Interview with John Manzoni – Our Analysis

Civil Service World recently carried an interesting interview with John Manzoni, the CEO of the Civil Service and now also Permanent Secretary at the Cabinet Office. Manzoni spent his career until around three years ago in the oil industry, and has brought a real commercial focus to his role. Indeed, he puts the need to improve commercial skills right at the top of his priorities for the civil service.

So not surprisingly, in the interview, he talks about several issues of interest to procurement people. He says Cabinet Office has hired over 40 senior "commercial experts" with another 40 to come. And there is going to be a "more holistic view of the top 400-600 commercial posts across government".

Now that is somewhat ironic - who remembers the "Government Procurement Service"? That was created around 2005 I seem to remember with Martin Sykes leading, and was trying to take just that sort of view, getting commercial folk to see themselves more as a single cross-government cohort. It was abolished by the new regime in 2010, except for the term itself - Government Procurement Service was used as the new name for OGC before it was in turn changed to Crown Commercial Service!

Anyway, Manzoni also talks about how there tends to be too much focus on cost.

"The combination of a lack of capability inside the civil service and the need to be “ever mindful of cost and price” in the public sector means “we have tended to default to a mechanism which says lowest cost is best,” he explains.  “[But] you can't just do things on cost, because some of the things we're doing are genuinely really complicated, and really novel".

We're going to pick up on some of these points in more detail shortly, and this is one where we're not sure we fully agree with him. We're not arguing with the need to focus on more than cost, but I'm not convinced the default mechanism in the public sector has generally been to look for lowest cost. His comment does not stack up with most of the procurement processes I have seen over the years.

And he wants to build "partnership relationships" with key suppliers. Now that is a fine objective, but any experienced public procurement person will also hear warning bells going off at this point. EU and national procurement regulations get in the way of "partnerships" in the way that the private sector generally might perceive those to work. The need for regular, open competition, for instance, is not something BP has to worry about. And there are good reasons for this to apply in the public sector, not least to guard against corruption, which again we will come back to in another article shortly.

Here is Manzoni again from the interview:

"In this kind of relationship, it will be capability on the part of civil servants that helps to ensure the public sector is getting good value from its partners. If it looks like contracts aren’t delivering value, officials need to be “confident enough to sit down with our partners in the private sector and say: ‘We may have mispriced this one’, or ‘No we haven't mispriced this, you're just not very efficient.’” 

Now being able to do what he describes there effectively is a huge ask for anyone, public or private sector, procurement manager or top oil company CEO. To know whether you as the buyer have "mispriced this one" or the supplier is not efficient or indeed is just trying it on - well, that is very challenging. (Actually, when you think about it, it's the supplier who does the mis-pricing generally, not the buyer anyway!)

Equally, we will quickly see successful legal challenges if disappointed bidders find out that the lower priced supplier who won the contract has been allowed a nice price increase because something was "mis-priced". So again, fine principles, but we are far from clear just how this would actually work in practice.

Anyway, it is good to see such a senior civil servant with such a keen interest procurement and commercial matters; do take a look at the whole interview here and we will be back with more detailed analysis and some further thoughts on the issues Manzoni raises shortly.

First Voice

  1. Sam Unkim:

    If it looks like contracts aren’t delivering value, officials need to be “confident enough to sit down with our partners in the private sector and say: ‘Lets nurse this along until you can give me a plumb job”

    FTFY

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