Exclusive! Procurement centralisation argument escalates, and is there a Maude grand plan?

Last week saw an escalation of the debate about the scope, scale and speed of procurement centralisation in UK central government. We understand it moved beyond the departmental procurement and commercial directors disagreeing with Francis Maude (Minister in the Cabinet Office) and Bill Crothers (government CPO).  At least one Permanent Secretary got personally involved last week to support his commercial head, so it appears that we’re getting close to the crunch now -  this is going up to Ministerial level, very soon.

And that’s because Cabinet Office appear to be going well beyond the procurement of relatively tactical  “common categories” and is making a play to take over some contracts that the departments see as fundamental and strategic to their operations. That is causing the push-back and it will need to be resolved by Ministers.

But another event last week has put a new perspective on this. Let’s backtrack a little first. We have pointed out previously that all the evidence suggests procurement strategy must align with wider business strategy to be successful.  That sounds obvious, yet CPOs  do get out of step with their own  organisations at times,  with consequences for the effectiveness of procurement and often the CPO’s job security.

One of my concerns with too much centralisation in government procurement therefore has been that it wasn’t aligned with the wider strategy. Departments are still very separate, so you’re trying to impose a different procurement model (centralisation) on a fundamentally decentralised system.

However, maybe I have misjudged the depth and subtlety of Francis Maude’s thinking. As the Guardian reported here on a speech last week:

“ Speaking at Policy Exchange thinktank, he (Maude) also questioned whether the old model of departments as freestanding entities is still sustainable, asking whether a unified operating system would be better”.

So it seems that he doesn’t believe in the departmental system.  In which case, does he see procurement, contract management, and project management (which Cabinet Office has an increasing grip on as well) as key levers to start breaking down the departmental ”silo mentality”,  as critics might define the current system?

maudeIf Maude got Cabinet Office control of major projects, procurement and contract management, then that would be a significant part of the department’s autonomy and power gone. He would then be the de facto owner of the “unified operating system...”  and that could easily lead into breaking down the current organisational model into something more flexible, perhaps more programme based.

So perhaps the procurement approach is actually aligned – if not to the current structures, at least to the ideas in Maude’s head? That would explain why he is staking so much on what to some might look like relative minor questions of “who buys the copier paper”?   It’s all part of a grand plan, perhaps.

Personally, I think it would be a very interesting debate and one that is well worth having. The cost reduction carried out to date by the coalition has been diligent but not really radical in approach – salami-slicing rather than transformational, we might say.  There are still the same number of Whitehall  departments, and permanent secretaries as there were in 2010 for instance (and even more people around the Cabinet table, if we’re looking at the efficiency of our “leadership team”)!

So there are more radical steps that could be taken, and perhaps procurement could lead the way on this.  But how will Maude’s Ministerial colleagues feel about such a radical strategy, and perhaps the creation of a new seat of real power in the Cabinet Office?

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  1. Phoenix:

    Oh, what a lovely picture that is. He really is gorgeous, isn’t he? Where can I get the 2014 Cabinet Office Calendar?

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