For all those who think all is rosy in SNP Scotland, I hate to disillusion you. It isn't. I share this from CommonWeal's Ben Wray, published this morning, as evidence:
The decision of Calmac, a Scottish Government owned public company, to sue the Scottish Government over it's awarding of a ferry contract to outsourcing giant Serco is stunning, and should lead to big questions being asked about the procurement process, and how fit for purpose it is.
The contract, on publicly subsidised routes in the North between Aberdeen and Lerwick and Kirkwall, and from Scrabster to Stromness, is at least six-years long and worth £450 million. So in ferrying terms, it's a big deal. For the Scottish Government to choose to reject a bid that was more competitive on price from a public sector bidder which is already running ferry services on the west coast, and instead accept one from Serco, a company engulfed in scandal, the latest of which is making asylum seekers intentionally homeless in Glasgow as temperatures plummet, is bizarre. When you add in to the equation that the bidding process weights bids 65 per cent on price and 35 per cent on bid quality, then it does start to smell a bit fishy.
Hopefully the court case will reveal exactly why Serco was given the contract. But this fiasco should lead to bigger questions being asked about the procurement process. Why, for example, is the track record of the bidder not apparently considered? What about terms and conditions for the workforce? What about climate emissions?
Then there is a strategic question that should surely be considered. The Scottish Government should be looking to build up its own assets, and one of its assets is Calmac. Choosing to support and subsidise a multi-national that has no long term interest in Scottish ferrying beyond how much zero's it adds to its profits is nonsensical. An independent review of public procurement is badly needed.
The question is, of course, of broader importance. This election is about who should be running public services, amongst other things. And it should also be about how we choose outsourcers when that is necessary. And what this decision highlights is that the considerable opacity around this process at present leads to very odd outcomes, at the very least.
I agree with Ben: an independent review of public procurement is badly needed.
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One significant issue is that the Scottish civil service is actually no such thing. It is legally part of the UK civil service and as such in terms of their professional conduct, promotions, etc are concerned then they are answerable to the various heads of the civil service in London. So yes technically Scottish Ministers direct the Scottish civil service (and get the blame when it goes wrong) but there are all the usual rules about Ministers not ‘getting involved’ in bidding processes, selecting appointees to boards of quangos etc. However, that is not to say that the SNP government (i.e. the politicians) could not be much more specific (and sensible) in terms of setting the rules for all of these processes. I think on the whole they have tended to be very timid whenever Sir Humphry has turned round and said ‘that would be very courageous, Minister.’ The Scottish Government’s legal department has also, in my opinion, tended to be very good at coming up with reasons for why Ministers can’t do things.
All that said I gather the First Minister (and / or her close advisors) has tended to be rather prone to listening to lobbyists and giving in to pressure from various commercial and vested interests. I was very disappointed, for example, that changes on the rules of inheritance were dropped after pressure from the big landowners (almost all of whom are Tories and never going to vote for Indy, so why listen to them?). Those changes would have required heritable property (i.e. land) to be equally divided among the children, as opposed to the present arrangement where land goes only to the eldest son (I think it is sons and not daughters). It might seem a small change but would quite quickly lead to the break up of the big estates (as happened in almost all the rest of Europe).
SERCO have a questionable record both on ferries with the failure of the Orkney ferry service a few years ago, and their running of the Caledonian sleeper. It still baffles me how a company can be expected to run such a huge variety of services as Serco does and do them all with economies of scale or any degree of specialist competence. There was a time when any half competent business strategist would be asking what their core competence is? Apart from fooling government procurement teams.
I am not surprised that the Scottish Government has awarded a major contract to a large private company in preference to giving it to their own publicly owned company. The SNP are merely displaying their neo-liberal credentials.
The SNP delivering political democracy without, also delivering economic democracy will deliver nothing of value to the people of Scotland. History demonstrates that it is easy to corrupt Neo-liberal politicians. The SNP does not support economic democracy. Without economic democracy the people of Scotland will lack agency over their future. Without agency no self-rule. No self-rule no independence. Their progressive social programme is just a red wash and will whither on the vine.
You will know when the SNP embraces on a truly progressive and radical programme that challenges the tenet’s of Neo-liberalism; it will coincide with when the SNP gets accused of institutional anti-Semitism.
I suppose there is a fair chance that Serco could have sued instead, if the contract had been awarded to Calmac. Additional transparency in the bidding and assessment process might help.
I am regularly up to my neck in public sector procurement processes creating frameworks etc. It is a pain in the bottom.
The search for value for money can throw up some right scoundrels (usually those who have underbid to win and then realise it can’t work) but there are exceptions.
I prefer the ‘get three quotes method’ myself.
I spend my time procuring design services for buildings (architects, engineers and the like) and it seems to me that the way procurement works is not how professional relationships/services actually work.
Networking, the sharing of market intelligence and data are all based on long term relationships and trust building over many years – word of mouth etc. Public sector procurement is a bit artificial and assumes that you must be too close to your supplier so there must be something dodgy going on. No doubts things have turned out like that but not in every case. Human beings have survived by learning to work with each other, building trust and create repeat business – not by bloody procuring stuff.
There are also firms who make a mint out of challenging procurement decisions.
Moan over…………….