Doing business with the Public Sector

[Hacked from a recent post I put on LinkedIn but with the emphasis shifted to show the possibilities of working with the public sector]

We are now in the middle of HMRC’s IR35 public sector consultation and it appears they have decided the rule changes are going ahead regardless, as reported in various places.

I am a several-times contractor spanning more than 15 years and dislike these changes as much as anyone but complaining about them (or even responding to the consultation!) is unlikely to achieve anything. So, what to do?

The contractor business model doesn’t work anyway

I know this is contentious but think about it: in many cases, many public sector bodies are choosing contractors for all the wrong reasons and IR35 is proof that the Treasury is doing all it can to minimise profit in contracting. Should we really be encouraging poor practice and paying accountants and tax advisors to find workarounds and loop-holes, or is it time to consider changing the way we work?

Yes, there are sometimes good reasons to employ contractors – to get over a short-term spike in demand, for instance. However, employing contractors on short term or rolling contracts is far too often just seen as a “low risk” option in the public sector when the real problem is that there are no set objectives and no clear business case. This results in huge waste where teams of contractors are hired at great expense, often to add no meaningful value. Worse, keeping contractors hanging on repeated short term extensions with no long-term commitment drives down motivation and kills whatever productivity there once was.

Genuinely agile programmes can also be a good reason for keeping a team of contractors on board. However, this requires management and skills that are typically not available in public sector departments.

As a group, contractors can add immense value to the public sector by helping them focus on value. We need to support these clients in understanding the issues they face and advise on ways to achieve measurable outcomes.

Introducing Digital Marketplace

Indeed, HMG thinks the same – the Digital Marketplace is designed to provide a way for smaller businesses to bid for work and the Digital Outcomes and Specialists (DOS) framework can be used for pretty much ANY public sector contract that might be relevant to IT contractors and businesses.

Looking at the Digital Gateway, there are over a thousand providers of all sizes and skill-bases (including my own, The Peak Consultancy) signed up to the appropriate Digital Outcomes framework agreement so we already have everything we need for contractors across the country to adopt this model.

What’s in it for the Public Sector?

The Public Sector (and every tax-payer in the UK as a result) wins because the undefined work with vague outcomes comes to an end. It is replaced with well-defined briefs that have a clear remit and measurable benefits. This means they can either prove the work was a success or start to learn why and improve if not. This will clearly take a little time to achieve but this is definitely one are where success breeds success.

Small business collaborating for larger contracts through Digital Marketplace also represents a real alternative to the large players who have traditionally represented high costs in inefficient working practices, leading to the Francis Maude report and his comment in the forward to the Government Digital Strategy: December 2013:

…there has been an over-reliance on a handful of large systems integrators, referred to by the Public Administration Select Committee (PASC) as an ‘oligopoly’…

What’s in it for contractors and small IT businesses?

Public sector contracts can be insanely frustrating (ask anybody who has worked on NHS projects…) but they offer huge rewards. I have spent the last few years working on a variety of projects, from helping used car dealers get the most for their stock to improving project management efficient in a fuel card programme where the biggest public benefit is that fleet managers may save a few pence per litre on their fuel – there is nothing wrong with either of these and I have met some great people in both but there is no real sense of doing anything really worthwhile. Consider that against a health-care project I am currently working on that has a real chance to help many people’s vision and even somebody’s life and there is no comparison.

The other (less altruistic) benefit is that public sector contracts can run for a long time, be high value (even if margins may be lower than you would like) and have very good payment terms – the Digital Marketplace rigidly enforces 30 day payment terms so the days of waiting months for payment have now gone.

How do I get Public Sector work?

The first step is to get in touch with one of the businesses on the DOS framework (list available on the link above) and talk about forming a partnership to take on public sector work. The Peak Consultancy is one such business but there are many others. If they are not part of HiveMind Network, introduce them; if they do not want to be part of the HiveMind Network, consider whether they are a business you want to work with and move on…!

The list of work available through the DOS framework is publicly available. If there is anything on there you would like to go for, get in touch with whoever you preferred DOS partner is and suggest bidding for it.

I will also post “Digital Specialist” positions (where a client is looking for a specialist to be on site; this is effectively in direct competition to agencies) from time to time – if they suit, please respond to them.