Public Sector Outsourcing Survival Guide: What you need to know about the Sourcing Playbook

9 minute read
09 March 2022

The Sourcing Playbook (the Playbook) was published by the Cabinet Office on 20 May 2021. The Playbook is a rebranded third iteration of the Outsourcing Playbook, which was originally published by the Cabinet Office in 2019 in the wake of the collapse of Carillion.

The Playbook is the Government's guide to "getting it right" when it comes to sourcing public services. It is structured around a typical sourcing lifecycle and captures best practice, common pitfalls and key principles at each stage.

It is aimed at commercial, finance, legal, project delivery and policy professionals in central government departments and their arm's length bodies (Departments) who are engaged in the sourcing and contracting of public services. It is equally important reading for suppliers in the market. Compliance with the Playbook is assured through Departmental approval processes and, for projects over £10 million, Cabinet Office controls.

The Playbook applies to all insourcing and outsourcing projects, although building, civil engineering or equipment projects have a separate Construction Playbook, and there is now also a Consultancy Playbook.

What do you need to know about the Playbook?

At the core of the Playbook are 11 key policies that Departments are expected to follow. These are:

  1. Publication of commercial pipelines
  2. Market health and capability assessment
  3. Project validation review
  4. Delivery model
  5. Should cost modelling
  6. Requirement for pilots
  7. Key performance indicators
  8. Risk allocation
  9. Pricing and payment mechanisms
  10. Assessing the economic and financial standing of suppliers
  11. Resolution planning

A series of 11 guidance notes accompany the Playbook, which go into the detail of how things are to be done.

The Playbook's overarching theme is a focus on early engagement and getting projects right at the start to ensure value for money and improved outcomes from delivery through to exit. To support better engagement, it recommends that Departments adopt a range of best practice measures, including publishing commercial pipelines at least 18 months in advance (and ideally three to five years ahead). This is to help suppliers understand the likely future demand for services across Government, and consulting widely and encouraging broad participation, particularly with small and medium-sized enterprises (SMEs) and charities, public service mutuals and social enterprises (VCSEs). The key to this will include making use of Prior Information Notices on Find a Tender Service, or a future opportunity or early engagement notice on Contracts Finder, as appropriate.

For more detail on navigating the Playbook and its key policies, we recommend that you read our previous alerts on it:

Below, we focus on the changes that have been introduced in the rebrand and release of the third version.

Outsourcing to sourcing: What has changed?

Firstly, the name! The essence of the rebranding is to emphasise that the guidance is not just about outsourcing projects, but insourcing and mixed delivery models too. The Playbook seeks to support Departments in identifying the delivery model that will deliver the best possible public services.

Beyond rebrand, the third iteration of the Playbook introduces the following new or refined content:

  • The Consultancy Playbook – A separate playbook has been created to guide Departments on commissioning and engaging with consultants more effectively in order to achieve better value for money and improve the transfer of knowledge and skills. This was developed in partnership with the Government's consulting hub.
  • Designing and publishing Key Performance Indicators (KPIs) – KPI guidance is now embedded across the commercial lifecycle. Departments are required to develop a robust set of KPIs that are relevant and proportionate to the size and complexity of the contract. The Playbook advises against using too many KPIs (i.e. more than 10-15 per service) as it may lead to overcomplicated contracts and ambiguity with suppliers. A review of the benefits being realised during contract delivery should be initially done at the 12-month stage of a contract, and every 12 months thereafter on a 'comply or explain' basis. There is also emphasis on the need to align KPIs with a project's broader social value outcomes to ensure social, economic and environmental benefits are delivered through the contract.
  • Embedding wider social value – Departments must use the Social Value Model and the accompanying Guide when engaging with suppliers in relation to procurements from 1 January 2021. The Social Value Model sets out the Government's social value priorities across five key themes, namely COVID-19 recovery, tackling economic inequality, fighting climate change, equal opportunity and wellbeing. As of January 2021, a minimum weighting of 10% for social value in a tender response will be applied to Government contracts, and should be considered by local authorities and the wider public sector. We will issue a separate insight with more detail on this.
  • Improved delivery model assessments – The guidance on delivery model assessments has been refined to reflect lessons learnt from delivery and to assist in determining whether services are best delivered 'in-house', with the support of an outsourcer or through a hybrid model. Further advice is included in relation to 'insourcing' and the considerations that public officials should take into account before insourcing a service. Also, detail is included around which services may be difficult to insource.
  • Improved Should Cost Model offering – The guidance on "Should Cost" modelling has been updated with additional tools and templates.
  • Bid evaluation - The guidance on bid evaluation has been updated.

Want to know more?

Read our guide to the Construction Playbook where we take a look at the key policies it sets out for public works projects. You can also read the previous articles in our Public Sector Outsourcing Survival Guide series:

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