Sector Focus Bulletin

Editorial

Watts Sector Focus Bulletin - Local Government

The recent passing of Baroness Thatcher has caused reflection by many on past government decisions and their impact upon the UK, our economy and people.

In this Local Government Focus Bulletin we consider some of the current Coalition Government’s changes to procurement strategy and consider how successful these have been thus far.  The government has clear intentions to drive cost efficiencies and time savings via these public procurement reforms.

Coffee also appears to have been more than a stimulus to start the day with; public backlash to Starbucks’ high profile UK tax dealings have filtered into the latest Budget and we consider the impact of this Budget on suppliers bidding for government contracts.

The Community Infrastructure Levy is encouraging local authorities to be explicit and clear when asking developers to contribute to infrastructure; will ‘double dipping’ now be confined to tea breaks and biscuits? We look at the progress being made to provide a clear protocol for BIM on government projects and give you the quickest way to acquire dis-used government property via their Rightmove inspired website.

Tom Kibblewhite
Associate, Watts Group PLC

Watts Sector Focus Bulletin - Local Government

More work needed on procurement reform

‘Must try harder’ is the verdict of the National Audit Office on the government’s procurement strategy for public sector projects.

PS Focus Main April 13

Since it was elected in 2010, the Coalition Government has made a number of changes to public sector procurement structures and processes. This has led to savings, but according to a recent report from the National Audit Office (NAO): “a cultural shift is needed if government is to obtain all the benefits available”.

Amyas Morse, Head of the NAO, believes there are significant signs of progress but stated in February that “the success of the reforms cannot depend on whether departments choose to cooperate”. Instead, the NAO Comptroller and Auditor General believes that government departments “must commit as much of their procurement as possible to central contracts and the Government Procurement Service must be held accountable for its performance”.

According to the NAO report, there have been signs of “real progress” in a number of key areas. Expenditure on common goods and services is increasingly centralised, participation by SMEs has increased and the Government Procurement Service is “an improvement on its predecessor”. The NAO also applauds the creation of the role of chief procurement officer and associated positions which have identified clear lines of responsibility and the Cabinet Office now has a “firmer grip” on expenditure on procurement. In total, an estimated £426 billion was saved as a result of the move to centralised procurement during 2011-2012.

However, central contracts only accounted for £3 billion of the £45 billion that central government spent on procurement during that period – less than half of its spending on common goods and services. According to the NAO, this shows that government is not maximising the potential for savings offered by efficient, centralised procurement. There have also been other problems in implementation including ineffective government structures, unrealistic targets, incomplete data and weaknesses in contract management.

Despite the issues raised, the NAO believes the current procurement strategy is “the most coherent approach to reform to date” and there will be “significant benefits” if the government’s approach can be successfully implemented.

For more information on the government’s procurement strategy, contact Tom Kibblewhite, Associate at Watts Group PLC, on 0161 831 6180.

We want to hear your views on the government’s procurement strategy - does it warrant further reform or are you satisfied with the changes that have been made? Get involved with the debate on Watts’ Twitter page or join the Watts Bulletin group on LinkedIn.

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