Introduction
Across the public sector, efficiency and improvement – two sides of the same coin – must drive public sector business processes. For successful Government Procurement, the emphasis is on the essential prerequisites for securing service excellence, focused on: creating an highly skilled professional workforce; the importance of collaborative partnerships; and optimising the use of innovative solutions.
Government Procurement 2008, will examine these issues and more; essential to realising an effective and efficient Government procurement service.
Background
Good procurement is defined as “getting Value for Money (VfM) – buying a product that is fit for purpose, taking account of the whole-life cost”. A good procurement process “should be delivered efficiently, to limit the time and expense for the parties involved, transforming the market to the benefit of others”.
Efficiency – defined as achieving the same outputs for less resource or additional outputs for the same resource – is a vital aspect of service delivery, and synonymous with good procurement.
Following Sir Peter Gershon’s Review of Civil Procurement in Central Government in 1999, the Office of Government Commerce (OGC) was established as a one-stop shop procurement organisation. In 2000, OGC Buying Solutions was formed as an Executive Agency of the OGC, tasked with providing a professional procurement service to the public sector, giving professional support, advice on technical issues, energy saving and environmental improvements.
Both organisations played a vital role in delivering the £21.5 billion in annual efficiency gains, following the publication of the Gershon Efficiency Review in 2004, Releasing Resources for the Front Line, which targeted 2.5% efficiency savings for every government department per year and £6.45 billion for the local government sector to be achieved over three years to 2007/08.
On 23rd January 2007, John Healey MP, former Financial Secretary to the Treasury launched Transforming Government Procurement. This initiated the first major re-shaping of the procurement agenda since the establishment of the OGC.
Central Government Procurement
Charged with maximising the effective use of 60% of Government spending and a £30 billion property estate, the emphasis for the OGC is now to deliver better VfM in central government procurement. OGC will drive up standards and procurement capability across central Government; securing a smaller, higher calibre organisation of dedicated procurement professionals by:
- Setting procurement standards and monitoring performance and capability;
- Developing a cadre of skilled procurement professionals across Government;
- Achieving VfM through collaborative procurement;
- Playing a stronger role in the successful delivery of Major Projects; and
- Improving management and use of the Government estate.
Local Government Procurement
In March 2007, the Government set out a requirement for 3% annual cash-releasing VfM gains from all parts of the public sector over CSR07; totalling £30 billion of annual savings by 2010-11. Councils are expected to achieve £4.9 billion cash-releasing efficiencies from revenue and capital expenditure over the period 2008-09 to 2010-11.
For local government, the effect of CSR07, the Local Government White Paper and the implications of the upcoming multi-year grant settlement and Comprehensive Area Assessments (CAAs), all serve to impact on the procurement agenda both locally and across the regions.
There is a renewed emphasis on the importance of Local Strategic Partnerships (LSPs), feeding into Local Area Agreements (LAAs) and now the new Multi-Area Agreements. For local government, this conference aims to highlight the new opportunities available and the challenges that lie ahead for attaining VfM in procurement and better outcomes in service delivery.