How will the public sector cope with all the coming change? It’s time to re-build internal capacity and re-discover SME suppliers.
Two budgets, a tight financial settlement for local authorities and the Localism Bill – all since the election. The public sector’s been bracing itself, and preparing for the deluge of change that will be required. There’ll be a torrent of new shared services, outsourcing and business transformation as never before. And because the cuts are front-loaded, they will need to be completed fast, cheaply and well.
How will the public sector organisations cope with all this change, when they’ve already thinned out their experienced management teams. Who will shape and manage the future organisations and their services? Who will be the ‘intelligent customers’ to ensure suppliers deliver what’s needed at good value?
The temptation will be to rely on large suppliers and their expertise to “just do whatever’s needed”. Now, although those large suppliers have a lot of capacity, they will rapidly be over-stretched by the surge in demand. They will appoint less experienced people to key roles, and try to resource the contract cheaply to stay within the tight budgets they’ve been obliged to set. Often their staff will lack the discretion or experience to adapt their approach to do what’s needed by this specific client. One size is assumed to fit all.
None of this bodes well. But what if the organisation uses help in a more discriminating way – from people who can help it get onto its front foot, to define and manage change and the new services from a position of knowledge, experience and strength?
To do this, the organisation will need people with experience of shaping and implementing transformational change. But if it lacks skills, and the risks of handing over to a large supplier are too great, there is a third way – SME expertise to help the organisation to plan and manage change, and to develop its staff in the process, so that they undertake their new challenges with confidence.
The SME sector has been largely ignored by the public sector, squeezed out of framework contracts for tenders likely to exceed EU thresholds. But it is full of seasoned professionals, and typically charges less than the large consultancies. What’s more, an SME can’t ‘take over’ in the way that large consultancies do – often leaving the organisation’s staff marginalised, not being developed to take back control.
EU procurement rules for framework contracts often seem to be implemented in a way that favours large suppliers. But what about small pieces of work below the EU threshold values? Organisational planning, workshop facilitation, business case preparation or review, or procurement support, for example. Smart public sector buyers could test the market by offering these for tender to SMEs with little risk, and the opportunity to develop credible alternative suppliers for larger pieces of work.
An organisation shouldn’t hand over whole core functions or changes to suppliers – excluding its own staff from the opportunity to learn. Instead, it should stir a little genuine external expertise into the internal team: enough to shape, guide and mentor, but relying on internal staff to execute the change.
Although a large supplier could provide these experts, they are more valuable enabling teams of less experienced consultants to be sold into the account. By contrast, there are SMEs for whom these sorts of small assignments are core business – they have the skills and are usually more affordable. So why not use them? It’s time for public sector buyers to look beyond the big brand name and recognise the contribution that SMEs can make.
It might even help the UK economy, too!
