A corporate-style overhaul of the way the government buys up to £12bn of goods and services will be announced today as ministers try to use the spur of austerity to change the way Whitehall operates and make savings of around £1bn a year.
from the July 23rd, 2013 Financial Times article Business-style agency to run £12bn of government procurement by Sarah Neville, Public Policy Editor
The recent report that a new executive agency called the Crown Commercial Service will assume responsibility for UK government procurement ranging from energy to travel and everything in between is interesting on so many levels.
To start, yesterday’s announcement in the above referenced Financial Times article represents a fulfillment of sorts of the promise made by Francis Maude back in 2010 that the “revenue party” for large IT/ERP projects was over. Specifically, Maude’s admonishment to the 31 major government suppliers including BT, Hewlett Packard and IBM at a Cabinet meeting, that large-scale bespoke IT systems – many of which have gone significantly over budget in the past – would henceforth be replaced by less expensive and “off the shelf” offerings.
A key part of Maude being able to make and follow through on such a bold proclamation was inextricably linked to the government being able to address major issues regarding the lack of an effective SME engagement mechanism. The establishment and reach of this new agency beyond central government appears to accomplish this shortfall as ministers will now look to smaller and more nimble companies to produce savings.
This leads into the second element of the story, which is the level of influence that larger players have over journalist/analyst musings.
For example, there is a belief that the PASC report gave undue prominence to Spend Matters’ Peter Smith’s objections to a ‘Crown Procurement’ or ‘Crown Commercial’ Service. This leads one to wonder if Smith’s protestations were driven by actual fact as opposed to commercial interest?
After all, it would not be the first time that purported industry experts championed a position based on industry ties that they later reversed, as demonstrated by Smith’s North American Spend Matters counterpart Jason Busch. Even Smith’s latest paper on software usability is what one could define as being a day late (okay 9 years late) and a dollar short.
One can only speculate as to length of time that Smith will champion his “Crown Procurement” objections now that they have been discounted and shown not to be valid.
Finally, and as pointed out in my March 18th, 2013 post, I have never been a big fan of centralizing the procurement process in the public sector – especially using an NPM model as a reference point. Said sentiments notwithstanding, the possibilities associated with the establishment of this new agency is promising provided that a collaborative framework along the lines of the Relational Model is utilized to both establish and manage the critical relationships that are necessary for savings realization.
Regardless of which side of the pond you are on, the developments in the UK will be watched by everyone very closely over the coming months and years, so stay tuned.