An influential committee of MPs has recently concluded that knowledgeable, commercially-savvy procurement professionals should be embedded in every governmental department. This is to ensure that the best procurement practices are implemented across the board, especially after the collapse of Carillion.
This week, the Parliamentary Accounts Committee (PAC) reported on the government’s procurement policies in the wake of the Carillion implosion. When the company folded in January, it was still the sixth largest public supplier despite months of speculation that it was unable to service its debts.
The MPs’ findings follow the Public Administration and Constitutional Affairs Committee’s report into the Carillion crisis. This concluded that the government’s procurement guidance was only adhered to haphazardly, leading to misguided efforts to transfer risks that it didn’t comprehend into the private sector.
Cabinet Office minister David Lidington has since given assurances that the government’s procurement rules will be adjusted to include ‘social value’ in all evaluations of providers for public projects.
The PAC has been fiercely critical of the government’s approach to contracting. The committee believes that a rigid, narrow approach to cost reduction in the public sector meant that quality and value for money were exchanged to make savings.
To prevent this from happening in future, the Cabinet Office has said that it will distribute a ‘playbook’ to every department that will encourage new suppliers to bid for community projects. While it welcomes this announcement, the PAC advises that these guidelines should really be made obligatory.
Noting that strategic suppliers receive more than £100m in annual revenue from government contracts, the PAC’s Chair, Labour MP Meg Hillier, said that public contract-awarding bodies must look “beyond bottom-line costs.”
She added: “Crucial to this will be to embed procurement best practice across departments. For example, there must be clearer specification of contracts, properly scoped, so that when any deal is signed there is an agreed understanding between government and supplier of what is being paid for, and over what timescale.”
Nick has over 30 years procurement experience in consulting, outsourcing and line roles within industry with international experience across many sectors and industries and led many procurement programs with blue chip organisations.