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One week on: What the UK Budget 2020 means

On 11 March 2020 the UK Budget was announced by the Chancellor of the Exchequer, Rishi Sunak, after less than a month in the position. The Budget was one of the most anticipated of recent years, encompassing a budget of true firsts. The first of a new decade, the first Budget under the new Prime Minister, Boris Johnson, the first Budget delivered since the Conservative party was elected into Government in December, Chancellor Sunak’s fist Budget and, of course, the first budget in post-Brexit Britain. The Budget is significant too, in its response to the Coronavirus, which was pronounced a pandemic by the World Health Organization (WHO) later in the same day.

In this developing political, economic and social landscape, BiP Solutions examines the key themes of the Budget by sector one week on from the Budget’s announcement. We outline what these new measures may mean for BiP customers, clients and other stakeholders in public and private sector procurement.

COVID-19 and business rates

The Chancellor was quick to acknowledge that the impact of the coronavirus will damage the UK economy sharply and largely – but temporarily. The risks had already been acknowledged with the Bank of England announcing an emergency cut in interest rates on Budget morning in response to the Coronavirus outbreak. Rates have reduced from 0.75% to 0.25% – the lowest level since the global financial crash in 2008. The Bank has predicted the virus will lead to temporary, but significant, disruptions to supply chains and challenges to cash flow which will be felt most acutely by smaller businesses.

The UK Government Treasury and the Bank of England have clearly co-ordinated their responses to the potentially severe economic effects of Coronavirus with measures in the Budget allowing banks to lend far more easily to support SMEs and other businesses throughout this period. A statement by the Bank of England said: “The reduction in Bank Rate will help to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance.”  

It is worth noting that the Bank of England does not cut interest rates lightly – this is a bold move by Mark Carney and his colleagues, as his six and half year term as Governor of the Bank of England comes to an end this week.

Business stability and growth are at the heart of BiP’s mission. We support and encourage businesses of all sizes and specialisms to grow through effective, collaborative and sustainable procurement. These measures implemented in the Budget seem comprehensive and will help businesses that may struggle the most get through a difficult period.

Statutory sick pay 

A significant area of the Budget that was mostly welcomed across opposition parties clarifies some areas of uncertainty around Statutory Sick Pay amid Coronavirus. All individuals who are advised to self-isolate, whether they have presented with symptoms or not, will be given Statutory Sick Pay and can obtain a sick note via NHS 111. In addition, they can claim Statutory Sick Pay from day one of their illness, instead of day four, which was previously confirmed by the Prime Minister.

For businesses with 250 employees or fewer, Statutory Sick Pay will be refunded by the Government for each employee for the full 14 days – a measure to protect smaller businesses from buckling under economic strains. The Budget also allows people to have faster and easier access to benefits, as well as contributory employment and support allowance (ESA) being claimable from day one instead of day eight. However, the budget did not clarify whether these measures would extend to people on zero-hour contracts.

The NHS and public services

Perhaps the most popular headline in the 24 hours after the Budget announcement is the £30 billion of extra funding for the economy, including £12 billion of emergency funds to support jobs, the economy and public services during the Coronavirus outbreak. Chancellor Sunak said the NHS will receive “whatever it needs” throughout the outbreak, although according to Budget allocations this is looking initially to be around £5 billion.

It remains to be seen how the NHS and other public services will cope as Coronavirus cases in the UK rise, but there does seem to be a consensus that all parties and all industry leaders will show a united front to pull together to protect the UK, its people and its economy.

For new and existing suppliers working in healthcare procurement, or who are looking to work in this sector in the future, we are in a historic time which will demand the very best procurement strategies, in preparation and in practice. The NHS and the wider healthcare sector will be looking to suppliers to help the sector respond to the unprecedented demands of Coronavirus. Procurement, more than ever, has an incredibly powerful role to play in bringing buyers, suppliers and other key stakeholders together to produce a lasting positive impact on the communities where we live and work.

Infrastructure 

Boris Johnson assured the public that this Budget would deliver “an industrial revolution”. However, the much-awaited National Infrastructure Strategy has been delayed until one week after the Budget, despite an earlier announcement that £600 billion would be invested in the UK’s infrastructure by 2025. The Strategy is expected to detail infrastructure funding and projects over the next 30 years, and to play an instrumental role in ‘levelling up’ regional disparities in UK infrastructure projects. The reason cited for the delay is to allow Sunak to refocus the strategy, reflecting the larger spend that has been made available. That said, the Budget had crucial talking points for infrastructure and the developments to come.

Mr Sunak announced an extensive investment in infrastructure of all kinds in the Budget, a total of £170 billion over five years. As well as £1.1 billion to build 70,000 new homes in high demand areas, flood defences in the north of England have been allocated £200 million for repairs and to improve local flood resilience. This doubles the spend on flood defences to £5.2 billion. Strategic and local roads was welcomed. The latter includes a £2.5 billion ‘pothole fund’ and £27 million ring-fenced to build over 4,000 miles of road across Britain. Other announcements included £5 billion to get gigabit-capable broadband into hard to reach areas, as well as investment of over £500 million in mobile phone capability in rural areas, illustrating how essential modern technology is to the economy and people’s lives.

The emphasis on digital transformation in the infrastructure industry, as well as the implementation of further green initiatives – including the Plastic Packaging Tax set at £200 per tonne and £500 million to be spent on charging points for electric vehicles – will mean buyers and suppliers working in infrastructure procurement will need to be more innovative, more sustainable and more collaborative than ever before. The infrastructure and construction industry, which equates to roughly 7% of the UK economy, will take centre stage in procurement and will be a key sector leading the UK into the new decade.  

