NAO report on Cabinet Office progress, including procurement initiatives

We mentioned the plethora of reports with procurement implications from the UK National Audit Office recently. One is "The Efficiency and Reform Group’s role in improving public sector value for money".

This reviews progress made by the Cabinet Office Efficiency and Reform Group (ERG),  who have public procurement as one of their priorities.  Well, to be honest, the report it's not that exciting because when it was researched and written, the ERG was still pretty new and there weren't a lot of results for NAO to assess. So it is more a case of NAO pointing out some previous issues and pitfalls around areas such as collaboration, and giving Cabinet Office some guidance; here is the final NAO paragraph, which sums up their thinking.

For the Government's overall strategy to have more success that the previous attempts detailed in this report, it will need;

  • a good understanding of the barriers to change and of the best levers for the
    centre to use to achieve sustainable value for money improvements;
  • appropriate strategies for each area, underpinned by a clear logic, and based on a good, data-driven understanding of the drivers of value for money;
  • arrangements to ensure compliance with the agreed strategies;
  • clear accountability for financial decision-making, especially where one department acts on behalf of others or the Group has decided to cancel or amend projects;
  • detailed planning by departments for how efficiencies and economies are to be
    realised, whilst minimising the impact on services;
  • milestones and accountabilities for tracking improvements; and
  • departments and the centre to work together with a clearly understood division of duty.

That's a decent list, although I suspect Francis Maude may feel that he knew all that already! In the full report, NAO make some good and more detailed points. In the area of 'savings' for instance:

At this stage, it is not clear what proportion of the spending reductions will relate to ‘efficiencies’ rather than reductions in services. Because of the short time scale, there is a risk that much of the cost reduction achieved by departments in 2010-11 will result from policy decisions to withdraw funding and reduce budgets or other short-term measures, rather than structured and sustainable cost reduction.

The perennial issue of savings measurement... But it would not be surprising, or inappropriate,  if the immediate cost reductions sought last year were delivered by what we might call demand management.  The trick for Cabinet Office in the procurement field is to move beyond just stopping expenditure and into real value improvement. That's what both the centralising procurement initiative and the negotiations with top suppliers are designed to do.

And NAO even point out that the reductions in spend we've seen - even in the consulting category - do have associated risks: "Key initiatives may have been delayed or harmed by the freeze on consultants".

The consultants of the world say 'thank you NAO!".

All good stuff, and I suppose NAO , if not exactly firing a warning shot across the Cabinet Office's bows, are making it pretty clear what they will be looking for when they come back and audit the outcomes and evaluate the success or otherwise of the programme.

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