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‘Repeated failures’ highlighted in Government procurement

Government’s approach to procurement is failing, a report by the Public Administration Committee (PASC) states.

Despite attempts to improve efficiency of procurement, the stream of failures “continues unabated”, MPs found. The public sector spends £227bn each year on procurement, £45bn of which is spent by Whitehall departments.

There is a clear need to improve efficiency and effectiveness of procurement to save money and drive economic growth, the report argues.

It highlights that EU Directives reinforce a process-oriented, risk-averse culture of procurement which results in delays, higher costs and a failure to focus on outcomes. SMEs and social enterprises should have improved access to government contracts, and major improvements are needed in the civil service’s capability and skills.

PASC called for authority for the civil service to provide effective procurement leadership and address “clear shortcomings” in the current ability to gather requirements, evaluate supplier capabilities, develop relationships or specify outcomes.

Bernard Jenkin MP, chair of the Committee, said: “In Government, the same kind of failures seem to be repeated again and again. In the EU we all operate under the same rules but the UK Government seems to take the longest and we fail to maximise the benefit of public procurement for our own economy. There is no excuse that it takes 50% longer here than it does in France or Germany.

“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. Lord Levene’s evidence was striking in this regard: he made big changes in the MoD in the 1980s, but he comes back 25 years later to find things are worse than they were before.

“Whilst we welcome the Government’s initiatives to centralise procurement, progress so far has been painfully slow and sporadic. Only a coherent strategic plan, setting out clear objectives and how they are to be achieved, backed by united leadership across the top of government, can achieve the necessary change. The Government has failed to set out a clear strategy for public procurement and it may be impossible to achieve this without changing the relationship between departments and the centre.

“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. 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.”

Peter Holbrook, CEO of Social Enterprise UK, commented: “This report is to be welcomed. In its current form, national and local Government buying practice is not working. A lot of money is wasted, and an unfair playing field has been created where a small number of large providers dominate the provision of public services in the UK. The situation usually results in the deterioration of public services, but the issue is also vital to the wider economy and to UK democracy.

“Much greater co-operation between government departments is critical. The £227bn of taxpayers’ money that is spent buying services gives the public sector huge purchasing power, and the Cabinet Office’s guidance on the procurement of services must be fully supported. The government must start acting as a single buyer, and get a better deal for taxpayers and public service-users.”

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