Failure to open Government procurement wider risks Carillion replay

Social Enterprise UK (SEUK) has warned that another seismic Carillion-like implosion remains a risk as…...

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Social Enterprise UK (SEUK) has warned that another seismic Carillion-like implosion remains a risk as the government has failed to open the doors of public procurement to social enterprises and charities.

This new analysis of data was supplied to SEUK by the data aggregator, Tussell. The study reveals that, of the contracts considered suitable for social enterprise, community and voluntary organisations, a mere 12% were actually secured by these enterprises during Q1 2018.

Community Interest Companies – a legal form adopted by 20% of these social enterprises – only won 69 contracts in this period. To put this in context, that amounts to a tiny 0.4% of all public procurement, a feeble 6% rise on the total achieved two years ago. The results have prompted SEUK to advise the Cabinet Office to engage in a fundamental rethink of its policy.

SEUK maintains that awarding social enterprises these contracts makes sound commercial sense, not only achieving cost reduction in the form of value for money but, as SEUK’s deputy CEO Charlie Wigglesworth put it, also because they “reinvest their profits back into the communities they serve leading to better outcomes.” In failing to open the procurement pool to a wider repertoire of providers, he said, they were failing to harness the benefits that come from working with these community groups.

He continued: “We must learn the lesson of Carillion which is that public procurement is not sufficiently diversified. Social enterprises are proven to deliver at a local and national level, but government is not doing enough to build partnerships with them. The Cabinet Office needs to go back to the drawing board and work with social enterprises to change this picture before we see another Carillion-style failure.”

The analysis marks the first occasion that the SEUK has collaborated with Tussell to analyse the presence of community interest companies in governmental procurement. But it won’t be the last: they plan to continue conducting this benchmarking exercise every quarter.

Ed Cross

Ed founded Odesma in 2014 with the explicit intent of creating a new kind of procurement consultancy founded entirely on cloud principles. Deploying best-of-breed subject matter experts alongside the best on demand technology to deliver rapid and effective change for customers.

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