UK centralised public sector purchasing – still work to do

The National Audit Office today publishes its report  Improving Government Procurement. The mainstream media will doubtless stay focussed on the headline examples of ‘waste’, especially in high-spending and high-profile departments such as the MOD and NHS. But for the public sector and its suppliers there is more to be concerned about in one of the main conclusions of the report; that less than half of public sector spending in the UK is carried out across departments to take advantage of economies of scale. That this is the case has long been a source of frustration for those suppliers signed up to framework agreements who find that things aren’t as clear cut as they believe when it comes to purchasing decisions.

The report is positive in some respects. For example, it welcomes the £426 million savings made by the Cabinet Office and Government Procurement Service (GPS) in terms of a programme of centralised procurement but concedes that much more still needs to be done. It says: “The Cabinet Office will have to lead a major cultural shift across government if the centralising of buying goods and services is to deliver the significant benefits on offer. There are signs of real progress, but the success of the reforms cannot depend on whether departments choose to cooperate. Departments must commit as much of their procurement expenditure as possible to central contracts and the Government Procurement Service must be held accountable for its performance.”

The GPS comes in for some particular criticism in the report, which says that there are “departments raising concerns about the inconsistency of contract management and the quality of customer service. While departments need to make compromises and adapt to a more standardised approach, there are cases where the central contracts do not meet departments’ operational needs, in part due to a lack of consultation when developing the specifications”.

If this were a school report, the teacher would sum it up as: ‘some progress, but can do much better’.