EU Archives - John Tizard

John Tizard: We don’t need Brexit to improve public procurement

John Tizard — Tue, 17 Oct 2017 21:57:42 +0000

The English Local Government Association (LGA) has called on the Government to reform public procurement regulations if Brexit occurs. It is arguing that the Government should introduce a more efficient UK system of regulating how the public sector, and in particular local authorities, procure goods and services if and when the UK leaves the European… Read More »

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Taking Back Control: Empowering Local Communities

John Tizard — Tue, 18 Oct 2016 21:31:36 +0000

On 23rd June 2016 the British people voted against remaining members of one of the boldest ever international attempts to create a union of collaborative nations based on the pursuit solidarity, economic progress and peace. This union will survive and evolve if and when and on whatever terms the UK leaves it. Ironically the historic union that is the UK may not survive.

The motivation for those who voted to leave was complex. There were many reasons but it would seem that one strong one was a desire to “take back control” from what is perceived as a remote unaccountable set of institutions; the Council of Ministers, the Commission and even the European Parliament. One can strongly argue that these bodies are accountable and not remote but this did not seem to resonate with the experience of many people especially those who feel that they and their communities have been left behind and even abandoned. The argument for the EU as a democratic body albeit one requiring further democratisation was not made well enough over a long period not just the few months of the referendum campaign.

A second and very serious irony for the English – leaving aside devolution to Scotland, Wales and Northern Ireland – is that in or out of the EU they live in one of the most centralised states in the democratic world. Successive governments have taken powers and resources from democratic local government and transferred them to Whitehall and/or non-elected quangos. Recent policies based on English devolution and localism have only dented this all powerful trend to central control and dictate.

If the electorate wants more control this has to include a English version of subsidiarity. It has to mean the transfer of power including tax raising and policy making powers to sub-regional bodies such as the new combined local authorities, to local authorities and to communities. It has to include what has been described as double devolution – powers from Whitehall to town hall and from town hall to communities and neighbourhoods.

The current English devolution agenda is a welcome approach but it does not go far enough. Its scope has been principally focused on economic development and large scale infrastructure with some cases of health and housing being part of the mix. The money being transferred is a small proportion of the central government financial support for local government which has been cut over the last six years. This is not subsidiarity.

More has to be done and done quickly if those who believe they have voted to “take back control” are not to feel as disillusioned and let down by government – central and local – as they appear to have felt pre-referendum.

However, there is a real opportunity now to think about a new political settlement which devolves more to sub-regions and is accompanied by redistributive transfer of resources. These sub-regions could then devolve power and resources to communities. This type of decentralisation introduces and extends participatory democracy, which could be enabled by technology like on-line political discourse, consultation, voting and much more. Given how much people participate in media and reality television based voting and use social media all the time this is a natural extension of citizen enfranchisement.

Any further devolution should be based on locally elected councillors and mayors but this representative democracy can be supplemented and enhanced by some new direct participation.

The principle of subsidiarity should prevail and shape the approach. Some matters are best dealt with at a national level – indeed prior to the referendum at the EU level – but others can be best controlled at sub-regional, place, community or neighbourhood level.

Some of us recall the ambition to create a Europe of the regions. This was commendable and could have made citizens feel closer to their governments. Post – referendum let’s aim to create an England of empowered people and communities with effective local democratic accountability at the heart of governance.

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EU Referendum: Charities Should Speak Up

John Tizard — Fri, 22 Jul 2016 17:57:55 +0000

In just over a week, the British electorate will have decided what is probably the most important political decision for generations, and for which the outcome will impact hugely on future generations.

The EU Referendum is vital for the economic, social, environmental and political future of this country. It also has major implications for the other EU member states, and still more internationally.

Clearly, this is, ultimately, a matter for the electorate (the citizens of the UK) to decide. However, there is a duty and responsibility for charities and others to at least consider the issues at stake, whichever way the vote may go; and to make their analysis of and views on these issues known to their members, supporters and other stakeholders. Indeed, it could be argued that a charity, its senior leadership and its trustees would be failing in their duty if they had not considered the possible consequences of the Referendum resulting in a decision to “Remain In” or to “Brexit”.

Whether a charity is concerned with poverty, children, refugees, the environment, animal rights and protection, health, education, employment or what so ever, it is almost certain the Referendum result will have an impact on their beneficiaries, the policies they are advocating, and potentially on the charity itself.

