Central government must get tough with departments on procurement

19 September 2013

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20 September 2013 | Will Green

MPs have said “tougher leadership” is needed from central government if procurement and contract management in Whitehall is to be improved.

In a series of reports published today the Public Accounts Committee (PAC) said the Cabinet Office (CO) and the Treasury have been “half-hearted” in dealing with departments and they have “failed to achieve best value for taxpayers”. 

In Improving government procurement and the impact of government's ICT savings initiatives, the PAC welcomed moves to centralise procurement but said there were still “weaknesses”.

The report said although the Government Procurement Service managed certain contracts, departments remained liable for spending decisions and were therefore reluctant to cede power to the centre, while management information on spending and savings was incomplete.

The report also said the government’s commitment to localism was “at odds” with centralised procurement, it had “not done enough” to boost spend with SMEs, and it is not using its buying power to ensure suppliers - particularly in IT - pay tax on profits secured on UK business activity.

In Civil Service Reform, the PAC welcomed government efforts to make the civil service “sharper and quicker” but said “commercial and contracting skills in the civil service remain weak and underdeveloped” and “the process for overseeing major projects lacks real teeth and is seemingly unable to stop ill-conceived or poorly-managed projects”.

Margaret Hodge, PAC chairwoman and Labour MP, said the CO and the Treasury “need to be much stronger if they are to exert effective corporate control over spending”.

“For too long these two central departments have been half-hearted in their dealings with spending departments and have failed to achieve best value for the taxpayer,” she said.

“The centre of government should be more forceful, rather than simply relying on encouragement and persuasion to get departments to alter their behaviour. It is bewildering, for example, that departments supposedly have to use central procurement contracts yet there are no sanctions for departments which do not comply.”

The CO said it had removed unnecessary procedures, improved the way government buys and enforced controls on spend.

A spokesman said: “We have worked hard to improve contract management across government because the public rightly expects government suppliers to meet the highest standards, and for taxpayers’ money to be spent properly. And we have set out clear plans for stronger leadership at the top of professions within government. But we know there's more to do and so we will keep pushing ahead with our reforms.”

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