Public procurement reform stifled by uncooperative departments

27 February 2013

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27 February 2013 | Anna Reynolds

The government is missing out on savings from centralised procurement because departments are failing to cooperate with new reforms, according to the National Audit Office (NAO).

In a report published today the NAO said the government had saved £426 million in 2011-12 through centralised procurement. But, while spending through central contracts has increased from £2.6 billion in 2009-10 to £3 billion in 2011-12, this is still less than half of its spending on common goods and services.

The NAO described the current government procurement strategy as “the most coherent approach to reform yet” but blamed weaknesses in contract management and a lack of enforcement to use a centralised approach for why maximum savings are not being made.

Amyas Morse, head of the NAO, said in a statement: “The Cabinet Office will have to lead a major cultural shift across government if the centralising of buying goods and services is to deliver the significant benefits on offer.

“There are signs of real progress, but the success of the reforms cannot depend on whether departments choose to cooperate. Departments must commit as much of their procurement expenditure as possible to central contracts and the Government Procurement Service must be held accountable for its performance.”

The NAO reported concerns from departments about GPS’ inconsistency of contract management and the quality of customer service. It said roles for everyday contract management are unclear and there are inadequate mechanisms in place for departments and the Cabinet Office to hold each other to account. The watchdog also identified unrealistic targets, incomplete data and ineffective government structures.

But there was praise for the progress made on increasing participation of SMEs and for the improvement GPS is on its predecessor, Buying Solutions.

In response to the findings, a statement from the Cabinet Office said: “Our priority has been to strip out unnecessary procedures and use government’s bulk-buying power to get maximum value for the taxpayer – in the first half of this financial year alone we saved £295 million.

“We welcome the NAO’s report which recognises our strong progress. Like the NAO, we are convinced that there is much more to do. We will drive reform, acting as a single government customer and ensuring we have first-class commercial skills in place to deliver further savings.”

The CBI also highlighted the necessity of changing the way the government works. “Two and a half years after the government committed to centralising public procurement, individual departments are still too often doing their own thing. We need to see strong leadership from the Cabinet Office to drive a culture shift across the whole of Whitehall, highlighting the benefits of bringing procurement under one roof,” said Jim Bligh, head of public services reform at the CBI.

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