Looking to the future: R&D

The Budget placed emphasis on looking to the future and the development of new products and services to meet our needs with significant support for research and development. An increase in the R&D expenditure credit will help businesses of all sizes while SME R&D tax relief allows companies to deduct an extra 130 per cent of their qualifying costs from their yearly profit, as well as the normal 100 per cent deduction. It also allows businesses to claim a tax credit if the company is loss-making, worth up to 14.5 per cent of the loss. Overall, the Budget set out plans to increase public R&D investment to £22 billion a year by 2024-25, which will take support for R&D to 0.8% of GDP. This investment is good news for innovation, which in turn feeds into procurement as public sector buyers seek better, more efficient solutions.

The Budget Overall

The Budget has come at an unprecedented time, as leaders across the globe fight the Coronavirus. The Budget is also remarkable in its 2.8% per annum real growth in public service spending. On this rising spend, Paul Johnson of the IFS took to Twitter to state: ‘This is much faster than economic growth. With investment spending rising even faster, something has to give.’

It would not be wrong to say this Budget, the biggest giveaway since 1992, indicates the Government may be stepping away from the austerity and deficit reduction of the past decade to – in Mr Sunak’s words – provide “security today” and “prosperity tomorrow”. The Chancellor also announced a review of the framework underlying the fiscal rules on balancing borrowing and spending. Commentators suggest that this means that the fiscal rules could be relaxed in time for the Autumn Budget, giving the Chancellor more options to borrow to fund future spending. In combination with the Spending Review, due to be completed by July, this suggests that this government is looking to spend more to invest in public services and the UK economy. This, in turn, is likely to create more opportunities for businesses looking to supply to the public sector, which will perhaps go some way to counteract the economic dive caused by Coronavirus.

Despite the economic and social risks associated with the Coronavirus pandemic, the message from Budget 2020 is that this is also a time to prepare for a future of developing projects across a number of industries. The landscape of the UK, from healthcare to infrastructure, to SME support, is full of potential.

BiP Solutions’ Content, Research and Communications Director, Grahame Steed, echoes this sentiment in his statement:  

“This budget demonstrates that public sector investment is firmly back on the agenda: meaning there will be countless opportunities across the supply chain. While the Coronavirus is clearly the number one priority at this point, we anticipate that further investment into the public sector will be needed in future, to restore social and economic activity.” Now is the time for suppliers to engage with this huge, diverse and solutions-hungry market, and benefit from a boost in public spending not seen since 1992.

Stay updated with the evolving Coronavirus situation and other aspects of interest to the public and private sector with BiP Solutions. 

UK Budget 2020: What You Need to Know

On 11th March 2020, the Chancellor of the Exchequer, Rishi Sunak, delivered the UK budget in the House of Commons, after just 27 days in the position. The budget itself is significant for a number of reasons. The planned Autumn Budget in 2019 was delayed due to the General Election in December, and this Budget provided the first clear indication of government spending plans under the newly elected Conservative government.

Additionally, part of the Budget speech was rewritten to include emergency announcements designed to limit the economic impact of Coronavirus and to prepare the public health system and smaller businesses for likely challenges in the event of a serious outbreak. Other areas of the Budget with significant relevance to the procurement sector are infrastructure, business taxes and increased spending on greener initiatives.

BiP Solutions outlines the key areas of the UK budget and the spending allocations for specific sectors below.

Coronavirus

As expected, the economic response to the Coronavirus outbreak formed the most urgent element of the UK Budget speech. The Chancellor himself said that the Budget “holds one of the most comprehensive economic responses to this outbreak anywhere in the world.”

The Chancellor is anticipating the UK economy will be temporarily disrupted by the virus, with up to one fifth of the UK population possibly being off work at any one time. The government, therefore, is providing £30 billion fiscal stimulus to support the NHS, people, jobs, welfare and the economy in this period of Coronavirus. This includes £7 billion for businesses and families and £5 billion for the NHS. Mr Sunak announced the following measures:

The NHS and statutory sick pay

  • The NHS will receive “whatever it needs” to cope with the coronavirus. This includes funding into additional research and additional staffing on top of the £6 billion of new funding to provide 50,000 more nurses, 40 new hospitals and 50 million more GP appointments that the government has introduced. Although there was no exact figure given for extra funding resources for Coronavirus, Mr Sunak was clear in his statement: “whatever it needs, whatever it costs, we stand behind our NHS.”
  • The government will support people who fall ill or cannot work. The Prime Minister, Boris Johnson, has already announced that statutory sick pay will be paid from day one of the illness, instead of day four.
  • Statutory sick pay will be available for all those who are advised to self-isolate, even if they have not yet presented with symptoms. Sick notes to give to employers will be obtained by contacting NHS 24 on ‘111’.
  • People who are on contributory Employment and Support Allowance benefits will be able to make a claim on day one of their sickness, instead of day eight. The income threshold for claiming Universal Credit will be removed, making it easier to claim.
  • A new £500 million Hardship Fund will be distributed to local authorities to directly support vulnerable people in their local area.

Supporting SMEs

A number of measures have been put in place to directly support small businesses which will particularly struggle economically when affected by Coronavirus.

  • The Government has introduced a £3,000 cash grant available to 700,000 of the smallest businesses, paid by local authorities, which is worth a total of £2 billion.
  • Abolishing business rates altogether for this year for small firms in England whose rateable values are below £51,000, a tax cut worth a total of £1 billion.
  • Statutory sick pay for businesses with less than 250 employees (SMEs) will be refunded by the Government in full for up to 14 days per employee.
  • The launch of a new Coronavirus Business Interruption Loan Scheme that will see banks offer loans of up to £1.2 million to support SMEs.

