Baby boxes are due to be given out to all new mothers in Scotland who have a due date from 15 August onwards.
Who is providing the boxes?
The Times reported back in April that the contract for all aspects of baby boxes – getting the box made, obtaining the contents, filling it, delivering it, dealing with questions about its delivery – had been given to APS Group (Scotland) Ltd. This is a firm which began as a print services company but has developed a more general publishing and marketing brief. This is the main APS website, and here’s details on its Scottish arm. The most recent accounts for the APS parent company mentions its business roots in printing. APS (Scotland) is 75% owned by APS and its last filed accounts recorded a turnover of just over £9m: the baby box contract roughly doubles that.
A print and marketing firm is not perhaps the obvious body to be sourcing and distributing baby care goods to new parents nationwide out of the health budget (see the Level 4 health budget here). But there’s one strong reason for their having this contract.
Since 2014, APS has a “call off” contract with the Scottish Government for “publishing, printing, design and associated services”: here’s a piece from when they first won the contract. The call off contract is a product of the out-sourcing by government (a long time ago) of various publication services. This particular call off contract means that officials don’t have to go looking for a designer/printer every time they produce something – they can just go straight to APS. It’s a very useful arrangement once you no longer have in-house services, and has been around for ages. The call-off contract was won via a competitive tendering process and in fact covers a range of Scottish public sector bodies, not just the SG (more on that here). This is part of a general efficiency drive: the Director of APS Scotland was a guest speaker at a McKay Hannah event in 2014 on managing public sector budgets.
The nature of the contract
A PQ answer to Elaine Smith MSP confirmed that
The [baby box] contract awarded to APS (Scotland) Group Ltd takes the form of a call-off to the existing Publishing, Print, Design and Associated Services Scottish Government Procurement Framework. This is a single-supplier framework agreement to which APS Group (Scotland) Ltd were appointed in 2014 following an advertised procurement process.
This means no further specific competitive bidding process has been required for the baby box work. There is nonetheless a specific contract for the boxes on the SG site (link). Here’s what it says:
All this means that…
The provision and delivery of approximately 56,000 boxes (with contents including baby clothing and maternal and infant health products) per year. The provision of associated operational services including printing, claims processing, customer contact centre, warehousing and distribution.
…has been interpreted as falling within “Publishing, Print, Design and Associated Services”.
That’s a surprisingly wide interpretation of those terms. The more detailed coverage, see here includes “promotional goods” and “warehousing and logistics”, which I suppose might have been felt to provide enough cover. Still, procuring and delivering 56,000 large multi-item boxes to new parents is clearly a bit different from producing a few campaign-specific lanyards or pens, and posting out documents. So the decision not to submit this to competitive tendering must surely have to had to be put through the legal wringer, given how it stretches the interpretation of the terms of the existing call-off contract and that it is so large in value, at £35.3m. The legal implications of its size relative to APS Scotland’s existing scale must also presumably have had to be examined (“due diligence” is the fancy term here), as this contract would prima facie raise capacity issues well beyond any explored when the original call off contract was let. This is pretty exceptional stuff, in other words, and worth noticing for that reason.
The contract formally runs from February 2017 to July 2019, suggesting around 6 months of preparation and then around two years’ worth of supplies boxes, with a “max extension option” of 24 months. The Times established however that the £35.3m cost assigned to the contract covered the whole four years (this has also now been confirmed in a PQ response), up to summer 2021, so it’s not clear how “optional” the extra two years are, or why this wasn’t simply let as a four year contract.
The total implies a cost of £8.8m a year, compared to £6m a year originally quoted and the £7m in the most recent budget (which it becomes clear was only a part-year cost). As the Times piece notes, the SG confirmed it was expecting each box to cost £160, rather than the £100 originally expected. This does mean however that it has managed not to get pulled to something close to the £500 or so which was the cost of the boxes in the pilot.
Answering a further PQ from Elaine Smith MSP on why costs had increased, the Minister said:
We considered the views of parents in determining the contents for the initial national roll-out of boxes.
