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GO Interview – Adrian Ringrose

Tuesday November 3rd, 2009

By Morven MacNeil, GO Features Editor

Adrian Ringrose, recently appointed Chairman of the CBI’s Public Services Strategy Board, speaks to GO Features Editor Morven MacNeil about his new role and how outsourcing can help achieve the latest efficiency targets.

The CBI’s mission is to help create and sustain the conditions in which businesses in the UK can compete and prosper for the benefit of all. The confederation is the premier lobbying organisation for UK business on national and international issues and works with the UK Government, international legislators and policy makers to help UK businesses compete effectively.

GO spoke to Adrian Ringrose, recently appointed Chairman of the CBI’s Public Services Strategy Board (PSSB), for his thoughts on outsourcing and how crucial innovative thinking will be in achieving efficiency savings over the coming years.

How does the CBI influence public procurement policy in the UK?

The CBI achieves this by doing a combination of things. These include sharing our ideas and thoughts with various publications and meeting and talking to politicians and officials as often and as frequently as possible. Particularly in the area of public procurement, we have put a lot of quite useful case studies into our arguments to try and draw out what makes procurement go well and what tends to lead to less satisfactory outcomes.

In everything that we do there is a combination of policy ideals, practical evidence and real-world argumentation. That manifests itself in terms of the public services area through a work group which includes a number of member companies and advisors who focus on a specific area of public procurement. This work stream cuts across all sectors – including health, welfare and local government groups – and draws from each of them.

Can you give our readers a rundown of the PSSB’s strategies as regards procurement?

We have a number of strategies that we feel matter. Some of these relate to skills and making sure that the people with the right commercial skills are in post and empowered within the procuring authority’s set-up. We also feel it is very important that the experience and knowledge gained in public procurement is transferable so that people do not repeat the mistakes of the past or constantly reinvent the wheel.

Some government departments are quite centralised in the way that procurement is executed, while others are increasingly decentralised. The advantage of decentralisation is that it potentially puts procurement closer to the coalface; the risk that comes with that is that we don’t use the learning and knowledge from past experience to best effect. Looking at our own contribution as suppliers to government, we could perhaps be more forthcoming with our experiences as well. That is something that many bidders are quite reluctant to do on an individual basis, because if you are going to be critical of the process there might be ramifications. However, one of the things the CBI is able to do in that context is to provide feedback on a no-names basis. This helps us make an effective contribution on behalf of our members to the Capability Reviews.

How much further do you believe government could go towards reducing waste in public services?

I guess you could always go further; how much further will vary by department or authority. However, there does seem to be a tendency to try and take more things into account and burden decision-making with more and more criteria, rather than perhaps putting fewer things in and focusing on what really matters. That is a particularly important issue in the present environment where change is necessary and the ‘flash to bang’ time on enacting that change needs to be shortened to help contribute to getting the public finances back into shape.

Making procurement less efficient and effective is definitely something to be avoided. This comes down to people as much as processes. I could hold up a number of examples where public sector procurement has been carried out quickly, efficiently and very effectively and where it is hard to see how it could have been done much better. Probably most of the examples that I could hold up would not measure up quite as well though.

Chancellor Alistair Darling announced in April’s Budget Report that an extra £35 billion of recoverable VfM savings needed to be achieved by 2010-11 in light of the findings of the Operational Efficiency Programme. How will outsourcing play its part in achieving these efficiency targets?

Outsourcing has a big part to play because what it represents is the introduction of effective choice. From a CBI perspective, we are interested in choice and using a market approach to provision because we think that is the most effective way of generating continuous improvement and better value for money. I would contend that in the sort of environment where you are making a multiplicity of suppliers the norm, the market share of the outsourcer will increase because there is really only one way market share for a monopoly can go when you introduce choice. Over time it could well be that in many instances the best value service solutions do not come from the private sector; they might come from the voluntary or the public sector. Our message is that the benefit to the taxpayer is maximised in an environment where the choice dynamic is real and is well run.

How important do you believe innovative thinking will be in achieving efficiency savings over the coming years?

It is very important; I think that anybody who believes they are in a situation where innovation cannot play a part is probably not going to be a long-term survivor. However, I think the short-term imperative is more about perspiration than inspiration; we have to get on and do things, focusing very much on implementation and challenging ourselves and tracking progress against some of the efficiency targets that are being mooted. We do not need to spend all our time dreaming up new efficiency targets, rather we should be spending our time implementing the targets we have already set ourselves and measuring our progress accurately and transparently. Innovation is important, but application and implementation are as important if not more so in the short term.

Is the Government doing enough to encourage small and medium-sized businesses to bid for its contracts? What progress have you noted?

I think the Government certainly has in the past said and done a number of things to try and encourage SMEs into the public procurement process, but the positioning of SMEs in the marketplace is something that can be pushed too far.

SMEs in many instances would perhaps far rather be part of the supply chain to a bigger organisation than be the prime mover in that supply chain. In large and complex service provision situations, access to a decent balance sheet to be able to absorb pain, if pain is what emerges, is pretty critical. There is little point trying to put an organisation into a role if it is not big enough to take that potential hit. Most larger organisations that take up the lead role in major outsourcing operations, for example, are well integrated and will use some of their own skills and resources; but they will also use their supply chain, which inevitably is comprised of SMEs. I think the market is actually working more effectively for SMEs than people might give it credit for.

What is the most significant change that you have seen in recent years with regards to procurement?

I am not sure I have seen that many significant changes. Things seem to take the same amount of time, and probably involve more detailed interaction at an earlier stage than they used to. If anything, the more important issues tend to come to the table earlier now than they used to. In my experience more of the procurement detail is now worked out at the competitive stage than was the case previously, when transactions could move a long way from what they looked like at the end of the competitive stage to what they actually looked like once they were contracted for. I have seen lots of small steps rather than any single significant change.

Thank you for speaking to GO.

Profile

Adrian Ringrose is Chief Executive of Interserve Plc, with responsibility for developing and implementing the group’s business strategy and for ensuring that the right people are in place at the head of Interserve’s operational divisions with the necessary support to achieve their targets.

He joined Interserve (then Tilbury Douglas plc) in December 2000 with the acquisition of the Building & Property Group. He was appointed Business Development Director of Interservefm and was later promoted to Managing Director. In January 2002 he joined the Board of Interserve Plc, becoming Deputy Chief Executive in January 2003 before assuming the role fully the following July.

Mr Ringrose is also President of the Business Services Association, Chairman of the CBI’s Public Services Strategy Board, a member of the CBI’s President’s Committee, a Companion of the Chartered Management Institute and a member of the Chartered Institute of Marketing.

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