Infrastructure

In the lead-up to the UK budget announcement, the Prime Minister promised the budget would be “an infrastructure revolution”. The Budget focused on the government’s levelling up agenda – its manifesto commitment to improve infrastructure and facilities for those outside London and the South East. This commitment lies behind the announcement of infrastructure projects in strategic and local roads, broadband connectivity, improving Further Education facilities and buildings, and the Affordable Housing programme, as well as additional funding towards flooding defences for communities in the north of England.

Roads and potholes

  • The government will spend £27 billion to building and developing more than 4,000 miles of strategic and local roads in England between 2020-2025.
  • A £2.5 billion pothole fund, which is expected to fill in 50 million potholes. This equates to £500 million dedicated to filling potholes each year.

Broadband and connectivity in rural locations

  • £5 billion of funding dedicated to implementing gigabit-capable 4G broadband to far reaching and remote places in the UK, bridging infrastructure with digital transformation.
  • Investing £510 million into the shared rural mobile phone network so that 4G coverage in the next five years will encompass 95% of the UK.

Housing

  • A £10.9 billion increase in housing investment to support the building of at least 1 million homes by the end of this Parliament, and an average of 300,000 new homes a year by the mid-2020s.
  • Extending the Affordable Homes Programme with a new, multi-year settlement of £12.2 billion.
  • Nearly £1.1 billion from the Housing Infrastructure Fund to build nearly 70,000 new homes in high demand areas of the country.
  • £1 billion for a ‘Grenfell fund’ to help remove dangerous cladding from tall buildings.

Greener initiatives and flooding

  • £500 million to support the roll-out of new rapid charging hubs for electric cars, so that drivers are never more than 30 minutes from a charging station. This is in a bid to support and encourage electric vehicles throughout the UK.
  • £640 million to plant more than 40 million trees and restore 35,000 hectares of peatland over the next five years.
  • Introduction of a plastic packaging tax to tackle plastic waste.
  • £5.2 billion of funding towards doubling flood defences over the next five years, which, it is hoped, will protect 300,000 properties.

Allocated Budget Spend for the devolved administrations

  • An extra £640 million for Scotland
  • An extra £360 million for Wales
  • An extra £210 million for Northern Ireland

The Budget overall

Overall, the Chancellor announced investment of £170 billion over the next five years, saying that the Office for Budget Responsibility (OBR) estimates that this will boost growth by 0.5% and productivity by 2.5%. In addition:

  • According to the Chancellor, day-to-day departmental spending is set to grow at the fastest rate over a spending review period since the Spending Review in 2004.
  • 8% per annum real growth in public service spending.
  • In March 2019 – the most recent official growth forecasts from the Office for Budget Responsibility (OBR) – the UK economy was expected to grow at 1.4% for 2020, 1.6% in 2021, 1.6% in 2022 and 1.6% in 2023.

The Budget provides an economic response to evolving global events, such as Coronavirus, but it also puts measures in place to improve the country’s infrastructure sector and invest in the UK regions.

The Chancellor also announced a review of the framework underlying the fiscal rules on balancing borrowing and spending. Commentators suggest that this means that the fiscal rules could be relaxed in time for the Autumn Budget, giving the Chancellor more options to borrow to fund future spending, such as that arising from this year’s planned Spending Review.

BiP Solutions will be publishing an extensive analysis piece on the UK budget and what it may mean for our customers and clients in due course. In the meantime, find out more information on the UK budget and figures on www.gov.uk

Get started in defence procurement with Supply2Defence

Keeping ahead of the curve and giving your business the best possible advantage is set to become even easier with the upcoming launch of the new tender alerts service ‘Supply2Defence’.

Supply2Defence is brought to you by BiP Solutions and is the latest addition to the Supply2 family, focusing on opportunities within the defence, security and emergency service (‘blue light’) sectors.

In FY 2017/18, the MOD spent almost £21 billion on defence and security, accounting for over 40% of all UK central government procurement spend and representing the fifth biggest defence budget in the world, with over 16,000 suppliers.

This budget, together with the Government’s aspiration that 25% of public procurement expenditure should be with SMEs directly or as part of the supply chain by 2022, represents a fantastic opportunity for organisations of all sizes looking to supply to the defence sector.

It’s always worth reiterating that opportunities in defence are not limited to the tanks, submarines, ships and aircraft that make up the typical defence budget. Procurement activity covers a very wide range of requirements such as facilities management, goods and services, catering, IT, logistics, training and fleet management.

Supply2Defence provides the UK and Ireland’s largest database of defence, security and blue light tenders, publishing more notices than any other provider – including government portals.

This single source solution allows users to browse all the latest defence, blue light and security tender notices and awards.

Users will be able to create the perfect plan to grow their business with public sector tenders. Daily updates, based on data extracted from over 3000 sources, will provide customers with the peace of mind that opportunities will not be missed.

Accessibility and flexibility are both key to the service, which offers free registration to new customers with a free subscription to the local area of their choice.

Customers then have the option to ‘pay as they grow’ with monthly and annual subscriptions available. The service also provides resources and support to help customers win more business.

Be one of the first to know when the site goes live by registering your interest here.

BiP Solutions celebrates National Apprenticeship Week 2020

National Apprenticeship Week runs from 3-9 February 2020. To celebrate this event and the significant contribution Modern Apprentices make to our daily business, last week  BiP Solutions is celebrated by sharing the stories of our apprenticeships over the years – past and present. Some have recently joined the business while others have progressed onto other positions within the wider business, bringing a combination of skill-set, product knowledge and positive enthusiasm to their teams.

