Review of UK Central Government Procurement Spend by Colin Cram

Whilst the UK government seems to be re-doubling its efforts to improve procurement by central government, the impact of the changes so far have been limited according to one Parliamentary body. Whilst parliamentary debates between the government and opposition parties tend to hit the headlines, much of the hard work of ensuring good quality legislation and holding the government to account takes place in the Select Committees. These are committees made up of elected members of Parliament or members of the unelected House of Lords. They consist of members of all main political parties and some are chaired by members of Parliament who are not in the governing party.

The Parliamentary body that has reported recently on procurement is the National Audit Office, that reports to the Public Accounts Committee. This, under its Chair, Margaret Hodge, is a very influential committee which scrutinises government expenditure and efficiency, highlighting deficiencies in its management and as often as not, stating how things should be put right. It regularly calls government ministers to attend its meetings and account for their actions – or sometimes lack of actions. A report last year by the committee on major projects made uncomfortable reading for several government ministers.

The most recent report on procurement looked at how the government was improving its management and to what extent initiatives to encourage collaboration between government departments were succeeding. The report only covered central government, which accounts for only about a quarter of public sector procurement spend, but it made for interesting reading.

The report, rarely for the National Audit Office, was quite complimentary in parts. It acknowledged the government’s efforts to improve the management of procurement. In particular, it praised, as much as it ever would, the work of the fast growing government procurement agency, the Government Procurement Service (GPS). However, it pointed out that although government departments had signed up to using the service for common procurement categories, expenditure through its agreements was only about 50% of what it should have been. Various excuses were made by heads of procurement – service was determined without suitable consultation, specifications weren’t always right etc. This was despite the fact that several departments were represented on the management board of the GPS and that there were two groups of departmental representatives that should have ironed out these problems, but were ineffective.

This felt like déjà vu. I have come across all these arguments before when managing collaborative operations and trying to get heads of procurement to work together more closely. I decided on one occasion that collaboration was so ineffective – heads of procurement trying to undermine it, that it should be replaced by a single procurement organisation, taking on all the responsibilities of the others. This solution was sold to their directors of finance. I asked one of the former heads of procurement (who by then was working for me in the new organisation) why people were so reluctant to collaborate. His response was that they all felt that if collaboration worked, someone might feel that a joint procurement organisation should be created. The outcome was therefore rather ironic.

The National Audit Office concluded that the limited collaboration between government departments was due to protectionism by procurement personnel. It could have taken a stronger line, pointing out that civil servants were able to frustrate the government’s intentions through non-cooperation. This demonstrates the powerful influence the procurement profession has managed to achieve in the UK central government. However, the report casts the heads of procurement in the role of blockers rather than facilitators. If this perception increases, it may be only a matter of time before the influence of procurement professionals begins to wane.

©Colin M Cram FCIPS

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