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Procurex South Live review

Wednesday March 11th, 2015

Procurex South Live 2015 took place at London Central on 10 March and the Keynote Arena was buzzing with discussion about the past, present and future of public sector procurement. Government Opportunities

Bill Crothers, Government Chief Commercial Officer, Cabinet Office, was the headline attraction and discussed the need for putting commercial thinking into the DNA of the public sector – something it seems has been missing until recent times.

He outlined how far public procurement has come over the last five years. Procurement in the public sector has changed and this change was central to much of what Mr Crothers discussed at Procurex South Live. He outlined the sea change over the past 30 years in the way the public sector works, with a rapid increase in the involvement of the private sector in both service and policy delivery. This puts procurement at the heart of providing services to citizens. This in turn not only places huge capability demands on procurement professionals, but, equally importantly, policy makers also need to become ‘business minded’ and understand the commercial implications and opportunities of delivery options and decisions.

During his keynote speech, Mr Crothers cast his mind back to five years ago when considering how far procurement has come, saying: “Five years ago central government was spending about £50 billion on goods and services, five per cent of which was on consultants and contractors. It’s hard to believe but we did not know who our largest suppliers were. We had no data to tell us who we were spending money with. Everything was organised in a fragmented way.

“We had some difficult contracts and delivery against contracts – frankly we weren’t a good client. I call it the three ‘I’s – we were indecisive, incoherent and inconsistent – we weren’t a well-organised client and it was very difficult to do business with us.

“We are better organised today than we were. But we still have a long way to go; this is a journey – and it will take another five or ten years.”

Mr Crothers was keen to tell what is being done to embed commercial thinking in the public sector. It’s an ongoing process but one that has made significant progress over the last five years, according to Mr Crothers. He said:

“A lot has changed due to circumstance. It’s been a positive perfect storm. There was the deficit and times of austerity, so there was a need to do something and this Government set an agenda of very material savings. A combination of Francis Maude, economic circumstances and the Civil Service needing to respond to the set of circumstances meant change would happen.

“£5.4 billion, a third of the total efficiency savings, was made by commercial savings over the four years until March 2014. It came from better procurement, better contract management and better contracting generally.

“Savings have been realised. We are today better organised than we were. In no way do I want to paint a picture that the job is done, we still have a long way to go, but we are better than we were five years ago. This is a journey that will take another five or ten years.”

So, according to Mr Crothers, the Government is more efficient and better organised than it was five years ago. It now knows who its suppliers are, how much it spends, what its contracts are, and it has a much more mature relationship with its top suppliers. It created the Crown Commercial Service (CCS), which is essentially a managed procurement service that does three things: manages direct spend; has an advisory service; and offers policy advice. With the scene now set, his attention shifted to the future.

Savings will continue to be very important but Mr Crothers believes making savings over the next five years will be very challenging. With a General Election on the horizon, he said that, whatever the composition of the new government, he will drive for efficiency and better procurement practices. He said that there is a need to recruit experience in complex contract management and highlighted the role of frameworks as great commercial vehicles for savings and better contracting.

Mr Crothers explained:

“The amount of spend that goes through the CCS frameworks is £15 billion, that’s an eye-watering amount of spend. The more we can [establish] frameworks as great commercial vehicles for everyone in the public sector to use, the more common goods and services CCS will be responsible for in buying and management.”

Looking to the future, another positive change to public procurement is in its growing professionalism. There is still the continuing need to improve capability but Mr Crothers wants the Civil Service to grow its own capability through recruiting and developing graduates. He said that government procurement has gone from being a ‘backwater’ function to a strong career for the next wave of graduates and that the Civil Service would be recruiting between70 and 100 graduates by this September under the flag of the CCS.

Mr Crothers said: “Government procurement wasn’t at the forefront of ministers’ or senior officials’ minds five years ago – to work in government procurement wasn’t the way you were going to make your career as a civil servant.

“We need to improve our capability – we want to ‘grow our own’ by bringing in graduates at a greater volume than before into commercial profession. There’s now a graduate stream dedicated to commercial.”

Improvements have been made but Mr Crothers believes that central government still needs to be a better client, although it has improved. At the same time, the public sector wants suppliers with distinct capabilities, and also needs better performance from its suppliers. Mr Crothers put out a call for high-performing and innovative suppliers to get involved in public sector procurement:

“We need our suppliers to under-promise and over-deliver, not over-promise and under-deliver. We also need to continue to be a great client to deserve great service.

“We want to hear from individuals who don’t have public sector experience – we want the best from other industries using new technologies, operating on thin margins to be more innovative. That’s the sort of supplier we want.”

Capability, being a better client, better supplier performance, the CCS and the new EU Public Procurement Directive as implemented by the UK Public Contract Regulations were highlighted by Mr Crothers as five priorities in government procurement in 2015. There is work to be done by the sound of things, but the drive for efficiency is strong if the talk around Procurex South Live is anything to go by.

 

 

 

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