What’s happening with Government Procurement Service? (Part 1)

I've mentioned my visit to Liverpool last month a couple of times now, so here at last is the "meat" of that - my discussion with David Shields, MD of the UK Government Procurement Service (there is no definite article apparently), and some of his senior execs.

Let's declare my personal interest - I've known Shields for some time (the same applies to Alison Littley, the previous head of their predecessor organisation, Buying Solutions) and would consider them both valued procurement colleagues without being "best mates". So our relationship is good but not regular chats down the pub - Shields is more likely to invite you for a 50-mile bike ride than a beer anyway from my experience! An aesthete rather than a sybarite....

Anyway, impartiality issues aside, the overall and most important comment has to be that Government Procurement Service is going through a very significant change programme, driven by Shields and the senior team with considerable energy, commitment and determination. That won't in itself guarantee success of course, but one thing is clear - this is not going to be merely Buying Solutions with a different wrapper.

Why is such dramatic change needed? Surely Buying Solutions (BS) reported huge savings every year and a growing volume of government spend “influenced”?

Basically, the new centralised procurement model being pursued now by the coalition government, with contracts "mandated" across central Government, means that the old BS model and ways of working are just not good enough. BS in most cases put frameworks in place for public bodies to use on an optional basis. If the deals weren't good, people didn’t have to use them. And in many cases, as the National Audit Office pointed out, it was the convenience that was the main benefit for users (avoiding having to run OJEU competitions etc.) rather than great value for money.

But the new world of mandating collaboration means that the contracts put in place MUST be best in class, or the whole strategy will fail. Individual organisations will not support it, and you can imagine the press response if we find that collaborative deals can be beaten at your local Dixons or WH Smith. So Shields and the team have to deliver excellent contracts, with value and performance provided by suppliers through the whole life of the contract – something again that Buying Solutions did not particularly focus on.

It’s also clear that the old savings methodology allowed them to claim ever increasing savings on the back of two things – some “interesting” savings methodologies, and what we now know was an unsustainable growth in public spending (hence the £140 Billion deficit last year). So as public sector spend rocketed under Labour, almost inevitably more was spent through BS contracts, and higher and higher revenue and savings numbers could be reported.

So change is essential. And the first thing that strikes you in the Liver Building* open-plan office is indicative of that change - self standing notice boards in every department. And they're covered with paper - project plans, KPI lists, charts showing supplier compliance, progress on initiatives. Saying Shields is data driven is a bit like saying Jeremy Clarkson quite likes cars - and I suspect this focus has come as a shock to many staff.

There is a programme management rigour behind the new thinking and approach, with attention to detail, planning and use of data. And it is clearly rubbing off on the organisation. Recent major collaborative procurement exercises have run to the planned timescales – no mean feat and certainly something that hasn't always been achieved by Buying Solutions (or indeed many public organisations). And the standard contracts are being revised in order to reduce the number of supplier challenges and questions – which of course also improves the effectiveness and efficiency of procurement processes.

Stay tuned for part 2 tomorrow when we’ll look at other specific developments.

*Government Procurement Service is also retaining an office in Norwich.

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