David Cameron speech to CBI – down with EU procurement regulations!

"Consultations, impact assessments, audits, reviews, stakeholder management, securing professional buy-in, complying with EU procurement rules ...  this is not how we became one of the most powerful, prosperous nations on earth. It’s not how you get things done".

(David Cameron, UK Prime Minister, speech to the CBI, November 19th 2012)

The Downfall of a Good Civil Servant - a Tragi-Comedy in Three Acts

Act 1 -  Public Accounts Committee, November 19th, 2015

Chair:  Mr Smith, I believe you were Commercial Director in the Department of Administrative Affairs when the Department let the franchise contract to Ponzi-Madoff plc?  With your signature on it I understand?

Smith: Yes, I was, and yes, I signed the contract.

Chair: If I understand the National Audit Office report correctly, the procurement process was run more quickly than usual, and not very well. And as Mr Morse has already told us, it ended up with “the biggest shambles of a contract  I’ve ever seen in my life”.

Smith: Yes, well, clearly things haven’t worked out too well, but we were listening to the Prime Minister ...

Chair: That’s the ex Prime Minister, David Cameron.

Smith: Yes, he told us we should not let EU regulations stand in the way of economic growth, this was the equivalent of wartime ....

Higginbotham (Labour) - Well the electorate certainly dropped a bomb on him! (laughter)

Smith:..   so we should not hang around but get the contract in place as quickly as possible to get the money into the economy, and complying with EU rules wasn’t important...

Chair: And that was why you didn’t go through the normal checks on the company’s finances and track record?

Smith: That’s right, we simply couldn’t afford to waste the time. And Ponzi-Madoff were offering to create 200 high-skilled jobs for local workers in Skelmersdale if we signed by the end of the year..  and they seemed such nice people...

Chair: But instead of wasting time, Mr Smith, it turns out you’ve wasted the taxpayers money. I understand your Department is now being challenged by an unsuccessful supplier and with that on top of the total failure of Ponzi-Madoff to deliver, we’re looking at losses of tens of millions of pounds!

Smith: Well, that is true but..

Chair: And as well as proceeding with undue haste, you failed to take up performance references, you ran a flawed evaluation process, and allowed the contract to be signed without the parent company guarantees that NAO say should have been requested!

Smith: Well, the supplier wouldn’t agree, and we didn’t want to delay things any longer, I mean the Prime Minister said ...

Chair: So did you really think that a few throw-away comments from the PM meant you could ignore the law of the land, forget everything you supposedly knew about good procurement practice, and waste tax payers money in that way? Did you? Did you really? Did you? Did you?

Smith: (weeps...)

(Curtain – end of Act 1 - Music )

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Voices (5)

  1. Cicero:

    The problem with Judicial Reviews & EIAs lies not in their intrinsic importance, which I take as read. The problem lies in (a) the box-ticking lip service that is paid to these guarantees of our judicial and human rights, and (b) a lack of thoroughness and intellectual rigour among civil servants who feel constrained to view them as no more than a hurdle to be flattened en route to getting the desired outcome.
    When the much-derided Framework Agreement (FWA) on the Use of Interpreters and Translators in the Public Sector was mooted – on the back of which ALS/Capita won a contract they could not service – professional interpreters became the victims of an intellectually-bankrupt EIA. On the basis of a skewed industry survey, the FWA decided a full EIA was not required, partly because, according to that survey, ‘48%’ of those working in the language industry were born in the British Isles and were natives of these parts. [See ‘linguistlounge.org’ for a full critique of the survey].
    Excuse me? 48% of interpreters are home-grown? Ok a handful are home-grown & some are second generation immigrants. Even so, at very least 90% of fully-qualified Public Service Interpeters were not born in the British Isles. These interpreters therefore comprise what one might call a global BME (Black Minority Ethnic) constitutency. Of all policies that cried out for a proper EIA this was it. Almost every interpreter affected by the FWA was a BME. Yet we didn’t get an EIA worthy of the name.
    Meanwhile a Judicial Review on the award of a previous contract to ALS/Capita found that an EIA had not been carried out. The contract was suspended. When the EIA (such as it was) was carried out, no real issues were flagged up. Surprise, surprise. The contract was reinstated.
    No wonder Cameron thinks these things are a waste of time. Even when JRs are successful, the wrongs they highlight can be swiftly righted so that the guilty party can resume business in short order. Plus ça change…
    As so often, it is not the legislation itself but the attitudes around its enforcement & implementation that are flawed. The letter of the law is everything. Ask MPs about their (continuing) ambivalence towards their expenses.