If, as most economists and internationally respected economic institutions and commentators currently forecast - that a “Brexit” vote will inevitably lead to a weaker British economy and a further squeeze on public expenditure, this will clearly have a major negative impact on the well-being of many charities’ beneficiaries, and at the same make fund raising that much more challenging.

Similarly, if employee protection and rights were to be at risk from “Brexit”, for some charities this would of significant concern.

Likewise, if the standards of environmental protection were to be reduced and ceased to be effectively standardised across the continent, this would be of considerable concern to many charities working in this field.

And the same applies to all charities involved across the full spectrum of concerns, policy areas, client groups and communities that the UK sector addresses.

In addition, for many charities there could be a negative financial impact of a “Brexit” vote given that many are in receipt of EU funding. Indeed, many have recently been involved in the latest round of European Social Fund bids, whilst many others receive money from public bodies that in turn are in receipt of EU funding.

Research undertaken earlier this year by the ‘Britain Stronger In’ campaign found that British charities would lose more than £200m in funding each year if the UK votes to leave the European Union (the research conducted found that 249 charities received £217m from the EU in 2014, the most recent year for which there are available figures).

If the UK were to leave the EU, there is no guarantee that the UK or devolved governments or other public bodies would replace the lost funds from the EU. In fact, and in all likelihood, they could not and certainly would not make up the entire lost funding.
This serious risk to the financial security of charities should be of major concern to senior sector leaders and trustees.

I have no doubt that others may argue that “Remaining In” could have disadvantages to some charities and to their beneficiaries. However, in order to know (or at least, reach a reasonable judgement on these matters), charities do need to ‘think’ and ‘analyse’ the facts and likely prospects as best they can.
If the previous few paragraphs have given the impression that charities should be most concerned about the potential adverse risks of the Referendum results, there are positive considerations to be taken into account too.

Many environmental, social and economic issues, which charities are concerned with, can best and sometimes only be dealt with on an international scale, and through collaboration across politically-drawn national boundaries. Indeed, some require collaboration between governments, and/or between charities and civil society organisations, themselves collaborating internationally.

If the UK votes to “Remain In”, I believe that there will be many more opportunities for UK civil society and charitable organisations to build upon and extend existing European co-operation. This already takes many forms, including: joint campaigns to influence the EU political leadership and its institutions; co-ordinated campaigns aimed at the domestic governments and citizens in member states; joint programmes to address pan-border issues, such as support for refugees and much more; and the sharing of learning and experience between and across member nations.

The UK charity sector is at the forefront of civil society and social action. What could be more powerful and a greater stimulant for a more socially responsible Europe than a pan-EU social movement for change, progress and social justice. In fact, for these last few words, one could easily substitute ‘environment’, ‘climate improvement’ and many other goals core to the mission of so many charities.

My plea to charities, their senior leaders, trustees, supporters and other stakeholders is that over the next week, you consider five key questions and share your thoughts widely on the answers to them. These are:

if the UK were to “Brexit”, to what extent would our charity and its ability to fulfil its mission be diminished or enhanced?
if the UK were to vote to “Remain In”, to what extent would our charity and its ability to fulfil its mission be diminished or enhanced?
can our charity, and others with similar missions in the UK, achieve more by collaborating and working with sister organisations across the EU; and would be this be easier and secure better outcomes if the UK is a member of the EU or not?
how should and can we share our analysis and views on the benefits and risks of the UK voting to leave or to stay within the EU?
should we be offering advice to our stakeholders and/or the wider electorate on our preferred Referendum decision, or simply share our analysis of the two possible Referendum decisions, or should we stay silent?

I recognise that some charities will wish to be silent but this should be a conscious decision and not one born out of a failure to consider the questions.

There may be just a days until the polls open but there is still time for charities to consider and answer these questions - if you believe that they are appropriate, and if you believe it is appropriate to engage in the campaign.

After ten o’clock on the evening of 23rd June, it will be too late - and the die will have been caste.

My personal expectation is that most charities would, if they were to be objective in their approach, want an affirmative vote for the UK to “Remain In”, because this will best enable them to pursue their mission.

And it is significant that some charities have already made their views known - or at least, shared their analysis.

Ultimately, I fully recognise and accept that the decision is one for the citizens of the UK, but charities not just politicians should speak up and do so for their beneficiaries. But let’s remember that it is those same citizens who together form civil society and are members of, work for, support and/or benefit from charities.

