The Government Commercial Organisation – How To Demonstrate Performance?

We wrote here about the report from Tom Gash of the Institute of Government (IfG), titled “Building Government’s Commercial Capability”, which looks at the changes under way in central government procurement and commercial activities, including the formation of the “Government Commercial Organisation” (GCO to its friends) within Cabinet Office.

Here is a key paragraph from the report that touches on how the success of this programme will be evaluated.

"A new accountability model for the profession. The January 2016 commercial standards for government have been overhauled and new (November 2016) commercial operating standards will be used as a way of measuring department’s commercial capability and driving continuous improvement. How well standards are being achieved will be measured against defined success metrics which will indicate whether standards are met – and whether capability is ‘good’, ‘better’ or ‘best’. Initially, departments will benchmark their own departmental capability, but six months later departments will be reviewed by peers in other departments. Commercial and broader departmental leaders will be judged not on the current standards their department is attaining, but on the rate of improvement in capability. Staff capability is being judged by the new ‘people standards’ used within the assessment and development centre".

We have highlighted the particular sentence that most concerns us here. The concepts of self-assessment and peer assessment have major issues and potential flaws, in our opinion.

Indeed, if he is interested we can give Gareth Rhys Williams (the government's Chief Commercial Officer) the full history of the Procurement Capability Review programme of 2007-8, run by OGC which was then part of Treasury. This was an extensive programme which assessed performance across all central government departments. After the first wave of reviews, in which the review team included both senior OGC civil servants and external reviewers (including me in several cases), the departments persuaded OGC that the next time round should be self-assessment, rather than external reviewers.

The quality of those self-assessments varied hugely. Actually some of the departments, generally those that were better performers to begin with, did a decent job, but some that had come out poorly first time round had in two years mysteriously moved from a 4/10 type rating to a 9/10 without apparently any great investment, transformation or change in personnel!  I seem to remember DCLG making a particularly miraculous move, and it was a total joke in a couple of cases, but no-one took any action.

We’re also cynical about the idea of departments rating each other. We will either see a quid pro quo – give us a good rating and we will do the same for you – or there will just be a general wariness about giving anyone a bad report. And who is going to rate Defence? Quite rightly, MOD Commercial Management will be very sceptical of the ability of anyone from a civil department to understand their issues and get inside their commercial capability in what will inevitably be a short period of time.

This route is only a good option if Rhys Williams is cynically just looking for a tick in the box in a couple of years’ time – something to say “look, we’ve improved”! Now we happen to believe he is not a cynical man and is genuine in his intent. As he has said publicly, “My vision is to make the Government’s Commercial Function the best in the UK”.

We do believe that is a tough but achievable target and applaud his ambition. But the only way to do that is to get some sort of external verification, through benchmarking, reviews or whatever. Put it like this – no offence to either department, but if a commercial executive from DCMS announces that HMRC procurement is now world-class, why exactly should Spend Matters or anyone else believe them?

We’re not trying to create work for the consulting industry, but this is one area where independence (and genuine expertise) does seem critical. Even if Rhys Williams, Malcolm Harrison and their teams do achieve the goal of “best in class”, and they are generally heading in the right direction, it seems unlikely that they can prove this to the outside world by marking their own homework.

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