Next three years 'make or break' for public procurement

The UK government is improving its management of outsourced public services but reforms are precarious and need to be bolstered in order to make a long-term difference, a report argues.

The Institute for Government (IfG) says in its study Building Commercial Capability in Government, that the plans instituted by the civil service to remedy poor management of commercial contracts are sound but are vulnerable to being rolled back.

The next three years in particular are vital to ensuring success, according to the report.

It cited how high-profile government contracting scandals, such as those which occurred with Serco and G4S, revealed weaknesses in government’s management of its suppliers and led to the civil service trying to turn things around.

But previous attempts to reform government contracting have often tailed off when short-term priorities diverted attention, the report said. In other cases Cabinet Office and departmental leaders have failed to work together to push through changes.

Among the shortcomings in government contracting are repeated failure to consult commercial experts when designing policies and programmes and inadequately investing in ongoing management of contracts, suppliers and markets.

The report also cited “patchy” procurement, contract management and commissioning capabilities and inadequate knowledge among the operation and policymaking communities of how to get the best from commercial staff.

Having long recognised these issues the government has recently stepped up efforts to improve performance and there have been cross-governmental drives to improve commercial capability, as well as reforms within individual departments.

Reforms have included recruiting senior commercial specialists, centrally shaking up the recruitment and pay of senior commercial specialists and introducing new salary arrangements to help retain staff.

Measures have been taken to help departments share information on what works and which suppliers are performing well. The best procurement professionals have been deployed to high-priority areas.

And crucially, the report argues that the appointment of Gareth Rhys Williams as the government chief commercial officer means one individual is in charge of overseeing all change.

While strongly commending the government’s approach the report stresses that reforms must now be developed and sustained over the next three or more years.

“The reforms remain at a relatively early stage and are still vulnerable,” it said.

The next step the government needs to take is to ensure these reforms are fully understood by everyone affected, especially staff in commercial roles.

“Capability building efforts are by their nature long term and require sustained effort, and previous reforms have often tailed off before they could deliver results,” the report said.

“The next three years are make or break, and civil service leaders need to concentrate on ensuring these reforms are fully understood by everyone who works in a commercial role in government.”

Tom Gash, author of the report, added: “More than half of people we polled think no one takes responsibility when something goes wrong with these outsourced public services. It’s time for the government to prove them wrong.”

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