Public sector construction procurement is in crisis. Stories of procurement foul ups across the public sector have been headline grabbing for years of course, and there have been government responses, such as sending some civil servants off to be better educated in project management.
But after the West Coast Mainline fiasco and a few other celebrated pratfalls the view has been spreading that something fairly fundamental needs fixing in public sector procurement practices.
All of the sorts of shortfalls that have been heard before, and more, have been highlighted in the National Audit Office (NAO) report, The role of major contractors in the delivery of public services (see news). The focus was on outsourcing, but the findings apply all the way across public sector procurement capabilities. Those capabilities are very low in places, the report confirms; not that contractors are necessarily helping things.
Speaking at the release of the report NAO head Amyas Morse said that as well as Departments not being on top of their briefs there was a ‘crisis of confidence’ in using contractors for outsourcing caused by some contractors not treating the public sector fairly.
The NAO said that the newly created Crown Commercial Service (CCS) – a central buying service launched this year by the Cabinet Office as representing a step change in public sector commercial capabilities – does not have the right resources in place. The Cabinet Office has gaps in commercial experience and expertise below senior levels. There was a need, said the NAO, to reset the ground rules for both contractors and their departmental customers. The NAO seems clear on what it thinks is the way forward for contractors; the way forward for the public sector itself might be more problematic.
For contractors the NAO suggests having more competition in contract awards, while asking whether awarding so much work to a relative handful of successful major contractors is in the public interest.
Contractors might only be paying lip service to controlling costs and quality across their operations, warns the NAO. There needed to be more transparency over performance and access to information about how contracts are being run. Financial penalties for underperformance should be in more widespread use and seriously underperforming contractors should be banned from future work.
Following the NAO report’s release the Cabinet Office was reported admitting that it knows the Civil Service lacks commercial capability and that its management of contracts needs to be improved. But we have to question whether this message has in fact really penetrated the Cabinet Office.
When the CCS was launched it was announced that it was to include a Complex Transactions Team which will work with Departments and reduce the need for external advice – given all that has been confirmed by the NAO about public sector procurement capabilities this is possibly not the ideal time to consider reducing the input of external expertise.
Margaret Hodge, Chair of the House of Commons Public Accounts Committee which ordered the NAO research, said what the government couldn’t outsource was responsibility. Responsibility for achieving better returns from its investments rests within the public sector itself.
Nick Barrett
Editor