Welcome to the Global CEO (UK) blog. Its aim is to draw attention to developments and ideas in the world of procurement and supply management and in the work of the profession’s Institute.
We change the blog monthly, and I would welcome your comments personally on firstname.lastname@example.org
David Noble FCIPS
What now for government outsourcing?
How must it feel to lose £500m of your company’s value within minutes of announcing a profit warning? Quite devastating I’d imagine. Being plunged into the realisation that not only are profits disappointing but you’re losing the trust and faith of your investors too is a dire situation.
But this is exactly the position Serco finds itself in. As the UK Government services provider responsible for a range of services from prisoner tagging to London bikes, their fourth profit warning in a row should send a chill through us all reliant on public services. The company has had £1.5billion wiped from its balance sheets this month and its total value is set at only £1.7billion. In March of this year, profits had already dropped by 60% amidst investigations from the Serious Fraud office resulting in a ban on any more Government contracts while the investigations took place.
The company is big. Employing around 120,000 people in 30 countries around the globe, and this is its fourth profit warning in a row. Perhaps a victim of its own rapid expansion and success over 25 years has resulted in such scandals as overcharging taxpayers for prisoner tagging and escorting, demonstrating quite clearly that proper due diligence hasn’t been exercised.
So reliant has the Government been on Serco that 25% of its contracts have been held with the company. So this latest debacle is a further
embarrassment for the Government too; especially when they have taken great pains to tighten up procurement processes and take a commercial approach to supplier management which has resulted in some grumbling from Serco themselves on their treatment.
Serco’s situation is devastating for us too. The debate still rages around whether public services should be given to private firms following the failure of G4S to supply sufficient security staff for London 2012. So this latest development won’t win any plaudits for Government or for private firms themselves bidding for public service work and makes us ordinary taxpayers a little uneasy about the quality of these important services.
Chartered Status and name change
I am really pleased to announce that Her Majesty’s Privy Council has agreed the recently proposed changes to CIPS Charter and Bye-Laws.
This means that we can now change the Institute’s name to The Chartered Institute of Procurement & Supply and from January 2015 CIPS can offer Chartered Procurement and Supply Professional Status for suitably qualified and experienced members.
This announcement comes after a long period of consultation where we spoke not only to the global membership, with surveys and in-depth discussions on social media, we also took the views of a wide range of other stakeholders such as CIPS Congress, the Global Board of Trustees as well as businesses and other professional bodies.
MCIPS will remain our benchmark membership grade and the professional licence and FCIPS the highest grade of membership, but what Chartered Status will offer our members is an opportunity to enhance their lifelong learning and demonstrate their commitment to developments in the profession.