Spending in the spotlight

4 October 2009

05 October 2009 | Jake Kanter

UK public sector buyers have come under attack amid immense scrutiny over government spending.

Critics have questioned the profession's ability to deliver the hard-nosed savings required to offset potential cuts to frontline services. They highlighted the need for greater collaboration, better supplier relations and improved decision-making.

Adrian Ringrose, chairman of the public services strategy board at business lobbying organisation the CBI, argued procurement can play a big part in the government's efficiency efforts, but first buyers must improve their skills. Difficulties that occur when departments are carrying out a complex procurement for the first time could be avoided, he said, if buyers with experience of working on similar projects managed the process.

"We need more fluidity to put people with relevant experience into situations across boundaries," Ringrose told SM.

Buyers are also failing to take account of supplier risk as budgets are reined in, and have "a lot to learn" from contract management in the private sector, according to advisory firm Deloitte. A report from KPMG urged purchasers to be more aggressive to help the government cut costs.

The savings credited to the public sector have also been called into question. The KPMG report, published last month, said: "It will be essential to avoid the kind of playing with numbers that occurred in the wake of the Gershon review. We will need absolute clarity about cash and non-cash items."

At the Labour party conference last week, ministers highlighted areas where procurement is making an impact. Communities secretary John Denham said local authorities have saved £1.7 billion in 2008-09, after a "groundbreaking shift" in council efficiency. The government also said it would use its purchasing power to help create 20,000 apprenticeships over the next three years.

This month, the Office of Government Commerce (OGC) announced improvements central government departments have made since procurement capability reviews began in 2007. Departments are appointing more senior commercial staff and reducing dependence on consultants. Chief executive Nigel Smith said: "If government is to ensure it meets efficiency targets then it is vital momentum is maintained, especially through developing the procurement skills base."


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