Regional devolution – the opportunity for ICT suppliers

Written by David Furniss on 16 March 2016 in Opinion
Opinion

Will new regional authorities and other bodies opt for OJEU procurements or create their own frameworks?

We are all aware of the need to transform public service delivery. The continuing austerity agenda, and planned reductions in public sector spending, will be impossible to deliver without changing the way public services are designed and delivered.

In the July Spending Review, chancellor George Osborne said: “The government must step back and think about the shape of the state”. And he has a point. If we were to design the public sector today, we would likely align and integrate services that today are currently being delivered separately, by a plethora of departments and local agencies, to the same citizen and with the objective of achieving similar outcomes, but with little acknowledgement of the differing local challenges faced across the UK.

There was a time, before post-war governments pursued a course of increasing centralisation, when local government had far greater autonomy to determine priorities and align investment against the local challenges they faced. There is a strong argument that regional devolution will provide the focus and energy to enable the transformation of services to citizens – a transformation that the public sector has been unable to achieve at a national level. So after 70 years we are on the verge of a fundamental change in the public sector, with an increasing concept of “place-based” services and the shift of powers to enable them.

Leading the way has been Greater Manchester, which confirmed the first phases of a far-reaching devolution agreement last year, including the transfer in 2017 from NHS England of control over £6bn of health budgets to the Greater Manchester Combined Authority (GMCA).

In October 2016, devolution proposals were submitted from 38 areas of the country, among them the Liverpool city region, The North East, Greater Brighton, Southern counties and the West Midlands. Negotiations are progressing with six areas including Manchester having now agreed proposals, albeit with varying scope.  Devolution has momentum – granted not without some bumps – from the centre where its clear Osborne is committed to ensuring power is transferred from Whitehall and into the hands of local people and businesses.

Why is this important to ICT suppliers?

It is our view that devolution presents significant market opportunity for those suppliers to the public sector. Reorganisation of our sector has to be supported by a digital infrastructure and information sharing tools to ensure effective collaboration.

Although the 38 devolution proposals submitted last September didn’t contain much detail about technology or digital strategies, it is clear that the priorities of joining up public services, enabling citizen self-service and self- management and developing digital skills which are contained in most proposals, will only be enabled by greater investment in, and adoption of technology.

The emergence of distinct regional devolution areas such as Greater Manchester, with a priority of transforming local service delivery, will in turn drive the necessity for increased information-sharing, collaboration and integration across local public sector organisations. Most devolution proposals have within them an initial high-level, place-based digital strategy, focusing on improving connectivity, providing increased self-service and self-management through technology and emphasising digital inclusion.  

Despite the fact that the majority of the devolution proposals remain to be finalised, it is apparent that common themes are the consolidating of local infrastructure and the early wins from scale economies that could be gained from further use of shared services across regional organisations. Reorganisation and budget sharing has to be supported by a digital infrastructure and the necessary information sharing tools for it to be truly effective.

How will this impact procurement and frameworks?

It’s too early to say conclusively. But an increase in aggregated procurements, consolidating common requirements across regional clusters should, in theory at least, lead to a lower number of higher value deals.

So, would these be more likely to go down the OJEU route? Probably in the short-term, but logic and examples like Unicorn, which is an aggregated procurement agreement for public sector organisations in Surrey and bordering counties, ESPO and others would suggest that the devolved regions will consider introducing their own frameworks, optimised for regional requirements and leveraging the benefits locally, particularly through maximising the availability of opportunities to locally-based suppliers.

This is a definitely an area for suppliers to watch, and one Innopsis will be keeping a keen eye on and better understanding the market opportunity it presents.

David Furniss is regional government and healthcare director at public sector tech trade association Innopsis.

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