Public sector urged to raise purchasing performance

12 December 2002
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12 December 2002 | Mark Whitehead

Government and industry leaders have underlined a growing need for more specialist procurement expertise in the public sector.

Opening the Confederation of British Industry (CBI) conference in Manchester, its president Sir John Egan appealed to the government to improve its procurement operations.

“We need the government to develop its procurement processes for capital projects and services,” he told delegates.

“Shortly, it will be spending 42 per cent of gross domestic product so it is vital that the government brings out the best performance from industry, to enhance service quality and improve productivity.”

In the roundtable debate on improving public services, health secretary Alan Milburn highlighted the need for more specialists who are able to handle complex deals with private-sector companies involved in public-private finance schemes.

In a defence of the government’s private finance initiative (PFI) policy, he said the move to semi-autonomous foundation hospitals would include more public-private finance deals. The policy was “here to stay”.

But he said it was crucial to build capacity and have experienced staff for the expansion.

Local authorities were so short of commercially experienced staff that “when we find someone good, the private sector nicks them or Whitehall tries to poach them”.

Rod Aldridge, executive chairman of Capital Group, one of the leading PFI contractors, said the lack of competent public-sector negotiators was a problem.

“When we go through procurement, it’s apparent that the people on the opposite side are often long on policy but don’t have the practical commercial experience,” he said.

But Dave Prentis, general secretary of Unison, attacked the government’s enthusiasm for private-sector involvement in the public sector and called for a review of PFI.

In a policy statement, the CBI highlighted the need for more procurement expertise in the public sector when negotiating PFI schemes.

But it warned there was too much emphasis on the lowest cost rather than value for money.

Digby Jones, CBI director-general, said: “The quality of the public-private debate has been appalling. We need to get away from confrontational language and focus on delivering quality services to the tax-paying public.”

SMdec2002

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