Government procurement announcements today

Francis Maude, Cabinet Office Minister, is making an announcement today around the future procurement strategy for UK central Government, and he's all over the newspapers this morning. We haven't seen the back-up material yet, which will be published later, but the headlines include the following.

Savings are targeted at 'more than £3 billion a year by 2015 – 25% of the Government’s current annual spending on these items, helping departments to meet tighter budgets set in the Spending Review'.  Given that staff numbers in most departments will fall by about 25% as well in that time-frame, then third party spend in many categories (but not all) should fall by a similar amount without too much effort.  So this seems a reasonable but not hugely aggressive target.

The initiative seems to have been re-branded -The new ‘Government Procurement’ team will be headed by Government Chief Procurement Officer, John Collington. And Buying Solutions survives although 'streamlined' and renamed.

"Government Procurement will comprise of the expertise of a streamlined more efficient Buying Solutions – the Government buying agency – supported by departmental buying teams where they have particular expertise in buying certain goods and services..." So we're not clear if this means Departmental procurement teams are actually reporting into the centre or whether this is a CLAN type structure. And the * Daily Mail reports that "900 of the 3,000 procurement staff across Whitehall will be axed to save money".  (This may 'just' be the headcount reductions that are happening in pretty much every department and every function of course).

Savings of  "more than the anticipated £1.15 Billion" have been made to date from the 'demand management' actions taken in categories such as consultancy and travel in the last year. (We believe this is true).

There's a strong re-statement of the commitment to SMEs, with evidence of greater use of the EU Open Procedure (12% up 'between March and April alone' - although see our comments here on whether that is actually helpful for SMEs).

And "actions published today set out how each Government Department will seek to achieve the Government’s overall aspiration to do 25% of its business with SMEs". Some further reading for us there. And there's more on innovation;

"Following the Innovation Launch Pad, five further Dragons’ Den style ‘Product Surgeries’ are planned so that SMEs are increasingly able to pitch their innovative proposals directly to Government".

There's also an interesting example of a voluntary sector SME winning a contract for office services from HMRC in Nottingham via "its reverse auction 'open' procurement process".

The programme for the centralised categories is mentioned but there's little new detail - there may be more in the supporting papers. There's little direct mention of the "mandate" word although that is the feel of it - "ending the signing of expensive deals by individual departments".

So, an interesting progress report, some good stuff and nothing frankly that you'd probably disagree with.  Not earth-shatteringly exciting either in the headlines, but as we say, the 'new' thinking and actions may be in the supporting material.

The one thing that did make me groan was quoting again from Sir Philip Green's report  "where Government departments.. paid between £350 and £1000 for the same laptop and between £85 and £240 for the same printer cartridge from the same supplier".

Cabinet Office has turned down FOI requests for more information on this, and I have great suspicion that these were NOT proper like for like comparisons; if anyone can show me the data to prove I'm wrong, I'll gladly retract that publicly.  (I was going to say I would run naked down Whitehall but I realised that would be a certain way of ensuring no-one would ever take me up on the offer!)

It's a shame to see such dubious 'facts' repeated here, when it has been impossible to verify them properly. But that shouldn't detract from other positive actions here, although we'll come back with more considered views once we've had a chance to read and digest all the material over the weekend.

* Maude won't be pleased with the Mail headline, a somewaht cynical; "Ministers pledge to cut Whitehall waste by £10bn: but haven't we heard all this before?"

Voices (4)

  1. Peter Smith:

    That’s a great spot, Mr Furlong!
    For the full story of how Sir Humphrey got this little difficuly sorted out, read Spend Matters next week!

  2. Final Furlong:

    I spotted the announcement on the Cabinet Office website.

    With reference to the SME agenda, there are links to individual Departmental actions plans.

    But, firstly, let’s all note that “to award 25% of Central Government’s spend to SMEs” has now seamlessly migrated to…

    “Government’s overall aspiration to do 25% of its business with Small and Medium sized Enterprises (SMEs).”

    Note “to do business”.

    Now, looking at Departments’ plans, this ‘aspiration’ has been fully embraced.

    I looked at the DWP because I’m told that the vast marority of its spend is carved up across some fairly significant suppliers, so the target of 25% of spend to SMEs would appear to be very aggressive.

    However, that was until I read the Executive Summary to their plan…

    “In March 2011, the Government set a new target that 25% of spend with third party suppliers should go to SMEs by March 2015.” (Note that it does not say “awarded to”.)

    And then…

    “DWP is committed to supporting the achievement of this target and is putting processes in place to promote greater engagement with SMEs. We are working to increase the level of business they get from DWP, either:
    – directly by winning contracts with us, or
    – indirectly by winning contracts with prime contractors or further down supply chains….”

    And, ditto, the Department of Education….

    “From June 2011 the Department will publish a Periodic Indicative Notice (PIN) in the Official Journal of the European Union (OJEU) to allow SMEs time to form consortia or partner with larger suppliers. We will continue with successful supplier open days for larger requirements, to encourage SMEs to form connections with larger suppliers, or create consortia.”

    So Departments can count the number of sub-contractors (tier 2) and sub-sub-contractors (tiers 3, 4, 5 etc) in achieving their aspirational targets.

    Phew!

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