IPEC > Unlocking the Power of Procurement for Innovation

Unlocking the Power of Procurement for Innovation

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Unlocking the Power of Procurement for Innovation

Public procurement in the UK is worth nearly £400bn a year, yet many organisations still struggle to use it as a tool for driving change.

At IPEC, we believe procurement isn’t just about process; it’s about unlocking opportunities, supporting local economies, and delivering better public services. That’s why we’re empowering local authorities to take a more strategic, innovation-friendly approach.

In our latest panel discussion at the IPEC Annual Reception, we brought together industry leaders to explore key issues shaping the future of public sector procurement. Featuring:

  • Rikesh Shah, Head of IPEC
  • Elizabeth Vega, Group CEO, Informed Solutions; Chair of the session
  • David Wilkins, Head of Smart City, Digital & Innovation, Westminster City Council
  • Marut Gohil, Senior Associate, Gardiner & Theobald LLP
  • Kevin Calder, Partner, Mills & Reeve

Together they explore:

  • How procurement can stimulate commercial opportunities
  • The challenges and risks of adopting innovation in the public sector
  • Practical examples, including Westminster City Council’s approach to tackling air pollution

Watch the full discussion below and see how you can apply these insights in your organisation.

Help Shape the Future of Innovation Procurement

Have you used innovation in your procurement processes? Whether it led to success or uncovered challenges, your experience can help others.

We’re gathering case studies from local and combined authorities to share practical insights on what worked, what didn’t, and what others can learn. 

By sharing your journey, you’ll contribute to a growing knowledge base that supports better procurement across the public sector.

Share your case study

Answer:
Key risks include not conducting PME early enough in the procurement process and failing to integrate insights from PME into the procurement strategy, reducing its impact.  This is particularly pertinent if we are bringing new innovative solutions forward.

Answer:
PME should include market research to identify potential suppliers and their ownership structures. For procurements with national security implications, organisations should engage with security teams to ensure compliance with regulations.

Answer:
We are seeing some good examples from across the public sector when it comes innovating through procurement but not enough. To drive innovation procurement at scale, it is crucial to create the right internal culture for innovation through procurement to thrive. Sharing successful examples and providing training on risk management and innovation procurement will also improve outcomes.

Answer:
It is about working with initiatives like IPEC with the aim to empower colleagues in the public sector to use procurement in a new way. Subsequently, it is then about creating new communication vehicles e.g. establishing a dedicated platform or network within local government can facilitate the sharing of successful procurement approaches, enabling different teams to learn from each other and adopt proven solutions.

Answer:
Barriers often stem from governance, funding structures, and organisational culture. Addressing these challenges requires clearer communication between legal and procurement teams, better training, and a more open approach to risk management.

Answer:
The Competitive Flexible Procedure can be suitable for procuring long-term innovative solutions which creates more room for R&D, iteration as well as scale, but councils need to ensure that the outcome of a pilot does not unfairly advantage a supplier. Contract specifications, payment structures, and performance measures must be carefully considered, especially for SMEs.

Answer:
The new Procurement Act introduces a "Procurement Review Unit" to ensure compliance. While the centralisation of procurement listings is not guaranteed, it may help address accessibility and transparency concerns.

Answer:
Not necessarily. In cases such as framework agreements, competition may have already occurred earlier. Value for money should be assessed through governance processes to ensure that the awarded supplier meets the requirements.

Answer:
Frameworks can both enable and hinder innovation. Open, dynamic frameworks can provide access to innovative solutions, but traditional frameworks tend to prioritise pre-vetted suppliers, which may not always be the most innovative.

Answer:
Innovation is often mistakenly defined as something entirely new. However, it can take many forms. Each procurement process should clearly define innovation in its specific context, whether it involves proven technology, transformational change, incremental improvement, or co-designing solutions with suppliers.

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Collaboration across local authorities to pool resources can help with large-scale challenges like environmental improvements. However, governance complexities can make managing joint projects difficult. Clear governance structures and effective facilitation are key to ensuring successful outcomes.

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Standard model contracts can be useful if thoughtfully designed, adaptable, and crafted by experienced procurement and legal professionals. They should be tailored to suit the specific needs of innovation procurement, especially for SMEs.

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Yes. Rigid specifications can hinder innovation. A clear problem statement, coupled with early market engagement, allows for flexibility and better exploration of potential solutions, helping to achieve the desired outcome.

Answer:

Ultimately, it’s about generating new value. At a macro level, there has been a Return on Investment if innovation through procurement is to work. The nature of innovation means that it is inevitable that some things won't work as initially hoped but at an aggregate level, there should be overall value.


It can be quantified by several factors:

Ultimately, it’s about generating new value. At a macro level, there has been a Return on Investment if innovation through procurement is to work. The nature of innovation means that it is inevitable that some things won't work as initially hoped but at an aggregate level, there should be overall value.

It can be quantified by several factors:

  • Public sector reporting that shows the transition from prototype and pilot projects to fully operational solutions.
  • The sharing of lessons from successful projects across the public sector.
  • A growing and diverse SME marketplace with equal opportunities for start-ups and scale-ups.
  • Stronger direct spend with SMEs, demonstrating the public sector’s ability to procure innovation independently.
  • SMEs retaining and monetising new intellectual property (IP) to leverage national and international business growth.


These factors suggest that success is measurable and achievable, leading to more effective, inclusive, and sustainable innovation procurement.

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