Public Sector Procurement Is Flawed

A recent article by The Independent listed all the railway operators in the UK showing their ownership.  Out of these 31 operators 28 are publically owned but not all by the UK Government.  Unbelievably, the UK state owned railway companies is a woefully low number of 3 companies.  The other 25 companies are owned by governments in Germany, France, Hong Kong, The Netherlands and Italy. 

Is it time to say that the public sector procurement process in the UK is fundamentally flawed when affluent countries can effectively organise large public transport networks that are state owned and submit competitive bids winning contracts over private sector companies elsewhere on the planet?  The Hong Kong Government owns Transport for London.  How ridiculous is that?

Regardless of who wins public sector contracts should there be other elements included in the assessment of bids?  For example, how about asking about how much of the money spent on contracts awarded will stimulate the economy in the UK?  That’s not an unreasonable request is it? 

How about asking about the wages structure within the organisation?  Also ask how many people working under the contract will be registered as working in the UK, paying National Insurance and PAYE?  Another question could be, how many people currently working for your company residing in the UK are claiming Housing Benefit? 

What is the point in awarding contract to employers when the British Government then has to prop up the income of those individuals by giving them Housing Benefit? 

The procurement process could also ask about sub-contractors, e.g. who those sub-contractors are, where those companies are registered.  One of the purposes of any Government is to look after its citizens economically.  Political parties have differing views on how to encourage economic growth, reduce poverty etc.  The public purse awards contracts through central government, quangos, local authorities, district councils, NHS, Big Lottery, education institutions and more.  All of this activity adds up to a lot of money. 

It would not be difficult to add in a section about the benefit to the public purse of any tender or grant application process that includes questions such as those included.  If this was an approach to be taken the weighting for these questions should not be a measly 5%.  Give it some proper weight and make that criteria account for at least 15% of the total assessment.

It surely is immoral to give public sector funded contracts to companies who do not pay enough money to their staff who then receive public money in Housing Benefit or other benefits so that they can just about manage.

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