The Ada Lovelace Institute (ADA), an independent research institute which aims to ensure that data and AI ‘work for people and society’, has published a discussion paper on whether the public sector is equipped to procure technology in the public interest.

The paper is timely given the recent Public Procurement Policy Note issued by the Government which highlights the importance of using AI appropriately and signposts various guidelines that have been published on AI procurement. 

Local authorities, housing associations and other contracting authorities will also be mindful of the Procurement Act coming into force on 24 February 2025. This will require contracting authorities to have regard to, amongst other things, the importance of ‘maximising public benefit’ when awarding, entering into and managing public contracts for goods, works or services.   

The paper highlights how this term is commonly used in guidance on technology and data and how the procurement stage can be a lynchpin for enshrining desired public benefit outcomes in technology contracts. This is particularly challenging however for under-resourced procurement and contracting teams having to design, commission, procure and monitor technology solutions provided by sophisticated technology providers.

The paper has a local government focus and finds that local authorities do not have access to a clear or comprehensive account of how to procure AI in the public interest. This leaves a significant burden on local government to navigate and interpret government guidance and legislation and determine the practical implementation of themes like transparency, fairness and public benefit. 

The paper concludes that practices around the procurement of AI and data-driven systems in local government need to be improved to help ensure that technology works equitably for people and society. When faced with limited human and financial resources against the backdrop of rapidly evolving technology and enthusiasm about the potential of AI to improve public services, procurement teams need to ensure that procured technologies will benefit the public and the public sector. ADA warns about the cost of not doing this, highlighting the Post Office–Horizon scandal and other procured technologies that have caused harm in high-risk settings, including visa decisions, child welfare allocation and fraud prediction.

Even when faced with imperatives to innovate or keep costs down, ADA warns about the risk of AI and data-driven systems severely damaging public trust and reducing public benefit if the predictions or outcomes they produce are discriminatory, harmful or simply ineffective. It is challenging for local authorities to overcome such risks when negotiations with suppliers often occur in the context of an imbalance of expertise between the suppliers and under-resourced local authorities. 

The ADA’s call for more clarity around guidelines and better support for procurement teams so that they can procure AI that is effective and ethical is therefore to be welcomed.

The ADA recommends some practical steps that could be taken including:

• Reviewing and streamlining Government guidance on procurement of AI and data-driven systems.
• Gaining consensus on definitions, leveraging existing data ethics frameworks and Government AI regulatory principles to clarify and consolidate relevant terminology.
• Improving governance, including the planned rollout of the Algorithmic Transparency Recording Standard and implementing the Government’s AI regulatory principles.
• Piloting an Algorithmic Impact Assessment Standard for local government to use when procuring AI and data-driven systems.
• Setting out metrics for success at procurement stage that technologies can be assessed against post-deployment.
• Clarifying when and how to engage with experts in this process.
•  Supporting local government in upskilling teams to ensure effective AI use and auditing.
• Enabling transparency mechanisms so local government teams and suppliers have clarity and coherence on what transparency means for them, and procurers are equipped to engage with suppliers.
• Defining responsibilities across the AI procurement process, including between public- and private-sector actors.

ADA plans to develop its initial findings in a subsequent report which will describe the barriers to effective procurement and will include recommendations to help local government make procurement decisions that lead to positive social impact.

ADA’s paper could also be usefully read in conjunction with the National Audit Office’s recent report on ‘Efficiency in government procurement of common goods and services’ which provides insights into the use of framework agreements in procurement and how greater transparency is required. 

Public procurement procedures provide an opportunity to scrutinise and test technology solutions as part of the procurement process and framework agreements are commonly used procurement routes for technology solutions. However, great care is needed when using such tools as a framework to procure technology to ensure that the solution procured meets the contracting authority’s requirements, is purchased on acceptable commercial terms and in a way that achieves value for money and maximises public benefit over the product lifecycle.