Government procurement still a painful process for business
Reform headed in right direction but pace is slow – new CBI survey
As private sector companies involved in the aborted West Coast mainline rail franchise and the taxpayer continue to count the cost of another flawed procurement process, the business community delivers its verdict on Government progress in reforming public procurement one-year-on from its White Paper.
In a CBI survey of nearly 100 firms published today including small and medium-sized businesses, implementation of procurement reform was given an average score of 5/10.
Although Government policy for reform is heading in the right direction - with an overall score of 8/10 - implementation is slow. Achieving faster procurement scored just 4/10.
The UK public sector spends £230 billion a year purchasing goods and services from the independent sector and driving growth through smarter procurement could have a significant impact but managed a score of only 4/10.
There are however some encouraging signs that Government’s desire for change is gathering momentum.
The publication of both pipelines and the first capability strategy were welcomed by respondents; information about future opportunities received the highest score for implementation of 7/10. And LEAN training, which will address the deficit of commercial skills and expertise in the public sector is being rolled out, and earnt a score of 6/10.
Although there are early indications of the drive to reduce the complexity of the procurement process, this has had the least impact so far with a score of just 3/10 for implementation to date.
Across the board the rate of reform requires more urgency. The lack of progress on turning sound policy into actual change is not only damaging to government and costly to the taxpayer, but it also stunts growth.
It also prevents the development of long-term mutually beneficial relationships between government and its suppliers which could have a positive impact on key areas such as industrial policy, cost reduction and the implementation of broader public service reforms.
John Cridland, CBI Director General, said:
“The recent problems over the procurement of the West Coast franchise have once again highlighted the challenge the public sector faces in its relationship with the private sector.
“As the complexity of deals increases, we need to see urgent improvement in the level of commercial skills that are second-nature to businesses, but are too often absent in public sector procurement. And more contracts should be focused on agreed outcomes, which deliver certainty and value for the taxpayer.”
Kevin Craven, CEO Balfour Beatty Services and Chair of the CBI Procurement Panel, said:
“The Government has the right policy solutions but, as suppliers, we are yet to feel the changes on the ground. Procurement reform needs to be part of a larger conversation about industrial policy and public service reform where industry wants to play its part.”
Businesses in this survey have highlighted the need for bid documents to be simplified and standardised and the number of bid portals to be cut; pipelines are welcomed but all aspects of them must be developed and their use made more widespread. Individual departments can drive reform further, by keeping to deadlines and publishing procurement performance metrics.
The CBI’s procurement survey was carried out between September and October 2012. 91 businesses across the UK responded, covering 12 key sectors and over 50% represented small and medium sized business.
The CBI Annual Conference 2012, Forging a New Economic Future, will take place on Monday 19 November at the Grosvenor House Hotel in London, featuring an exceptional line-up of business and political speakers.
Media accreditation has commenced. All media wishing to access the conference venue must be accredited. The process will close on Wednesday 14 November and late applications may be unsuccessful. This can be done through the CBI website - you will need to submit a digital passport-style photo for the conference ID badge.