Centralization, accountability key to UK procurement reform

Procurement "still needs a culture shift"

The coalition's new procurement strategy is the most coherent approach to reform yet and has resulted in savings but the government is failing to save as much as it could through centralised procurement, according to a report from the National Audit Office (NAO).

The NAO said that since 2010 there had been signs of good progress in key areas, such as expenditure on common goods and services and participation by small and medium enterprises (SMEs). Also, the creation of a Chief Procurement Officer and other posts had formed clearer lines of responsibility and the Cabinet Office has a much firmer grip on procurement expenditure. The NAO agreed that savings had amounted to around £426m in 2011/12.

However, the report highlighted ineffective governance structures, unrealistic targets, incomplete data and weaknesses in contract management. These "operational issues" meant that the centralised approach was not releasing procurement resources in departments as originally expected.

NAO head Amyas Morse said: "The Cabinet Office will have to lead a major cultural shift across government if the centralising of buying goods and services is to deliver the significant benefits on offer.

"There are signs of real progress, but the success of the reforms cannot depend on whether departments choose to cooperate. Departments must commit as much of their procurement expenditure as possible to central contracts and the government procurement service must be held accountable for its performance."

"Two and a half years after the government committed to centralising public procurement, individual departments are still too often doing their own thing," said Jim Bligh, CBI head of public services reform. "We need to see strong leadership from the Cabinet Office to drive a culture shift across the whole of Whitehall, highlighting the benefits of bringing procurement under one roof."

Bligh added: "High quality procurement can be an important driver of growth and although the government has made some progress in using more SME suppliers, it needs to create more opportunities for smaller businesses directly and through supply chains."

Richard Bacon, a member of the public accounts committee, said the Cabinet Office was making some real progress in improving government procurement, adding that big names do not necessarily mean best value.