Our views on the UK government procurement programme

We’ve featured this week our interview with John Collington and David Smith, who are driving the central government procurement programme.  We had interesting insights into the future strategy for the ‘central’ categories, SMEs, technology and a number of other issues.

So will the programme succeed?  My personal view is that the basic approach, the technology side of things, and much of the programme design make a lot of sense. And the more nuanced category approach – moving away from the simple “one size fits all” approach – is very good news. The emphasis on compliance to a category approach rather than shoe-horning all organisations into a single mega –contract is very sensible, increases the chance of stakeholder buy-in,  and should deliver better value results.

However, it does perhaps leave the programme open to further simplistic criticisms – we might still have another Sir Philip Green type report in a few years complaining that government “isn’t using their buying power” because there isn’t a single contract for every item required. (We’ll come back to one solution to that problem later).

The key to success is getting those category strategies, and their execution, right.  Which leads to perhaps the biggest question – does Government Procurement (GP) have the skills and capability to make this happen?  I swapped emails with David Shields, the new head of the ‘delivery’ arm of GP, to put that question to him.  He told us that they’ve completed a series of commercial skills training sessions and “finalised the recruitment of a number of Category Leads across the major categories, which consist of some private sector, some internal and some external public sector recruits (a good mix)”.

They also bolstered the energy and legal team with some specialist skills and have recruited a Head of ‘E’ Operations.  Lean initiatives are underway, and Shields has restructured into one procurement team with “improvement in on time delivery and quality of procurement”.  He acknowledges there is more to do – but he feels that things are moving rapidly in the right direction.

That all sounds good, but of course it is that visibility of change, improvement and strong performance that is key. So what Shields, Collington and Smith have to do is show the senior managers in each Department that they and their team really are on top of this programme.  Mandate or no mandate, a Permanent Secretary won’t use a central contract if it really doesn’t meet their needs or puts their own delivery (and success) in jeopardy.

The market view(s) are also important. It’s not a representative sample, but  the few potential providers I’ve spoken to about the 2 current tenders aren’t that impressed with what they’ve seen, so there’s more work to do there and another group of key stakeholders to work on.

One suggestion – for the centralised spend areas, make the category strategies that sit behind the published tenders more public.  Tell the market, and the public, why you’re doing certain things. Indeed, consult with the market before you launch the tenders. Explain why the office supplies category has been positioned as two lots, and why the particular pricing mechanisms have been used. Show that the issues have all been considered (although we need to be pragmatic - you can’t please all the people all the item).

That communication and openness will also help address what we might call the “Sir Philip” problem we highlighted above. If there’s not going to be a single contract in a category, GP needs a communications strategy to explain why - go on the offensive. Explain to the media, the market, and the Daily Mail why a single contract won’t always deliver the best value.  Be robust.

And the final point is savings measurement – that’s one area we didn’t discuss in the interview, which I regret.  But National Audit Office will have a role to play in verifying the savings that will no doubt be claimed.  Lessons have been learnt from some of the previous government savings episodes, so I’m hopeful we will see more realistic measures here.

So, closing on the topic for now, we very much appreciated the chance to talk to the key people. The jury will remain out for some time to come, but it’s hard to pick holes in what Collington, Smith and Shields are doing – it all looks good conceptually, but the proof will be in the results. That means strong category approaches and implementation, very high levels of stakeholder acceptance; and real delivery of savings.

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