Public sector buyers aren’t “enemies of enterprise” – a response to the Prime Minister

Here is the text of a letter we've sent to the Prime Minister this morning.

As an ex senior civil servant in a procurement role, and ex President of the leading procurement professional body, I felt I should defend my friends and colleagues from your attack this week during your spring conference speech. Calling public procurement staff “enemies of enterprise” was unfair and inappropriate, particularly as you know they are not well placed to respond given their roles as civil and public servants. Indeed, that aspect of picking on those who cannot defend themselves was particularly disappointing.

Here are the points I would suggest you consider before you address this issue again.

1. Do you really think procurement people in Government come into work thinking “today I’ll stop some enterprising young company from succeeding”? Of course they don’t. Every procurement person I know in the public sector wants to do a good job for their organisation and their country; and they often stand as a bulwark against potential corruption or waste of public money. In addition, there has been excellent work done in many public organisations already, usually driven by procurement, to encourage SMEs; I could give you many examples if you are interested.

2. That procurement role – helping to drive value for money and working within the law - is critical because in the vast majority of cases, procurement people are working for internal ‘customers’; the managers who actually hold the budgets. In my experience, it is often procurement that encourages a wider supply base, output based specifications and similar, while the budget holder is saying, “just place a contract with the same big firm who has done it before”. Yes, procurement will also try and ensure that laws are not broken, but you should see procurement as a potential ally in achieving your goals, not your enemy.

3. The main cause of what you perceive as ’bureaucracy’ in the procurement process is the EU procurement regulations. Most procurement professionals would be very happy to see them abolished, simplified or down-played. What are you as Prime Minister doing about this? There are no signs as yet of your Government challenging the EU on anything, let alone something as fundamental as public procurement regulations. Clearly, you feel that picking a fight with public procurement staff is easier than doing the same with Brussels!

4. But even if we didn’t have EU regulations, procurement people have - and should have - an overriding aim to spend public money wisely. Giving contracts to exciting, ‘innovative’ companies who don’t have a track record and can’t objectively show that they deserve to win those contracts leads very quickly to corruption, fraud and misuse of public funds. And you know as well as I do, the minute that some scandal comes to light, (and it will), politicians will pin the blame very firmly on the poor procurement officer, who decided to ‘take a risk’ with an interesting-looking small company that turns out to be incompetent, corrupt, or owned by the Minister or Council Leader’s mistress. Encouraging risk taking in procurement will lead not just to legal challenges and huge fines for public bodies; it will lead to some interesting scandals on the front pages.

5. And finally, your proselytising for small suppliers does not sit well with the almost daily exhortations from your Ministers for police forces, councils, or central Government Departments to come together, collaborate, and use their ‘buying power’ to try and get better deals by awarding bigger contracts. This will almost inevitably mean larger suppliers will gain; they are better positioned than smaller, innovative or young firms as contracts get larger and scope of provision wider. You can’t have it both ways.

We all know of course that public procurement can be improved; no-one is denying that. And I am impressed by much of the work going on in Cabinet Office to achieve that; I also know Francis Maude is more engaged with public procurement than any Minister has ever been.

But this was an unworthy comment, made to score political points at the expense of a group of professionals who share the same aims as you – to see their organisations get the best possible value from suppliers to the public sector. I don’t expect it to happen, but I believe you owe procurement professionals in the public sector an apology.

Voices (9)

  1. Andy Davies:

    In London, the last Mayor set up Supply London, an organisation designed to help SMEs in London win public contracts. It worked both ways – advising public authorities how to make tender processes more accessible and open to SMEs, while they in turn were coached on how to compile and submit better tenders. In successive projects, buying temporary agency staff, legal services and estates maintenance for London’s universities, colleges and other cultural establishments, SMEs punched well above their weight as a result of this intervention. Supply London met all of its targets, but the present Mayor has cut its funding and Supply London closes next week. And yet it’s us who are the ‘enemies of enterprise’, apparently.

  2. Roy Ayliffe:

    As the professional body whose role is to represent the profession, CIPS needs to vigorously engage in this issue. CIPS should use its place on the Cabinet Office’s procurement panel to correct the Prime Minister’s perception and public statements. Also CIPS members should be made aware of CIPS approach and actions on this issue.

  3. Barry Henniker:

    Peter

    I thoroughly applaud the comments and sentiments expressed in your letter. It deserves much wider coverage. Why not submit it to the heavyweight press, BBC News and Supply Management as an open letter to the PM? It would most entertaining to see Jeremy Paxman testing David Cameron or his Lib Dem sibling what they actually do know about the conduct of public procurement.

    Many thanks

  4. David Atkinson:

    Nice letter Peter.

    I wish you well in circulating it widely and I hope it takes the debate forward. It’ll be interesting to see if it gets any response.

  5. dangermouse:

    As a small business who has been on the receiving end of destructive and murdering interference of HMRC to the point where the company is barely alive, I have to say I duly welcome his comments and wish him every success in his mission to achieve this.

  6. Melanie Teal:

    Well said Peter. You have summarised the dichotomy faced by public procurers and their potential suppliers beautifully. I particularly endorse your point about EU Procurement regulations.
    However, perhaps David Cameron is being deliberately provocative in order to stimulate a debate on how to square the “collaborate for buying power” v “decentralise for enterprise” circle.
    It is an exciting time for procurement professionals and suppliers to the public sector, lets engage postively in the debate!

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