GPS and Cabinet Office – integration or disintegration?

Bill Crothers “announced” (well, spoke to a journalist) on Monday that there would be more integration to come for GPS and the other procurement activities in Cabinet Office.

I have honestly been racking my brains to understand the business case for this. On the positive side, the benefits seem very nebulous. Maybe the Crown Commercial Representatives do need to be well aligned with GPS but unless you’re going to get these captains of industry they’ve appointed to physically work out of Liverpool, then merging GPS into core Cabinet Office organisationally doesn’t in itself achieve alignment. I’m just really struggling to see the positives.

Then we have the negatives. Well, it has already led (we suspect) to the resignation of David Shields, the most senior operational procurement professional in Cabinet Office. And I suspect many of his team are currently polishing their cvs as we speak, given the uncertainty now introduced by all this.

There are also practical implications of such a move. GPS is an independent organisation in many regards, and was set up as a “Trading Fund”. That is not accidental – it was set up like that for good reasons. But I don’t see how it can maintain that status if it is simply part of Cabinet Office.  I don’t believe it could carry out policy type work – for instance how could effectively the  same organisation both negotiate on public procurement regulations in Brussels AND trade as a commercial venture? There are obvious conflicts of interest.

In which case, if Trading Fund status disappears, is it still able to make money? If not, that’s £50 million of GPS  revenue gone for Cabinet Office – a huge hole in their budget.

How do the GPS non-executive directors feel about this? Do they disappear if GPS no longer has its own independence?  Have they had an input into this decision?  Are they happy about abolishing the organisation? Does this cut across their statutory responsibilities?

There are other issues with losing that arms-length status. How could anyone complain to the Mystery Shopper service about GPS  if it is all part of the same organisation – and from a general policy point of view, how could any complaints against GPS be investigated by the same organisation?

And – for me the biggest issue – I believe the wider public sector will simply stop using GPS if it is perceived to be just part of core Cabinet Office. GPS – and Buying Solutions before it – just about managed to keep that separation. But I suspect local authorities will be concerned if they perceive that  all their spend  information (and remember all the good work GPS has done over the last two years to try and collect better and wider government spend data) goes to Cabinet Office.  And if there is still a profit margin involved, will a Labour local authority be happy to subsidise the Cabinet Office – a department that is driving many initiatives that they oppose? As I say, GPS could just about claim to be separate enough to avoid these issues. That will quickly change.

We got a thoughtful comment from Ian Taylor who leads NEPO, one of the key local authority procurement consortia / collaborative bodies on yesterday's post on this topic - here's part of what he said (read the whole comment here):

If GPS are to become more focused on central government and its £5bn then there is bound to be less appreciation of the needs of the wider public sector. That might lead to a drawing back or more likely a one size fits all view that if a procurement is deemed good enough to be imposed on Whitehall then its good enough to be imposed on local government (or the police or fire and rescue or colleges). Lets hope somebody in the Cabinet office has some sort of clue about the wider public sector procurement world and the fact that it is a spend that is hugely greater than central government.

It would be really good to hear a view on the benefits. Perhaps I am missing some clever masterplan. Perhaps outsourcing is part of it (but even then, I can’t see how integration helps that really. No outsourced service provider would want the “policy” stuff).  And I’d love to see the risk register for this. Has it all been thought through? Or is it back of a fag packet stuff?

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