The National Audit Office and the Audit Commission have criticised public services for failing to pursue collaborative procurement. The watchdog’s review found the public sector procurement landscape fragmented and without any overall governance. The report urges public bodies to work together much more effectively than they currently do and calls for a clear framework to coordinate public sector procurement activity.
This is not a new message and it will not cause any surprise. The report makes no mention of the approaching sixth anniversary of ‘Releasing Resources to the Front Line’ produced in 2004 by Sir Peter Gershon, which urged an end to multiple buying by many purchasers from a single supplier. Nor does it mention Martin Jay’s contribution to the Treasury’s April 2009 Operational Efficiency report where he called for an increase in areas where government uses its collective buying power by channelling more spending through collaborative strategies.
In the last six years there has been a take-up of collaborative procurement and substantial cost savings have been made, but it is clear from the latest report that the culture change implicit in Gershon did not happen.
The watchdogs found that the public sector procurement landscape is shared by nearly 50 professional buying organisations, as well as individual public bodies running commercial and procurement functions. Many of these organisations manage framework agreements for similar goods and services, for example, stationery.
The review reveals that public bodies are continuing to incur unnecessary administration costs by duplicating procurement activity, and they are paying a wide range of prices for the same commodities, even within existing collaborative arrangements. It recommends that, given the size of public sector procurement spend and the potential to significantly improve value for money, public bodies should work together much more effectively than they currently do. And there should be a clear framework to coordinate public sector procurement activity.