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Brexit – consequences for public procurement

John Tizard — Fri, 22 Jul 2016 17:53:45 +0000

The narrow majority for Brexit in the recent EU Referendum could have substantial consequences for UK public procurement.

This may not have been the result that many of us voted for but given the Government feels it must now press ahead to take the UK out of the EU, it is important to take measure of and understand the potential consequences.

Inevitably, in the short and indeed the longer term, the decision will lead to considerable uncertainty, and a potential recession (or at least, a downturn in the UK economy) with the prospect of greater public expenditure pressures. There is also (although we cannot say for certain) a risk to current established employment protection rights, which are based on EU legislation.

Gut instinct tells me that the economic impact of Brexit will lead to ever greater pressure on public sector procurement teams to secure lower and lower prices for services and supplies, regardless of the fact that buying cheapest rarely leads to better goods and services – and, of course, it usually leads to poorer terms and conditions for staff.

The referendum outcome has not changed the fact that political leaders are divided over their wish to remain in the European Single Market. My own view is that leaving this market will have a seriously detrimental economic impact. And further, if the UK Government continues to want to curtail (or even halt) the ‘free movement’ of people across the 28 countries, then I believe that there is every prospect that the remaining 27 EU member states will not allow the UK to have access to the Single Market.

However, assuming for a moment that a deal can be struck for the UK to continue to have access to the Single Market, there will undoubtedly be other conditions beyond ‘free movement’. In particular, I would expect the EU to require the UK to continue to apply EU public procurement regulations and state aid policies – as is currently the case for Norway and Switzerland. In this scenario, UK public procurement rules would not change in the short term; but as the EU evolves and changes its rules, which would then apply to any country accessing the Single Market, the key difference would be that the UK would not be at the Council table to influence and shape these rules. Clearly, in the long term, this is not in the British interest although access to the Single Market very much is. So there we have it – influence and political involvement sacrificed for economic gain.

If the UK decides not (or fails to strike a deal) to remain part of the Single Market, the working assumption must be that we will continue to use our existing public procurement regulations based on EU law – although inevitably, over the longer term, these will gradually evolve.

So how to make the best of where we have ended up?

Looking ahead, I believe that the Government would be well advised to involve suppliers from the business, social and charitable sectors as well as public procurement professionals in a review of public procurement rules and practice, which could well lead to revisions to the existing rules.

I would like to see any such review address:

adopting a holistic economic cost benefit analysis of procurement decisions, which would take into account wider public interests and costs – eg if goods or services are to be procured in a different way, what are the potential costs to the local economy and to employment?

strengthening the Social Value Act

enabling public bodies to take positive decisions to prefer bids from social enterprises, SMEs, the voluntary sector, etc if they wish to and for them to be accountable for such decisions

a duty to take factors such as bidders’ tax and remuneration policies and practices into account

prescribing employment, governance and environmental standards on suppliers of goods and services and throughout their supply chains, including trade union rights

loosening state aid rules to allow public bodies to support the development and sustainability of suppliers, including public sector suppliers, especially when there is an economic and/or social imperative to do this

These are to some extent achievable under existing public procurement rules but there could be more emphasis and clarity re what can and cannot be done.

Any such review could also consider matters such as the future of competitive dialogue (which I strongly support), thresholds for invoking the rules and much more.

My key point is that if there has to be a review because of Brexit, let’s allow (indeed, encourage) the critical stakeholders to consider and input to the most appropriate and optimum UK model.

My key worry is that a combination of a weaker economy and political ideology could see a regression towards public procurement more akin to Compulsory Competitive Tendering (CCT), where lowest price dominates procurement selections and other considerations are squeezed out or even legally excluded. This has to be resisted by progressive companies, trade unions, local government and the wider public sector, charities, social enterprises and the voluntary and community sector. We do not want the EU Referendum to lead to any undermining of quality public services through short-termist, simplistic and expedient but ultimately damaging changes to public procurement rules and practice.

So, I call upon all stakeholders to speak up and engage now – alongside the public procurement profession.

Brexit will have many unintended and undesirable consequences, so let’s have a silver lining in terms of public procurement, even if there may be few other silver linings – or, of course, we may never actually Brexit!

