Tories Eye Simple Shopper

August 11, 2008 10:11 AM



On the trail of the Shopper


Shadow Chief Secretary Philip Hammond has been talking to the FT about how the Tories will tackle the Simple Shopper.

BOM readers are only too familiar with the Shopper. He's the one who costs taxpayers zillions each year by bungling the government's £160bn annual procurement spend. It's not just a question of getting ripped off by "greedy" private sector suppliers, it's also his chronic inability to spec requirements upfront, and his repeated failure to agree clear enforceable contracts. The Shopper is both naive and incompetent: you wouldn't consider asking him to do your shopping.

So what will the Tories do about him?

Hammond says:

“The first step is to make the public sector a competent partner – that’s a big challenge. The advice from private sector professionals involved in procurement is that the public sector invariably gets poor value for money. That’s because the public sector is very expensive to work with. They often don’t know what they want and are therefore not a competent procurement partner for private-sector providers to work with.

This inability to define what is required imposes huge additional costs on the private-sector providers, all of which ultimately get factored into the price the taxpayer pays.”

Well, yes, yes, we agree with all of that. But what will the Tories actually do about it? Hammond says they will:

“... change the culture in the civil service, so that delivery ranks alongside policy development in importance, just as it already does in the private sector”.

Ah. Well. Hmm. That's kinda what we feared.

You see, the problem you've got there, is that every government since the Court of King Caractacus has tried to change the culture of the civil service, and tried to get Sir Humphrey "delivering". Even old time socialist Gordon Brown has been hot on the case. Why, he even set up the Office of Government Commerce (OGC) to "professionalize" government procurement. The trouble is, every government has tried and every government has failed.

In reality, you can't change the culture in the civil service - nobody has the faintest idea how to do it.

So what else?

Hammond's second idea is more promising: devolving purchasing power to the lowest level practicable. He says:

“Where there is an alternative to centralised procurement, we should pursue it. We need to recognise the limitations of central government’s ability to manage these massive projects.”

Now that, we like.

Big government types believe that in theory taxpayers should be able to save money by aggregating procurement orders into the biggest possible deals. Indeed, that was a key driver behind the establishment of Brown's OGC. But of course, bigness brings its own problems which are much more costly than foregoing a few pence on order bulking, and in reality swamp any possible savings.

So Hammond is definitely pointing the right way.

But as we've said many times, the real key to getting better taxpayer value is to reconnect those who use public services with those who pay. That means not simply localising spending powers, but also tax raising powers. We need some real fiscal decentralisation.

This morning we hear the forthcoming Tory Party Conference will include a session on "preparing for government". Apparently, the session will focus on restructuring Whitehall, and will “set out the framework within which each government department will be expected to operate and deliver our manifesto commitments”.

Sounds like it should be interesting. But it would be even more interesting to have a session on dismantling Labour's Whitehall altogether.


On the trail of the Shopper


Shadow Chief Secretary Philip Hammond has been talking to the FT about how the Tories will tackle the Simple Shopper.

BOM readers are only too familiar with the Shopper. He's the one who costs taxpayers zillions each year by bungling the government's £160bn annual procurement spend. It's not just a question of getting ripped off by "greedy" private sector suppliers, it's also his chronic inability to spec requirements upfront, and his repeated failure to agree clear enforceable contracts. The Shopper is both naive and incompetent: you wouldn't consider asking him to do your shopping.

So what will the Tories do about him?

Hammond says:

“The first step is to make the public sector a competent partner – that’s a big challenge. The advice from private sector professionals involved in procurement is that the public sector invariably gets poor value for money. That’s because the public sector is very expensive to work with. They often don’t know what they want and are therefore not a competent procurement partner for private-sector providers to work with.

This inability to define what is required imposes huge additional costs on the private-sector providers, all of which ultimately get factored into the price the taxpayer pays.”

Well, yes, yes, we agree with all of that. But what will the Tories actually do about it? Hammond says they will:

“... change the culture in the civil service, so that delivery ranks alongside policy development in importance, just as it already does in the private sector”.

Ah. Well. Hmm. That's kinda what we feared.

You see, the problem you've got there, is that every government since the Court of King Caractacus has tried to change the culture of the civil service, and tried to get Sir Humphrey "delivering". Even old time socialist Gordon Brown has been hot on the case. Why, he even set up the Office of Government Commerce (OGC) to "professionalize" government procurement. The trouble is, every government has tried and every government has failed.

In reality, you can't change the culture in the civil service - nobody has the faintest idea how to do it.

So what else?

Hammond's second idea is more promising: devolving purchasing power to the lowest level practicable. He says:

“Where there is an alternative to centralised procurement, we should pursue it. We need to recognise the limitations of central government’s ability to manage these massive projects.”

Now that, we like.

Big government types believe that in theory taxpayers should be able to save money by aggregating procurement orders into the biggest possible deals. Indeed, that was a key driver behind the establishment of Brown's OGC. But of course, bigness brings its own problems which are much more costly than foregoing a few pence on order bulking, and in reality swamp any possible savings.

So Hammond is definitely pointing the right way.

But as we've said many times, the real key to getting better taxpayer value is to reconnect those who use public services with those who pay. That means not simply localising spending powers, but also tax raising powers. We need some real fiscal decentralisation.

This morning we hear the forthcoming Tory Party Conference will include a session on "preparing for government". Apparently, the session will focus on restructuring Whitehall, and will “set out the framework within which each government department will be expected to operate and deliver our manifesto commitments”.

Sounds like it should be interesting. But it would be even more interesting to have a session on dismantling Labour's Whitehall altogether.

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