Philip Green on public procurement

I've been away for a couple of days with limited blogging opportunity, so of course all sorts of interesting procurement stuff has been happening in that time, particularly in the public sector.

I'll come back to John Collington's appointment at greater length, but Philip Green's involvement is fascinating, particularly as he seems to have identified procurement as the major area of focus.  He seems also to have made up his mind that 'centralised procurement' is the answer.  Two points though I hope he might consider.

Firstly, that aggregating demand does not necessarily mean aggregating supply.  Any recommendations need to be sensitive to the power of the public sector.  Single national supply contracts in some areas for instance would destroy market vitality; and there are valid issues around supporting smaller, innovative companies that mega-contracts with mega-suppliers would ignore.

And secondly, treating public sector organisations as if they were shops within the Arcadia Group is not a good analogy.  Public organisations compete; for money, resources, attention.  That is true even for central Departments, and certainly is becoming even more pronounced in the wider public sector (schools, hospitals, even local authorities of different political persuasion).  I don't know if his remit goes that far into the wider public bodies, but this needs to be taken into account in any recommendations.  There is no Philip Green equivalent in the public sector, not even the Prime Minster, who can say "you will all buy your coat-hangers from this supplier" and make it happen purely by their personal power.

Obviously we wish him well; and I hope he comes up with some more interesting recommendations frankly than 'centralised procurement' (we do all accept I think that the public sector could and should make better use of its leverage in many areas).

I do wonder however about his other aim, to "examine all contracts that have been signed over the past three years".  Even in central Government alone, this will run into the thousands! Given his team only have about 6 weeks to do this, developing a sampling methodology is I suggest the first necessary piece of work.

There's an interesting piece written by Sir Philip in the Mail on Sunday - read it here.

First Voice

  1. Peter Smith:

    Good piece on Green’s centralising instincts here by Conor Ryan – what would it mean to hospitals, schools etc?
    http://opinion.publicfinance.co.uk/2010/08/green-greeted-with-groans-by-conor-ryan/

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