  2. Dan:

    I’m not surprised to see him having another go at the Procurement Regs – this was a speech to the CBI after all. I was more surprised to see that he thinks stakeholder management is an unnecessary inconvenience, contrary to all the best practice (both private sector and public) that is out there.

    I’m a little worried because he seems to place more emphasis on ‘getting things done’ than accountability. Yes, there is a balance to be found, but does he know where this is?

  3. Janine Baker:

    I have huge respect for the option pieces on spendmatters, but this one is not up to your normal standards. It is flawed on a number of levels.

    Firstly, you seem to suggest that strictly following EU Procurement Rules is a great idea and never ends up with the wrong decisions being made or horrendous losses of money being incurred. Like the National Programme for IT, FireControl, East Coast Mainline, West Coast Mainline.

    Secondly, the private sector works very well without following EU Procurement Rules, and can exercise common sense in procurement rather than setting the exam questions, telling the bidders exactly what they need to say to get top marks and not being able to adjust to innovative new proposals that might come up. Where you get the marking scheme wrong at the start of the procurement and then get straitjacketed into sticking with it even when you realise it does not give you best value for money.

    Thirdly, everyone, including the EU, know that the rules need reform, and there is a renegotiation going on at the moment.

    Now I don’t advocate throwing away all procurement rules, as we need some structure to stop big businesses getting contracts by taking their public sector mates on jollies, but I certainly think that there is a middle ground between the current situation and a free for all. And it is entirely appropriate for the Government to look into how we find that middle ground. (Just as long as it isn’t Vince Cable who gets given the job of finding it …)

    1. Peter Smith:

      I agree 100% with everything you say and it is an excellent summary of the situation. And yes, the Regs need amending although from what I’ve seen of the current renegotiation, ‘m not sure how much that will help.
      I had two purposes with the piece though – one was just I thought it was a while since we had anything vaguely humorous on the site (OK, that doesn’t always work)!
      The second and more serious is I do object a little when the Prime Minister seems to be suggesting that we break the law. Because you know as well as I do, that a procurement officer would get NO support from Ministers, Councillors, Chief Exec, Perm Sec etc etc if something went wrong with a big procurement and the excuse was “I thought I was doing what the PM wanted”.
      Indeed, West Coast Rail is the perfect example! You could argue, as Robert Peston did yesterday, that the team were trying to move quickly, take risks, and select the bid that offered the best deal for the taxpayer.(Indeed, I could argue that their problem was they didn’t follow EU rules on transparency and fairness). But what’s happened in return for their risk-taking – careers potentially in ruins, and Ministers talking about civil service incompetence.
      Personally, I’m probably moving into the Eurosceptic camp now, but as the PM hasn’t seen fit to offer us a choice on that either, I don’t think he can then just tell us to ignore the laws of the organisation he has chosen to remain part of.
      But thanks for the excellent comment and really, if Cameron had said exactly what you’ve said here, I’d be more than happy!

      1. Janine Baker:

        No problem Peter. Was having a grumpy moment first thing as I was wading through another EU-compliant tender document and am fully behind Cameron standing up to Europe and getting some rules that work. Unfortunately I don’t think he will actually achieve anything, especially with some of his Europhile coalition partners.

        Always love to come to spendmatters for your excellent commentaries – brightens up the day!

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