Committee reveals government procurement failing to drive efficiency
The government’s procurement and contract management failures “continue unabated” despite steps to improve efficiency and effectiveness, a committee has revealed.
The Commons Public Administration Select Committee (PASC) said in a report published today that by improving the efficiency and effectiveness of procurement, the government could save the taxpayer significant sums of money and drive economic growth.
Yet, the civil service across Whitehall departments show a real lack of understanding of the procurement process, and there is no clear strategy or leadership outlined by the Cabinet Office.
Bernard Jenkin MP, Chair of the Committee, said: “To be fair, there are failures of procurement [in the] private sector too, but that is no excuse. In government, the same kind of failures seem to be repeated again and again”.
The committee notes how EU Directives which govern procurement in the UK reinforce a process-oriented, risk-averse culture in procurement, which in the UK results in delay, increased cost and a failure to focus on outcome.
According to the committee, public procurement in the UK takes 50 per cent longer than in France or Germany, a situation which PASC says is “intolerable”.
However, whilst the government has made changes, such as improving data, aggregating demand across government departments and renegotiating the relationship with major suppliers, the committee believes “shortcomings” remain in the civil service’s ability to run effective procurement.
Thus, the government must make major improvements in the civil service’s capability and skills around procurement, as it “shows a consistent lack of understanding about how to gather requirements, evaluate supplier capabilities, develop relationships or specify outcomes”.
The Cabinet Office too must urgently set out a clear strategy for public procurement and be given the authority to provide effective procurement leadership, the report recommends.
Reforms which will allow criteria to be considered in the tendering process, such as wider social and environmental impact, and maximising the positive impact of public spending for the UK economy overall, must be welcomed, as the UK has trailed behind other EU countries in doing this.
The report also states that SMEs and social enterprises too must be given access to government contracts.
“Government has made huge strides in some areas, but there needs to be a more coherent strategy – a change programme – to ensure that improvement is universal and permanent, or the system and culture will just revert to type”, said Jenkin.
“Whilst we welcome the government’s initiatives to centralise procurement, progress so far has been painfully slow and sporadic.”
“We find it astonishing that a department should be able to cite legal restrictions as a barrier to collaboration with the Cabinet Office on initiatives that could save the taxpayer money. The government is a single customer and should behave as such. It is striking how immune departments seem to feel from agreed Cabinet policy. This could explain why there is so much frustration”.
He finished: “Our inquiry into the Future of the Civil Service has considered whether a more unified system in Whitehall is now required if we are to have modern government administrative system; we hope to publish that report in the autumn.”
The public sector spends £227 billion each year buying goods, services and work, £45 billion of which is spent by Whitehall Departments, and £20 billion spent by the Ministry of Defence.