Why do so many public sector projects fail?

21 September 2010
Lindsay Clark, international news editor, Supply ManagementProcurement, procurement, procurement. I’ve never heard the word mentioned so many times on national television. Last night it was on the Channel 4 broadcast How the MoD Wastes Our Billions, asking the question: Britain’s £42 billion defence budget puts it in the top four in the world, so why do we appear to be struggling to support just 10,000 frontline troops? It goes on to detail, with an element of speculation, the cosy relationship between the MoD and the UK defence suppliers. Yet despite its constant iteration that defence procurement is out of control in the UK, it hit on what I’ve always thought is the root of the problem, which is largely beyond the control of procurement professionals. Helicopters, the programme says, are a good example. Operationally, they fall between the army, air force and navy and are therefore victims of inter-service rivalry. Likewise, individually services are always likely to underestimate risk, and become over optimistic on delivery, in order to get the biggest slice of the pie – and knowing it is unlikely a project will be pulled once it is under way. So it is the structure and management of the defence service that lies at the heart of the problem, not flawed procurement methods or personnel. Before joining SM, I spent far too long pondering large-scale government IT projects and would sometimes get asked, by TV or radio people, why they can go so disastrously wrong. The answer is similar to the procurement puzzle the MoD faces. Take the police national intelligence system. One of the main problems was getting locally accountable and culturally distinct forces to agree on a single process for intelligence gathering – not anything to do with technology or procurement. That challenge will be replicated across government in the coming months as procurement teams strive to aggregate demand and collaborate on purchasing. This should save money and help slash the deficit while minimising cuts to services. When SM has asked about buy-in from disparate local government, NHS, and police services organisations, for example, the answer is that, once budgets are cut, they will have no choice but to use these better value deals. That sounds like an aspiration, not a plan. My experience has taught me never to underestimate the ability of public sector organisations to see a project fail if the cultural fit isn’t right. Unless you get management traction on the ground it will never work. But when it comes to the post-mortem, its easier to blame procurement than to grapple with these complex management issues.
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