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Artillery Row

The problem with public sector procurement

The Social Value Act has brought questionable benefits and serious costs

Today I’m talking bullshit. Or, more precisely, Bullshit Jobs. 

That was the title of an influential 2018 book by anthropologist David Graeber, which argued that many jobs today serve no useful purpose at all: from roles that exist to stroke senior execs’ egos, to those that serve solely to make “busy work” for others.  

We’ve all encountered people doing pointless jobs. If we’re honest, we might admit we’ve done ‘em ourselves. But today it’s not just jobs that are bullshit, but everything to do with creating, managing and evaluating them.

Today’s trend for Equity, Diversity and Inclusion (EDI / DEI) is a perfect example of the current mania for manure in many workplaces today. The EDI sector claims “diversity” is self-evidently a public good, and they’ve got the studies to prove it. For instance, a 2021 report by the Financial Reporting Council (FRC) claimed “gender diversity of FTSE350 boards correlates with better future financial performance.” If you actually analyse the studies, though, they show no such thing. To use the technical term: it’s bullshit.

We’re all for removing obstacles that bar women, ethnic minorities, the disabled and other under-represented people from particular industries, or the workforce in general. Our issue is with using bogus statistics to push dubious and ideologically-driven EDI initiatives. 

It’s easy to paint EDI as the villain of the piece, but really it’s a symptom of a much deeper malaise: the reluctance to evaluate the benefits of “socially valuable” initiatives. Nowhere is this more apparent than in public sector procurement.

no one is measuring the benefits of these initiatives, still less the costs

As we’ve pointed out, the Social Value Act requires companies applying for government contracts to show how their bids will deliver “social value”. Yet no one is measuring the benefits of these initiatives, still less the costs to businesses and, of course, the taxpayer. The Campaign for Fair Procurement recently submitted a Freedom of Information request to the National Audit Office, which provides good practice guidance for public procurement. Their reply: “The NAO does not provide a quantitative record of social value measurements or outcomes in public procurement.”

If the NAO isn’t measuring this, who the hell is? The answer is that it’s often the suppliers who mark their own homework. The whole system stinks: it is utterly lacking in accountability. Meanwhile, the immense burden of red tape imposed by the Act effectively freezes smaller businesses out of government procurement, since SMEs typically lack the resources and experience (and, some might say, the cynicism) to tick all the “social value” boxes in the bidding process. This helps kill competition, eliminates a swathe of nimble and innovative SMEs from government projects, and hands a huge advantage to multinationals like — to pick a name completely at random — Fujitsu.

None of this answers the most important question: Why is no one evaluating social value? The most likely answer is that measurement is hard. Take something simple, like job creation. You’d think that would be easy: just count the number of new jobs, right?

Wrong. We spoke to Brian Bishop, CEO of DPC Ltd, a technology firm specialising in measuring social value. Brian discussed a project with a major UK city council to measure the social value of a job creation scheme. He ran up against a “a fundamental, semantic question”: what constitutes a valuable job? Is it full-time or part-time? Does it pay the minimum wage, living wage, or more? Will the job go to an unemployed person or is it a transition (i.e. an already-employed person moving into a new role)?

He was too polite to add: “And is the role a Bullshit Job?”

It’s bad enough that, eleven years after the Social Value Act came into force, there’s no official body providing accountability and measurement. But even if one came into being tomorrow, we’d still have years of work to agree and implement standards for judging “social value” across everything from employment, to education, to the environment.

The situation is scandalous, and so is the silence that surrounds it. That’s why we founded the Campaign for Fair Procurement: to highlight the insane complexity of the Social Value Act, give a voice to small businesses frozen out of the procurement process, and urge the government to take “social value” measurement seriously. And if it can’t do that, then just scrap the Act.

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