BiP Solutions will continue to support the Modern Apprenticeships scheme and is looking forward to welcoming more new apprentices to our Glasgow and Manchester offices.

Meet the apprentices of BiP Solutions:

We are an exciting and vibrant place to work, with offices in Glasgow and Manchester. We know that the company would not be where it is today if it were not for the passion and innovation of our employees. If you would like to join us…

View our latest job opportunities

Scotland budget announcement 2020-21

The Scottish Government has announced its budget for the year 2020/21, with a live announcement by Kate Forbes MSP, Minister of Public Finance and the Digital Economy, to the Scottish Parliament on 6 February 2020.

This Budget comes over a month earlier than the UK budget announcement, set to be delivered by the Chancellor of the Exchequer, Sajid Javid, on 11 March. This is unusual. The Scottish government usually waits for the UK Budget to announce UK funding for Scotland before finalising its own spending plans. However, it was decided that 11 March fell too close to the start of the new financial year for this to be practicable. UK funding for Scotland is expected to be increased from last year, with the Conservative party stating there will be an extra £1.1 billion allocated to Scotland.

Kate Forbes described the Budget as setting out a “bold and ambitious programme” with “wellbeing and fairness at its very heart.” The main figures in the Scotland Budget are highlighted below, with climate change, public services and income tax forming key areas of spending and investment.

Scotland budget – facts and figures

Climate emergency

The Budget focused heavily on measures to tackle climate change and transform Scotland to implement new greener initiatives. As expected, the climate emergency formed perhaps the largest topic in the Budget announcement speech, with key spending figures in the following areas:

  • £1.8 billion of capital investment in specific products to reduce carbon emissions. This is an increase of £500 million compared with last year.
  • The Scottish Government committed to over a quarter of a billion (£250 million) dedicated to peatland restoration over the next ten years, to spend on large restoration projects which will enhance biodiversity in some of the most important habitats in Europe and generate more jobs in rural communities. This includes £20 million in 2020.
  • £200 million of revenue-financed investment to local authorities to provide an incentive to use the assets available to reduce emissions and boost the Scottish economy through the green growth accelerator.
  • Investment of more than £64 million to support the commitment to plant 12,000 hectares of forestry, with the aim to reach 15,000 hectares by the mid-2020s
  • £120 million for a heat transition deal, to recognise the need to reduce the carbon use in our buildings. This will allow Scotland to seize the huge economic opportunity renewable heat will present – delivering thousands of new green jobs.
  • £2 billion ring-fenced for transformational infrastructure investment for measures to support the delivery of the Climate Change plan during the next Scottish parliamentary term.

It is worth noting the figures above are not the only investment allocated to tackle climate change. However, they are the highlights of spending in an increasingly important area which the Scottish government has clearly prioritised. This view is expressed by Kate Forbes MSP during her Budget speech:

“These measures alone represent a substantial plan of action for the year ahead, but we must, and we will, go further. The climate emergency demands immediate action, but it also requires genuine long term commitment if we are to deliver against our statutory emissions reduction targets.”

Public services

Forming another much anticipated area of the budget, the Scottish government has pledged, for the first time ever, funding of more than £15 billion for health and care services as well as increased funding to support other key public service areas. This budget will protect and improve these services. Among the principal announcements were:

  • Investment of £9.4 billion in health and social care partnerships
  • £117 million investment in mental health services for all ages and stages of life
  • A real‑terms increase in resource funding for local government, with total overall support given through the settlement of £11.3 billion
  • Delivering an increase of nearly 60% in targeted funding to reduce harm from alcohol and drugs
  • £72 million investment for Police Scotland, which is above the increase the Scottish Government had promised, in order to effectively maintain officer numbers
  • An above real-terms increase of £37 million to the police budget and an additional £6.5 million to support community justice to reduce re-offending
  • An increase in overall funding for rail and bus services by £286 million. This will mean a total of £1.55 billion worth of investment in 2020/21. Investment in active travel will also increase to over £85 million promoting cycle, walking and more sustainable transport.
  • A 3% pay uplift for public sector workers earning up to £80,000.

Income tax

In her speech, Kate Forbes passionately stated that Scotland will continue to remain the lowest taxed part of the UK for income tax, with no increases to income tax this year. However, the Public Finance Minister did state that if there were increases, this would only be in response to the UK Government cutting taxes for higher earners.

  • Scottish income tax is expected to drive £12 billion investment
  • 56% of Scottish taxpayers will pay less than they would if they lived elsewhere the UK in 2020-21.
  • No Scottish taxpayer will pay more income tax than they did last year.

Other areas of investment

  • Infrastructure investment will boost to nearly £1 billion in the first year of the National Infrastructure Mission.
  • £800 million investment in affordable housing to help the Scottish government continue to progress towards the target of 50,000 affordable homes by 2021.
  • £220 million of seed funding for the Scottish National Investment Bank to support its mission to drive the transition to a net-zero carbon economy
  • An estimated £1.4 billion investment to support low-income households, with increased effort to bring 30,000 children out of child poverty.

Grahame Steed, Content, Research and Communications Director at BiP Solutions has recognised the importance of the Scotland budget, in his statement:

“BiP Solutions welcomes the increased investment into public services and infrastructure set out in the Budget – this should not only improve this lives of citizens in Scotland, but also create a significant economic opportunity for all types of business within this diverse supply chain.”

More information on the Scottish Budget can be found on the Scottish Government website.

The UK Budget announcement is coming on 11 March.

UK General Election 2019: What Next?

The General Election of 12 December 2019 gave the Conservative party a comfortable majority, meaning that the Government will likely find it easy to introduce the legislation and changes to public spending that they wish. Here, we review what we know so far about the pledges the Government made before the election, and the effect they are likely to have for business with the public sector.

