Lord Heseltine calls for a CPO in every government department

31 October 2012

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31 October 2012 | Adam Leach

Former deputy prime minister Lord Michael Heseltine has called for pay restrictions to be removed so each government department can recruit a chief procurement officer at “competitive market rates”.

The Conservative peer’s report, No stone unturned in pursuit of growth, published today, made 89 recommendations to the government. These covered everything from economic growth to how taxpayers’ money is spent.

The study, commissioned by the current government to set out a wealth creation plan for the UK, praises Cabinet Office minister Francis Maude for creating the Major Projects Authoritywhich oversees the biggest procurement projects in government. However, Heseltine recommended that CPOs be appointed in each department to strengthen controls around spending.

He said: “Every government department should recruit a chief procurement officer at competitive market rates, reporting direct to the permanent secretary, to lead the procurement and delivery of major projects and improve the capabilities of their procurement cadre.”

SM is waiting for feedback from the government on how many departments have CPOs (or equivalent positions) already in place with that reporting structure.

Leading up to the recommendation, Lord Heseltine noted a number of issues that he factored into his reasoning. He said that previous efforts, such as Professional Skills for Government, had failed to improve commercial skills in the civil service. He concluded: “The vast majority of civil servants are still policy thinkers first and project managers a distant second.” He welcomed the move to create the Commissioning Academy and the Major Projects Leadership Academy, but said their impact would take time.

In order to get the commercial expertise required quickly, he called for the Cabinet Office to remove pay restrictions on external appointments so departments can bring in experienced professionals from the private sector. “There is no alternative in the short term but to bring in the necessary skills from the private sector,” he said. In his view, procurement professionals from the private sector “would eat most people for breakfast”.

CIPS CEO David Noble said the institute broadly welcomed the review’s recommendations but cautioned “against replicating precisely the approach to procurement in the private sector”. 

“While there are lessons to be learnt from the private sector, public sector procurement requires a unique skill set that balances value for money with delivery of service, rather than profit. 

“The Olympics, delivered on time and on budget, has set new standards for best practice in public procurement. It was able to do so because procurement professionals with the right skills and resources were making procurement decisions. We join Lord Heseltine in urging the government to learn the lessons from this experience and emulate this approach across government.”

Commenting on the report, John Cridland, CBI director-general, said: “The focus on fostering better understanding and relationships between the public sector and its commercial partners is welcome. A key part of this is the public sector developing better commercial skills and engagement, and better procurement practices.”

Chancellor George Osborne said: “I wanted Lord Heseltine to do what he does best: challenge received wisdom and give us ideas on how to bring government and industry together. He has done exactly that. This is a report bursting with ideas and we will study it very carefully.”

The government will issue a formal response to the report around the time of the Autumn Statement, which is now expected on 5 December.

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