Procuring from external suppliers amounts to a third of all public expenditure but current government procurement data is 'poor' © PA Images
Procuring from external suppliers amounts to a third of all public expenditure but current government procurement data is 'poor' © PA Images

Better data is ‘critical’ for public procurement

22 January 2019

The UK government spends £284bn procuring goods and services from external suppliers each year but current “poor” standards of data on government procurement could be costly.

A report by think tank the Institute for Government (IfG) has warned that while procuring from external suppliers amounts to a third of all public expenditure, the current procurement data available is poor, with critical information public bodies could use to make more informed spending decisions often unavailable or incomplete.

IfG's analysis into the scale and nature of contracting looked at all government procurement, including everything from goods such as stationery and medicine, through to the construction of schools and roads as well as IT services.

The aim of the report was to measure the scale of government procurement spending, looking into who supplies the government and what for, as well as contract lengths and values. This information, the group said, should be easy to answer, but found the poor quality of government procurement data limited the analysis.

Analysis by the group found that 82% of the total government procurement spend was dominated by four departments, with spending on health and social care, defence, transport and education totalling £112bn.

However, the majority of government tenders and contract award notices were not listed on the government’s own procurement portal, Contracts Finder, with only 39% of tenders published on the portal in 2018.

The number of contract award notices published was found to be even lower, with less than 30% of contracts agreed by the government published on Contracts Finder.

As an example, the report said that the lack of data available meant that when Carillion went into liquidation in January 2018, only 28 contract awards notices for the firm could be found on Contracts Portal, despite the fact the firm was estimated to hold up to 450 public sector contracts.

The report said: “Given the importance that procurement will continue to have, it is critical that the government, public services and suppliers are reliably able to answer questions about how much is being spent, what is being bought and who the suppliers are.”

The researchers have noted that the government has recognised the issue and is supporting departments to “bulk upload” missing items where gaps have been identified.

As well as highlighting issues with procurement data, the report noted that strategic suppliers have increasingly been awarded government contracts. Spend with the top 25 suppliers increased from 13% in 2012-13 to 18% four years later. Meanwhile, spend with social enterprises was largely unchanged.

The report said: “Every day, public bodies procure hundreds of millions of pounds’ worth of goods, works and services. With a clearer picture of how much is spent, with which suppliers, what it is being bought, and how contracts are structured, government could make better-informed spending decisions, reduce waste and make significant savings.”

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