Public versus Private Sector Procurement – Why Public Is Better (Maybe …)

In our two previous articles in this series, we gave the four fundamental differences between procurement in the public and private sectors, that drive all the other issues we see. We then presented the arguments here as to why we might consider the private sector to be “better” in some sense. Today we will present the opposite case – why public procurement might be better.

In the public sector you’re doing something other than just making money – there is a higher cause of some sort. Whether you are helping your colleagues to defend the country, save lives, support disadvantaged people, recycle waste … you are contributing to something worthwhile rather than simply making money for some rich owners or shareholders! You get to buy some interesting stuff too - aircraft carriers maybe?

Scrutiny and transparency is good  – you can argue this is a negative (as we did in the last article), but actually, we could argue it drives good practice and good behaviour. And there is something satisfying about seeing your project being reported in the press or debated in Parliament (as long as it is going well of course)! I speak as someone who was once on the front page of the Sunday Times … it was a slow news week, that’s all I’ll say.

There is a framework, policy, structure – this is linked to the last point really. Some of the best procurement I have seen has been in the private sector - as has much of the very worst. At least the public regulations give a structure and a framework for good procurement practice, whereas in the private sector, there are no limits on how amateurish, non-existent or even corrupt procurement might be.

Public procurement encourages creativity –public sector buyers have to be clever to achieve the best results while working within those rules constraints. I have always seen that as a challenge rather than a problem in all honesty – how to come up with something legal (and genuinely fair and transparent) but that would achieve the outcomes my stakeholders want. That is the approach that good public buyers take and it can be challenging, but also satisfying.

You work with a great variety of interesting people – more so than in the private sector generally. From Permanent Secretaries, probably the most intelligent cadre of people I’ve ever met, to politicians, police officers, the military, doctors and nurses. It all depends where you work of course, but you may well have dealings with the public, charities, think tanks and all sorts of interesting folk, as well as your supply base.

The benefits are not bad – most public sector staff still don’t understand the value of their pensions even if they are paying more in themselves now. It is the index-linking that is hugely valuable. I got a quote the other day for an index linked annuity (annual pension) of £10,000 a year at age 60. The cost? I need a lump sum of £400,000 to buy that! Oh yes, as another benefit, you might end up with an OBE or CB or CBE as well …

Clearly, it is daft to say one side is “better” than the other – they are different although there are many common factors too. But we hope our articles might at least give you a few points to consider if you are thinking about moving between sectors or indeed entering procurement for the first time!

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Voices (2)

  1. Procurement Geek:

    I find the emphasis on pensions odd. I guess it is down to what stage you are at in your life. generally though, i suspect if a lot of people were asked would they rather have extra money now (through more competitive salaries) instead of in X years via a future pot that is at risk if raiding/undermining by UK govt, i would wager the majority would ask for the money now!

    1. Peter Smith:

      I don’t disagree but equally I don’t think most public sector people realise the value of their pensions. Mid level public sector procurement people are retiring with a pension that would cost them over £1 million to buy if they had to do it from their own money (or from their accumulated defined contribution pensions pots, which is what most privates sector people have now). Most private sector people – unless they are on major six figure salaries – won’t get close to building that sort of amount. Yes, this could be undermined in the future but given how hard Francis Maude had to work to make public sector pension changes that basically saved f*** all for the public purse, I wouldn’t worry too much about that!

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