Features: June 1st, 2009

Collaborative procurement of goods and services across all UK public bodies will only deliver the predicted £7.7 billion efficiency savings if the quality of management information can be raised to an acceptable level. Because public services function independently, procurement is fragmented and there are no consistent data standards. Collaborative procurement efficiency savings are part of the Treasury’s ‘Operational Efficiency Programme’. Publicnet provides an overview of the Programme.

The weakness of the management information systems was identified in Publicnet . The systems currently in place in most public bodies were designed to provide accountability for expenditure, rather than to give managers insights into the effect of expenditure decisions. Because accounting structures and systems have developed in this way they do not provide a common basis for categorising expenditure by supply market. Also, unlike the private sector, it is not common practice in the public sector to capture commodity codes at the point of data entry.

A consequence of this is that it is often not possible to understand emergent trends in procurement data because public bodies do not maintain commercial management information in an accurate or consistent way.

Other factors which limit the consistency of data are that there are no endorsed government standards and the public sector does not implement consistent technologies such as enterprise resource planning or other back office proprietary systems in a common manner. The cumulative effect of these information barriers is to prevent identification at an aggregate level of what the public sector spends by category and hold back the development of evidence-based decision- making in government procurement.

The Treasury is now guiding public bodies in recasting their management information systems so that collaborative procurement can go ahead as planned. Public bodies spend, in total, £175 billion each year. The key requirements are that they focus their systems on suppliers and categories of spend where expenditure is significant. They must also provide a baseline against which they can identify the value that has, or has not, been derived from a category spend through collaboration and other department specific routes. Until these new systems are in place it will not be possible to get maximum leverage with suppliers which is essential for delivery of the predicted savings.