More on the Heseltine UK growth report – and procurement implications

We started discussing the Michael Heseltine report on UK economic growth, “No Stone Unturned: In Pursuit of Growth”, the other day. Here are a couple more recommendations from the report with a procurement interest.

 Recommendation 43: Rather than setting up duplicate teams across government, a single source of expertise for innovative procurement should be established that builds on existing work and successful mechanisms. This resource should help to aggregate demand and coordinate activity around shared innovation challenges, provide expertise, coordination and guidance, and scale up and develop innovative procurement initiatives.

What he means by “innovative procurement”, to be clear, is procurement of innovative stuff, not doing procurement in an innovative manner. And I think this single source of expertise is a reasonable idea; you can’t force public organizations to do “innovative procurement” if they don’t have a need for innovative solutions, but providing some sort of shared expertise and co-ordination seems sensible. It wouldn’t need to be a large team; a small unit in the Cabinet Office perhaps?

Yes, this really is the report cover page!

There is something worthy of more argument here, not a specific recommendation but an interesting comment:

“Once procurement decisions have been taken, it is important that contracts are well managed – there is just as much value to be lost in poor contract management as in making the wrong decision in the first place. In addition to the urgent recruitment of high calibre procurement professionals into the civil service, there is another way of improving delivery.

Outsourcing the contract management of government projects could ensure that those managing supplier performance are focused solely on the contracts and are not distracted by political considerations. There are many reasons why public bodies throw good money after bad in poorly run projects, but none of them should override the basic requirement to drive up performance. Putting contract management – but not the allocation of contracts – into private hands could diminish these excuses and enable government to improve its record in contract management”.

 I’m totally on board with the importance of contract management, (here again is what I wrote for National Audit Office years ago), but outsourcing it? I’m not sure, although it worked well for the Olympic construction programme, and of course Ministry of Defence are in effect considering this under the Defence Equipment and Support GoCo scheme.

But I can’t believe Heseltine really thinks that outsourcing would somehow mean contract managers “are not distracted by political considerations”!  What might happen is that contract managers working for private contractors may be more robust in telling Ministers the costs and implications of changes, etc – I suppose that might be a good thing! On the other hand, these contractors might feel that giving Ministers exactly what they want is the way to retain their own contracts. But I suspect the “political “ issues could be worse, not better under this scenario. 

Then there are comments around how the state can better support develop of innovative technologies and businesses. It gets a little vague here, to my eyes anyway, with talk of the Small Business Innovation Research programme in the US and similar ideas in the UK.  The recommendation probably gives an idea of the somewhat generic nature of this section.

Recommendation 38: The Government should go further in its plans to build strategic relationships with industry, ensuring that the long term impact on technological advantage and the UK industrial base are taken into account in the procurement of specialist technologies.

So, in our next  - and probably final - piece on the report, we’ll go back and look at one of the issues we highlighted in part 1 – Heseltine’s desire to bring more private sector procurement skills into the  public sector, and increase salaries for top public procurement people.

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Voices (2)

  1. life:

    Absolutely.

    Although I don’t have a cover page, and just for the sake of debate, I’m sorry, but isn’t ALL of this platitudes? Props to Heseltine for taking business seriously, as ever, but how much of this needed him to get off his (self-purchased) sofa to write? It’s all at the wrong level, and doesn’t get us any further on in terms of improving things.

    Whether he’s proposing to do it or procure it, “innovation” is truly top of the list of “words to be wary of”. I mean, with innovation, what can POSSIBLY go wrong? Unless he’s invented something pretty uniquely fabulous in front of the fire, something that everybody else still currently involved on a day-to-day basis has missed, “innovation” is more likely to be what’s tied to the rails to derail the West Coast Mainline than be the happy soul whistling it off at the station.

    And as you point out, a recommendation to “improve contract management by letting bigger contracts and then please manage those contracts better” already has a feeling of loss, almost of grief, about it.

    I think what best sums it all up is the word “strategic”. With the possible exception of the word “complex” (with a rising last syllable), currently nothing better flags the defence of a vacuum, or poor performance, in public life. Strategy, if it exists, is usually defined in lengthy periods far beyond the tenure of nearly all those in civil service roles, or come to that private sector roles, who claim some sense of responsibility for it. Of course assuming we’re not counting those about to enter industry from the public sector ( 🙂 ), given the numbers who will profit personally or politically from “strategic relationships with industry” (with 50% reduction in your price while we’re “partnering” please) it’s going to be some sort of a quorum to ensure this happens in the current climate. Oh, and you best not be setting up a quango now either.

    A report saying “do less, but make sure you resource the stuff that you do properly” is boring, but at least it would have been quicker to write (and read). Almost, innovative!

    Would it be a good idea to stick to the knitting, pay attention to detail, look after your people and make sure they (and you) grow and benefit from training and new skills? It might help also that you will then have no need to look for scapegoats to pillory when it all goes wrong (causing the rest of the government major procurement world to seize up in fear of challenge). Looking forward to the next instalment of the series to find out…!

    1. life:

      Found my cover page!

      http://tinyurl.com/procurementinnovation

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