Procurement ‘should be more than just price’

THE Government needs to take a “more holistic” approach to procurement taking into account strategic economic benefits to the UK such as the creation of jobs, future skills and tax income, an MP claimed at the Global Manufacturing Festival yesterday.

Labour MP Andrew Miller, chair of the House of Commons select committee for science and technology, told the Yorkshire Post that when Government assesses the merits of a particular product that it wants to buy, it needs “to take into account things other than the basic price of the product”.

“They’ve got to also take into account whether procuring from a foreign company genuinely produces overall better value for money or whether if you take into account the potential tax revenues, people in employment, the re-skilling of people that come through having high value jobs, whether sometimes they ought to give greater priority to British companies.”

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The Government has in the past faced questions over the awarding of lucrative contracts to overseas firms.

Mr Miller, who was among the speakers at the event held at the University of Sheffield’s Advanced Manufacturing Research Centre (AMRC) at Rotherham, said: “It is nonsense to say it’s the European rules that’s the problem, it’s the application, the interpretation of the rules that is lacking.”

He said that the taxpayer must be getting best value for money and that he was not suggesting second-rate goods should be bought, but added: “If two companies are bidding for a product, one happens to be French, one happens to be British, and the goods were of equal quality, it’s not simply the base price we should be looking at, but those other strategic economic benefits as well.”

Mr Miller also said that by creating the kind of partnerships seen at the Advanced Manufacturing Centre, the site of the AMRC, “we’ve the potential of shifting Britain’s manufacturing sector back where it belongs”.

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“We really ought to be targeting the growth of the sector back up to something like the European averages at the very least.”

Mr Miller said that what is needed is better relationships between manufacturing and universities, better relationships between manufacturers and the finance sector and a “vision that is longer than the term of a single government”.

“So the fact that we now have a fair degree of cross-party consensus about the need to regrow the manufacturing sector does help tremendously as well,” he added. Also speaking at yesterday’s event was Prof Stephen Garwood, director of research and innovation for nuclear activities at Rolls-Royce, who said that it is “vital” that the UK focuses on high value manufacturing if it is going to have “any manufacturing capability for the next generation of new (nuclear) builds”.

Rolls-Royce is building two factories at the Advanced Manufacturingn Centre in Rotherham. One of these will manufacture components for nuclear power stations and the other turbine blades for Rolls-Royce’s high-thrust engines.

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He said that the Government needs to “oil the fields” and that the UK must not rely on market forces taking over. “It doesn’t work in a market like nuclear,” said Prof Garwood.

Mike Hawe, group managing director of Nuclear Engineering Services, spoke of the challenges faced by the companies in UK manufacturing waiting for the arrival of nuclear stations.

He also said that it was a challenge to recruit the necessary resources across all disciplines.

Alan McLelland, director of The National Metals Technology Centre, said that there exists “huge opportunity” for UK industry in the nuclear sector. He said: “It’s clearly demanding and covered in legislation but that doesn’t mean there isn’t opportunity.”

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Meanwhile, Juergen Maier, managing director of Siemens UK & Ireland, said that the German engineering giant is waiting to hear from the Government on how a public subsidy for the offshore wind sector might work before it can announce its final decision on whether to proceed for plans for a £210m turbine factory at the Port of Hull, expected to create well over 1,000 jobs directly and along the supply chain.

He said details on the public subsidy will not become clear until the summer, but added that he is “personally quite confident we are going to get there, it’s just taking a rather long period of time”.

Concerns have been voiced from within the energy industry about the Government’s failure to set out precisely how much subsidy – known as the ‘strike price’ – it will offer investors in the years after 2017.