As the situation continues to develop, the BiP Solutions news page will bring you the latest updates, and what they mean for public procurement.

Spending pledges

Incumbent Chancellor Sajid Javid has proposed revision of the rules concerning government borrowing, to allow borrowing so long as debt does not exceed 3% of GDP, rather than 2%. This allows for potentially dramatically greater spending. The Conservatives’ election manifesto pledges were costed at an increase in spending of £2.9bn a year by 2022. The NHS has also been a major source of discussion, with a proposed bill enshrining an increase in funding for the NHS, alongside the pledge to recruit thousands more nurses. Similarly, the Conservatives have pledged to recruit more police officers. Such recruitment would mean, for example, a greater requirement for uniforms, catering, facilities management, payroll and HR solutions and other services. Investment into people usually requires investment into infrastructure – for example new buildings or the renovation and re-fit of existing premises – which in turn drives a fresh cycle of investment into furniture, IT equipment and other goods.

Infrastructure is another potential major source of investment, with the Conservative manifesto allowing for up to £100bn in additional capital spending over the next five years. Of this amount, £22bn has been designated for specific projects, such as £2bn on fixing potholes and £2.2bn on a public sector carbon reduction scheme. £78bn of the infrastructure fund remains to be allocated. You can read more about the outcome of the election and what it means for the construction industry at Construction Online.

On tax, the Conservative manifesto pledges to raise the national insurance threshold to £9500 from next year, and that there will be no rises in rates of income tax, national insurance or VAT. There is also a reaffirmation of the party’s pledge to make the UK a carbon-neutral country by 2050, with the attendant spending on renewable energy and associated technology. More speculatively, there have also been discussions of reforming central government departments such as the Department for International Development and the Ministry of Defence. To read more about the outcomes of the election for the MoD and the defence industry, visit Defence Online.

To read more about key trends for public procurement in the wake of the general election, download our recent report, ‘The Public Sector Market in 2020 and Beyond.’ Published ahead of the election, this report includes detailed breakdown of data relating to public sector notices before and after election periods, and describes the major themes that will shape public procurement in 2020.

Brexit confirmed?

The Conservatives’ election victory also appears to reduce some of the uncertainty around Brexit. The Government will seek to implement the Withdrawal Agreement that Prime Minister Boris Johnson has previously negotiated with the EU, ahead of 31 January. The Conservative party has previously stated that the terms of a trade deal with the EU will be negotiated in 2020, with the aim that the UK trades outside of the EU single market and any form of customs union. The Cabinet Office has suggested a divergence of procurement rules from EU standards post-Brexit, with the aim of making it simpler for smaller firms to bid for local government contracts. Such changes may be dependent, however, on the terms of the future trading relationship with the EU, and the required alignment of terms.

During the transition period, the UK will remain aligned with EU rules. The Conservative party have previously stated that there will be no extension to the transition period beyond the end of 2020, and the Prime Minister will potentially modify the Withdrawal Agreement Bill to enshrine this in law. The date of the end of the transition period is significant as, in spite of the most recent Brexit extension up to 31 January 2020, trade regulations effectively replicating a ‘no-deal Brexit’ will remain the legal default unless a trade agreement superseding this is ratified by both the EU and the UK Parliament. This remains the case in spite of the Withdrawal Agreement previously negotiated with the EU.

For all the latest news, guidance and information relating to Brexit and public procurement, visit BiP Solutions’ dedicated Brexit resources page. Alongside guidance on how businesses can best prepare for a ‘no-deal Brexit’, our recent report ‘Brexit: Challenges and Opportunities for Public Sector Buyers’ is also available. Based on a detailed survey of public sector procurement leaders, this research report reveals what the public sector really thinks of Brexit, and how prepared the public sector is – including for a ‘no-deal’ outcome.

“Good for business, good for communities”: Local economies and procurement at Procurex Scotland 2019

Procurex Scotland 2019 and the 15th Scottish Government National Procurement Conference were held this year on 29 October at the SEC, Glasgow. You can access our event report on procurement and sustainability here. In the second of our reports looking back at some of the highlights and key themes of the day, six weeks on, we look at the links between procurement and social benefit. Although considering social value as part of any procurement exercise has been mandatory for buying organisations since 2012, buyers and suppliers are increasingly aware that areas such as environmental impact, community activities and contribution to the local economy are increasingly important to service users, employees and businesses. As the talks at Procurex Scotland and the Scottish Government National Procurement Conference showed, considering social impact is also good for business too, with community sustainability going hand in hand with economic growth.

The local economy agenda

Kate Forbes MSP at Procurex Scotland 2019

A keynote address from Kate Forbes MSP, Minister for Public Finance and Digital Economy, began the Scottish Government National Procurement Conference. Ms Forbes’ talk was a survey of many of the ways in which procurement can effect change, on a local and global level. Insisting that “there is great collective power in this room,” Ms Forbes described the need to “build resilience into our own organisations, but also organisations we have dealings with.”

Emphasising the role of building sustainable economies at the local level, Ms Forbes stated that “it’s easy to look at the national picture without realising how powerful the local picture is.” She pointed out that issues of corporate responsibility such as paying a real living wage or addressing gender inequality in the workplace are not simply beneficial for their own sake, but stimulate local economies – in turn feeding back into business. Reminding the Conference audience that “your spend creates £10bn of economic activity,” Ms Forbes underlined the extent to which procurement has a major role to play in stimulating local economies.

