Francis Maude speech at the Public Sector Show 2014
Francis Maude discussed reforming public services and helping small businesses with government procurement.
It바카라 사이트s a real pleasure to be asked to deliver the closing address at the Public Sector Show, now in its fourth year.
I pride myself on being the minister responsible for the plumbing in government. When I tell people that I바카라 사이트m responsible for things like procurement and commercial reform, quite often their eyes glaze over because I talk in a very animated way. So it바카라 사이트s great to talk to an audience that lives and breathes these subjects.
Sometimes our work may seem to be all about spreadsheets and flowcharts or endless meetings. But of course, it really matters. It바카라 사이트s central to helping people get the services they deserve. It바카라 사이트s about ensuring taxpayers get a fair deal. And actually, it바카라 사이트s about shaping the future of our country. So what we do in this space is really important and we must never lose sight of this.
Today I바카라 사이트m going to focus on how government is opening up to small- and medium-sized enterprises (SMEs). Because the way in which the public sector goes about buying goods and services can make or break a small business. But equally, the success of SMEs will make or break Britain바카라 사이트s mounting economic recovery.
It was Napoleon who called us a nation of shopkeepers. He meant to be derisory but it바카라 사이트s actually a great compliment. He was of course referring to our commercial and trading strength 바카라 사이트 and he was onto something. Two hundred years later, 9 out of 10 companies in the UK are SMEs 바카라 사이트 let alone the micro businesses and the sole traders. They바카라 사이트re the job creators and the wealth generators.
When we talk about growth, it바카라 사이트s not some abstract concept invented by the City. This is real 바카라 사이트 it happens every time a small business takes on a new member of staff; every time an innovative new tech start-up takes a brilliant idea and converts it into a marketable product; every time a great British success story secures its first contract overseas. And that바카라 사이트s precisely why this government is doing everything in our power to help Britain바카라 사이트s SMEs to succeed by levelling the playing field which previously was stacked against them.
Mystery Shopper
Let me tell you about a recent case dealt with by my Mystery Shopper team in the Cabinet Office.
These are the officials we have on standby, ready to jump in through the window 바카라 사이트 plunger in hand 바카라 사이트 whenever a small business reports a blockage which makes it more difficult for them to bid for a government or public sector contract.
Earlier this year, they were contacted by an SME, which was owed money by a major government department. It wasn바카라 사이트t just a one-off payment. The department had racked up a substantial bill over the course of a year. Around Β£70,000.
Now sometimes we get so used to talking about spending in terms of millions or billions of pounds that we lose perspective바카라 사이트¦ Β£70,000 is in the overall scheme of government spending is a ripple. But it can make or break a small firm.
The business in question had already contacted the department several times. They just wanted to be paid. No one likes to be left dangling on the end of the phone. But they were brushed off with patently unacceptable excuses.
Thankfully, the Mystery Shopper team lost no time in contacting the department and they worked together to unblock the problem. The company was finally paid the money it was owed. The department 바카라 사이트 suitably contrite (which isn바카라 사이트t something you always see) 바카라 사이트 promised to be more aware of the needs of small businesses in the future. So everyone went away happy and the problem was solved.
Well no actually. It바카라 사이트s not quite that neat. You see, when we did the digging, it turned out the real problem was that nobody in the department knew how to use the payment system.
And that바카라 사이트s the nub of the issue 바카라 사이트 basic commercial knowledge and common sense.
Understanding the needs of SMEs
Too often in the past, government seemed to be oblivious to the basic needs of small and medium sized firms.
In this case, it failed to understand that SMEs rely on prompt payment 바카라 사이트 and that government can set an example to others by paying on time. Equally, it failed to equip public sector staff with the skills and the commercial capability to do their job properly.
The whole public sector spends Β£230 billion a year on goods and services 바카라 사이트 equivalent to the economy of a medium sized country and roughly 15% of the UK economy and Β£1 for every Β£7 spent in Britain.
Yet at the time of the last general election, just 6% of central government procurement spend was with SMEs. They were frozen out by an clearly bureaucratic and painfully slow system that worked against them.
Not only was government missing out on a powerful way to support growth: it was failing to recognise the innovation and value that SMEs provide. The economic downturn meant we couldn바카라 사이트t afford to miss out for a moment longer.
So in 2010 we committed ourselves to creating a supportive environment in which ambitious businesses can flourish. We바카라 사이트re aiming for 25% of overall central government expenditure to be spent with SMEs by 2015 바카라 사이트 not just at the top, but down through the supply chain. We바카라 사이트re working to weave that commercial common sense into the fibres 바카라 사이트 the warp and weft 바카라 사이트 of government.
