More from the PASC public procurement hearing (aka the Cram & Hughes show)!

More on last week’s Public Administration Select Committee hearing on public procurement, when Colin Cram and Jon Hughes, doyens of the procurement world, were grilled by a group of British Members of Parliament.. ..

Picking up from yesterday, we’re still on the old centralisation argument.

One MP points out that the current government is tackling “monolithic structures” – doesn’t that cut across Cram’s argument for centralisation. (Yes! It does! )

Hughes says getting the balance right is key. Consolidate within an overall plan. Localism agenda – we want to see lots of work going out to innovative SMEs – hard to do that from centre.  And certainly don’t centralise all in London.

Do you agree Mr Cram? I’d argue for an integrated structure. Doesn’t mean it all has to be in London. Could build it on the existing Government Procurement Service in  Liverpool. Then add some regional hubs.

So you’re proposing  a Crown Procurement Organisation? Yes. But with regional hubs.

Bernard Jenkin, the Chair, asks good questions about how it would work.

Hughes  says he doesn’t agree with the model at all – a model that failed 30 years ago. He would focus on Whitehall, health, local authorities, MOD. A clear leadership structure and CPO for each .

But we have a CPO for Whitehall already? He has the title but role not defined properly.  Need more focus on people, and best in class process and tools.

Colin thinks the case could be made to get buy-in to his centralisation model.

Jenkin asks for “wiring diagrams” to show how organisation would work from both of them! At last we move on from structures…

Do EU directives inhibit procurement?  Cram gives a very good answer to this – EU directives aren’t the problem.  But don’t other countries buy from local suppliers, why can’t we do that? Even better and brave response from Cram, he says these stories are apocryphal.  We don’t understand where our money goes anyway, he says.

Hughes says we could ignore the regulations, evade them, speed them up or fundamentally change them. (He is on less strong ground here as he isn’t perhaps as well versed in public procurement technicalities as Cram).

One MP starts going on about Crossrail trains contract going to Siemens. Interesting example I always thing given that Bombardier – who MPs think should have won – aren’t a UK company anyway.

Jon struggles to answer the question “what are we doing wrong” in term of the directives. Perhaps because there isn’t an answer. Onto the remedies directive. All a bit pointless, this debate. The problems aren’t in the directives.

Then Cram goes off track – although I know what he was trying to say – saying the regulations are a good thing because they allowed Virgin to challenge the West Coast Rail decision. Of course you can almost hear the MPs brains working as they all think “it would have been better if they hadn’t had that right to challenge!”

Finally, we get a question about skills.

Jon wants to invest lots of money to upskill procurement. He’s talking to people about an NHS procurement academy – interesting. I’m with him on the need to invest in this area (by the way, what’s happened to all the GPS “profit” that was supposed to be re-invested in skills development)?

Someone asks about outsourcing procurement? Bit of a red herring. There is very little at the moment – Jenkin is wary about the GoCo idea for MOD. Brings in a profit motive which makes him nervous. Tend to agree with him. Jon points out that you have to keep expertise in house to manage the outsource. Agreed again.

And that was it – but we’ll return to this whole centralisation debate at a later date.

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Comments

  • David Atkinson:

    After viewing the whole things yesterday, I thought that Jon Hughes spoke with directness, clarity and precision, whereas Colin Cram embellished his answers sometimes to the point of confusing the committee.

    I was also left with the impression that Jenkin was either wilfully obtuse, or he genuinely had only considered the ‘dirty’ business of procurement in the run up to the hearing. If it’s the latter, and that senior politicians have a similar lack of awareness and/or interest in procurement, then we really are in a sorry state.

    And don’t get me talking about bean counters at the helm….

  • Dan:

    Of course the EU directives inhibit procurement! (Albeit indirectly). The constant stream of case-law, some of which is reversing the previous legal position (see Commission v Netherlands) is creating more uncertainty. The Remedies Directive introduced more, and arguably worse, consequences for organisations that breach the directives. More uncertainty + more severe consequences = more delays and bureaucracy.

    This no longer just applies to the Directives either, but also other legislation. The Equalities Act ensures that organisations take into account equalities and diversity when procuring. There are no requirements that have to be complied with, the Government preferred to use ‘light-touch’ legislation rather than one which required an industry to comply with. It therefore doesn’t require consultations or EINAs to be carried out, it simply leaves the organisation to decide for themselves if they are appropriate.

    In the recent case of R V Devon CC and Devon PCT, the court decided that the organisations had not carried out sufficient consultation or an EINA effectively. Thus, the position now changes from “Do we think an EINA is appropriate?” to “Would a court think an EINA is appropriate?”. Given that this question could derail a procurement, a lot of people will assume that it would, just to be on the safe side.

    It’ll be interesting to see what happens as a result of the Social Value Act which is just about to come into force….

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