An important element of contributing to local economies, as was addressed by several of the day’s speakers, is the role of SMEs. The Supply2Gov tender alerts service allows SMEs to be alerted to upcoming opportunities, through access to the UK and Republic of Ireland’s largest database of public sector contracts. With a particular focus on organisations newer to public sector tendering, Supply2Gov allows businesses to access alerts from the whole of the UK, or simply a local area of their choosing, free of charge. For buyers looking to work more with SMEs, CompeteFor exists to deliver sustainable and measurable community benefits through ‘opening up’ major supply chains from capital expenditure projects to SMEs and local businesses. Aiming for transparency of opportunities through the entire supply chain, CompeteFor’s free service enables businesses to compete for contract opportunities linked to major buying organisations in both the public and private sector – increasing the diversity of organisations participating in the supply chain, and ensuring ethical transparency throughout.

Local communities, national benefits

Scott Bell at the National Procurement Conference

Following Ms Forbes was Scott Bell, Deputy Director of Procurement Development and Construction with the Scottish Government, whose talk focused on specific instances of procurement success that have had wider community benefits. These included the case of a school in Inverclyde which, thanks to a national framework, was able to provide iPads for some of its poorest pupils to use in class, along with the necessary training for teachers; and the ‘baby box’ delivered to every new parent in Scotland, a GO Award-winning project delivered by APS Group. However, as Mr Bell pointed out, the benefits of procurement “are not just about the contract.” By way of example, he pointed to the case of a family in South Uist who were able to have a new boiler fitted in their home – after having to use an oil burner for heat – thanks to the Warmworks scheme. Aside from the benefit to the family, Mr Bell pointed to the fact that Warmworks is a collaboration between a business, a third sector organisation and a charity. The procurement process itself therefore and the collaboration are “good for business, good for employees and good for communities.” Introducing the National Performance Framework, Mr Bell explained that it “describes the Scotland we aspire to.” Despite – or because of – showing the benefits that can be achieved through the procurement process as well as the end result, Mr Bell impressed on delegates that “purpose beats process.”

A seemingly very different topic was addressed in the talk by Paul McNeill, Head of Community Development at Scottish Football. Mr McNeill said that “the impact of football is far bigger than 22 men running about a field”, claiming that “every household in Scotland has some kind of engagement with football” – from supporting teams as fans to working for a business that sponsors or is involved in providing building materials for stadiums. Mr McNeill said that the Scottish FA recognised a need to “take responsibility for being the country’s biggest sport,” and to communicate better the social and business benefits of football to Scotland. Looking at the “social return on investment,” Mr McNeill talked about the economic, social and health, as well as financial, benefits of grassroots football, and the importance of making sure these benefits are communicated widely.

Paul McNeill of the Scottish FA

Beside the financial importance of football for Scotland and Scottish communities, which Mr McNeill made very clear, the link between football and procurement more widely may not seem immediately obvious. However, there was an interesting discussion between Mr Bell and Mr McNeill after the latter’s talk, which made clear how the two fields can learn from each other. Mr McNeill’s talk made clear, said Mr Bell, the importance of leadership space, and how strategic thinking from leaders in key positions can ensure that a wider agenda, and the benefits that it will have, are communicated clearly to both end-users and stakeholders. Moreover, said Mr Bell, “the place agenda features very highly” for procurement in Scotland, with an increased focus on benefiting local economies and communities, which – as the talks at the National Procurement Conference showed – have a positive effect on sustaining economic growth. The Scottish FA provides “a great example,” Mr Bell noted, “of taking something national and applying it locally” – making apparent how a large-scale national industry can benefit local communities, as well as showing how small-scale local economic growth can scale up.

Sharing best practice, celebrating success

The strength of Scottish procurement in tackling local issues was also recognised in a keynote talk by Malcolm Harrison, CEO of the Chartered Institute of Procurement and Supply (CIPS), and Nikki Archer, Deputy Director, Head of Procurement and Commercial Policy & Strategy and Head of Procurement Profession with the Scottish Government. Kicking off the GO Excellence Live Stage at Procurex Scotland, Mr Harrison and Ms Archer, interviewed by Scotland Tonight presenter Rona Dougall, described some of the major trends and challenges currently facing procurement in Scotland.

Malcolm Harrison, Nikki Archer and Rona Dougall at the GO Excellence Live Stage

Mr Harrison suggested that “there are areas where Scotland is leading best practice internationally,” particularly noting social value and the impact on local communities. Ms Archer agreed that “the holistic approach [Scotland] takes is unique.” Ms Archer said that assuring social value and a positive wider impact through procurement is “not a tick-box exercise,” urging delegates to look at priorities in individual cases. For example, where a supply chain includes a high proportion of SMEs, Ms Archer suggested that focusing on the local economy impact would be particularly important. This is not always a simple fix, however, and Ms Archer added that “buyers deserve recognition for managing these challenges.”

The GO Awards series of events aims to recognise and celebrate excellence in all aspects of procurement from across the UK, from the public, private and third sectors. As Mr Harrison and Ms Archer kicked off a series of interviews with nominees for this year’s GO Awards Scotland, Ms Archer said that while the procurement environment in Scotland is unique, it is important for Scottish procurement leaders to share best practice with colleagues in Wales and Northern Ireland too. The GO Awards Northern Ireland and GO Awards Wales 2020 events will take place on 10 March and 18 March, respectively, and entries are now open. As well as celebrating organisations’ success and innovation in procurement, the Awards are a great opportunity for teams to share best practice with colleagues and potential partners, including in areas such as Social Value, Environmental Impact and Supplier Relationship Management. See the full list of categories here. The nominations will be announced at the end of January, so enter your organisation or team soon to make sure their success is recognised.

