Hughes & Day report on public procurement – “Structures”

Today we’re looking at the 4th pillar (topic) in the Jon Hughes and Professor Marc Day report on public sector procurement – "Structures". Like the report in general, I can thoroughly recommend their thinking on this topic to anyone, public or private sector, who has an interest in how to structure procurement organisations.

But while again, there is some top-class thinking here, it is around this point that I feel a faint sinking of my heart. (I’ll explain why later).

On the positive side, they provide an excellent analysis of how organisational landscapes can evolve, looking at different models from ad hoc co-operative procurement, through consortia, to national or European collaborative sourcing or outsourcing.  The authors also map out a “fit for purpose, hybrid approach (which) is the pragmatic solution to collaboration and aggregation” for the public sector –it is very thoughtful and thought provoking.

They also touch on some of the failures to date, looking at National Audit Office reports into topics such as Firebuy, which highlighted some of the problems with previous collaborative efforts in the public sector.  There’s also a brief review of how IBM and Vodafone handle some of the issues; Vodafone have a “centralised function based in Luxembourg” which a cynic might suggest is more driven by tax than strategic procurement reasons, but it’s interesting nonetheless.

So given all this good stuff, why am I vaguely depressed when I read this? It’s just that I’ve spent considerable time in my consulting days looking at exactly these issues, mainly working for OGC. We worked on the “procurement landscape” for ages, trying to get better co-operation and work out how we could structure a better overall system. Now there have been some slow improvements – I believe the PRO5 collaborative buying organisations in local authority land work together (and with the Government Procurement Service) better than they ever have. But for every step forward, there’s been another back – such as the chaos in the health collaboration landscape.

And that’s where Hughes and Day, like all of us, struggle. Much of what they say makes perfect sense. But how are we going to get collaboration and shared structures when we have local authorities run by different political parties, hospitals and independent health trusts with their own local governance, schools getting ever more independent, police forces with independent Police Authorities or even Commissioners in the future.. and so on.  How do we get them to buy into a grand plan in terms of procurement structures and landscapes?

It’s unfair to expect the authors to come up with the answer to that. But it does mean that this section of the report feels more like an excellent theoretical model, rather than something I can see happening in the near future. Unfortunately..

Download the report here at the "deficit reduction" website.

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