Innovation and efficiency are complementary, say Lords

25 May 2011

The House of Lords Science and Technology Committee today reports its findings following an investigation into the use of public procurement as a tool to stimulate innovation

In 2009-10, public procurement was valued at over £236 billion, approximately 15% of GDP. Government is "the single largest customer" in the UK. This magnitude of expenditure provides enormous potential to stimulate innovation and encourage economic growth – a potential which, according to the Committee, is not being realised. 

Having investigated departments across the board and the Department for Transport in particular, the Committee calls for a "root and branch" change in attitude towards adopting innovative solutions throughout the public sector. It wants the Government to find innovative procurement solutions to achieve better value for money, promote economic growth, and encourage the translation of scientific research into innovative goods and services.

Committee Chairman, Lord Krebs, said:

"Government spent over £236 billion in 2009-10 on buying goods and services. This represents a significant opportunity for public sector organisations to use that money not only to encourage innovative solutions to procurement problems but to achieve better value for money and to stimulate economic growth.

Too often, the public sector falls back on tried and tested solutions and new ideas are stifled by a culture of risk-aversion and overly burdensome procurement processes. We have uncovered a number of barriers to innovative thinking and we call on the Government to use their expertise to resolve them without delay.

We look forward to hearing the Government’s ideas about how they can solve some of these problems and what methods have been put into place to embed innovation as a fundamental component in the procurement process. We will carry out a follow up inquiry in 12-18 months"

The report also recommends appointing a Minister to have overall charge of procurement and innovation, and a Minister within each department with specific responsibility for innovation and procurement in relation to departmental spend.

Further information

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