New research report: ‘Brexit: Challenges and Opportunities for Public Sector Buyers’

Against the backdrop of a further Brexit extension, and a general election which could have a significant impact on the form Brexit takes, we are excited to reveal the results of the latest research survey from iGov Survey in partnership with BiP Solutions and Delta eSourcing, ‘Brexit: Challenges and Opportunities for Public Sector Buyers.’

Cover of new report 'Brexit: Challenges and Opportunities for Public Sector Buyers'

With UK government public procurement spend totalling around £284 bn per year, public sector buyers account for around 13% of UK GDP. It’s therefore essential to consider the potential impact of Brexit on various possible scenarios, such as a ‘no-deal Brexit’, on public procurement – as well as highlighting potential areas of opportunity. It is important to note that a ‘no-deal’ outcome is possible at the end of the transition period at the end of 2020, even if a Withdrawal Agreement is ratified, meaning that it is still important to consider the implications of a ‘no-deal Brexit.’

Capturing the opinions of procurement leaders allows for developing a real picture of the level of knowledge and aspirations of the public sector, in addition to what is already known about the legal position of procurement in relation to Brexit. This research project surveyed procurement leaders from throughout the public sector – from local and central government and the NHS to higher education and housing associations – for their predictions, concerns and aspirations around what effects Brexit will have on UK public procurement. The survey explores areas such as:

  • The key aspects of procurement on which Brexit may have an impact
  • Areas where the expectation of Brexit has already had an impact
  • The level of impact that different Brexit scenarios, including a ‘no-deal Brexit’, might have
  • The level of preparation procurement leaders have undertaken for various Brexit scenarios

Over 80 organisations from across the UK participated, and the new survey report includes a full breakdown of the results, including analysis of how responses differed by sector and where correlations and contradictions appear. Key findings include:

  • There is a perceived lack of clarity as to the extent of Brexit’s impact on procurement.
  • A majority of procurement leaders have not undertaken preparations for Brexit.
  • Cost is viewed as the area where the impact of Brexit will be felt most keenly.
  • There is concern about the potential for disruption to supply chains, but a lack of clarity as to what the practical effect will be.
  • However, in some areas of procurement, Brexit is predicted to have little effect.

Download your copy of the full report here. Visit BiP Solutions’ dedicated Brexit resources page to keep up-to-date with all the latest information and guidance around Brexit, as the situation continues to develop.

Local Government Procurement Expo 2019: Transformation and Innovation

This year’s Local Government Procurement Expo (LGPE) showcase was held on Thursday 28 November at the Novotel London West in Hammersmith. As the premier event dedicated to the development of the UK local government procurement marketplace, and officially supported by the Local Government Association, LGPE remains an unmissable date in the public sector business calendar. Procurement professionals from across local government departments the length and breadth of the UK came together to discuss the major ongoing themes affecting the industry, from the embrace of social value to initiatives supporting smaller businesses, to drive efficient and effective procurement in this vital sector.

Increasing innovation in public procurement

Malcolm Harbour CBE at LGPE 2019

Malcolm Harbour CBE at LGPE 2019

One of the highlights of the day was the speech delivered by Malcolm Harbour, Chair of the Local Government Association Task and Finish Group on Public Procurement of Innovation, on how the procurement rules can be innovation-friendly if organisations know how to use them correctly. Mr Harbour said that driving innovation begins at the root of a company, with management responsible for creating “a culture in which you encourage people to think about new ways to do things and how you want to do them.” He further commented how “alternative procurement procedures including innovation partnerships, negotiations and working closely with suppliers in a commercial partnership” can inspire collaboration between buyers and suppliers. Lucy Patchett from Supply Management covered Mr Harbour’s speech in detail in an article, which you can read here.

Another key speaker was Kevin O’Malley, Innovation/SBRI Lead at Innovate UK. Mr O’Malley’s speech focused on how effective procurement strategies can help solve the complex public sector service challenges of today, with support for innovative SMEs at the heart of this endeavour. Lizzy Grayson’s session on supporting apprenticeships and Sarah Bass’s on ‘Preventing Modern Slavery in the Supply Chain’ continued the social value theme, with lively and informative discussions afterwards.

“A number of people came to speak to me afterwards and queued up… People wanted to share their experiences with me, and they also wanted to ask what we’d done and share documents with them which I was absolutely thrilled to do. One individual came up to me and said she’s aware of an individual who she believes is being trafficked into the UK and she’s struggling with what to do, so I’ve been able to support that. If there’s one thing I’ve done today [at LGPE] it’s preventing someone from being in modern slavery – which is just amazing.” – Sarah Bass, Commissioning, Procurement and Brokerage Service Delivery Manager at Telford and Wrekin Council

Transforming local government procurement

One interesting theme that was echoed throughout the event by all organisations, across the public and private sectors alike, was just how exciting a time it is to work in the UK local government procurement marketplace. Across the many special features and zones of the event, there was an overwhelmingly positive understanding of the sheer size of the opportunity available in the sector – and an appreciation that buyers and suppliers should work together to make a real difference to the lives of people across all our communities. Through many passionate speeches and insightful conversations, the message was truly delivered how imperative it is that events like LGPE exist to provide a platform for professionals to network and share experiences that can drive positive change.

Looking to the future

Thank you to all the 700-plus delegates who attended LGPE 2019, the 40-plus organisations that exhibited on the day and the 20-odd speakers who delivered such important and insightful sessions. We hope the impact of this year’s LGPE showcase will continue to be felt for a long time to come. Keep your eyes peeled for LGPE 2020 announcements and register your interest soon on the LGPE website.

