Building Government’s Commercial Capability – IfG Report Is Balanced, Insightful

We mentioned the recent report from Tom Gash of the Institute of Government (IfG), titled “Building Government’s Commercial Capability”,  which looks at the changes under way in central government procurement and commercial activities, including the formation of the “Government Commercial Organisation” (GCO to its friends) within Cabinet Office.

The idea of the GCO is to bring all senior commercial specialists in central government into the Cabinet Office in terms of their “solid” reporting lines, although they will be seconded out to departments and work there on a day-to-day basis. A co-ordinated process of skills assessment and development sits alongside that structural change.

The IfG report is very thoughtful and interesting, helped by the fact that this is a highly respected independent organisation and can therefore call Permanent Secretaries or even Ministers and get through for a chat! (One day perhaps that will apply to us too …)  Here, Gash has spoken to a good number of the key people, from Gareth Rhys Williams, the government’s Chief Commercial Officer, to departmental Procurement Directors and other senior stakeholders.

His overall conclusions are pretty positive; like us, he feels that there is much to admire and support about what is going on, but he raises some concerns too. The aims around improving commercial capability are of course good ones, and he applauds the spirit of co-operation between Cabinet Office and departments that Williams is fostering. There is less of the feeling that Cabinet Office is “doing things to departments” or imposing constraints, information requests and rules on them – something of a change from the previous Maude / Crothers regime perhaps.

Gash comments positively on the capability work, with assessment centres for existing staff and new recruits into GCO, although he identifies that Treasury has not actually given Williams more money for salaries; we weren’t aware of that. Instead, better pay is at the expense of pension provision, which is less good for those choosing the higher salaries. That means some people are hesitant about transferring into the GCO.  He acknowledges that it is early days, and serious reform in government tends to take years rather than months, but he notes, as we have, that some impressive people are coming into government procurement which is a good sign.

He also goes into the tricky issues of alignment between GCO and departments. This is perhaps the biggest potential area for problems, if senior procurement staff are not seen as “part of the team” by permanent secretaries and other senior colleagues. We’ll come back to that issue soon, but it is critical that departments don’t start to see these senior people as somehow outside their organisation, or even in the worst case, part of another organisation that is not particularly on their side.

We always look for points we can argue with in reports like this, because frankly it makes for a more interesting article. But there is precious little here that falls into that category. The one point we might take issue with Gash is when he says that the changes have “clear objectives and ways of measuring success”. Objectives yes, they are reasonably clear so we will give him that. But measures of success?

We are not so certain, and what is proposed seems to rely rather strongly on a self-assessment or maybe “peer assessment” process to see if departmental capability is improving.  So how do we really think any department will assess itself?  Does anyone ever say, “yes, we have definitely got worse”!

We are somewhat doubtful about those options, and our experience through the previous government Procurement Capability Review process of 2007-10 provides some support for that cynicism. So we will come back to that topic shortly and discuss further those issues around assessment and self-assessment.

But before then, anyone interested in government procurement or indeed the issues around centralised / decentralised procurement structures generally, should read “Building Government’s Commercial Capability” now.

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