CBI Procurement Report – getting into the detail on UK government’s progress

We are in the process of commenting on the CBI (the UK’s leading business organisation) publication of their UK Public Procurement Report, based on a survey of 100 corporate members.  Today, let’s look at some of the detailed findings from the survey.

Disappointingly, in a number of key areas, respondents (suppliers to government) saw no improvement or change – that was true of 61% of firms in the case of ‘evidence of commercial skills’.  55% of firms surveyed saw no change in ‘ease of doing procurement’ with central government, with the rest pretty evenly balanced between better and worse. But in local government, things are apparently getting worse; 35% of firms see a deterioration, and only 24% an improvement.  In terms of commercial skills, 61% say ‘no change’ – and again ‘getting better’ and ‘getting worse’ are balanced. Similarly, there was no real change in the ‘speed of procurement’ factor.

54% of respondents “believe government does not currently have an effective approach to ensuring internal stakeholders in departments and non-departmental bodies follow its new commercial strategy”.  Not unreasonably, the CBI calls on the new Crown Commercial Service to “have a clear leadership role in ensuring reforms are implemented consistently across the whole public sector”.  Difficult to do that however across the devolved public sector, as we’ve pointed out before.

The respondents feel that the ‘public sector still over-specifies or seeks bespoke solutions where ‘off-the- shelf’ is still an option’. And we mentioned previously the view, erroneous in our opinion, that 67% of firms think lowest cost is still driving most contract decisions, at the expense of factors such as whole-life cost and service quality.

An improvement in ‘information about new contract opportunities’ was noted for Government Procurement Service – but not really in central departments. Also positive was a greater number of firms seeing an increase in the use of pre-procurement market dialogue. But on the negative side, and worryingly, 35% of respondents saw an increase in the number of PQQ questions and only 13% a decrease, despite Francis Maude’s efforts in this area.  And 65% don’t think framework contracts are well managed – this was an interesting quote from a firm on that topic:

“All the effort goes into designing and letting new frameworks, such as PSN or G-Cloud – there’s not nearly enough focus after that on helping buyers understand how to best use them”

Fewer firms felt that contracts are more accessible to SMEs – 20% this year as against 25% last. Here’s what the CBI say:

“Surprisingly, a good number think government contracts have become less accessible to smaller & medium-sized firms, particularly so among construction members”.

Not a surprise to us – the drive to centralise and the resource squeeze across procurement generally in the public sector means that there is more collaboration and spend aggregation and more ‘central’ frameworks for instance. This may be admirable from some angles, but as a strategy or even an accidental consequence, it was never going to be good news for SMEs.

Finally, the CBI say this “The Government’s use of ‘big’ vs ‘small firms’ rhetoric is damaging business confidence and overseas investment. It must talk more about the importance of ‘big and small firms”.

A good and challenging note to finish on, for now at least.

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