Consequently, we have included more expensive items, including the digital thermometer and the baby wrap, which parents involved in the pilot have indicated that they found more useful than they originally anticipated. These are the sort of items that some families on low incomes might consider to be unaffordable, yet they are recommended by professionals as being helpful for babies’ wellbeing.
…We will keep the contents and costs of the box under constant review to ensure we continue to achieve effective value for money.
Asked by Monica Lennon MSP how much of the cost was specifically attributable to the box and the mattress (an important point, because doubts are being increasingly raised – not just in Scotland – about claims made about the boxes specifically: it might be a lot cheaper just to give everyone the contents in a jolly bag), the minister declined to provide a split of the costs owing to commercial sensitivity.
The case for taking more time
One argument for by-passing a competitive process may have been lack of time. The decision to go straight to a full national scheme this year is because of promises made by Scottish Ministers early on. There are good reasons to argue that a more cautious approach would have been better. Other places are running pilots which cover the whole of the expected period of use, and then allowing time for reflection on the experience before committing further: see here. Scotland is exceptional in making a political commitment to a national scheme, ahead of any piloting. Here, the evaluation was conducted less than 5 months in, and while it was published in June, the contract for national implementation had already been let (without any announcement, as far as I can see) since February.
There was no external reason to rush. Finland has had these boxes since the 1930s, we are often reminded. Scotland could have taken a little longer to lay the ground for a scheme here. If the politically-set timetable was a significant factor in the decision not to hold a competitive tendering exercise, that would have been another good reason for taking longer. A central purpose of competitive tenders is to help control spending, to protect the public purse (this money is, after all, coming out of the hard-pressed health budget). Instead, we have ended up in the odd position where lots of effort has gone into running a competition for the design on the box, but none at all into one to choose the particular commercial supplier handling £35m of public cash.
A competition will be run next year, according to this PQ answer.
Due to the imminent procurement exercise for year 2 of Scotland’s Baby Box, the itemised value/cost of any item is currently commercially sensitive. Once that exercise is concluded, we will review the efficacy and sensitivity of providing itemised costs and if appropriate, provide further information in due course.
As the SG has already done its bit by letting the main contract, this appears to be for the contents only, and it’s not clear whether this competition will be run directly by the SG, or on its behalf by APS Scotland, as the main contract holders (though I’m not sure how public procurement works if done at arm’s length by a commercial body).
Practicalities for parents
The SG has a website for new parents which has more about the arrangements for distributing baby boxes, with detailed Q&A about the practicalities which anyone following this might find useful. The involvement of health professionals is limited – midwives are asked to fill in a registration card with mothers at around 20-24 weeks and send that off. APS makes delivery arrangements direct with parents thereafter, on an Amazon-like model. Anecdotally, just in the last few days I’ve come across a couple of examples where women well past 24 weeks haven’t yet heard anything from their midwife about this, so it’s possible coverage may be a bit patchy to start with. APS must be providing the forms, but it’s not clear who is responsible more generally for making sure all midwives are briefed and engaging with pregnant women.
Shortly there’s going to be a whole lot more PR about these boxes. So it makes sense at this point to stop to ask which organisation is actually running the project in practice, and is therefore immediately accountable for the practical side, and how they were chosen.
For me, this all feels like further evidence that it would have been better to approach this idea with much more caution. That would have permitted more time to reflect on the pilot and do a proper cost-benefit analysis of this against other ways achieving particular aims with the same money (indeed, clarifying what those aims are, and the balance between them: SIDS reduction, symbolic gesture of welcome, practical support?). It’s now also clear that standing up to the political impulse to go national, fast, would have enabled the costs to be pinned down better before the long-term commitment was made, and also allowed time for the government to run a proper competitive tendering process for any national scheme, thus avoiding the need for any special interpretation of the contracting rules.
First published on the author’s Adventures in evidence site – and slightly abridged
Image via Scottish Government CC BY-SA 2.0