 

“An incredible responsibility”: Procurement and sustainability at Procurex Scotland 2019

One month on from Procurex Scotland 2019 and the 15th Annual Scottish Government National Procurement Conference, held this year on 29 October at the SEC Glasgow, we look back at some of the major themes of the day. The event saw some of the key current and future trends for procurement discussed in depth, and among the most prevalent themes was environmental impact.

Climate change and environmental impact are issues that are increasingly being addressed in many aspects of business as well as people’s everyday lives. Given the increasing focus on social value in procurement, and the awareness that how organisations choose to spend their money can have major impacts, it is perhaps not surprising that the role procurement can play in combating climate change has increasingly come to the fore.

Managing resources

Kate Forbes MSP

Kate Forbes MSP

Kate Forbes MSP, Minister for Public Finance and Digital Economy, began the Scottish Government National Procurement Conference with a keynote address focusing on “the power of procurement.” Introduced by the day’s chair, Scotland Tonight’s Rona Dougall, as “having long been a champion of the environment,” Ms Forbes stressed that “we have a collective responsibility to our social and economic wellbeing.”

Her ministerial address emphasised two key message that were to be repeated throughout the day: that the purchasing decisions procurement leaders make have a real power to influence change; and that contributing to local economies, addressing global issues like climate change and long-term business growth are not contradictory aims. Ms Forbes pointed to ideas such as challenging the “need to buy” – as reduction in resource consumption contributes to both environmental and economic sustainability.

Malcolm Harrison, Chief Executive Officer at the Chartered Institute of Procurement and Supply (CIPS), also discussed sustainability and environmental issues in his speech on some of the most pressing issues for supply chain management. “We as procurement professionals have an incredible responsibility to look at how we use limited resources,” Mr Harrison said, once again emphasising the power that procurement professionals have to influence change. However, Mr Harrison also urged attendees not to “get caught up in the plastics debate.” While not attempting to downplay the environmental impact of plastics, particularly for oceans, Mr Harrison was keen to suggest that there are areas where plastics are in fact essential. He cited transport of time-sensitive medical products as an example of “a good use of plastics,” suggesting that the aim should not be to remove plastics altogether from supply chains, but to be critical and reflective of how they are used – reducing rather than eliminating their use. Mr Harrison concluded that, in light of environmental concerns as well as other ethical issues facing procurement, “this is a challenging environment for the profession – but it’s an exciting time.”

To address sustainability concerns, and understand how scarce or impact-heavy resources are used throughout their supply chains, it is important that public sector buyers have greater visibility of their entire supply chains. Supporting buying organisations to manage every stage of the tendering process and supply chain in a single solution, Delta eSourcing allows for greater end-to-end visibility of supply chains, giving greater transparency. Learn more about Delta here.

Showcasing success

Reiterating Kate Forbes’ earlier address, Caroline Colliston, Chair of the Business Leadership Group of the Scottish Business Pledge, made clear in her talk at the Scottish Government National Procurement Conference that “sustainability and long-term business growth are not competing objectives.” Ms Colliston used the image of a ripple becoming a wave, noting that small changes can add up to wider trends. Her talk pointed out that business decisions with an environmental impact do not only include large purchasing decisions, but also choices such as which hotels are booked for business travel – if travel is necessary.

Kersti Berge

Kersti Berge at the National Procurement Conference

Rounding off the main talks at the Scottish Government National Procurement Conference was a presentation from Kersti Berge, Director of Energy and Climate Change at the Scottish Government. Ms Berge began her talk by “going back to the science,” showing several graphs that illustrated the scale, speed and severity of climate change and “proving conclusively that human activity is a big factor.” Ms Berge also emphasised that climate change is not a remote issue for procurement, with the widespread wildfires in California in 2018, and Australia in 2019, causing billions of dollars’ worth of damage. Ms Berge pointed out that, for example, insurance costs will rise dramatically for businesses with the increasing likelihood of extreme weather events.

Although Scotland is already world-leading in terms of taking steps to tackle climate change, thanks to Scottish Government legislation, Ms Berge said that, for the sake of business as well as the wider world, “we all have a role to play.” She pointed out that annual procurement spend in Scotland adds up to £11bn, and so can have a huge influence on the wider agenda. Inviting organisations to “mainstream” their successes, Ms Berge suggested procurement leaders “start early and think strategically to reach people who can influence,” to help cascade change throughout supply chains. She pointed out that there are many ways that small strategic changes can have a wider influence – for example, reducing the number of deliveries through reduced demand for goods or services means fewer vehicles on the roads and, in turn, reduced emissions. Although Ms Berge ended with a stark warning about the dangers of climate change for potential future generations, she also encouraged organisations to realise the scale of influence they can have – inviting them to “showcase your success.”

Attendees at Procurex Scotland 2019

Procurex Scotland brought together around 1500 buyers and suppliers

Early engagement – beginning conversations ahead of the formal tendering process – can help organisations share their successes and establish a position as a thought leader, even potentially influencing the factors that buyers consider in specifications. These kind of broader discussions than might be possible during the tendering process are made easier through Ingenium, the public sector data community containing every UK public sector leader, organised by job function and sector. Click here to learn more about how you can begin conversations to share your organisation’s values and showcase your success with the public sector.

As the major political parties campaign for the UK General Election on 12 December, climate change, sustainability and energy efficiency are high on the agenda for all parties, with several making commitments as to the year by which the UK should be carbon neutral. To find out more about the parties’ election manifesto pledges, and what they mean for business with the public sector, download the latest edition of our new report, ‘The Public Sector Market in 2020 and Beyond: Opportunities for Smart Suppliers.’

Further reports on other key themes and trends discussed at Procurex Scotland 2019 and the Scottish Government 15th National Procurement Conference will be coming soon on the BiP Solutions site.

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