Exclusive! Huge Government Procurement Re-Organisation Under Way in Secret

In the UK, the Government Commercial Function was set up a few months ago, a logical outcome of the move from the Cabinet Office to centralise and gain more control over government procurement and commercial activities that started under Bill Crothers and Francis Maude.

The Cabinet Office website says this: “The Government Commercial Function (GCF) is a cross-government network of senior civil servants with commercial expertise, procuring goods and services for the government.  We support our members to help them develop the knowledge and skills they need to compete successfully in commercial environments on behalf of the government.  We aim to increase the commercial capabilities of the Civil Service, making significant savings for the taxpayer”.

All good stuff, and that seems hard to argue with as a concept – networking senior folk and having some central overview is something that the CPO (procurement functional head) in any large organisation in the private sector would want to do, we suspect.

But we now hear that Cabinet Office has launched the Government Commercial Organisation (GCO) which takes a huge step towards a more embedded centralisation. We understand that the GCO will actually directly employ commercial / procurement professionals who are currently Grade 6 and above. For most government department, that means the top 2 or 3 layers of procurement management.  That must be a couple of hundred across government, excluding MOD (more on that later).

The GCO will also engage with Grade 7 staff, the next level down, who might one day move up into the GCO if they get promoted. So drawing the parallel with the private sector, this would be like the HQ of Ford, P&G or Shell actually employing at Head Office all the procurement senior managers around the organisation, then “lending” them back out to the divisions and business units. Incidentally, we aren’t aware of any large private sector organisations that do this – can anyone give us an example?

The idea we believe is that the departments will then pay a fee, based on the cost of the staff, back to the Cabinet Office. It’s not clear who gets to choose who goes where, or whether all staff to begin with stay in their current roles. But we assume the development, training and appraisal of the individuals will now be the role of Cabinet Office and Gareth Rhys Williams, the new Chief Commercial Officer.

The process for the transfer of staff is also interesting. They will go through an assessment day, which looks at their procurement and perhaps “soft” skills too. We’d love to know who is making the judgement on the individuals, by the way – but we don’t. At the end of the day, the staff get a rating. Those who pass the threshold can join GCO, those who don’t get sent back to their department presumably with a large black spot on their foreheads … metaphorically of course. We also understand that staff will have a choice – they don’t have to join GCO, but a fair bit of pressure is being applied for them to do so.

We were surprised that nothing has been discussed publicly about this major development, but it may be because of the “purdah” period up to the referendum during which time civil servants can’t announce much.  However, that only started in the last week of May, so it is hard to understand why nothing was known publicly about this earlier, as we believe it is well under way.  Interestingly, the only place we have found a public mention of the GCO is here – on Adrian Kamellard’ s LinkedIn page. It looks like he may be running the programme, even though it is a little confusing as he lists several other “jobs” – is he working as an interim? Kamellard is a very bright chap, with an interesting and impressive cv, but he is not (in our eyes anyway) a career “procurement professional” in any sense.

So there are fascinating points to discuss here from both a strategic and operational perspective. The benefits as perceived by Cabinet Office are pretty clear – maximise scarce resource, build the functional skills, develop a professional community. We would have a lot of support for those goals.

But there are some more troubling strategic issues and questions to answer. If the Permanent Secretaries who run departments are no longer responsible for “their” senior commercial staff, how can they (or even Ministers) be held to account for anything that goes wrong? West Coast Rail? MOD cost overruns? The Rural Payments IT fiasco? Blame the GCO and Cabinet Office. And how do you build a cohesive team if the junior and mid-level staff are employed by DWP, for instance, but then the top 20 or so managers and directors in that department are working for the Cabinet Office?

We’ll have more commentary tomorrow.

Voices (3)

  1. Lady:

    Is the GCO the new OGC? Is this all a refresh of how the OGC and OGC Buying Solutions existed, so now we will have the GCO and CCS?

    Perhaps for the next iteration we can have COG or GOC or CGO… just to mix up the letters a bit… as long as the logos aren’t rude…

  2. Nick Hanson:

    Another civil service, old school, attempt to politically control government procurement.. The real solution is simple; centralise procurement and contracting of suppliers whilst departments manage delivery. They always compromise and will fail until they revolutionise.

  3. life:

    Mmmmm. Too early to say but has ” ‘ere we go again” written all over it. Stand by for more dodgy dossiers full of “savings”.

    But who will join if it’s voluntary? Especially given the shelf life of all these schemes.

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