And we will continue to hold other departments and the wider public sector to account. Since we set up Mystery Shopper in March 2011, the scheme has tackled 620 cases. In 4 out of 5, we were able to make a change which resolved the issue.
We바카라 사이트re now extending the service so that it not only investigates reports of unfair treatment raised by SMEs and other concerned suppliers, but also undertakes proactive spot checks on procurement processes across the public sector. It바카라 사이트s about weeding out potential problems before they get in the way.
The results are being published on 바카라 사이트 so that poor practice by public bodies and their contractors can be challenged and good practice identified. We want to get to the point where we have a kind of system for public procurers so we can know which bits of the public sector are doing it well and which aren바카라 사이트t.
Lord Young reforms
And that바카라 사이트s not all we바카라 사이트re doing. As you heard earlier, the government commissioned the Prime Minister바카라 사이트s adviser on enterprise 바카라 사이트 and my old boss 바카라 사이트 Lord Young to recommend more ways to open up procurement to SMEs.
In central government we바카라 사이트ve already been working hard to simplify our procurement process and cut out some of the needless form filling and red tape. Now these reforms will spread to the wider public sector to ensure a single market when doing business with the state.
We바카라 사이트re completely abolishing pre-qualification questionnaires (PQQs) for low value contracts. For high value contracts, we바카라 사이트re insisting on a simplified, standard PQQ, which absolutely prohibits unnecessary questions or excessive requirements.
We want to increase the visibility of the opportunities available to SMEs within the public sector. All opportunities valued over Β£10,000 for central government and Β£25,000 for other authorities must now be published on Contracts Finder. Furthermore, contracting authorities must also publish contract award notes, with information on whether a contractor is an SME or a voluntary organisation, charity or social enterprise.
And there will be absolutely no hiding place for late payers. All procurers will be required to publish cases where they fail to pay within 30 days, including interest paid or interest liable. They must also include a clause in the terms and conditions of all new contracts, mandating payment of invoices in 30 days all through the supply chain.
As Lord Young has outlined earlier today, we바카라 사이트re introducing these changes at the first possible opportunity.
I know some public sector procurers have already have plans in place to prepare for these changes and they should be congratulated.
For everybody else, this is the time to take note and take action. There바카라 사이트s nothing stopping you adopting these changes straight away, but at the very least you should now be considering how you will brief your staff and whether training is required. If you need it, help is available from the .
My message is simple: change is coming 바카라 사이트 be ready for it, because we need to deal with it when it happens.
Transforming public services: 5 principles
Our reforms to public procurement are just one part of a wholesale transformation of public services as we rebalance the British economy.
Part of this was an immediate reaction to the economic situation we inherited. We faced the deepest recession in peacetime history, coupled with the largest budget deficit in the developed world 바카라 사이트 and public sector productivity had, amazingly, over the previous decade remained completely flat, showing no improvement at all. This was a perfect storm that threatened to ravage public services unless we took urgent action.
At the same time austerity in public finances is going to be a fact of life for some time to come and there will always be pressure on governments 바카라 사이트 of all parties 바카라 사이트 to deliver more for less. For far too long we have been prisoner to the fallacy that you can바카라 사이트t deliver more for less. We have definitively proved that defeatist consensus wrong and showed we can deliver much more for less by transforming the way we work.
So we faced a choice: the low road of salami slicing departmental budgets to impose top-down savings; or we could take the high road of redesigning public services from the bottom up. We took the high road because governments owe it to the public and the taxpayer.
After a few years, we have realised that we were really applying 바카라 사이트 and it was retrospective 바카라 사이트 5 principles for public service reform to help us meet these challenges. They바카라 사이트re practical, not ideological 바카라 사이트 this is about creating truly 21st century public services, and as we do it we will create even more opportunities for Britain바카라 사이트s smaller businesses.
Open
The first principle is open, because being transparent builds trust, sharpens accountability and brings improvements. People can compare costs in once place with costs in another.
Publishing open data can also stimulate economic growth in exciting new ways. The first industrial revolution was based on the raw materials of iron and coal. This one is based on the raw material of open data.
Our open data portal, , is the largest resource of its kind in the world. There are over 14,000 data sets there already, and more data is being added all the time. And that바카라 사이트s supporting a thriving community of digital start-ups, SMEs and tech-based companies that can use this raw data as the basis for new ideas and solutions, cultivating new markets and creationg new jobs in the process.
