Tax, spend or save? Hughes and Day on the future of public procurement

In the UK, we’re in that thrilling time of the year when our political parties get together in unattractive conference hotels and centres to tell themselves how brilliantly they’re  doing.  One big topic this year seems to be tax.  50% tax for higher earners; or the mansion tax; or how much tax university students will pay to cover their debt.

The other side of the equation of course is public sector spending but there seems to be much less debate about that. It almost seems that having defined spending levels for government departments, and other public bodies, in their first year in power, the coalition feels the job is done.  And all the talk pre election about spending money better so that services won’t need to be cut seems to have faded – it’s clear that jobs are going, and services and activities are being cut.

Better procurement can of course help this gloomy picture – genuine improvements will mean jobs and services can be saved. But again, things seem to have gone a bit quiet here, with the exception of the centralising activities in Whitehall which proceed apace. But what about the other £200 billion-ish a year (more if you count PFI spend) of third party spend? Who is really addressing or driving that? As per our comments on the Health sector this week, there’s a lack of strategic direction evident generally in the public sector.

So it may be timely that this week sees the pre-launch of a very detailed, thoughtful and impressive report which considers some of these issues, from two of the genuine thought leaders in the procurement profession.  Jon Hughes is a leading consultant, academic and writer, and holder of the CIPS Swinbank medal amongst other achievements; while Professor Marc Day is Professor of Strategy & Operations Management at Henley Business School, University of Reading,

They’ve published, “Why Public Procurement is Central to the UK’s Economic Performance ....  and How to Transform It”, which looks at how procurement could be truly transformed in the UK public sector.  It has a sweeping and broad scope, and as such there will be some areas where I suspect their diagnosis will just be too advanced or radical for likely acceptance. But there’s a lot of thinking in there that is well worth debate and consideration.

It’s not a document to summarise in a couple of hundred words; we’re going to feature it here over the next few weeks and look at the different issues it raises and recommendations it makes.  But you can register here and download a free copy of the report ...

Voices (5)

  1. Final Furlong:

    Thanks Peter. They are absolutely spot on with some of their insights and, particularly, with one of their key recommendations – the need to bring about significant reform, not just scratch the surface with, for example, the current ‘commodity buying programme’ under Mr Collington, where other major government buyers, such as TfL, can opt out if they want to for the simplest of reasons (“we don’t want to play at this time…”) and aim for significant savings of £37 billion+ etc. The major criticism of the report that I do have, is that most of the recommendations are already in progress in some way – if this had hit the press 12 months ago, it would be visionary, but they’ve missed the boat methinks. Perhaps the prime focus should now be upon specifically ‘how’ these initiatives could be accelerated, particularly major reform.

    Jon, however, is spot on with reference to PFIs (take a good look at Barts). It is the equivalent of ‘toxic debt’. Having said this, we need a silver bullet, not another gun…

    1. Tony Coffey:

      Jon and I go back a long way, though I haven’t seen him in ages. Together with Andrew Cox we looked at the healthcare system in Nottingham for two years – the commissioning bit. I was Asst Director of Commissioning there, and brought Jon and Andrew in for a few weeks that lasted two years or thereabouts. Scope creep of the best sort. Its about 16 years or so since Nottingham. It still ranks as one of the most exciting times in my career as well as great crack. I look forward to reading this article and hope to come back and comment on it Peter if that’s ok with you. Those of us who know Jon, know he has a habit of re engineering supply chains as a hobby. One of the classics in Nottingham was for Jon and Andrew to be amongst the first residents in the patient hotel They kept saying they were consultants….. Oh and by the way the new patient hotel was next door to the brand new Maternity wing. Both PFI’s as I recall; so it wasn’t all bad.

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