The End of an Era – Looking Back at Bill Crothers’ Time as the UK Government’s Chief Commercial Officer (Part 2)

(Continuing our reflections on Bill Crothers' time as the UK Government’s Chief Commercial Officer; part 1 is here).

Our discussion then turned back to the commercial programme that Francis Maude and Crothers implemented. It was a pragmatic approach; Maude had a clear view of what needed to be done, and he was very happy to roll up his sleeves and get involved,  but there was never a "grand plan,” there was no huge chart or spreadsheet with everything laid out.  Crothers describes the process of prioritisation - "we had to make tradeoffs, you can't do everything, so we had three key priority areas. Start with the money, then get a grip of the supplier situation and also look at system improvements such as capability.”

That aspect of going after the money was primarily through the programme of negotiations with the biggest suppliers.  This achieved two things. It took cost out but it also changed the perspective - it said to suppliers "we are serious about changing the way you work with government.”

Crothers expands on this. "There was an extraordinary asymmetry of information, so we had poor data, suppliers had plenty. And it was a matter of policy and practice for government previously to act as a series of largely uncoordinated Departments! So the message to suppliers was that we expected better from them.”

That meant government should pay the right price, stop buying the things it didn't really need, or the "gold plated" version.  "And we don't want to build in cost for the supplier by our own actions, and then see that cost get reflected back to us.”

That's quite a complex message to get over to suppliers, so how was it approached? The team approached it as the "three steps to heaven" according to Crothers. Get the basics right, like the price, then look at specifications and similar issues, then eventually get to step three which is more about capturing good ideas and innovation from suppliers. He believes that the relationships with major suppliers are much more at that third level now.

One problem in terms of the credibility of the programme has perhaps been commercial confidentiality issues stopping much public discussion of what happened. But Crothers mentions one supplier where on analysing their accounts, it was clear that they were making margins around 5% greater from government business than from their general UK private sector clients.

"We pointed this out to them and they eventually made a contribution, let's say!”

Now in an ideal world, with perfect markets, the competitive procurement process itself would drive out the "right" price. But as Crothers points out, many of these government markets are far from perfect, so that's why it was necessary to get into this level of detail and discussion. But is it fair that there was some negative perception about the meetings being all about "beating up" the suppliers?

Not at all, according to Crothers. But they were very different from the senior-level meetings suppliers were used to, which were 30 minutes of pleasant chat. These were 90 minutes, Francis Maude was involved in many, he was well-briefed and set the scene - the country needs your help, and we need to save some money. The attitude was "firm but professional - we were respectful of suppliers but they knew they'd been in a meeting!”

There were only a couple of sessions that were apparently "at the feistier end of the spectrum.” But the government team did have to point out that occasionally that this wasn't about getting some nice-to-have "social benefits" from the supplier, it was hard-edged savings that were sought. There was a desire also to make sure the "savings" were as real as possible, so they were signed off by the departments, by suppliers, by National Audit Office - "there is always some leakage but I do believe the numbers were pretty robust,” says Crothers.

It certainly sounds like Crothers is proud of this work - and there seems little doubt that the "rebalancing" he talks about was necessary. Government had too often been exploited by some large suppliers.  He also makes another point about the reduction and controls on consulting spend; he feels it started to help the civil service get more confident in dealing with suppliers, whereas previously there had been too much reliance on consultants in this and indeed other areas. (I would have to agree with that, having seen at first hand the preponderance of consultants on programmes such as the ID Card and elsewhere in government back in the "noughties").

(We will be back with part 3 tomorrow).

First Voice

  1. Secret Squirrel:

    So there was never a grand plan? Best get the money back for that McKinsey report then.

    And I like the positioning of the supplier renegotiations. That wasn’t his in the first place. It was Adrian Kamellard’s teams work.

    That’s not to say he didn’t do some good (although his manner was pretty off) in some of these but its a bit revisionist again to not mention all the work which he follows through on and didn’t start.

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