03 July 2008
A lack of procurement skills, management information and influence over spend continues to trouble central government purchasing.
According to the latest round of procurement capability reviews, carried out at the Department for Transport (DfT), Department for Environment and Rural Affairs (Defra) and Department for International Development (DfID), purchasing is "fit for purpose" but there is "clear scope" for improvement.
The reviews were conducted by the OGC to assess buying in central government departments, as part of the Transforming Government Procurement plan.
Departments are ranked on nine factors encompassing leadership, skills and systems, and each area is given a "traffic light" ranking from green meaning "strong" to red meaning "serious concern". The DfT achieved three amber/green scores, five amber and one amber/red. Defra achieved one amber/green, five amber and three amber/red. DfID received six amber and three amber/red scores.
The DfT, with an annual spend of £10.9 billion, was praised for its strong purchasing leadership. Procurement director Jack Paine was singled out as being well regarded, energetic and visible. But the review found the success of the department's strategy had a "high dependency" on him and "he is clearly very busy".
The OGC also raised concerns that there "is currently no overarching commercial or procurement strategy at board or functional level". And the implementation of a shared service centre is "late, over budget and currently performing poorly".
The review recommended the department develops and implements a procurement strategy, and reviews the responsibilities of senior staff.
Defra has an annual spend of £4 billion and is the third best department at making savings. Purchasing also scored well on its supplier relations and for improving its commercial agreements since the foot-and-mouth outbreak in 2001. But the review found no department-wide plan for SRM and "no co-ordinated approach" for the sharing of supplier performance or benchmarking.
Recommendations included emphasis on the department's new finance director becoming a "board champion" for procurement.
DfID was not able to provide the OGC with records of spend with suppliers and there was "no evidence of benchmarking of procurement process or performance". It was urged to nominate a board member to champion procurement and review the position of the function to reflect its expanded role.
View the full reviews at http://tinyurl.com/5ncop3SMjul2008
