Public Services

Turf war breaks out over public sector procurement

Charlotte Jee Published 07 February 2013

IT procurement policy criticised by former G-Cloud director Chris Chant


The Cabinet Office has defended its approach towards public sector IT procurement following criticisms from former G-Cloud programme director Chris Chant.

Responding to Chant's critique in an article in Civil Service World , the Cabinet Office insisted that it has changed the way the government procures IT, bringing it back under control and achieving significant savings thanks to "strict financial checks enforced by the Efficiency and Reform Group".

The Cabinet Office said that it had saved £409m on departmental IT spend at the mid-point of 2012-13, with further savings of £200m expected by the end of March this year.

It added that the government is making it easier for SMEs to win government business, and also hailed G-Cloud as "a key part of our drive to make public sector ICT buying more agile in adapting to changing needs, matching solutions to business requirements, reducing waste, and cutting costs".

Chant had argued that the government can transform the way it procures IT by targeting far greater savings.

He said that the government has ended up "giving existing suppliers a gentle squeeze, and securing a modest discount rather than the transformational change that would be possible. Five or ten years ago, savings of 10 per cent would have been good, but today 90 per cent is becoming eminently achievable."

Despite welcoming the recent news that both the Department for Work and Pensions and Home Office have, in effect, adopted a "G-Cloud first" IT procurement policy, Chant said that the G-Cloud programme "remains woefully under-resourced".

The debate over public sector procurement is by no means confined to Chant and the Cabinet Office, however.

A separate argument, put forward by public sector procurement consultant Colin Cram, that the government should move towards a Tesco-style approach in its procurement policy by increasing centralisation and cutting down on overlap, has also opened up a wider debate on public sector procurement.

Cram's vision is for a national integrated procurement organisation, cutting across departmental and wider public sector silos because of the great commonalities mentioned above. He argues that a central expert team would handle major contracts, major outsourcings, major project support and PFIs. The team would provide commercial input into policy development and be capable of ensuring delivery of pan-government and public sector initiatives. It would also specify and procure products and services that were best bought nationally.

Critics say that the differences between Tesco and the public sector include the fact that the public sector lacks a similar level uniformity, that public sector organisations such as hospitals and schools, councils are individually accountable, that the public sector has wider responsibilities beyond shareholders, and that, as a whole, the public sector is far larger than Tesco.

Stephen Roberts, Managing Director of Kable, said, "Government often looks enviously at retail, where smart procurement and centralisation drive business success. But procurement experts like Cram and retailers like Philip Green miss the point when they suggest that the diverse, specialised public services industry can emulate Tesco or TopShop.

"If public service delivery needs to be benchmarked against a private sector comparator, the financial services industry is a better place to start."

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