How efficient is Government procurement – Civil Service World takes a look

It hasn’t been widely publicised, but Government Departments have started publishing Quarterly Data Summaries (QDS) – updates to departmental business plans, providing the latest management information and reports on progress against key business plan indicators.

But there are two issues. Firstly, they aren’t pulled together in a single place – that’s a general and frustrating theme actually around much of the generally very admirable transparency drive.  So you have to get the data from each  Department and integrate it yourself.  And secondly, as we’ll see, the data is of variable quality.

Now Suzannah Brecknell at Civil Service World (CSW) has done an excellent job of looking at the data (well, some of it anyway) and trying to make some sense of it across Procurement, Estates, Finance, HR and IT functions.

She asked me to comment on one particular metric, the procurement spend per unit cost in the procurement function. CSW compared the value of goods and services procured by each department with the costs of its procurement function in both 2009-10 and 2010-11.

And this is a very difficult measure to interpret of course. Is a low number good? That could mean very efficient procurement function – or could indicate an organisation that doesn’t take procurement seriously and is under resourced. A high figure – the exact opposite. So we should be careful in looking at these numbers.

The number that stood out was HMRC, who appear to spend just £14 for every £ of cost in procurement. That seemed strange as they’re usually considered a pretty good function. But when Brecknell asked them why this was, the spokesman said this.

 “The cost of procurement for HMRC includes all costs charged to procurement cost centres. It includes the centralised budgets that procurement manage on behalf of HMRC such as post, print, couriers, vehicles, envelopes, office machines and stationery. This inflates the figure materially,” she said.

So their figures cover a wider basket of costs than included in other departments’ numbers, which makes the comparison pretty meaningless.

In the other direction, DECC appear really efficient, but their “spend” number is inflated by inclusion of nuclear decommissioning contracts. My argument is that if you include this, the entire cost of the Nuclear De-commissioning Agency should be included on the “cost” side, as this entire organisation is in effect tasked with procurement and contract management. And can we really believe that DECC spend on procurement went from £1,000,000 (exactly) to £1,500,000 (exactly)?  Made up numbers, anyone?

But at least they tried, whereas Business, Health, Defence, Education and Treasury don’t seem to know either their procurement cost, their spend, or, in the case of Defence, both, which is somewhat worrying. (Or perhaps this supports the idea that MOD are pushing back against Cabinet Office interference, as we discussed in the Alix Partners context last week?)

So does this data have any value at all? The other functional data Brecknell considered had similar problems, so you might cynically suggest that the Government is publishing data they know is useless so they can appear to be transparent, whilst actually giving nothing away.

I don’t believe that, natural cynic though I am. Francis Maude has, I’m sure, a genuine belief in transparency – it will be his major legacy to the country, way ahead of anything else he might do in his current role. And Brecknell comments on stories that “senior officials were generally opposed to publishing this data, but Cabinet Office minister Francis Maude was insistent”.

Ideally, the data would serve two purposes. It would allow Departments to benchmark with each other, and the public to hold them to account in some sense. It is certainly not good enough to do the latter but there is some value in there for comparing performance (particularly for some of the other metrics, not discussed here).

And I suspect Maude’s view is that it is better to publish something than nothing. Actually showing how bad the data is at least tells the public something about the state of civil service management information. That in turn might add pressure for reform to get better management (in general) and information management (in particular ) into Whitehall Departments.

We have also seen a comparison table for the last year end, which included all the procurement metrics – we may come back to that at some point. And it is well worth reading the whole CSW article.

First Voice

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