Public procurement is set for reform – and about time too 

A casual reader of the last few issues of CSW would be forgiven for thinking that we had decided to run a campaign for more efficient public procurement. First, prior to the election we gave plenty of space to Francis Maude’s apparent conversion to the idea of enforcing greater central control over the internal functioning of departments, in the pursuit of improved efficiency. Next, on 19 May, David Noble of the Chartered Institute of Purchasing & Supply argued forcefully for more effective and directive leadership on procurement within government, while an accompanying feature found widespread support for an ‘integrated’ model of procurement.

This integrated model has an enthusiastic champion in Colin Cram, whose Institute of Directors report helped shape the new National Audit Office review that also calls for greater centralisation of some categories of spending and the introduction of a clearer, more coherent over-arching framework for public procurement. We have now published an Opinion piece by Cram, and an interview with the NAO review’s author Keith Davis.

In fact, CSW can’t claim any credit for the government’s new push towards greater centralisation of procurement, which has been clearly signalled in the mission statement of the new Efficiency and Reform Group. We merely identified and examined the gathering calls for a thorough overhaul of public procurement. It is clear, however, that impartial experts from across the procurement sector and the public spending watchdogs are agreed on two points. First, there is vast potential for greater efficiency in public procurement. And second, the best way to realise this opportunity is to force public buyers to combine their public spending at the highest possible level, channelling purchases through expert buyers charged with aggregating buying power and getting the best possible prices. This, it seems, is the road which the Efficiency and Reform Group will travel – though the government has not yet signalled how far and how fast it intends to move.

For many public bodies – and, in particular, for their procurement departments – this reform will be an uncomfortable process. There is clearly excess capacity in the current system, which positively encourages duplication; so job losses are inevitable. A plethora of public agencies have sprung up to support collaborative procurement, creating a cluttered and opaque environment that diverts rather than combines public spending: many of these may prove superfluous. But public agencies faced with painful reforms should make sure they’re on sound ground before resisting reform. 

When systemic change could yield big savings, reducing the pain for frontline services and key central functions, there is only one obvious argument for hanging on to control over procurement operations: that your organisation’s needs are so specialised that you’re the only public agency in the country that requires this particular good or service. This is an argument with weight: any reform must not weaken frontline services – particularly given the new government’s desire to free local service providers to respond to local needs. But it is also an argument that should be deployed with great care. 

Certain sections of the public sector have long experience of resisting greater coordination on the basis that their needs are unique and utterly special. However, this is an era in which the interests of service users are under threat – and their needs must be paramount. If public bodies end up reducing efficiency in an attempt to protect their managers’ freedom of maneouvre, they may find themselves on a collision course with their users, their partners – and the new government.