Restructuring public sector procurement – Mr Cram speaks

The Institute of Directors is the latest to jump on the pre-election bandwagon (no doubt there will be more) and tell us all how public procurement could be improved.  But actually, wait a minute, this is a bit different; this is actually Colin Cram telling us how it could be improved! Yes, ex Head of Contracting for the Benefits Agency in the DSS, CIPS Council member, leader of the NW Procurement Centre of Excellence.  So a report actually written by one of us, not some 25 year old consultant.

Colin is an original thinker and his report is also unusual in that it spells out in some detail how procurement in the public sector could be organised differently to drive benefits.  He identifies procurement structures - the 'landscape' - as a key barrier to better procurement, something often ignored by less well informed commentators.  His prescription is a much more top down, centralised, and ordered procurement landscape.  It has a lot going for it.  There should undoubtedly be more collaboration, and fewer separate buying points around the public sector than we have now.  But...(you knew there was a 'but' coming didn't you!) I can't see where the projected savings come from; £25 billion seems an awful lot to be saved via what is proposed here. And as well as the credibility of the numbers;

  • If you are going to centralise procurement, why not HR?  IT?  Everything else?  Procurement strategy has to follow organisational strategy and I can't see this working if we retain hundreds of local authorities, agencies etc and just centralise procurement.
  • Secondly, we used to have some pretty big 'centralised' government organisations that acted in this sort of way and my understanding is they weren't exactly beacons of customer service and innovation.  (The PSA?) How do you stop these bodies becoming complacent and flabby?  Outsource and create a competitive market?  Maybe.
  • Thirdly, I am less convinced that economies of scale are as powerful as many seem to think.  I don't think buying bigger always means buying better, and Colin's model could be very bad news for SMEs and local firms.
  • And finally, good old human nature.   When I became Procurement Director for the Department of Social Security in 1995, my task was to drive collaboration across the various Agencies within the DSS.  Some individuals in procurement were positive. Some less so.  One in particular was dead keen on collaboration - as long as he could lead on every category he currently bought.  Strangely enough, Colin became a great convert to collaboration once he went into roles where achieving that was his job...  Now to be fair, I think he recognises this issue as his report is clear that these changes would have to be mandated.  I know he wouldn’t have signed up to them voluntarily  in 1995!

But for all that, this is well worth reading, well done to the IoD for actually commissioning a procurement persdon to do this, and to Colin for a thought provoking report.

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