The face of the UK’s public sector procurement is changing. To meet the challenge, many councils are reviewing their delivery models for procurement services.
I have seen an upturn in shared service arrangements; interest in creating mutuals and collaboration with other authorities. In some cases there has been the transformation to a fully devolved model, where responsibility for procurement sits within technical teams and only a handful of procurement specialists are retained.
Despite these changes, it is inevitable the private sector will grow its market share of providing procurement services. As public sector consultant and commentator Colin Cram observed in his 2012 article A dogfight for public sector procurement: “The management of about £160 billion of wider public sector procurement, which includes local government and the NHS… is going through a transformation, with increasing provision by the private sector.”
He referred to the growth of joint procurement hubs (fewer councils in England have their own procurement teams) and said if private sector procurement organisations can demonstrate value, outsourcing procurement could become the norm.
So, what does this mean for public sector procurement professionals?
A survey of CBI members in 2014 found more than 60 per cent of businesses have not seen an improvement in commercial skills in public procurement in the previous year, and a fifth believed capability had deteriorated. It’s only in the past five years – having worked in procurement for more than 20 years – that there has been a focus on more commercial skills.
It’s why, I believe, UK central government rebranded its ‘Government Procurement Service’ as the ‘Crown Commercial Service’ with the emphasis on being commercially attuned. This must be mirrored in local government.
Public sector professionals have raised their game to meet the challenge of austerity and there are successes. But more needs to be done to alter perceptions that the private sector is innovative while the public sector remains traditional.
Capita is a good example of change, with a business model structured on a gain-share approach which incentivises the procurement professional to scrutinise expenditure to the last penny.
Commerciality is required. As John Wallace, head of procurement at Anchor Trust says, the public sector needs to unshackle its procurement teams so they can add more value.
☛ Mark Pearson is head of procurement at the London Borough of Hounslow