UK Industrial Strategy – more procurement reform in the pipeline?

This week the Government published its new UK Industrial Strategy. There's a lot of interesting stuff in there, but what does it say about public procurement? 

Building on the PA23

The Government intends to continue to implement the reforms established through the Procurement Act 2023 “to create a simpler, more commercial, and transparent regime”, but also wants to go further focusing on using public procurement to deliver three key ambitions: (1) strategically support Industrial Strategy priorities, (2) create high quality jobs and skills in local communities, and (3) support sectors critical to national security. 

The Government has today launched a Public Consultation on how it can give more weight to firms that can show they will boost British jobs, including by requiring Contracting Authorities to: 

• Set at least one award criteria in major procurements which relates to the quality of the supplier’s contribution to jobs, opportunities or skills. 
• Set at least one social value KPI relating to jobs, opportunities or skills in major contracts and report regularly on delivery. 
• Set three-year targets for procurement spend with SMEs and social enterprises and publish progress annually. 
• Exclude suppliers from bidding for major contracts if they do not pay their subcontractors promptly. 

In addition, there are plans to : 

• Set more ambitious targets for the IS-8 (i.e. those 8 sectors identified as having highest potential: Advanced Manufacturing, Clean Energy Industries, Creative Industries, Defence, Digital and Technologies, Financial Services, Life Sciences, and Professional and Business Services) to promote innovation pull-through, including through a new Commercial Innovation Hub, which will trial new approaches to service design and procurement. 
• Leverage the new Digital Commercial Centre of Excellence in central government, bringing together digital and commercial expertise to make it possible “to buy once and well”.

“Top to bottom” reform of defence procurement 

The Government intends to reform defence procurement “from top to bottom” with the objective of “increasing speed and value for money”. These plans include: 

• Engage industry early in procurement processes on desired outcomes. 
• Ensure that suppliers are rewarded for productivity and for taking risks. 
• Reduce the burden on potential suppliers from startups to primes.
• Implement a new, segmented approach to procurement: contracting Major modular platforms within two years; pace-setting spiral and modular upgrades within a year; and Rapid commercial exploitation within three months. 
• Actively build exportability into procurement processes, including by requiring major procurements to include an assessment of export potential.
• Launch UK Defence Innovation “to identify, develop and procure cutting-edge technologies” backed by a £400 million budget.

This demonstrates once again the critical role that public procurement has to play in supporting and delivering Government policy. 

Every department has a critical growth role: areas from defence spending to clean energy deployment, from migration to public procurement, are now linked to our Industrial Strategy and critical to how we deliver it.