Ditch EU procurement sham
Post-Brexit the Government must streamline public procurement rules, and make the transparent and accountable to the public, says Alex Fiuza.
With their ambition of remaining in the EU customs union dashed, the Remain camp have now trained their sights on a settlement whereby we mirror EU legislation entirely. This will mean we continue accepting the undemocratic rule-making, the restrictions on our trade, and the burdensome regulations of the EU. Notable among the rules we would be unable to change are those on government procurement. Every year billions are wasted because of them – billions we don't have.
Whenever the Government needs to procure something, from infrastructure to armaments, that is above a certain value, EU rules apply. This value is £123,900 for supplies contracts, £191,700 for certain types of defence contract, £383,500 for energy, postal, transport or water contracts and £4,793,000,000 for works projects like HS2. Notices of the contract and awarding of the contract must be published. Once a notice has been published there are a variety of procedures for tendering.
The open procedure gives any business 35 days to apply. Closed procedure gives 37 days to apply to be considered, then a further 40 days for those accepted to submit tenders. Negotiated procedure and the loathed competitive dialogue allow 37 days before three or more businesses are chosen to be negotiated or briefed on the specifics of complex projects. Finally, electronic auctions set a series of rounds in which companies can put in their bids at specific dates and times. Those rejected must be given reasons they weren't chosen.
Of course, it's much more complex than this – 128 pages are spent on it. Typical Brussels requirements like the obligation to advertise major tenders in the official journal of the European Union add paperwork. When you read the marketing about it, though, it sounds alright.
As anyone struggling to get things done in government knows, it isn't. The long tendering process creates expensive delays to necessary projects. The process itself has its operational costs. What few transparency requirements there are, are flawed – there is no requirement to publish details of the tenders considered, making meaningful public scrutiny of government choices is far harder. People simply don't know whether the Government is actually in the end getting the best deal.
Just how much does it cost us? Research by the EU itself estimates its monetary cost at the equivalent of £1.7 billion per year. On top of this, the delays it causes are estimated to add up to 5,000 years in 2014 alone. Add in the lack of serious public scrutiny and the well-known problems of unreformed Defence procurement, and the full costs could be even higher. This would be bad at the best of times; when we can't afford what the Government is currently spending, and necessary major projects suffer years of delays, it is intolerable.
We can do more than just cut red tape, however. We could let local authorities account for cultural, heritage, educational and leisure services in selection of a contractor, subject always to value for money considerations. We could enable great use of mutuals, co-operatives and charities managing local authority and other public services, as the Conservative 2017 manifesto committed to. We could delegate services to parish councils, voluntary bodies and mutuals without the need to undertake expensive market testing.
Housing associations could be exempted from the public procurement rules entirely, as they were only included following both a mistranslation from the original French directive and pressure from the French government in 2005. We could reduce the number of procurement methods and increase monetary thresholds for services, supplies and works, subject to any international obligations. Above all, we can create a system of more efficient and effective dispute resolution by cutting out the European Courts.
Post-Brexit the Government should look to streamline public procurement laws, and to make the process more transparent, that they can be properly held to account by the taxpayer. To do this we must not be bound by EU laws. Such changes sound bureaucratic, but they would save the Government time and money. Our time, and our money.
