UK Government Uses Public Procurement to Encourage Apprenticeships

A couple of weeks ago, the UK government announced that firms’ willingness to provide apprenticeships -vocational training for (usually) young staff – would be taken into account during the public sector procurement process.

Our immediate reaction was one of mixed emotions. On the positive side, of course organisations should invest in training, and UK business has not historically been good at doing so. There is also nothing more frustrating than losing staff to a rival who don’t invest in people in the way your firm does, but just steal your star people when they need them by offering a few grand more on the salary.

But it is a free market -- and one of the negatives of this move is it introduces another form of regulation to the market. Even if it is just at the margin, it makes bidding for public sector business just that bit tougher and perhaps more time consuming, as well as adding to the cost base for some firms.

However, the detail of the new policy brings some re-assurance on that issue, with some sensible ideas. For a start, this only applies to contracts worth £10 million or more, which last 12 months or longer. A potential fear would have been pricing small firms (SMEs) out of the market (or at least driving their cost base upwards) by in effect forcing them to recruit apprentices. But not too many SMEs bid for that larger size of contract for obvious reasons.

It can also only apply when “apprenticeships and skills development are sufficiently linked to the subject matter of the contract to be included as tendering and contractual requirements”. We’re pretty sure that is to keep this policy within EU law, as you cannot use unconnected or spurious evaluation criteria when evaluating proposals.

Then the detail of the procurement recommendations says that the use of apprenticeships should be one factor taken into account in the tender evaluation process. So it is not a “yes / no” qualification issue, but rather another evaluation factor that will be looked at and scored appropriately, along with (in most cases) multiple other criteria.

Now that does add to the “technical” burden for public procurers, and that’s something we will come back to soon, but it does mean that firms can decide whether they want to play ball on this initiative or not. I suspect most will, fearing that losing even a few percentage points on the scoring might be fatal to their chances. The government of course wants them to think like that, so they do take on apprentices.

But at least there is a choice there. Coming back to the whole point of this, it would appear that apprenticeships are pretty unequivocally A Good Thing, so all in all, we think the government has got this just about right in terms of balancing the overall policy goal with practicality whilst avoiding unintended consequences*. It also brings to mind some thoughts about procurement and possible procurement apprenticeships too. But let’s come back to that another day as well.

There is a Procurement Policy Note from the Crown Commercial Service available here as well, with a lot more detail for contracting authorities and buyers. It is a very helpful note actually, putting this issue in a wider context and therefore providing some useful “refresher” points on running good procurement and selection processes generally.

(I’m sure Mr Cameron is delighted to have received the Spend Matters seal of approval - no doubt there will be celebrations in Number 10! Or maybe not ... )

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