Value for money public service commercial projects

Meeting the need to do more with less

Central Government’s Commercial function continues to operate under huge pressure – increasing workloads, fewer people and cost-saving drives bring challenges that can lead to poor outcomes for every stakeholder. Add in inflationary pressures, regulatory reform and sustainability targets, and it’s no wonder that some Commercial Directors have a reputation as the people who say ‘No’ more than ‘Yes’.

Of course, a rigorous commercial function underpins the success of every public sector project, driving value for money, delivering operational efficiencies and managing substantial risk. Doing these things consistently well requires diligence, restraint and challenge, which is where Baringa’s experienced Government and Public Sector team bring practical solutions that deliver tangible results.

Working smarter

Our preferred approach is always to embed a team within the civil service. This gives us direct access to every level of the commercial function to identify where and how the most value can be added to projects. Baringa’s team then coaches and supports the commercial team to upskill, implement new ways of working and optimise processes in order to:

Actively seek out opportunities
Embrace novel commercial models
Empower expert teams
Develop close ties with operational colleagues across Government.

Unlocking potential by saying yes

When times are tough, it’s easy for Commercial Directors to say no. But saying ‘Yes’ to the right public sector projects, when they are well-planned and tightly managed, pays dividends and can deliver significant returns:

Energy buying: Energy is no longer a commodity purchase given the wholesale market and Government’s Net Zero ambitions. Commercial teams without a thorough energy strategy are missing substantial savings. We estimate that Power Purchase Agreements (PPAs) can deliver savings in the region of £250m - £350m over a typical 15-year contract for departments and bodies using 1 TWh. By entering into a PPA under current market conditions, electricity costs over the next three years could fall by around 75%. Via PPAs, power can be sourced directly from new-build renewable generators, saving 50 to 100 ktCO2e each year compared to average grid electricity to help achieve Net Zero goals.

Technology: The long shadow of legacy IT and commercial constructs looms large over government. Commercial teams can unlock significant value through focus on innovation, disaggregation, modernisation and migration to the cloud. And it’s not as scary as it sounds. Through our work across government, and recently with HMRC’s Technology Sourcing Programme, we know that commercial teams can drive value for money by:

- Embracing an array of procurement routes, commercial models, and even establishing new bespoke Frameworks to meet today’s needs. Baringa’s support to HMRC and CCS in developing both the Big Data and Analytics and Digital and Legacy Applications Frameworks will enable significant technology innovation across government.
- Engaging early with the new DDaT supplier base to explain project needs, existing technology estate and commercial constraints. Suppliers with greater insight can offer better tailored solutions, partner-up with relevant companies and bring savings through Best And Final Offer.

Procurement processes and teams: Planned changes to legislation will bringopportunities for commercial teams to innovate and collaborate with the market differently. We’ve seen great success from practical steps such as:
- Using all avenues available for procurements
- Moving away from the direct awards that accelerated during Covid. The simple act of competition can save 20-25%
- Building the capacity and capability of in-house commercial teams to meet the challenges of increasing complexity of business requirements, commercial priorities and supplier diversity
- Coaching
- Automation of routine tasks
- Upskilling on commercial platforms (e.g. SAP Ariba).

Change can bring great opportunity

Changing the way things are done can feel daunting, especially at scale. But by challenging established processes and embracing new ways of working, significant savings and enhanced efficiencies are achievable for commercial teams working across government.

To find out more about how we are helping Government's commercial function discover the power of 'Yes', please get in touch with Sarah Ashley or John Thompson.

Transcript

Kavian Brown, Partner and expert in Government and Public Sector

The imperative for public service transformation has never been greater. The needs of our communities are ever more complex, and we see huge pressures on key frontline services every day. Now, events like the pandemic have shown how quickly and effectively departments can move from policy to delivery, but often the gap between policy, intent and operational delivery remains where we continue to see delivery challenges and programs that do not fully deliver on their objectives.

This creates frustration for those responsible for delivering public services and for citizens whose expectations go unmet. Ultimately, it means people who need the services most may go underserved. Our experience shows that placing more focus on people at the early stages of policy and strategy creation will help to close this gap.

It means bringing lots of different voices in from the outset and not losing sight of their needs throughout. No matter how long the program or project, we believe there are three solutions that can make the difference.

Define policy and strategy with a purpose that stands the test of time, and be clear about what that means practically to implement them. Purpose should not be confused with short-term goals or objectives, which may change or be important to different teams at different times.

People need a binding thread from policy through to implementation, and this is most compellingly achieved when there is an enduring purpose that underpins the policy. Define purpose early and communicate it often.

This will align teams to common and consistent outcomes, and it will give individuals who work in different areas across the organization a common cause to rally around when changes occur, whether in policy, strategy, or implementation.

Come back to purpose every time to ensure that initiatives live their mission. It's often talked about, but rarely done. Take a truly people centered approach to design. We are all prone to confirmation bias or jumping ahead to the answer.

Taking our own needs and experiences outta the equation takes discipline where it's done well. Teams move beyond designing the things they know the nuts and bolts of policy, process, or technology change and place the things they know less well.

The experiences of the operators, the customers and citizens, the people for who the policy is intended to change their lives. At the center of the design process, make these people the central part of a project's design as well as planning and implementation.

Answer questions early and consistently about what people need to achieve the policy objective. Think big, but start small by not undervaluing the insight that can be generated by existing digital capability.

Data and technology use must go further than just improving service performance. It can be a driving force for understanding the impact on people much earlier in the process and placing them at the center of implementation later.

The need to use digital well in public service only continues to grow, and the Opportunity to draw a clear link between service intervention and real world citizen and behavior change is huge.

Incorporate data that will help you to model behavior change and prioritize technology that will help you to drive and track adoption from the outset. We believe these three solutions, defining purpose that stands a test of time.

Designing for people not process and using data and technology to drive outcomes for people are what can truly make the difference to the gap between policy, intent, and operational delivery. When you combine strategy with people, you can bridge the execution gap and deliver impact that lasts for your teams and for citizens.

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