A cross-Whitehall review of how to use the ?125bn spent each year by the state on goods and services to foster innovation and other government policy objectives in the private sector will be announced shortly.
The review, which will be led by a senior business figure, is designed to encourage ?creative? thinking by public-sector purchasing managers, according to the top official at the department charged with spearheading the initiative.
Sir Brian Bender, permanent secretary at the Department of Trade and Industry, told the Financial Times the review would produce examples of how procurement could be used to support government objectives, such as increasing innovation and enterprise, as well as simply getting the best deal.
?The question is how can any of these issues, like innovation and sustainable development, be factored into procurement?.?.?.?into the thinking in setting the terms of the contract. What does value for money amount to [in this context]? It?s certainly not necessarily the cheapest bid.?
He stressed the support for innovation should not be equated with ?let?s take a risk?, in the sense of the public sector buying untested products that might fail. Instead, he cited as an example the encouragement of innovative design for buildings for the 2012 Olympics in London.
The review will complement more formal initiatives, such as the sustainable procurement taskforce that was set up earlier this year to produce environmental guidelines for public sector purchasing managers. Instead of such detailed guidance, the latest review is expected to come up with a series of examples to illustrate how lateral thinking can be used to help achieve broader government objectives across the procurement spectrum.
As an example of the type of thinking the new review hoped to encourage, Sir Brian cited food procurement guidelines drawn up during his previous tenure as top official at the Department for the Environment, Food and Rural Affairs.
The government wanted to support UK farmers but was bound by European Union laws that bar the use of procurement to exclude overseas goods.
Officials discovered that switching a food order from orange juice to apple juice increased the chance of the drink being of British origin from zero to 50 per cent, Sir Brian said. Similarly, adding a salad to food orders boosted the odds of local produce being used.
A DTI official said the new review should help the department?s stakeholders, including smaller businesses and high-tech companies.
?The government is the single biggest contractor in the economy ? ?125bn a year. The key thing being looked at is whether that spending power can be harnessed to produce not just economic but social and environmental outcomes, such as encouraging innovation and the use of small firms,? the official said. ?It?s all about being a smarter contractor.?
