Mixed reaction to public procurement shake-up

26 January 2007
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26 January 2007 | Antony Barton

Business bodies have had mixed reactions to the changes to public sector procurement announced this week.

The Confederation of British Industry (CBI) said it was pleased the government had recognised the importance of effective procurement and was looking to address the issues of skills, innovation and flexibility.

But the Forum of Private Business (FPB), which represents approximately 25,000 UK-based businesses, said the changes could have gone further.

Government's changes to procurement, described in this week's HM Treasury report Transforming government procurement, include the Treasury taking over the OGC's responsibility for monitoring efficiency. A Major Projects Review Group will also be created to ensure the most complex public sector projects are subject to an enhanced Gateway review process.

Procurement capacity will also be increased in government departments and the chief executive of the OGC will lead the relaunched Government Procurement Service.

Neil Bentley, CBI director of public services, was glad the government had taken on board its recommendations for improving public procurement, which it had made over the past year. He said: "There is no doubt that government departments will have to up their game. Business is willing to use its experience to help government secure long-term improvements to the way it buys goods and services."

But Martin Smith, the FPB's European spokesman, said the changes hadn't gone far enough as they failed to put contracts out to tender to smaller companies. "The government is ignoring the easiest way to get better value," he said. "Clearing the barriers to entry into procurement markets for smaller businesses would increase competition and save taxpayers' money."

The FPB is lobbying the government to follow the example of the US and set aside a percentage of contracts for smaller businesses.


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