Originally posted on Public Finance 8 June 2015
The European public procurement directives will probably be quite low on David Cameron’s to-do list as he shuttles to Brussels to renegotiate the UK’s EU membership. But the increasingly irate debates over the Mayor of London’s proposed Garden Bridge are an object lesson in the problems these can cause when political initiative rubs up against technocratic process.
The directives require all public spending over specific levels to be openly tendered, including through the Official Journal of the EU (the \’OJEU\’ that gives the regulations their name). These are intended to ensure transparency and a level playing field across the bloc, but the complexity and length of time taken (OJEU procurements can take six months or longer) have a number of perverse consequences (and there are persistent mutterings that other countries don’t seem to take them quite as seriously as ‘we’ do).
Complying with the regulations involves delay and paperwork, so ‘going over the OJEU threshold’ is something that all public servants try to avoid. One strategy is to try to break down contracts to keep them under the limit. Another is to rely on opaque ‘call off contracts’ or ‘panel arrangements’ where a small number of (usually large) suppliers are assembled on to a panel, among whom individual commissions are divvied up. This creates a closed shop for the period of the panel, and combines with the complexity of the procurement process and a cautious approach to scoring financial risk, to exclude the local small businesses that many politicians have pledged to support.
The problem becomes acute when it comes to big ideas like the Garden Bridge, rather than more run-of-the-mill projects. The theory is that an elected authority carefully develops strategies and policies, and prepares budgets and tender documentation for the projects identified. Following exhaustive planning, consultation and procurement processes, these are commissioned and delivered.
But anyone who has worked in public administration knows, life isn’t quite like that. The man from the ministry (or the Mayor’s office) no longer has a monopoly on wisdom, and probably never did. Ideas emerge from civil society, from private initiative, from every angle. Politicians grab good ones, and their teams currently have to twist themselves into knots trying to create the process that will lead to the right answer.
The Garden Bridge row is a case in point. Whatever you think of the proposal, recent revelations in the Observer tell a typical story. Joanna Lumley, designer Thomas Heatherwick and others approached the Mayor of London with an idea, Boris liked it, and that idea is now being pushed forward. Between these two points, there was a process that can perhaps most politely be described as ‘messy’ whereby there was a competition, which the Lumley-Heatherwick proposal won. Cue understandable anger from other, disappointed, architects, and negative coverage that the project does not need right now.
But the alternative would have been just as problematic. Other people have proposed garden bridges in London from time to time, but would the Heatherwick design team have put so much work into developing and promoting their proposal if there was a good chance that someone else would have ended up getting the commission?
Open and transparent procurement is an important defence against corruption, kickbacks and simple waste, but the European regulations set technocratic process against political accountability. Mayors and other politicians will be approached with bright ideas from time to time. Surely they should have political space to judge how bright these are, and to implement them, subject to safeguards and controls – not least, the electorate’s ability to eject politicians who pursue vanity projects?
Rather than going through cosmetic competitions, perhaps the elected leaders of public authorities should be allowed to sign a statement formally exempting a project from open procurement, and setting out their reasons (a similar process is followed for some Freedom of Information exemptions). These exemptions would be published and would be intently scrutinised, by the press and opposition politicians, so political leaders would be reluctant to sign them unless they felt they had a really strong case – a unique idea, a genuine emergency, an economic justification for keeping a contract locally. This certification process could be accompanied by internal or external review of value for money.
The Garden Bridge has been criticised as a vanity project and rouses strong opinions on all sides, but our cities would be poorer if politicians were unable to grab hold of big ideas and help to make them happen. Reforming EU procurement legislation could save an enormous amount of ducking, weaving and bad faith, and allow politicians to decide and be held accountable for how public money is spent.