The CBI and its members have long called for a shift away from focussing on short-term cost reduction in public contracting.
For many years, members consistently say that a disproportionate focus on short-term cost reduction is undermining government’s ability to delivery value for money through contracting.
In 2018, almost two thirds of CBI members operating in this space said that public sector contracts were primarily awarded based on lowest initial bid cost, with just 2% stating it was service quality and 3% social outcomes. In turn, the CBI found this was reducing competition for government contracts, creating unsustainable service delivery models, and stifling innovation.
The CBI therefore welcomed the Cabinet Secretary’s announcement in June 2018, saying he would put social value—rather than price—at the heart of public sector contracts.
To put this commitment into practice, the Cabinet Office is creating a new social value delivery model for public contracts, which will see new metrics included in govern