National Audit Office on Improving Government Procurement (part 2)

In part 1 of our look at the recent National Audit Office report “Improving government procurement”, we looked at the findings around the collaborative category programme. Today we’ll look at some wider policy and people / capability issues covered in the report.

We reported here on the recent Cabinet Office update on the target of 25% of spend going to SMEs – NAO cover this as well.  And NAO also share our doubts about the reported growth in spend with smaller firms from 6.8% to 10%: “However, the poor quality data on SMEs means that these figures are difficult to verify”.

It was always a risky target, not really well thought-out, although the intent was good - to focus attention on the issue. Here is NAO again:

Departments have also raised concerns about government’s 25 per cent SME aspiration. This is a cross-government figure and when it was set, it did not take into account the circumstances of each organisation…  some categories, such as ICT, Professional Services, and Facilities Management, are more suitable for SMEs in the supply chain than others. More recently, the Cabinet Office has started to work with departments to develop more tailored SME targets by department, within the overall government aspiration of 25 per cent.

To be fair, there has been some increased focus on the topic, and the report does cover some of the worthwhile initiatives that have been introduced.

When it comes to people issues and  improving procurement capability, there are also interesting findings. On the positive side, the “lean” training has been rolled out more extensively than I realised.  “The forecast for 2012-13 is that 700 staff will have been trained on the three-day course and 1,800 on the one-day course”.

Now it isn’t the answer to all the issues with central government procurement, but it is a worthwhile initiative.  On the less positive side, “the Procurement Investment Fund was suspended in 2012”.

There was forecast to be £5.66 million in this fund from the GPS trading surplus in 2012/13, which was to be used for developing and improving procurement capability. But without any explanation, it seems to have been dumped – very disappointing.

And it was a shock to read that Cabinet Office have not collected any data on staff numbers in procurement functions, or taken any action to see if departments were responding to the centralisation issue by re-structuring their own internal functions. NAO had to gather data themselves.

This shows that numbers have fallen in procurement departments across government from 3,900 in June 2010 to 3,200 in June 2012 (a fall of 17 per cent), although numbers with formal Chartered Institute of Purchasing and Supply (CIPS) qualifications have increased ... We cannot attribute this to the release of resource through the procurement reforms, as it may be the result of wider headcount reduction activity in departments.

I think if I were the “Government CPO” then I would want some view of procurement resourcing across “my” empire, even if the staff weren’t reporting to me directly. And there seems to have been little work around skills mapping or planning.

Although overall staff numbers have reduced as a result of wider cost reduction activities, departments have not been able to free up procurement resources to focus on more strategic procurements, as planned. Furthermore, neither the Cabinet Office nor departments have a detailed operating model of what mix of skills are needed following the reforms.

This is all disappointing. Developing procurement skills, and using them in the right place, must be key to the future performance of government procurement. It’s not very glamorous though, and doesn’t give the politicians easy headlines, so it tends to end up down the priority list, which seems to be the case here.  But I suppose it gives me more to talk about when I give evidence on “procurement capability and skills” to the Public Administration Select Committee next week... (gulp...)

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