26 April 2001
Purchasers have been asked to bear a big responsibility for making self-government in Wales good value. But, as David Arminas reports, to do so they need to change themselves - and the way they work
Devolution of power to national assemblies within the United Kingdom has always been a controversial issue where analysis and fact take a back seat to emotion.
Even after creating national assemblies, questions are being asked about the effectiveness of the Scottish Parliament and, in particular, the National Assembly for Wales.
Few people in Scotland questioned the value of creating a parliament. But the Welsh voted by only a slim margin to have an assembly. Even then, Cardiff, the capital city, was at best lukewarm on hosting it.
A common question during the referendum in Wales was, "what's it going to cost me to have a government?". The assembly's procurement review goes some way to addressing that question and purchasers may have the answer.
The review, Better Value Wales: The Review of Procurement in the Welsh Public Sector, has set a target for saving £90 million - 3 per cent - of the assembly's £3 billion annual public-sector procurement spend from mid-2003.
The savings look modest in percentage and cash terms compared with the central government targets in the review laid out by Peter Gershon's Review of Civil Procurement in Central Government in 1999. It set a target of £1 billion savings on its £13 billion annual spend by the financial year 2001-02, but was driven forward by a then-proposed Office of Government Commerce (OGC).
The Welsh savings, if attained, would go some way to answering the critics who decry the effectiveness of a devolved assembly, especially one that, unlike the Scottish parliament, has no powers to raise taxes.
To get the savings, it appears purchasers within the Welsh public sector - at local and National Assembly level - are headed for major changes in processes and attitudes.
The report pulls no punches in laying bare the attitudes of purchasers and senior public-sector managers. There was an "understanding that the amount of procurement spend… was approximately £2 billion annually, although in reality nobody really knew", according to the review. "Only a handful [of people questioned] were able to say with confidence how much they had spent on what and with whom."
Other comments included the belief that estates management, construction and IT projects had nothing to do with purchasing, which was all about buying office stationery.
However, Paul Skellon, head of procurement at the assembly and leader of the review team, warned against being too alarmed by its findings. This was how purchasers thought in central government before Gershon and the OGC, he said.
Indeed, Gershon's attitudes on procurement are evident. Priorities include:
• designating a procurement champion at board level, along with a written and board-approved procurement strategy;
• establishing a gateway review process for large capital projects such as IT procurement and construction;
• the assembly implementing a major study to find the best ways of implementing an e-commerce strategy;
• ensuring that senior management understand the importance of procurement as business strategy;
• establish a high-level supervisory board chaired by the principality's minister for finance, local government and communities.
Notably, the review recommends setting up a body as a catalyst for purchasing improvements and three "organisational options" are preferred by the review team: a new body similar to the OGC called "Better Value Wales" (BVW); a private-sector organisation similar to the BVW; and strengthening the resources and remit of the assembly's procurement unit and estates division.
Purchasers have until 15 June to register their ideas with the assembly. Unlike their central government counterparts, they have the benefit of seeing how an OGC operates to decide if that model is best suited to improving procurement to Wales.
Creation of any new body runs the risk of increasing bureaucracy and deterring Welsh small and medium-sized enterprises, cautioned Professor Michael Quayle, Bosch chair in purchasing and supply at the University of Glamorgan, who has studied SME-client relations. SMEs make up nearly 85 per cent of Welsh companies, so their inclusion in the procurement process will be essential for a healthy Welsh economy, for which the assembly is ultimately responsible.
Responses to the review could influence the environment of purchasing in Wales for years to come. Moreover, procurement professionals find themselves centre stage in proving the principality's citizens were right in voting for a devolved assembly.