Challenges For New Government Commercial Organisation – Execution Is Key

Coming back to the new Government Commercial Organisation we discussed yesterday, there are some major operational and execution questions as well as the strategic issues we touched on yesterday. The procurement senior management cadre from all the departments of central government are being encouraged to join the GCO and switch to being actually employed by the Cabinet Office. The Civil Service Board has given its approval, but there is many a slip between ... etc.

The first step is for all the affected managers to go through an assessment centre. So our first point concerns those days. How will those be made robust and credible enough to stand up to potential challenge from individuals or from senior managers? Particularly if the idea is to look at soft, behavioural skills rather or even as well as more fact-based procurement skills and practice, this requires considerable care and skill to design and run such sessions (I know that from experience).

Handling the outcomes may also prove interesting. So if GCO decides someone is ready to be promoted, perhaps from G6 to Senior Civil Service for example, but their ‘home’ department says “well, we don’t think they were ready for that, we’re not paying a larger fee to cover their newly inflated salary” then how does that work?

VAT has also been a problem in other internal government “outsourcing” concepts. Will GCO / Cabinet Office have to add 20% onto the charges for the staff sold back into the departments? And indeed, once departments literally get a bill from Cabinet Office, are they expected to act as the “intelligent client” for the procurement “service” they are receiving, and manage that as they would any other moderately important supplier? What if the Department says “our budget has been cut, we don’t want six senior commercial staff any longer, we can only afford three”? What happens then?

Harmonising terms and conditions is another potential bear-trap, if GCO members are to move onto a common Cabinet Office contract. Some ten years ago, I was the first acting Commercial Director for the National Policing Improvement Agency, which took people in from four different organisations, including the old Police IT Organisation and the Home Office. The arguments about the terms of individual’s transfers, discrepancies in salary, pension arrangements and other benefits, as well as grading issues, all took up far more of my time over several months than real procurement work did. Pensions might well be a particularly interesting issue here for GCO.

If these issues do mean that something well short of 100% of staff choose to transfer to GCO, then at some point GCO might be seen as a "lame duck” . It would fail to realise the potential benefits but would still have many of the potential negatives and costs to cope with.

We have also commented before on the fallacy that all central government organisations can be treated as if they are part of the “same organisation” in some meaningful procurement sense. But in reality, the requirements of an MOD submarine base in Devon and a DWP employment office in Bradford are somewhat different to say the least. So are the skills needed really so common? We’re not convinced – and interestingly we understand MOD have so far not signed up to GCO. One reason offered, so rumour has it, is that most of their senior people are close to retirement, it’s hardly worth bothering to transfer them! (Not sure that’s true but that is the story doing the rounds).

So, we wish John Manzoni, who must be the architect of this, Gareth Rhys Williams and Adrian Kamellard good luck – we’re totally supportive of their high level goal to improve government commercial capability. But there are some interesting questions and issues here in terms of whether this particular strategy is the right way to achieve that worthy aim. And it is a shame there has not been a little more open debate about this key initiative.

Voices (2)

  1. Sam Unkim:

    and then Colin Cram woke up & realised twas but a dream.

  2. Nick Hanson:

    They should centralise common major purchases e.g. IT, Consultancy, Vehicles, Office Stationary, etc. They should have consistent training and certification of all procurement personnel. They should leave unique specialist procurement in individual departments. It is not rocket science, it is pure common sense. The private sector has successfully portfolio managed for decades. They would gain huge benefits in costs, efficiency and personnel. The later is usually the problem as the civil service are reluctant to reduce headcount.

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