Government Procurement Service Annual Report and Overview published – and Francis Maude wants to keep his job

Government Procurement Service – or at least the “trading” arm, Buying Solutions as was, released their annual report this week. It’s a fairly weighty document, but alongside it they also published a snappy 8-page “Performance Overview”, which gives a very readable summary of their activities. It’s heavy on bar charts and while there’s a lot of data in there, it is clearly presented – a good initiative to make the results more transparent and accessible to the casual reader.

We’ll take a closer look at the detail next week, but if you’re looking for some light reading for the weekend, here’s your answer. You can download the main report here, and this is the Overview.

We also saw this week Francis Maude start his Ministerial reshuffle campaign – I’m sorry, I mean to say, saw Francis Maude in the Telegraph explaining how the savings target for government would be increased from £5 billion a year to £20 billion by the end of this parliament. The 2011/12 savings are now being claimed as £5.5 billion – but we still haven’t seen the detail on that.

Now, given the public sector spends in total some £700 billion a year, even £20 billion is not as big a number as it seems. But if it is only applied to the central part of government, where Cabinet Office has some jurisdiction , then it is very significant. So to achieve £20 billion of savings, Maude will either have to start collecting data and claiming wider “savings” - those made in local councils, hospitals, on reducing error in benefit payments,  and so on. Or we will have to see huge staff reductions across Whitehall in the major departments (and beyond into agencies and NDPBs).  It clearly can’t come from just the procurement work – the central collaborative categories have a combined value of around £10 billion, so reduce that to nothing and you’re still only half way to your target!

Which is why I do wonder about the politics of it, with a Ministerial re-shuffle widely expected shortly. Is Maude proposing such a huge target knowing that it could be a poisoned chalice for his successor if he was to get moved / sacked? Might it discourage others from throwing their hats into the ring for the Cabinet Office role - they would be taking on an "impossible" task? Could it make the Prime Minister think “I better leave Francis there, he’s the only one who understands how to get me this £20 billion”?

Looks like a smart move.

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Voices (5)

  1. Jon Hughes:

    Maude reminds me of many CFOs who “get” procurement for the first time. Good results driven through, enthusiasm more, recognition that the savings campaign is only just starting. The challenge with these CFO types is to help them understand that their real knowledge and insight into procurement is distinctly limited, but to do that without being thrown out of the door. The real goal should be somewhere c. £100bn of savings over two terms of Parliament. Someone needs to help Maude get his head around the four phases of savings that can be readily identified from other sectors:
    Phase 1: expense control and demand management. Already under way.
    Phase 2: price levelling, rationalisation and aggregation. Some of it under way.
    Phase 3: solid, robust procurement practice and teaming to drive cost management. Barely started.
    Phase 4: cost transformation, restructuring and breakthroughs. Hardly understood, but with massive scope across infrastructure and big projects.

    At the moment though I would be very sceptical. The #1 role of a top quality CPO is to influence that agenda upwards. How many are putting their hands up to try and do that?


    1. Final Furlong:

      Watch this space Jon. Whitehall whisperers tell me that some potentially significant changes in personnel (at the top) are planned, including in relation to Maude himself (who, as we all know, isn’t a Cabinet Minister). Might explain some of the recent, strange, seemingly short-term decisions that have been made (I’m thinking specifically of the CPO role).

      Now that ERG’s ‘Sales Director’ (Collington) has departed, the ‘spin’ will start to be replaced by hard savings (and facts) and deliverables.

  2. Final Furlong:

    Peter, I think, broadly, from memory, the budget is £700 billion with spend circa £260 billion (from memory). Whitehall spend (central) was circa £60 billion?

  3. life:

    Very insightful points! The only spanner in the works for FM, strategically, is that without some sort of seismic event, £20bn is clearly never going to happen. If anything, the IMF will have us spending more (albeit I grant not in Whitehall!) and as discussed previously even the current claimed “savings” are flaky as hell – so much for “low hanging fruit”. We’re also now getting closer to the necessary coalition split before the election, and a minority government isn’t going to have the clout to weather the sort of political storm that would brew up around that sort of number. Which supports your point – very strangely, all of this is very little to do with savings!

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