National Audit Office on Improving Government Procurement (part 3)

In this final part of our review of the National Audit Office report, “Improving government procurement”, we’ll look at their recommendations (in bold here) and make some comments (not in bold) .  As you will see, we don’t disagree with anything much really – apologies if you’re looking for controversy, but they seen like in general very sensible suggestions.  Of course, implementing them will be more difficult than talking about them...

The first recommendation is the most general. Then they are organised in terms of to whom they apply.

- Departments are outsourcing part of their procurement function to GPS. Under this model, there needs to be defined roles and strong accountability on both sides.

NAO have rightly identified that what is happening here is an “outsource” of procurement, and as such, it needs to be properly managed. Spot on.

For the Cabinet Office

- The Cabinet Office should strengthen mutual accountability within this model of centralised procurement. ...  may include more formal reporting lines to the Chief Procurement Officer, sanctions for non-compliance, or holding departmental budgets for common goods and services at the centre. To improve the centre’s accountability to departments, the Cabinet Office should simplify governance structures, and clarify how it will deal with performance issues.

There’s a lot to consider here. Sanctions, common budgets and reporting lines are tricky issues given the fundamental system of departmental independence. But there are things that can be done on governance.

 - The Cabinet Office should be more sophisticated in setting procurement targets. It should work closely with departments to review the current targets... etc . Absolutely! And I think GPS (and more to the point, Ministers), do take this on board now.

Cabinet Office should strengthen the quality and consistency of the data it collects, to improve its oversight of procurement expenditure, and to ensure the data is useful to departments. NAO recognises the huge steps made already, but of course there is more to do.

For the Government Procurement Service

- GPS should provide robust evidence to departments, to give ongoing assurance that the central contracts provide value for money. Yes, of course they should.

 - GPS should be accountable to departments for underperformance, and should address a number of weaknesses in its management of the central contracts. NAO want to see clear expectations for service quality, and appropriate forums where departments can provide input into the development of contract specifications. I thought GPS had done a fair bit on this already, but again, all very sensible.

For departments

- Departments should comply with the central mandate to sign-up to central contracts. Some departments continue to resist signing up to central contracts, as they are not convinced that they provide a better deal than their existing arrangements.  NAO say this is “mandated at ministerial level” but I still don’t know how an accounting officer (Permanent Secretary for instance) can justify spending more than they need to just to support a centralised contract. So onus for me is on GPS to show that overall they offer better value – including of course elements like the resource saving within the Department.

- Departments should remodel their procurement functions to adapt to a centralised model. Yes, but of course they always have the worry that the next Government might follow a totally different strategy!

-  Departments should improve the quality of their procurement data, and should work with the Cabinet Office and GPS to ensure consistency. Absolutely! This is key, so get with the programme, people...


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Voices (2)

  1. Life:

    It’s all a bit wooly and obvious isn’t it? Could’ve, would’ve, should’ve…. Agree with Stephen above, albeit from a far more ignorant position. When’s Hailey’s comet coming round again?

  2. Stephen Heard:

    Well as an ex Executive Director of OGC Buying Solutions I am totally underwhelmed. There is nothing in the NAO report that hasn’t been said a million times over by Peter Gershon, the one I forget, Peter Fanning, Nigel Smith, Hugh Barrett, Alison Littley and now David Shields. I recollect saying in 2006 that centralised procurement of commodities could easily save a recurrent £1bn of real cash. However I had to say it as a personal observation as I wasn’t allowed to say it officially as Board policy just in case the dreaded M word was used! Roll on retirement.

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