London: A new way of buying consultancy services will save money and boost business with SMEs, the UK government claims.
It says the ConsultancyONE Framework, launched this week, heralds a new era of consultancy procurement, but the UK's Management Consultancies Association, MCA, argues that an exclusive focus on day rates is a retrograde step and risks driving many SMEs out of the market.
Minister for the Cabinet Office, Francis Maude says the new single route for government to buy consultancy services — where there is a clear business case in line with Cabinet Office controls — will make it cheaper, end reliance on big business, and give more work to smaller firms.
The first phase of the new ConsultancyONE framework developed by Government Procurement Service (GPS) is expected to deliver significant reductions in consultancy day rates by at least 20%.
Alan Leaman, CEO of the Management Consultancies Association commented, "We worked very closely with the Cabinet Office and others on the design of this new framework. There is a lot of common ground between the industry and public sector clients. Government recognised that it needs quality consultancy services to help it achieve its objectives and the consulting industry wanted to see a new start in how the public sector buys consulting."
"The key issue is ensuring that the public sector gains the best possible value from its engagement with consultancies. That is why we urged the government to give buyers in the public sector a wider choice of firms via this framework. But an exclusive focus on day rates risks driving many SMEs out of this market. The next stage in the development of the government's policy will involve focusing on delivering value for the taxpayer and not just on driving down prices."
The new consultancy framework will replace all existing arrangements for central government departments and can also be used by organisations across the UK public sector. The government says it offers a wider choice of suppliers with more competitive, innovative solutions than ever before — 47% of the successful firms are not existing framework suppliers. Smaller providers have been given more opportunities to win government business with 27% of first phase suppliers being small and medium enterprises (SMEs). In addition, SMEs have been awarded places on lots which have historically been dominated by large firms. This is seen on the multi-specialism delivery advice lot where 25% of providers are SMEs.
Francis Maude said, "We've already put an end to excessive consultancy spend by establishing stringent controls which have slashed the cost to the taxpayer by 85% and saved over £1 billion in 2011/12 compared to the level of spending in 2009/10.
"But we want to go even further in changing how Government buys in consultancy services by introducing a new single framework which saves even more money for the taxpayer and ends our reliance on larger suppliers. With SMEs making up over 27% of suppliers on this first phase of the framework, we're creating more opportunities and boosting business for smaller providers where we know greater value and innovation can be found."
David Smith, Commercial Director at Department for Work and Pensions and Senior Responsible Officer for the consultancy framework, said, "Departments are continuing to reduce their expenditure and dependency on consultancy and I very much welcome this single framework for Government which will offer us better value for money and greater and direct access to the innovation and expertise that SME providers can offer.
"I have worked very closely with GPS and experts across Whitehall to put this framework together and I'm confident that it will offer significant savings as well as further improving the quality of consultancy services to Government."
Under the arrangement all consultancy requirements between £100,000 and £2 million would be managed through a single buying team in GPS. Larger assignments above £2 million will be subject to full competition via the OJEU process.
The first phase of awards for ConsultancyONE will be for nine lots including:
- Multi specialism programme delivery advice
- Financial strategy
- External audit
A second award of a further six lots will be made in March.