UK public procurement; good news and bad news

The good news is the announcement by John Collington that the savings target for the central Whitehall collaborative procurement initiative has been increased from around 13% over 4 years to 25% (as Supply Management reports).

We commented here that the original savings target was far too low, as procurement needed to contribute an appropriate and proportionate amount to the overall savings targets.  I'm not suggesting for a moment that our intervention had anything to do with the change; and arguably the target should be to take a third, rather than a quarter, out of these costs in order to align with the overall savings needed.  But it is a move in the right direction anyway.

Less good are reports that the RIEPS* are (as we always suspected) going to lose most of their funding from next year. Making collaborative procurement work in the public or private sector requires considerable and regular injections of energy in my experience.  The 'entropy' of collaborative initiatives is high so (to really mix metaphors), someone has to keep spinning the wheel or it will stop.

I've seen people assume that once collaboration is up and running, then the line managers involved will keep it going without additional input or resource.  But local priorities quickly take over, particularly in the environment we're likely to see in the public sector over the next few years with reducing staff numbers.

In one of my previous roles, I set up collaborative procurement groups in around 8 different European countries, and an over-arching pan-European initiative.  I wouldn't claim it was totally successful, but after 5 years we had pretty good country level collaboration between business units, and some European success across major suppliers.  When I left, the organisation decided that the non-UK collaborative groups and the pan-European activities didn't need 'corporate' help any more; they would be self sustaining.  Within 6 months nothing was happening.

It needed someone to organise meetings, push the agenda, identify priorities, hold people to account if they agreed to do stuff on behalf of the group, report success, spread best practice... I only spent perhaps 8 days a year per country group, but it was enough to make progress.  Take that 'energy' away and the groups' batteries quickly ran out.

And that I fear is what will happen in local authorities.  We'll see some collaboration I'm sure, probably at a very local level, but working across whole regions will become much less common.  A shame at a time when, as we keep pointing out, we need to maximise public sector procurement savings to minimise cuts in jobs and services.

* Regional improvement and efficiency partnerships - organisations that (amongst other things) have been driving procurement improvement and collaboration in UK local government.

First Voice

  1. Rob:

    Increased to 25% Peter but the timetable remains the same – at the end of the first wave (year one), broadly (and please forgive the basic mathematics), 75% of the achievable savings (roughly 2.4bn) will still be on the table?

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