So that바카라 사이트s the first principle, transparency and openess.
Tight
The second principle is tight control from the centre over common areas of spend. Controlling discretionary spending helps ensure every penny of taxpayers바카라 사이트 money is spent to maximum effect, by reducing waste, fraud and inefficiency.
It바카라 사이트s why our new , which Sally Collier spoke about earlier, brings together the government바카라 사이트s central commercial capability into a single organisation. It will gradually take on direct procurement of all common goods and services from departments 바카라 사이트 everything from energy supplies to photocopier paper 바카라 사이트 and it will offer indirect support for large and complex procurements.
It바카라 사이트s one of the largest commercial and procurement organisations in Europe, it can maximise economies of scale to deliver the best possible value for the taxpayer. The government ought to be the best customer there is. We operate at scale; we can deliver better, consistent prices and better value from the taxpayer by managing things like property and IT from the centre.
Looser
But tight control at the centre should be matched by looser control over frontline operations, which is my third principle. We바카라 사이트re strongly supporting the creation of staff-owned mutuals, joint ventures and social enterprises in this country.
There are now nearly 100 public service mutuals around the country 바카라 사이트 all of them new enterprises 바카라 사이트 employing between over 35,000 people and delivering around Β£1.5 billion worth of services. An entirely new sector of the economy 바카라 사이트 and it바카라 사이트s thriving. Boston Consulting Group projects an average increase in revenues of 10% this year.
And let바카라 사이트s face it: public service commissioners had become too dependent in too many areas on too limited a range of suppliers. Every new mutual that spins out of the public sector helps to remedy that deficiency, making the market deeper, wider, more dynamic and competitive 바카라 사이트 and that바카라 사이트s good for the economy, it바카라 사이트s good for the taxpayer and it바카라 사이트s good for the user of public services.
It drives productivity dramatically 바카라 사이트 marked and dramatic improvements almost overnight 바카라 사이트 as well as a better quality of service for the user. Loose control liberates and empowers the people actually delivering the services to the public.
Digital by default
The fourth principle is digital by default, because as well as being cheaper 바카라 사이트 a 50th of the cost of doing it face to face, a 30th the cost of by post and a 20th cheaper over the phone 바카라 사이트 it바카라 사이트s also a chance to redesign services around the needs of the people who use them, rather than designing them in a way that바카라 사이트s convenient for the government.
We know the best technology and digital ideas often come from small businesses, which is why we바카라 사이트ve created the G-Cloud framework. It바카라 사이트s an open market where public sector organisations can purchase cloud-based IT off the shelf. For both government and the companies listed on the CloudStore, this means less bureaucracy and less hassle.
As of last month 바카라 사이트 the figures hot off the press only yesterday 바카라 사이트 the public sector as a whole has already spent more than Β£175 million through G-Cloud. And over half of this, 60%, is going to small- and medium-sized firms. Central government is spending is higher still at 63% and we want it to grow even more.
And we have committed to spend a further Β£100 million with small businesses offering IT services and technology to government by 2015.
Innovative
Fifthly, there needs to be a properly innovative culture in the public sector.
Public servants must be given the training, skills and confidence they need with the responsibility to do their jobs and to be accountable for what they achieve. For too long the commercial profession has been undervalued and under-developed within the civil service and has failed to attract and retain sufficient high calibre staff. We바카라 사이트ve also managed our people poorly.
So we바카라 사이트re going to strengthen expertise among our specialist practitioners through stronger leadership, better career development and better talent management. We바카라 사이트ve already established the Commissioning Academy to help commissioners develop the practical skills and judgement to design different ways to deliver services and manage new markets.
At the same time commercial understanding and confidence shouldn바카라 사이트t be just the preserve of those deemed to be procurement specialists. All civil servants involved with policy development and delivery must be more commercially attuned.
Conclusion
So, in conclusion, open, tight, loose, digital, innovative바카라 사이트¦ these are what I believe should be the characteristics of modern, productive and effective governments, now and in future.
Taken together, they represent a positive and historic opportunity to transform the public sector. They바카라 사이트ll help ensure that the way government works 바카라 사이트 and the money it spends 바카라 사이트 boosts, rather than undermines, Britain바카라 사이트s competitiveness.
And they바카라 사이트ll introduce new ways of working and thinking into government 바카라 사이트 helping us deliver better services to the public, in a way that is affordable and sustainable in the future.