Headlines: October 12th, 2006



The Confederation of British Industry has criticized public sector procurement practices and set out an approach to get better value for public money from the annual 150b pounds procurement budget. It has called on public bodies to get smarter at purchasing. Last year a CBI survey of its members revealed that 69% of companies considered that Government procurement skills represent a ‘major problem’.

In a new report ‘Improving Delivery: Realising Best Practice in Procurement & Contract Management’ the CBI recognizes that while some public authorities have become adept commissioners of services from all sectors, aborted contracts and long-drawn out procurement processes continue to impose additional and unnecessary costs on the taxpayer, undermine the confidence of alternative providers and delay the introduction of improved service delivery.

In the report the CBI argues that public procurement is risk averse and there is a need for greater professionalism. Moving from risk averse purchasing to taking bold but calculated risks and being more innovative would lead to better public services, big cost savings, and knock-on innovation benefits to the whole economy. The report is critical of procurement staff who lack sufficient skills or experience and are unclear about what they want to buy at the outset. This weakness creates shifting sands during contract negotiations, delayed projects and extra costs for both taxpayers and suppliers.

Public procurement could also be improved by creating a better dialogue with potential bidders earlier in the procurement process, so that authorities understand what they can afford and decide what they are prepared to pay for. There should also be detailed procurement timetables that are set out up-front with clear consequences for failing to stick to them. Improved dialogue with potential suppliers would also mean that alternative solutions to public needs could be considered from the start of the procurement process rather than being spotted when it is too late.

The CBI recognizes the efficiency savings that have been made in procurement, but believes that the public and the taxpayer are only securing part of the potential improvement.