Readers’ comments on UK government public procurement structure and organisation

We had some very good comments on our posts regarding the structure of UK public procurement, and the Tesco comparison, so I wanted to feature some of them here. There isn’t space for everyone’s full comments, but thanks to all of you who did get involved in the debate. I haven’t included Colin Cram’s responses, not because we disagree, but simply they are lengthy and I’d suggest you should read them in full – here and here after my articles.

Anyway, Mark Pedlingham, who held a number of very senior roles in public procurement himself, wrote a highly insightful comment, worth featuring in full. Almost a guest post, really.

"Having spent as long as anybody on this matter (Procurement reform in the MOD was launched in 2002/3 bringing category management to a major department for the first time, successfully I might add) I am afraid there are no quick answers and no silver bullets – this is not Defeatism, simply Realism. The path that the Departmental Commercial / Procurement Directors set out on in the ‘mid noughties’, following Peter Gershon’s first review, was the right one – a blend of local and national deals that would be made available for all to use – if it was the Demanders best route to market.

Whether a deal was National or Local depended on the Category and the nature of the market, however big was not always beautiful and some of the procurement actions got themselves tied up in knots (trying to agree requirements – for instance) with progress so slow that the bigger Departments could not wait. Progress was also delayed by the lack of spend data and even agreement across the profession as to the form of categorisation that would best be used. And, of course, no one had any spare resource to throw at the problem, as belts were being tightened and manpower numbers restricted.

Peter is right that Tesco model is much too simple for most things, but Colin is also right that pencil is a pencil and that it will have its place for some commodities and services. So back to a no one size fits all and a lot of focussed graft, organised centrally, but recognising Departmental sovereignty born of the responsibility of Cabinet Government and Permanent Secretaries responsibilities (and other similar models for other Agencies and Bodies) to Parliament.

One final comment on where the ‘control’ should lie (and by control I mean the money). First it will remain with Departments to decide how to spend their funds, so I cannot see them passing money across to any central body to spend on their behalf (hence the ‘provide good commercial vehicles which can then be used’ model) – do we all remember the PSA? Secondly that demand management is the key for reduced costs to lead to savings – experience taught me that half price laptops did not necessarily create a bottom line saving, particularly in the current resource constrained state. A Demander simply bought twice as many – as even this did not match their real need"!

Dan pointed out the issue of accountability:

“... how do you deal with the principle of democracy/accountability in local government procurement i.e. a Council should be responsible for its procurement to its local electorate rather than central government? Is centralisation really desirable in this sector?”

Here’s Pat Barlow on economies of scale:

“There is also a concern I have that economies of scale have their upward limits – you can’t please everybody all of the time (Aesop), and the more stakeholders you have the more cumbersome the means to satisfy even the basic common demands perhaps”?

Paul Wright identifies a number of issues, including one I didn’t touch – that of resource:

“There is an inherent problem with Government aims – particularly I think this government, but it is not confined to them. They want to have the political benefits that arise from their spending (local accountability, supporting SMEs, supporting minority businesses, flexibility etc.) AND they want to have the economies of scale and lower prices that come with size (let’s for the moment accept that is possible, though as you point out it is far from certain). It’s a “have your cake and eat it” philosophy that is in no way grounded in reality. The current government also wants to do that with fewer people, which is going to be quite a stretch...”

Stephen Heard, who has worked in the public sector for years, said this:

“...So we should have Tesco’s for health (as advocated by Roy Lilley in his splendid nhsManagers.net blog) and a Morrisons for education, Sainsbury’s for local government. You get the picture. But then again didn’t we have that with PASA and Firebuy and look what happened there. Surely the key to all of this is successful behavioural change of cultures and working practices that have been in place for centuries and a lot longer than Tesco. I know, as someone who has been trying to advocate these type of changes, how difficult this can be and almost impossible without some sort of mandate. I know that in my time in the private sector that I had to buy from a Head Office approved supply list or my job would be on the line. Why doesn’t that apply in the UK public sector? Discuss”.

Here’s Gerard Chick:

“So rather than copying the traits and practices of an organisation or sector which has different drivers, remit and policies to those of the Public Sector (that is not to say that there are no analogues in the private sector for the public sector to learn from – think social security payments and the payment of insurance claims) why not look at the unique nature of the UK Public Sector and examine the aspirations and capabilities within to improve execution of its role. Increased productivity beats efficiency any day in my reading of “paper stone scissors”.

Trevor Black wasn’t too complimentary about politicians:

“What is missing at the heart of this debate is that there is an absence of commercial common sense at the heart of government and anyone with the power to stand up to Ministers and to point out that some of their schemes are unworkable and just barking mad”.

Thanks again!

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