Procurement needs to improve, with a more balanced approach that is not focused on price, to boost the prospects of success of major government projects, the Infrastructure and Projects Authority (IPA) has warned.
There will be some £600bn invested in infrastructure projects over the next decade, with around half of this to be financed by the private sector, according to the IPA.
In a speech to delegates at the Infrastructure Investment and Policy Summit in London this week, Matthew Vickerstaff, interim chief executive officer of the IPA, stressed the need for a new approach to be taken on procurement.
“We need to renew our focus on deliverability and improve our procurement processes, with a far more balanced scorecard, which delivers best value, and sustainable procurement rather than focusing on lowest cost," he said.
Major projects such as Crossrail and HS2 “epitomise the challenges facing us at the moment,” he remarked.
“The IPA is already working hard to ensure project delivery expertise will be at the core of future spending decisions. And I’m encouraged that as a result, the Chancellor is making deliverability a cornerstone of the next Spending Review.”
This move will “help drive a real cultural change” which includes “becoming better at procurement.”
Vickerstaff argued in favour of a more risk-taking culture, with “an environment where taking well calibrated risks is considered acceptable and not criticised incessantly so as to drive poor decision making.”
This comes amid growing concern over the state of government procurement. In February, the Cabinet Office published the Outsourcing Playbook in order to improve procurement processes.
And earlier this month a new report by the think tank Reform recommended a “large-scale and comprehensive review” into public procurement to tackle “weak or underperforming elements in the commissioning cycle that have led to failings.”
In his speech earlier this week, Vickerstaff placed some of the responsibility for improvement on the private sector. "The collapse of Carillion is still casting a long shadow over the sector’s ability to deliver at the moment.”
He added: "We need to be certain that the market is addressing its skills and capability gaps, innovating and driving productivity improvements and perhaps most importantly, being disciplined when they bid for projects.”
Transparency and trust are key, Vickerstaff said: “We need to be certain that the market isn’t just telling the government what it wants to hear. That you can deliver what you say you can deliver, for the price you say you can deliver it.”