Procurement professionals are being asked to meet a triple challenge: securing better value for money, while improving services and meeting wider social objectives. Suzannah Brecknell reports on our online debate

At the centre of two of the coalition’s public service aims – to reduce public spending, and to diversify service delivery – sits a group of professionals responsible for managing government shopping. Procurement officials tend to get criticism from all quarters – but they have a crucial role to play in efficiency drives and public service reforms alike.

In a recent online debatehosted on CSW’s website, www.civilservicelivenetwork.com, experts from inside and outside government discussed the series of high-profile procurement reforms which are being driven through the Cabinet Office’s Efficiency and Reform Group. The debate, held in partnership with international law firm Pinsent Masons, was kicked off by John Collington, head of procurement at the ERG, who emphasised that value for money and service improvement should not be considered as separate goals: “Quality and improved service delivery is at the heart of government procurement,” he wrote, “and must not conflict in the bid for value for money. It is part of that very value we seek.”

Collington went on to outline the ERG’s plans for reform. It has targeted £12bn of spending across key categories of commonly-procured services, such as travel, office supplies and marketing (see CSW 3 November, p1). By centralising the management of procurement in these categories, it hopes to save £400m through “more effective sourcing and contracting, buying and paying, and continuous supplier management”.

This work will be based on existing best practice and assets wherever possible, he said, supported by a series of “deep dive” ERG-led reviews designed to “base-line the current position and agree immediate actions to improve the supply and reduce costs” in these key categories. There will also be simplification of the procurement process, and more engagement with small- and medium-sized enterprises (SMEs).

Contributors raised several questions and challenges for Collington. Bridgette Cameron, of interim staff providers Alpine, wondered how the drive to centralise management will affect SMEs. Responding to her concerns, Collington said category management teams will ensure their strategies support SMEs, and there will be simpler mechanisms for businesses to engage with government – for example, a Contract Finder website to be launched next year.

Peter Smith, managing director of consultancy Procurement Excellence, asked whether it is practicable to centralise all spend in these categories, suggesting that aligning 80 or 90 per cent “will give virtually all the benefits anyway”. Smith also questioned whether the projected savings are large enough. They amount to around a 13 per cent saving over four years, he said, suggesting procurement will “contribute less than its fair share” when departmental administrative budgets are to fall by a third during that period.

Another challenge to push reforms further came from public sector procurement expert Colin Cram. The ‘deep dives’, he said, “will need to go beyond what are normally considered the procurement aspects, to those who commission or influence procurements. So work will have to go both up and down the supply chains.”

The deep dives should also be broadened to address social issues, suggested John Lee, director of the West Midlands Economic Inclusion Panel, a cross-sector partnership to address worklessness in the West Midlands. Lee is co-author of the West Midlands Procurement Framework for Jobs and Skills, which won the Equality in Procurement Award at the Civil Service Diversity and Equality Awards this year.

Procurement “can play a crucial role in delivering the government’s socio-economic goals”, he said, arguing that this is already happening in some areas. “Recent years have witnessed real progress in demolishing the myths that surround EU competition law,” he wrote, and more public bodies have stipulated that bidders must provide evidence of social value in their tenders. However, he added, this is currently limited mainly to large projects: it should be spread to all aspects of public sector procurement. His particular concern is to ensure that “every pound of public sector spend is ‘sweated’ for its potential to deliver local jobs and skills outcomes.” This could be achieved by placing contractual requirements on government providers to invest in workforce development, for example, and to offer “workless people access to jobs, apprenticeships, internships and work experience”.

While few could argue against the objective of realising social benefits through public spending, Cram raised a concern about measuring these benefits. Principles of corporate social responsibility have been part of public sector procurement policy for many years, he said, but he was not “aware of any attempt to measure whether any of these initiatives have had any significant impact”. Before implementing any new initiatives, he continued, one should at least have a baseline and an idea of the metrics which will define success; without this, “initiatives tend to become little more than slogans or political propaganda”.

There is a “paucity of measurement, monitoring and evaluation” in this area, agreed Lee. Part of the problem in establishing this data, he argued, is the fragmented nature of public sector procurement.

At the recent More for Less conference, organised by CSWpublisher Dods, Cabinet Office minister Francis Maude expressed a similar frustration when discussing contract renegotiations with key government suppliers – there was no easy way to aggregate spend data across government, he complained. Centralised procurement management and the ERG’s reforms will help to improve this data in central government, but tackling fragmentation across the wider public sector will be another challenge entirely.

Even if spending figures can be aggregated, measuring social benefits will require a great deal of careful analysis; and this brings us back to the point where Collington began – that the value of services must not be judged by financial criteria alone. As Rob Wormald, head of strategic market development at the Department for Work and Pensions, put it: “Building an effective public procurement service must include looking at how we can secure our objectives in ways that deliver best value for money – as judged by the citizens who are on the receiving end, as well as the Treasury.”

Wormald focused on the opportunities for each department to realise its policy objectives through better procurement. Many public services are now commissioned out, he noted, arguing that procurement professionals “need to be able to understand the total cost and benefit of services” to consumers as well as departments, and should be increasingly aligned to the holistic, citizen-focused approach of initiatives such as Total Place – now evolved into the 16 place-based budget pilots which will launch next April.

To deliver value for the Treasury and citizens, Wormald argued, contracts should increasingly focus on “the whole citizen” rather than emerging from departmental silos. This would give “the taxpayer scope for savings, citizens more integrated and effective service delivery, and suppliers scope to reduce costs by cutting overheads and reporting performance through a single agreed channel”. He also raised the need to find “imaginative ways of mobilising the strengths of the voluntary and community sector”, which can “offer us the best ways of reaching out to the very hardest to help”.

To make a success of this kind of change, the procurement community will need to be “more risk-taking, collaborative and whole-customer-focused than has all too often been the case among commissioners up to now,” Wormald said. These issues are among those expected to receive attention in a green paper on commissioning due to be published by the Cabinet Office soon, so while the ERG pushes ahead with its centralising agenda, we can also expect wider reforms in the procurement and commissioning community.

Things are moving fast in the procurement world; as Collington said when he opened the debate, there has never been “a greater opportunity for procurement professionals in central government to shine”. Should these reforms fail to deliver the expected savings and hoped-for improvements, it will be a blow not only to the procurement community within government and the coalition’s plans for public sector reform, but also for the citizens and taxpayers whose money the procurement community is, ultimately, spending.

The debate continues online: you can contribut to the debate here, or comment below this article (you will need to be logged in to do this).

Written by Suzannah Brecknell, CSW