Civil Service Capabilities Plan – Procurement high on the agenda

The Civil Service Reform capabilities plan – “Meeting the challenge of change”, published last week, has a very strong focus on procurement. That’s great in many ways for our profession, although there is a sting in this particular tail. There is more on project and programme management, digital strategies and general career development, but for obvious reasons we’ll focus on the procurement elements today and tomorrow.

The document stresses that improvement in commercial skills needs to cover a large number of people, not just those badged as procurement experts.  And the recognition that these skills that are required also go well beyond “just” the contracting phase and need to cover early market engagement and post contract management is eminently sensible.

All civil  servants must better understand what we need to  buy: how to plan and engage with the market to obtain  most choice and innovation; how to procure and  contract intelligently; and how to manage the delivery of goods or services so that our expectations are met.

It is also good to see discussion about getting “fast streamer” graduate trainee types into procurement. We need the Permanent Secretaries of the future to believe that a few years in procurement during their rise to the top is a good move.

But then the report seems to move beyond the general capabilities theme, into some fundamental proposals on the structuring of procurement effort across (at least) central government. The focus is on “the Crown” acting as a single customer.  It suggests that departments have agreed to fully centralise the procurement of common categories by the end of 2013.

To support this, the Government Procurement Service will be enhanced to provide an end-to-end purchasing service for departments by the end of 2013. Departments will transition spend on common goods and services to these new arrangements within the same timeframe.

Now before Colin Cram says “I told you so”, let’s get this into perspective. Even if these categories were fully centralised, that is around £8 billion a year of spend. That’s less than 20% of central government spend and 5% of total public sector spend. But if it really happens, it is still big news. And there is talk in this report about departments stripping out the procurement people who currently work on these categories. So there seems no doubt that there will be further cuts in procurement headcount in central government, and our prediction a while ago that procurement numbers in the UK might have peaked looks more and more likely to be proved correct.

“… Departments can expect to reduce costs and resources allocated to this work and so reduce the overall cost of their commercial functions… they will review the size and nature of their residual commercial functions”.

The other interesting development is the formation of the Complex Transactions Team, in Cabinet Office. They will support departments on major IT procurements.

We will recruit staff to this new team largely from the private sector, though also from fast streamers and, where appropriate, departments. Recruitment will commence in summer 2013.

There’s more – CPOs in departments will have a stronger line to the Cabinet Office CPO, there’s more training on commercial skills linked to the Commissioning Academy. And there will be a database of commercial specialists.

All these initiatives have some obvious positives. There is certainly a shortage of talented IT procurement staff (in the private sector as well), so using such people on the most important projects makes absolute sense. And going back to the centralisation, then once you’ve agreed conceptually to centralise these common categories, then you might as well go all the way and have a single central resource to manage that.

However.. I have a few concerns as well. We’ll be back with part 2 to look at those.

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  1. Final Furlong:

    Initial thoughts: they haven’t defined what “complex” means in respect of the proposed ‘Complex Transactions Team’. So, if the contract is simple but the transaction to deliver it is complex, is that included? Or if the contract is complex but the transaction is simple (ie concession contract) is that excluded? I know I’m being slightly facetious and splitting hairs but I think we should know how they decide this…… (It will exclude complex and high risk transactions, like those in the Department of Transport? Presumably, because they’re “trains” and have been explicitly and publicly excluded by Mr Crothers….

    Once a complex transaction has been ‘delivered’ by the new CTT, who manages the contract – the CTT or the client Department for whom it was delivered?

    I would like to see the process by which they have sized the CTT in terms of timing (recruitment will take time….), budget, people (organisation, experience, skills), location, and overall footprint.

    Also, slightly stunned that currently, despite the existence of a CPO in Central Gov for two years (since April 2011), there still isn’t a central database of ‘commercial specialists’ in Central Gov.

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