Procurement Trends for 2013 – part 4, UK Public Sector

We talked earlier in this series about the economic situation facing western countries. The prospects for continental Europe and the USA are most uncertain (Euro stability and fiscal cliffs being the big unknowns), whereas for the UK I’m simply pessimistic.

Given all this, the pressure on public sector procurement to perform and maximise the value we get from every bit of government expenditure is only going to increase further, everywhere, not just in the UK. Indeed, my US colleagues have been covering what seems to be some moves there to make public procurement more effective.  Yet that will be in an environment, certainly in the UK and probably elsewhere, of limited pay rises, few promotion opportunities and headcount pressure all affecting staff.

Whilst we can be positive about that presenting opportunities for procurement to shine, that is tough when resources are under such pressure. I’m sorry to say that aspects such as the pay freeze will also mean more good people will inevitably look to bail out of government organisations into private sector jobs.

But putting pessimism aside, where might we see some positive progress this year? Focusing more specifically on the UK, there really does need to be a decision soon about the Defence Equipment and Support (DEaS) organisation within the Ministry of Defence.  Is DEaS going to be quasi-outsourced / privatised? If not, what other business models might lead to improved performance in this area, so critical to the UK on many levels?  GoCo or no-GoCo?

Bernard Gray, DEaS leader and the architect of proposed changes to much in the MOD acquisition and equipment eco-system, celebrated his two-year anniversary in his job last week. When I met him (some time ago), he didn’t strike me as a man who would sit around for years just waiting for something to happen! Or has that old Whitehall alchemy transformed him into just another time-serving Sir Humphrey, happy to work at Ministers’ pace and take his knighthood in 2015? I don’t think so, but he and Philip Hammond, the Minister (and a sensible man himself), need to make some decisions before morale plummets completely in MOD procurement.

What else is there to say about Rail? A quiet year with no more excitement will be all they’re asking for. No more West Coast screw-ups please. But we’ll hear more about the recent issues, not least when we see if any individuals are ultimately held to account.

Health will be moving up the political agenda in 2013 as a far-reaching re-structuring of the system kick in. That includes major changes in the way front-line health services are commissioned – or “procured” in our language. (We see this as “procurement” even if others don’t). There are some other potentially interesting developments around procurement in the sector – we suspect we’ll have a lot to report on during 2013 here.

Meanwhile, will Stephen Kelly, the relatively new COO in the Cabinet Office, or Bill Crothers, the only slightly less new CPO, make their mark on government procurement in 2013? We haven’t really seen anything different yet from either in our arena, other than perhaps the termination of three IT frameworks. And some of the organisational announcements in December from Cabinet Office worried us slightly from a potential procurement focus point of view – more on that to follow.  But we’ll hope for some new and exciting thinking from Cabinet Office.

We should also get a clearer view this year of whether the GPS collaborative procurement programme is delivering tangible savings. And despite severe pressure on staff numbers, there are some positive signs in the local government world in terms of greater collaboration between organisations, and perhaps some moves for procurement to get more involved in absolutely critical spend areas such as social care. Personal budgets will start having some interesting implications also for councils generally and procurement specifically.

So no shortage of stuff for us to write about then...!

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