Today Yes Minister spoke exclusively to the author of yesterday’s controversial response to DWP’s consultation: A Benson
“It makes no sense if everyone is pretending that capital can be raised and that the payment model is workable , it simply is not. I noticed that despite everyone moaning and groaning few people have bothered to respond, I suspect this is because they are all worried about causing waves as all are heavily dependent on DWP contracts and do not want to be blacklisted. This is the main problem with the industry at the moment and this is why we cannot lobby collectively or speak with one voice”
“I have been researching the possible contraventions of UK and EU public sector procurement regulations and legislation…”
READ THE FULL CONTRIBUTION TO THE CONSULTATION;
Author: ABenson
Comment:
I agree with most of the comments above, my ears are still ringing with the laughter of some associates in the banking sector when it was suggested that capital can be raised to support Welfare to work providers. No bank or venture capitalist would touch businesses or organisations in the sector with a bargepole for reasons which are clear and have been so articulately enunciated by previous commentators not least of all when financial forecasts are impossible to prepare in the current climate, there are simply too many uncertainties. If the Govt itself is not prepared to take the risk by providing upfront payments why would an investor?
If we want providers to be able to access capital then DWP must be able to provide guarantees’ upon which business plans and projections can be drawn up and there must be some effort made to ensure that contracts are worth more than the paper they are written on and a commitment from the Govt not to arbitrarily terminate contracts which would provide some assurances from any would-be investors if any can be found.
In addition, the legality of the qualification criteria for the framework should be questioned; as it may, as currently constituted, be non compliant with EU and UK non-discriminatory regulations on public sector procurement. Public sector procurement must comply with all applicable EU and UK procurement legislation, in particular the principle of non-discrimination, and apply the rules to all potential tenderers in a fair and transparent manner.
Competition effects from procurement can be both positive and negative. The public sector, by virtue of its overall demand in certain markets, may be in a position to protect and promote competition, for example by maintaining a competitive market structure through deliberately sourcing its requirements from a range of suppliers, by providing incentives to suppliers to invest and innovate, or by helping firms to overcome barriers to entry. It may, however, also restrict and distort competition, e.g. by adopting procurement practices that have the effect of restricting participation in public tenders and that might even discriminate against particular types of firms. The current qualifying criteria for the framework as it now stands eliminates at least 90% of the market and could even be seen to promote collusion and create cartels, all these go against anti-competition laws.
The framework and the qualifying criteria will reduce competition e.g. by increasing the gap between large and small firms within a market, or by forcing some firms to leave the market altogether. A rule of thumb is that more bidders make for more intense competition, resulting in lower prices and better quality. Even though the incremental benefits from having more participants in a tender may become smaller as the number of bidders increases, in most circumstances adding bidders increases the level of competition. This suggests that any feature of public procurement processes that limits participation has a detrimental impact on competition, which, in turn could increase costs for the public purse.
I suggest that the whole premise of the framework and the work programme be reviewed in the light of its possible contravention of procurement legislation and the negative impact this would have on the market
