As we mentioned last week, Jon Hughes and Colin Cram had the dubious honour and privilege to appear before the UK Government’s Public Administration Select Committee last week to talk about public sector procurement. I’ve watched it now, so we’ll have a couple of posts with a summary of events and then some of my personal comments.
Bernard Jenkin MP is the chair and he kicks off.
Does the government have a clear strategy for transforming public procurement? Is it the right one?.
Jon Hughes- the answer is clear, no. Does have a strategy in part, not in totality. Government Procurement Service is influencing just 4% of total third party spend. Are there pockets of good practice? Yes. but there is an absence of clear leadership, clear accountability.
Colin Cram – there are “desperate attempts to patch up a flawed design”. We need agreed objectives, to understand the spend, design organisation. We should have an integrated, coherent procurement organisation. Break down silos. There is huge commonality across the whole public sector. (Stop hitting the table Colin, it’s annoying). He’s holding forth about his centralised procurement model. Are centrally negotiated contracts more efficient? Yes, he says, but should also look at strategies. Aggregate spend for whole of public sector. Not just about savings, need to look at security of supply chain.
MP asks about need for flexibility with central models - also need a tension, users need to be able to go elsewhere, otherwise suppliers will form cartel?
Cram does a swerve worthy of an MP and says but we already have cartels. It is easier to have cartels when procurement is fragmented - he broke cartels 20 years ago.
Hughes now – structure is one of 4 big levers. Debate about centralisation – prefer to use word consolidation not centralisation. Can’t centralise everything, can consolidate. What would be a fit for purpose structural change that would consolidate spend? £100B spend within the M25. Could we consolidate across NHS Trusts? Yes. Local authorities? Yes. But sector has a poor record on hubs, centralisation. How do we do this? Various options.
Bernard Jenkin, the Chair – don’t we need to talk more about leadership and skills. If everyone did their job well, regardless of structure, wouldn’t we be better off? Great point.
Hughes says leadership, accountability is the no. 1 lever of his four. Don’t have the concerted focus. Crothers is not really CPO for government, he is CPO for part of Whitehall. No clear plans for most of public sector. Bring about change by leaders taking accountability for what they’re doing.
Jenkin points out that the levers don’t exist by statute– fundamental problem. Hughes gets trapped a bit by tricky question – do we need change in legislation to drive better procurement? Neither Hughes nor I are quite sure what Jenkin means by that?
So... we’ll come back to part 2 of the debate tomorrow, when the hearing got onto EU directives and skills. But Cram’s idea of a central buying organisation for the entire public sector needs tackling head-on. It is absolutely mad, impractical, unrealistic... and I would bet the mortgage it will never happen. It distracts attention away from more important issues as well.
Over the last couple of years, Cram has established himself as a bit of a spokesman for the profession. That’s fine, we’re all entitled to do that if we can pull it off. And I like him personally, and his heart is in the right place (personally and professionally).
But he’s now doing the profession a disservice with some of his ideas. So we need to point out that he doesn’t speak for many of us and frankly, in some areas, he is simply wrong and is promoting ideas that are borderline crazy. But I’ll come back and give a full explanation for why the centralised model can’t and won’t work sometime soon – and maybe I’ll send that to the committee too.