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Values for money

As we approach the 10th anniversary of the ground-breaking Can Do Toolkits, Professor Kevin Morgan says they may offer the key to creative public procurement and help to deliver on the Foundational Economy.

The story of the Can Do Toolkit is instructive for many reasons, not least because this innovation would never have seen the light of day had it been left to the prosaic workings of government as it involved a high degree of novelty – and novelty is something that is not easily handled in or by the public sector.

The Can Do Toolkit was designed to secure more community benefits from public contracts, beginning with targeted recruitment and training to bring unemployed or economically inactive people back into the labour market, and broadening out to help local firms win a greater share of public sector business. The Toolkit condensed a bewildering array of complex EU regulations into a simple manual of good practice, showing public sector officers how to innovate not just exhorting them to do so.

If the Toolkit was an innovative product, so too was the political processthat fashioned it. At the heart of this process was i2i (inform-to-involve), a special purpose vehicle that had been set up to help registered social landlords to get the most out of the £3 billion investment programme to meet the higher quality specifications of the Welsh Housing Quality Standard. The most distinctive feature of i2i was that its members – all dedicated housing professionals like Keith Edwards of CIH Cymru – were in but not of government in the sense that, while they were clearly working for the housing and regeneration departments of the Welsh Government, they were also working for the social housing sector.

This semi-official status gave i2i access to government without the constraints of being in government, a relative autonomy that it used to good effect. Among other things, i2i recruited the services of Richard McFarlane, a leading authority on community-centred public procurement, and he played an important role in fashioning the community benefit clauses of the Can Do Toolkit, ensuring that they were fully compliant with EU procurement regulations.

Of all the hurdles that i2i had to overcome to deliver the Toolkit, the most difficult was the internal hurdleinside the Welsh Government in the form of Value Wales, the official procurement unit. Fuelled by conservative advice from its legal advisers, Value Wales expressed strong reservations about the legality of the Can Do Toolkit from the outset, claiming it failed to comply with EU procurement regulations. Value Wales even went so far as to commission external legal advice to bolster its opinion that the Toolkit was illegal, but to no avail. Significantly, the main reason for its opposition was the sheer noveltyof the Can Do Toolkit– the fact that nothing like it had ever been attempted in the Welsh civil service before.

That the Can Do Toolkitemerged at all is cause for celebration. But we should learn two important lessons from this experience. First, it was designed and delivered by i2i, an organisational innovation akin to what Americans call a Skunk Works, an officially sanctioned breakout space where a team of innovators is allowed to circumvent the habits and routines of a firm or organisation to excavate a novel path (the way IBM developed its first PC for example).

Second, the Can Do Toolkit would not have survived without robust political support from within the Welsh Government and this was provided by Jocelyn Davies and Leighton Andrews, the deputy ministers for housing and regeneration respectively, who were both deeply committed to the idea of a community-focused procurement policy.

What are the lessons from the past ten years? Perhaps the most important lesson is that a radically new public procurement policy would not have emerged from the normal workings of government for the simple reason that novelty – the inner core of creativity and innovation – is frustrated rather than fostered in the compliance culture of the civil service. This means that the public sector needs to create a culture of constructive challenge in its own ranks, either by engaging with challenging partners from the private and third sectors or by developing more challenging mindsets from within.

Fashioning a more innovative public sector is no longer an option here in Wales because radical change is being forced on us from two directions – from the brutalising effects of Tory-imposed austerity and from the potentially noxious effects of Brexit. Creative public procurement can help us meet this challenge if we deploy the £6 billion a year we spend in Wales to secure values for money– by focusing on such things as a better skilled workforce, nutritious food for schools and hospitals, renewable energy and dignified eldercare etc, all of which are part of the Foundational Economy. The missing ingredients in the recipe for creative procurement are professional skills and political leadershipand we will never secure values for money in Wales unless we address these twin deficits.

Professor Kevin Morgan of Cardiff University will be speaking at a conference in Cardiff on Monday celebrating the 10th anniversary of Can Do Toolkits and what the same principles might be able to achieve now. More details of the conference are available here

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