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The EU and the Referendum Matter to Charities and VCS – They Need to Engage Positively

John Tizard — Sun, 12 Jun 2016 08:19:27 +0000

The outcome of the UK wide referendum on 23rd June will have significant long term implications for the country’s governance, politics, economy, environment, public services, employment rights, social mobility, migration, refugees, asylum status ... and so much more.

Indeed, whatever the outcome, the referendum will result in what is effectively a new constitutional settlement, which will have implications for many charities. In other words - it matters!

Charities concerned with social wellbeing, fairness, social justice and inclusion, employment, the environment and much more simply cannot ignore the referendum. In particular, they should not assume that the vote on 23rd June has nothing to do with them and their beneficiaries. Quite the reverse - if they value the benefits of EU membership, it most certainly does matter. And I expect that many charities do value the benefits of membership - especially after any analysis of the issues.

Many charities, whether aware of such or not, are in receipt of EU funding, either directly, or via public bodies, or from public bodies that are using EU funds to support programmes involving charities. It is also the case that charities and community groups will be working in places and with communities which are the beneficiaries of EU grants and investment. And they will often be working with people who have enhance employment rights and protections as a consequence of EU legislation. Those charities which fall into this category would be ill-advised to ignore the referendum. It matters.

Some charities contract with the public sector and consequently are subject to EU procurement regulations. For those charities in this category, there is an immediate and direct reason to be concerned about the referendum. And no one should think that if the UK leaves the UK these or similar procurement rules will not continue, so it matters.

My advice to every charity board and senior executive is to ensure that you fully understand and are well briefed on the potential impact of the referendum on your beneficiaries, their communities and for your charity itself. You need to understand what could be at stake if the UK were to vote to leave the EU, including the implications of the inevitable economic turmoil.

Such activity is simply what any responsible board and senior leadership of any prudent charity should be doing; and indeed should be doing constantly in terms of: anticipating political and economic change; being confident of understanding the implications of any national or macro change; assessing the risks and identifying the opportunities; and ensuring appropriate strategies to respond are in place. This is what good governance is all about.

Charity trustees have an absolute and overriding duty to act at all times in the interests of their charity and deploy their charity’s resources only to advance its charitable purposes, for the benefit of the charity’s beneficiaries. So let’s be clear, for in the case of the EU referendum, this may require some charities to use their resources to make their voice heard and to explain why they are so doing. They can and should be willing to explain why their evidence-based analysis suggests supporting staying in or leaving the EU, and what this means for their beneficiaries. Failure to do this could very easily be deemed to be a dereliction of their responsibilities.

Of course, I fully acknowledge that charity trustees and senior executives will wish to avoid being drawn into partisan and over-politicised debates - but this does not mean they should avoid the issues raised by the referendum and engage in it. Far from it.

If trustees decide that a particular outcome of the Referendum is likely to support the charity’s ability to further its objects, they might well and quite reasonably decide to publicly advocate that outcome in the referendum campaign. And in doing so, trustees will clearly need to be mindful of the law and your charity’s reputation. Equally, however, you should also be aware of the risks of damaging this reputation by simply standing aside and remaining silent.

In any event, the Charity Commission has softened its original guidance that sought to dissuade charities from being engaged with the referendum debate. And significantly, the civil society minister has urged charities to speak up in the referendum debate. Rob Wilson, the Cabinet Office minister for the charity sector who backs staying in the EU, said it was legitimate and valuable for the voice of voluntary organisations to be heard during the campaign.

I share Rob Wilson’s view and similarly urge charities and voluntary and community groups to be ready to defend and promote the objectives of their charities and the interests of their beneficiaries.

As you will have gathered, my firm personal opinion is that the UK will be stronger if we stay as members of the EU. I believe that this is in the economic, environmental and social interests of the country and most charities’ beneficiaries. And I would be surprised if most charities, having undertaken an analysis of the issues at stake on 23rd June, did not come to a similar position (and many, like me, will also wish to argue and campaign for reform of the EU’s institutions and policies post-referendum).

There is an opportunity and, I believe, that there would be great advantage from the EU strengthening its current and adopting even more enlightened social policies and frameworks including addressing inequality and poverty across the members states, adopting an more enlightened approach to migration, creating a stronger sense of an Europe of communities as much if not more than of nation states and supporting pan-European social movements and social action. Many charities will agree with this and if Britain votes to remain a member of the EU this case can and should e made with vigour.

