What centralised public procurement would look like

2 April 2013
It is eight years ago since I posed the question “If Tesco managed its procurement like the UK public sector, would it still be in business?” A result of that was Towards Tesco, the report I produced for the Institute of Directors, which argued for:
  • A comprehensive analysis and understanding of the £200+ billion a year spend
  • Agreement on the objectives for public sector procurement
  • An understanding of the supply management techniques to deliver those objectives and the prerequisites for their success
  • Common, lean procedures and, as far as practicable, common processes
  • A coherent approach to managing markets, global supply chains and suppliers
  • Underpinned by long-term, world-class capability, providing exceptional expertise available to all through the right organisation structure, resources and authority.
Omit any of those elements and public sector procurement will, despite some areas of excellence, underperform by a wide margin. Despite improvements, that is where we are today. Bill Crothers, the government chief procurement officer, is the ninth person in that seat since it was created in 1985 (leaving aside the changes of job and organisational titles). His appearance before the Public Administration Select Committee (PASC) last week suggested to me he doesn’t have the level of authority he needs. 28 years of investment in incremental change have not delivered the transformation that successive governments have desired. The present government has been the most determined of all and can claim some significant successes, but key elements for transformational change are absent. So what should be the goals of such transformation?
  • Much improved quality, better value and fewer failures from major contracts and projects
  • Delivery of government policies for economic growth
  • Expert commercial input into policy making and overcoming departmental silos that inhibit the development and delivery of cross-departmental policies and create difficulties for joint working by other parts of the public sector
  • Identifying and dealing with risks to national security and global supply chains on which the UK is dependent
  • Large savings though use of best procurement techniques, market management and more effective management of suppliers
  • Assurance and accountability for delivering the above

The structure I proposed to the PASC would address these issues and could be implemented through building on current centres of expertise.

Committee chairman, MP Bernard Jenkin requested I submit a diagram of how it would look (which you can see here), and a two-page summary of what the organisation would look like, how it could be achieved and the benefits one should expect has also been submitted (which can be viewed here). It might take five years to complete substantially, but by then 80 per cent of public sector procurement spend would be managed coherently, with only categories such as very specialist defence procurement and NHS hospital drugs sitting outside it. ☛ Colin Cram is managing director of consultancy Marc1
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