Procurement in the public sector can be a challenging landscape, especially when introducing innovative technologies. At a recent panel discussion co-organised by IPEC and Digital Leaders, experts shared valuable insights on overcoming these challenges and driving successful outcomes.

Effective governance is key to fostering innovation. Elizabeth Vega OBE, Group CEO of Informed Solutions, highlighted that governance should be agile and adaptive, supporting decision-making processes that prioritise outcomes over rigid procedures. This approach encourages transparency and collaboration, as demonstrated by her organisation’s practice of keeping key subcontractors visible to the client. “Governance should be an enabler, not a blocker,” she noted, emphasising the importance of flexibility in governance structures.

A crucial element of innovation is creating a culture where diverse perspectives are welcomed. Elizabeth emphasised the importance of an environment where “people feel safe to express their beliefs in a constructive way,” allowing for respectful yet challenging discussions that can lead to real change. She added, “Innovation thrives where there’s psychological safety, enabling people to question the status quo without fear.”

Demonstrating value through case studies is another essential strategy. Elizabeth noted that while a single case study might not cover all bases, multiple case studies can collectively highlight relevant aspects of a solution, reducing perceived risks and showcasing capabilities to potential clients. “It’s not about one perfect case study; it’s about a portfolio that tells the full story,” she explained.

Flora McFarlane, Head of Growth & Partnerships at VivaCity, shared her approach to overcoming challenges by securing early adopters who are eager to innovate, such as Oxfordshire and TfL. These cornerstone clients played a critical role in validating their technology, making it easier for more risk-averse clients to consider adoption. Flora stressed the importance of understanding procurement teams’ needs and constraints, and working closely with them to navigate obstacles. “We had to be patient and persistent, demonstrating our value in every conversation,” she said, highlighting the importance of perseverance in the public sector landscape.

Darren Kelly, Central Government Capture Lead for UK Public Sector at Amazon Web Services (AWS), highlighted the need for early engagement and education to align procurement teams with the specific solutions being considered. He pointed out, “The procurement manager is an expert in the procurement process and not necessarily an expert on what they’re buying,” underscoring the value of clear communication and collaboration early in the procurement cycle. Darren also stressed, “If you engage early, you get to shape the conversation. It’s all about building trust and educating the buyer about your solution.”

The new Procurement Act 2023 offers opportunities for more flexible frameworks, which could greatly benefit both suppliers and buyers. Darren noted that open frameworks extending up to eight years can provide the flexibility needed to accommodate evolving technologies like AI and cloud services, allowing for new suppliers to be added as needs change. “These longer frameworks allow for a dynamic marketplace that can evolve with technology, rather than being locked into outdated solutions,” he commented.

Legal insights from Jenny Beresford-Jones and Shailee Howard from Mills & Reeve, added another layer of strategic advice. Jenny stressed the importance of staying updated with legal changes to gain a strategic advantage, while Shailee highlighted the value of not just meeting legal requirements but strategically planning engagement with the procurement process to maximise opportunities for innovation. Shailee noted, “Understanding the legal landscape isn’t just about compliance; it’s about leveraging the rules to create better opportunities.”

The discussion also touched on the delicate balance between innovation and alignment with organisational goals. Elizabeth suggested techniques such as empowering individuals to speak up, building skills alongside implementing solutions, and maintaining regular touchpoints to monitor cultural and emotional alignment, not just compliance metrics. She summed up by saying, “It’s about ensuring that innovation aligns not just with the letter of the law but with the spirit of the organisation’s mission.”

In summary, the panellists underscored the importance of building long-term relationships, understanding the unique dynamics of public sector procurement, and consistently demonstrating value through transparent and flexible approaches. As Rikesh Shah, Head of IPEC, summed up, the key to success lies in understanding the service owner’s problems, building lasting relationships, and focusing on creating long-term value over many years through innovation.

IPEC is currently partnering with four local authorities, addressing some of the key industry challenges and helping them find solutions through innovative procurement strategies. We are keen to hear from local authorities about some of the challenges they are currently facing as they look ahead into the next year. Reach out to us at contact@ipec.org.uk.

I recently had the opportunity to participate in a roundtable on July 17th, where leaders from local government and the digital transformation sector came together to discuss the challenges and opportunities of driving innovation through procurement.

The roundtable featured perspectives from the Ministry of Housing, Communities and Local Government (MHCLG), the Greater London Authority, Scottish Local Government, and the Innovation Procurement Empowerment Centre (IPEC). Each brought unique insights on digital transformation and public sector innovation.

It was agreed that local authorities face significant challenges, such as addressing climate emergencies, navigating health and social care issues, managing financial pressures, and meeting the demand for more citizen-centric approaches. These challenges underscore the need for innovation through partnerships and bringing in external expertise. However, procuring these relationships is fraught with challenge, often held back by a risk-averse culture, limited budgets, and fragmented approaches.

Contrary to its intended role in safeguarding public funds, procurement processes were highlighted as obstacles to innovation. According to research, only 23% of tenders receive more than one bid (Tussell), and just 5% of suppliers (CBI) found it easy to innovate within the public sector. An independent study commissioned by IPEC revealed that only 14% of respondents viewed public procurement as an enabler for innovation. While these statistics paint a challenging picture, they also highlight opportunities for the public sector to reshape markets through innovative procurement, especially as technology advances and barriers to entry decrease.