Any charities that believe that their beneficiaries would benefit from a “Brexit” should be ready to say so too. I would expect that such charities will be in a small minority.

Some may wish to work with others in the sector and / or with those engaged in the wider referendum campaign. Whatever you do, charity trustees should think and act positively; and above all, decide what if anything you should be doing and saying.

If charities and trustees in particular wake up on 24th June and think “Oh no this result is going to be very damaging for our charity and our beneficiaries” or ‘what a missed opportunity”, this will be too late. Now is the time to do something. It matters - so act.

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New EU Public Procurement Directive makes the case for progressive engagement with EU and its regulations

John Tizard — Sun, 08 May 2016 12:10:40 +0000

Whilst the debate rages (or tries to) on the merits of the UK remaining a member of the European Union or leaving, there have been some significant changes to the EU public procurement regulations.

Whether the UK remains a member or not, it is almost certain that EU regulations will shape our own domestic procurement law for many years to come. Indeed, if the UK were to decide to leave the EU, it is very likely that a fundamental condition of a beneficial trade deal (assuming one were to be available, let alone access to the Single Market) would be that UK public procurement must continue to be based on the EU Directives.

In light of the above, it is important that public procurement professionals and strategic leaders across the public sector understand the new EU Public Contracts Directive (Directive 2014/24/EU). This has been transposed into UK law for England, Wales and Northern Ireland by the Public Contracts Regulations 2015, and for Scotland by the Public Contracts (Scotland) Regulations 2015 – so again, if there were to be a UK exit from the EU, this law is already on the statute book. It is also most unlikely that any UK government would rush to rescind or change it, not least because the UK government has been a leading supporter of the Directive within the European Council.

As with any law (especially public procurement regulations), there will inevitably be a number of questions to be addressed as it is enacted, tested and clarified in practice, and possibly through the European courts. These include:

how should contracting authorities use the procedures when the justification used is that in Article 26(4)(b), Directive 2014/24/EU, i.e. to obtain regular and acceptable tenders where only irregular or unacceptable tenders are received in response to a call for tenders based on the Open or Restricted Procedures?
what can/should a contracting authority discuss in dialogue/negotiation, bearing in mind that the broadly drawn ‘right to discuss’ is not an obligation to do so and that a very wide scope for dialogue/negotiation may indicate lack of sufficient planning?
How well-developed should proposed bidder methods of delivering project outcomes be before final tenders are called for?
what greater flexibility do the new regulations give contracting authorities after the call for final tenders and the selection of the winning bidder (there are important differences between what is permitted in Competitive Dialogue and in Competitive Procedure with Negotiation)?
how in practice should contracting authorities comply with provisions for transparency about the conduct of dialogue and negotiations in the Competitive Dialogue and the Competitive Procedure with Negotiation (Art 55(2) (d), Directive 2014/24/EU), with its obligation to disclose the conduct and progress of negotiations and dialogue as part of the post-award debrief to any tenderer that has made an admissible tender?

These are, in part, technical questions but nevertheless, they are important ones.

There are also a number of less technical but equally important questions that public sector strategic leaders, their advisors and public procurement officials will need to address, including:

do we have the skills and capacity to apply the new regulations?
how can we apply these regulations in ways that will maximise our wider social, economic and environmental goals?
what specialist advice might we require and on what basis?
can the public sector collaborate to develop and ensure access to necessary advice and expertise from within the sector itself?
what will be the response of bidders and potential bidders; and how can we ensure that we adopt practices compliant with regulations, which are attractive to bidders and cost effective for our own organisation?
how do we avoid over-engineering these regulations?

Public procurement is a critical strategic tool for every public sector organisation, and consequently for the wider public interest. The public sector procures significant services, supplies and infrastructure, and it has to ensure value for money and wider social value. For many of its contracts, it can benefit from forging partnership-based contractual relationships with suppliers. The new competitive dialogue and negotiated procedures, when used well, could create the foundations on which such partnerships can be created. Therefore, it is very much in the public sector’s interest and the wider public interest to ensure that it has the right mind set, leadership and technical expertise to use the procedures well. This means more than a technical “tick box” approach and requires political leaders and chief executives or their equivalent to be engaged and enthused.

These regulations will outlive the EU referendum debate and vote and, whatever the outcome of that vote, they will shape domestic procurement for many years. So let’s ensure that we make the most of them.

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