations Act.

The procurement of goods, services and works by public bodies and some utilities is an area of law previously governed by EU Directives (on public contracts, utilities, concessions and certain defence matters). The Procurement Bill will remove the Regulations which implemented the current rules and create a new public procurement regime, which builds on greater flexibility outside the EU to make procurement quicker, simpler and more transparent.

Public procurement is covered by a number of the UK’s international trade agreements and the World Trade Organisation’s Agreement on Government Procurement. The Bill regime is compliant with these obligations and will allow a degree of future-proofing through some targeted delegated powers (exercisable through Regulations) to update the regime in the event that new agreements are signed.

Resource for the policy and legal team developing the legislation comes from Cabinet Office core funding. Business cases and programme funding have been approved by the Cabinet Office Approvals Board for the projects to deliver the learning and development project (March 2022) and the digital platform (July 2021). These Outline Business Cases cover existing spending but not the whole programme. A Full Business Case is being prepared for the first quarter of 2023.

A procurement to source additional digital skills is expected to complete in October 2022; the approved procurement route is through a compliant commercial agreement managed by the Crown Commercial Service.

Regularity Accounting Officer Standard: Met

Propriety

The Government held a public consultation on the proposals following publication of a Green Paper in December 2020. The Government’s response to the consultation set out the proposed way forward on the reforms in December 2021. A Procurement Bill was announced in the 2022 Queen’s Speech and the Bill was introduced on 11 May 2022.

The delivery programme forms part of the Cabinet Office portfolio, under the oversight of the Chair of the Cabinet Office Portfolio Office (COPO) and is included in the Government Major Projects Portfolio (GMPP). The Programme is monitored quarterly, and is assured by the IPA and COPO.

A permanent Senior Responsible Owner (SRO) for the programme has been in post since January 2021. The SRO is directly accountable to the Government Chief Commercial Officer, with Transforming Public Procurement at the centre of the Government Commercial Function’s objectives for 2021-2024. The programme’s wider governance framework is also well established and includes the Cabinet Office Performance, Risk and Insight team, individual Project Boards and Programme Board.

Propriety Accounting Officer Standard: Met

Value for money

A detailed impact assessment was approved by the Chief Economist at the Cabinet Office and was published alongside the Procurement Bill. The value for money appraisal was undertaken by Cabinet Office analysts in accordance with HM Treasury Green Book principles.

The cost benefit analysis estimates that the reforms could yield net benefits of £205m over ten years. There are costs in implementing the programme, however the expected benefits are greater in terms of time savings due to simplification and standardisation of processes and wider impacts to the competitive marketplace.

Value for Money Accounting Officer Standard: Met

Feasibility

The programme has already achieved a significant milestone with the introduction of the Procurement Bill in the House of Lords in May 2022 but it will take several months to complete its passage through Parliament.

Once the Procurement Bill becomes an Act there will need to be secondary legislation (regulations) to implement specific aspects of the new regime. In parallel, the Cabinet Office plans to produce a comprehensive package of published guidance on the key elements of the regulatory framework. The Cabinet Office will roll out the programme of learning and development to contracting authorities and other stakeholders over a 12 month period (expected to start later in 2023).

The exact date of when the new regime will come into force will be determined in the secondary legislation. This will ensure sufficient time is allocated to allow the remaining deliverables, including the digital platform, to be completed.

The programme intends to provide at least six months’ notice of go-live to contracting authorities, once the legislation has been concluded, in order to support effective implementation. The scale of change to the procurement regime is significant and contracting authorities will need time to prepare themselves to function effectively under the new regime. To help manage the transition between the regimes, the programme is issuing regular communications to contracting authorities to assist them in planning for the change.

While there are risks to delivery of the individual projects, the key risks lie in not realising the desired behaviour change by contracting authorities. Given the scope of change, it is likely that these risks will cover a number of years until the new procurement regime is fully implemented and in steady-state. Continued programme governance will monitor benefits realisation, assess the risks over time and identify appropriate mitigations. Ongoing support by the Cabinet Office in engagement with public sector buyers including through a programme of ‘communities of practice’ will support the sharing of knowledge and insight in the practical impact of the new regime across contracting authorities.

Feasibility Accounting Officer Standard: Met

Conclusion

I am satisfied that the Transforming Public Procurement Programme relies on clear legal powers, meets the standards in Managing Public Money and accords with the generally understood principles of public life, representing value for money for the Exchequer as a whole, and is feasible to deliver.

This summary will be published on the government’s website (GOV.UK). Copies will be deposited in the Library of the House of Commons, and sent to the Controller and Auditor General and Treasury Officer of Accounts.

Alex Chisholm

Permanent Secretary, Cabinet Office

20 September 2022