Challenges in local government innovation

The roundtable  identified key challenges for local governments in fostering innovation:

1. Outdated systems: Local government systems need modernisation to become more resilient and capable of adopting new technologies. While exploring shared services and joint procurement can lead to economies of scale and better resource utilisation, it was generally felt that it was questionable as to how successful shared services have been to date.

2. Financial constraints: Severe budget limitations hinder local governments’ ability to innovate and effectively serve citizens. Additionally, local governments struggle to attract and retain skilled personnel, often losing out to the private sector for top talent.

3. Data management: It was agreed that good data would be at the heart of any future innovation of local government services and here again Local Authorities are really struggling as data-sharing practices are often inefficient and, in many cases, manual. Establishing proper data standards and achieving seamless data sharing across local authorities are critical to overcoming this challenge.

4. Leadership and culture: Leadership is key to driving change. Local government leaders must foster a culture that embraces experimentation and accepts failure as part of the innovation process. This shift is necessary to move away from cost-based decision-making and towards value-driven procurement.

What is a Greater Cambridge Partnership, what is your role in it, and what challenges is it trying to address?

The Greater Cambridge Partnership (GCP) is a collaboration between local councils, businesses, and academia in the Greater Cambridge area. The GCP aims to improve transport infrastructure, support economic growth, and enhance quality of life. I am part of the team which is delivering the City Deal for the area – set up to ensure that infrastructure needed to deliver the 33,500 houses set out in the current local plan, supporting 44,000 new jobs.

Congestion is one of the biggest issues facing us along with infrastructure constraints. Significant investment is being made to improve the transport system, such as building new cycle and busways as well as new travel hubs.

I am the Head of Innovation and technology and lead the Smart Cambridge Programme, exploring how data and emerging technology can make a difference to the wider programme. We pilot and trial new technologies and have taken innovation out of this stage and scaled across the area.

Can you tell us more about the Smart Cambridge Programme and how you developed and scaled it to address city challenges?

The focus of the Smart Programme has primarily been on deploying technologies that support the transport programme – helping people to get around Greater Cambridge. To do this we have built collaborative partnerships across the public and private sector.

We encourage companies to use Cambridge as a test-bed for new technologies that align with the problems we are trying to solve. A good example of this is VivaCity who trialled their first smart traffic monitoring sensors in Cambridge on our existing infrastructure. Having seen how the technology performed we have worked with them on several pieces of work. We then wanted to scale these across the city and to allow partners to easily buy sensors to add into the network and to share data. We did this through open-market procurement that would purchase the core network and developed a framework to allow the network to grow. The success is evident as we now have a network of 96 sensors. On the back of this network, we recently completed a trial of the VivaCity smart signals product.

The data from the network is integral to the wider GCP programme supporting business case development and the monitoring and evaluation of big schemes to understand the impact on local communities.

We also partner with companies on funding bids and are currently the lead partner in Connector – an autonomous bus pilot which will allow us to explore how this technology can support our ambitions to expand the public transport system. Funding bids often bring procurement challenges, particularly if the funding is allocated to the Local Authority. Generally to develop bids, we need to work with partners, often we need to procure these partners post-bid so are unable to name them in the bid document and any procurement once the grant has been secured comes at risk, as the original partner may not be successful.

We work collaboratively with academia to access cutting-edge research. Working closely with the University of Cambridge we have built a data platform for the processing of real time data, and travel screens which have been deployed as a research project. We have also been involved in some early-stage digital twin work. At the beginning, this work tends to be unfunded or is funded through academic grants. The issue is when we want to scale the work up and invest GCP funds, procurement tends to be a barrier.

How have you used procurement to support Innovation?

We have used procurement to drive innovation. In the early days of the programme, we procured a start up to build a multi-modal, multi-operator app that had a number of innovative features. We specifically designed the procurement to support innovation in the market. Instead of specifying the exact functionality of the journey planner, we focussed on desired outcomes and made sure that the procurement was accessible for star- ups by amending our contractual terms and conditions lowering the insurance thresholds and adapting our approach to IP . This approach allowed suppliers the flexibility to propose innovative solutions that meet the end goals.

We are also currently working on a business case for Mobility as a Service and are looking to partner with another local authority who has already deployed this. Integral to these discussions are procurement colleagues who will help us to work through how we procure the solution to scale from one Local Authority area into ours.

How are you supporting Innovation in Cambridge?

We are keen to support innovation and launched our Innovation Prospectus last year, which is a call for collaboration to innovative businesses and academia to come and use Cambridge as a test bed. So, if you have an interesting innovation that can help us to solve some of the city challenges we face do please get in touch. The prospectus can be found here – Innovation Prospectus.

Finally, what have you been able to achieve to date through the Smart Cambridge Programme?

The pilots delivered by the GCP have demonstrated how Innovation has supported our ambitions to support travellers make more sustainable journeys and to keep the road network flowing.

The Vivacity Smart Signals pilot saw an improvement in traffic flows and the ability to prioritise for sustainable modes, the Starling pilot saw a 36% reduction in average pedestrian waiting times, the multi modal travel app had 2000 regular users and the network of Vivacity sensors has significantly improved our ability to develop business cases and evaluate the impact of major infrastructure schemes.

As pilots are scaled into business as usual deployments we anticipate that we will see significant benefits for local communities, supporting greater integration in the transport system, supporting more sustainable journeys and improving quality of life for residents.