Wanted: change driver for public sector

19 April 2010
It’s no surprise procurement has caught the attention of the main political parties in the run-up to the 2010 UK general election. Each party offers pledges featuring procurement in their manifestos, promising to review, reform and deliver increased value for the taxpayer. Problem is, while it all makes good headlines, none of the parties demonstrate a cohesive approach on procurement. The picture painted is of a reactionary, fragmented attitude to spend management with little understanding of how to execute it. Over the past 10 years or so the public sector has had vast amounts of money and resources poured into it to drive up capability in procurement – well beyond the usual change programme timelines associated with private sector procurement transformation projects. The processes, tools, templates and training necessary to drive good practice are in place and the resources available to those in the public sector would be the envy of many in the private sector. Yet after all this, the public sector continues to fall short, and no meaningful cohesive structure exists. All political parties are convinced procurement should do better but don’t know how this can be achieved. Why is this after so much time, resource and effort? I would argue the answer lies not in more reviews or reforms – best practices are well known to procurement professionals and can easily be benchmarked. Instead the change process needs to focus in two key areas - organisation and culture. The procurement organisation lacks centre-led accountability and direction setting - resulting in strategic drift. I would argue for the appointment of a Minister for Procurement (MfP) to address this issue. The cultural challenge is perhaps the most difficult problem to address because culture is derived from the organisation as a whole – not just procurement. With total annual third-party spend of around £220 billion, excluding reviews of insourcing and outsourcing strategy, a MfP would preside over spending greater than the total spending budget of any government department, including pensions and health. The MfP would be directly accountable for this expenditure and ensuring departmental procurement strategies support national government goals and objectives. Without this centre-led accountability there will always be too much room for individual departments to influence procurement policy to meet objectives which are not aligned to overall government policy, resulting in inefficiency and waste. An increased sense of urgency for change is needed to drive a more dynamic performance-based culture. Dramatic results come from doing something radically different – not through incremental change. A MfP could be a pivotal player in leading the required change by developing a more entrepreneurial centre-led approach to public sector procurement. Such an approach could realistically deliver savings of £20 billion or more and £12 billion year-on-year. Any chancellor worth their salt would grab such an opportunity and commit the necessary resources to make it happen. * You can read more on UK Plc: What’s wrong with Public Sector Procurement? at Dave’s Buying Magician blog. UPDATE: Dave has now posted part 2 of his synopsis of the ills of public sector procurement (and what can be done about it). You can read it by clicking here.
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