The Labour Manifesto – What Does It Say About Procurement? (or Efficiency? or Value?)

We gave an overview of the Labour Party manifesto here, so today let us go though some of the ideas and promises in more detail. We will give all the individual quotes that are relevant, but they do virtually all address the same broad issue – jump to the end of you want our overall analysis. But a sneak preview of that – we did a word search. Guess how often “value for money” is mentioned in the  page document? Or “savings”?  Or “efficiency”?

OK, here are the mentions …

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“In order to create a fertile ground for businesses to achieve these missions Labour will take action across the areas we know are necessary for business and industry to grow: (list includes) –

UK supply chains - by targeting government support where there are gaps

Procurement – by requiring the best standards on government contracts”.

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“National and local government spends £200 billion a year in the private-sector procurement. Labour will put that spending power to good use to upgrade our economy, create good local jobs and reduce inequality. We will require firms supplying national or local government to meet the high standards we should expect of all businesses: paying their taxes, recognising trade unions, respecting workers’ rights and equal opportunities, protecting the environment, providing training, and  paying suppliers on time. We will expect suppliers to reduce boardroom pay excesses by moving towards a 20:1 gap between the highest and lowest paid”.

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“Declare war on late payments by:

  • Using government procurement to ensure that anyone bidding for a government contract pays its own suppliers within 30 days.
  • Developing a version of the Australian system of binding arbitration and fines for persistent late-payers for the private and public sectors”

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“We will act to ‘insource’ our public and local council services as preferred providers”  (no, we have no clue what that means either)

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“Labour is committed to the rules-based international trading system of the World Trade Organisation (WTO). We will rejoin the Government Procurement Agreement, whilst safeguarding the capacity for public bodies to make procurement decisions in keeping with public policy objectives”.

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“We will also scrap the changes brought in by the Conservatives in 2014 to TUPE, which weakened the protections for workers transferring between contractors, and we will abolish the loophole to the agency workers regulations known as the Swedish derogation”

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“Shifting the burden of proof, so that the law assumes a worker is an employee unless the employer can prove otherwise …”

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“The part-privatisation of probation services has already failed. Labour will review the role of Community Rehabilitation Companies. The Conservatives bulldozed changes to the probation service through despite warnings that they had not been tested and were founded on a weak evidence base”.

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"We are committed to a procurement process that supports the British steel industry and defence manufacturing industry, which in turn provide good jobs throughout the supply chain. Labour will publish a Defence Industrial Strategy White Paper, including a National Shipbuilding Strategy to secure a long-term future for the industry, workers and UK defence …”

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"Labour is committed to ensuring respect for human rights, workers’ rights and environmental sustainability in the operations of British businesses around the world, and we will work to tighten the rules governing corporate accountability for abuses in global supply chains.

Labour will work with business to ensure the provisions of the Modern Slavery Act are fully respected, including reporting on due diligence in supply chains".

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Ok, back to our commentary.

Some of this is positive, clearly – supporting the Modern Slavery Act is good, the late payment ideas are not daft at all, and probation privatisation does not look great in retrospect. Some is obvious; no-one  has really suggested we would not re-join the GPA. Some is incomprehensible, like this. “We will act to ‘insource’ our public and local council services as preferred providers”.  And some plays to the feeling that business is to be controlled, legislated against, and yet used as a source of huge additional tax revenues of course.

But the most notable point is what is not there, and what it says about Labour's view of the role of public procurement, which is seen purely as a tool to drive the social agenda – to get CEO salaries down, support local business, drive more trade union representation.

Neither “value for money” nor “savings” are mentioned once. The word “value” is used twice –  “value their contribution” and “new options such as a land value tax”. The only use of “efficiency” is in a critique of rail services; “They say we get choice and efficiency but the reality of their transport privatisations …” etc.

So there is nothing to suggest that Labour even understands the concept of getting value from the £200 billion a year procurement spend with the private sector, how savings might be delivered, or how suppliers might offer innovation, new ideas and services to help the nation. (To be fair, those aspects of procurement are largely missing form the Tory manifesto as well).

That is disappointing to say the least; perhaps next time a few of us might volunteer to write a few pages for them! There are good ideas out there that have not been pursued by the current government and could have been proposed by Labour; but there is nothing here to make a wavering public procurement expert change sides, we suspect.

 

Voices (4)

  1. RJ:

    There appears to be much in the Labour manifesto to praise and at least they have tried to cost out what the impacts of their policies will be. Totally agree that the theme of “value” seems to be missing from much of the above but then current public procurement processes, which as Simon points out above, are largely base on Thatcher era principles, do not really sit well with modern approaches and certainly don’t always deliver even best price, let alone best value outcomes.

    However, the stand-out point for me that just sits there with no explanation is the “20:1 gap between the highest and lowest paid”. The implication seems to be that any organisation employing a single apprentice at £3.50/hour will have a pay cap for all employees (or maybe just those “in the boardroom”?) of £70/hour or effectively about £120k. Now I know that sounds a lot to most people, but it’s hardly a practical pay cap in any industry. And even if you base it on a single cleaner working for the national minimum wage of £7.50/hour it’s still only £255k. Does this mean that government will no longer deal with banks or major industrial firms or even many of their own departments? Guess that’s one way of not having Trident.

  2. Sam Unkim:

    Dan
    Since “Inhouse” suppliers, are usually not allowed to bid, thats a bit of a moot point.

  3. Simon Lydiard:

    I think I can help you with “We will act to ‘insource’ our public and local council services as preferred providers”.  It means re-establishing internal capability that has previously been outsourced and making it the “default” supplier. Here’s an example – the previous government “insourced” the East Coast Mainline rail franchise though – sadly – it then put it back out into the private sector for purely dogmatic reasons. Under the Labour proposal here, public authorities and local councils could actively look to bring services in house and then keep them there as “preferred supplier” (i.e. no automatic re-competition). It makes sense to me – rather than the dogma of everything should be privatised it if can be. This approach would enable councils to make case-by-case sensible decisions – reversing the Compulsory Competitive Tendering of the Thatcher era.

    1. Dan:

      But surely an assumption that everything should be kept inhouse is just as dogmatic as outsourcing everything? Shouldn’t these decisions be based on value for money? The ‘preferred supplier’ should be the best one, regardless of which sector they sit in.

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