22 July 2010 | Steve Bagshaw

Michael Portillo, former MP and now a broadcaster and media commentator, will be speaking at this year’s CIPS Conference. Steve Bagshaw quizzes him on purchasing, politics and profile-raising

Q. The issue of government efficiency savings was one of the key discussion points during the election campaign. What advice would you offer the new administration in order to reduce spend while maintaining services and not upsetting the unions too much?

A. The changes that need to be made are very large. We have to make an adjustment of about 8 per cent of national income by cutting spending or raising taxes. I suspect that if we could raise public sector productivity and efficiency to the best standards found in the private sector, the whole amount could be found through reductions in waste. But, sadly, in practice the squeeze will put pressure on services because eliminating waste requires better management information and better management than is to be found in much of the public sector. Part of the long-term drive has to be towards making improvements in those areas.

Q. When you were chief secretary to the Treasury did you have responsibility for overall government spend and earlier efficiency drives? What did
you learn from that and what lessons could be carried forward?

A. The chief secretary’s task is to make all the budgets of government departments add up to the total of government spending decided upon by the Cabinet. He probes areas of waste or unnecessary spending like a dentist looking for decay. But he cannot in the end second guess departments. They must find the means to achieve the limit that they are set, with the minimum of damage or bloodymindedness, we hope. Both the chief secretary and his Cabinet colleagues are politicians and they must use their judgement to achieve acceptable outcomes.

Q. Given the significance of efficiency savings, what is your view of the establishment of a dedicated minister for procurement – one minister to direct, oversee and report on savings across Whitehall? Is that workable or is it too difficult to get departments to work together in this way?

A. There is procurement expertise which is applicable to a range of departments and processes. Best practice needs to be spread. The government should deploy a central unit to put pressure on departments but the only ministers who can apply pressure with the necessary authority are the prime minister and the chancellor of the exchequer.

Q. You have become an authority on reputation. What advice would you offer procurement professionals who are keen to raise their profile internally – be that in the public or private sector? And what advice would you offer MPs following the allowances and expenses scandal?

A. Procurement professionals can readily demonstrate the huge savings they can bring about, if only by pointing to examples of catastrophic waste that have resulted from poor practice in the past. Ministers are likely to be highly receptive.

MPs need to develop the objectivity needed to see things as the public sees them. In the past MPs entering the Commons have maybe hung their ethics on a peg at the door and adopted a group mentality. It isn’t easy for them to change because many feel they have been the victims of a witch hunt and rough justice – not a good state of mind to embark on reform.

Q. What was the profile of the procurement professionals in the departments in which you worked? Armed forces procurement, for example, is constantly in the spotlight – as a former defence secretary, what is your view? Is sufficient resource allocated, is it well spent and how would you improve it?

A. Procurement was a huge issue in defence and had its own minister of state overseeing it. The government in my day invested heavily in expertise and facilities. But I am unhappy about our many failures then and since. I feel that objectives were poorly identified and far too many people were able to interfere with decisions already made.

Meddling resulted in kit that was complicated, late, expensive and ineffective. We often set out to buy off-the-shelf fully proven systems and ended up with prototypes. The ministry’s problems are evidently deep-seated.

Q. How would you advise UK companies with large volumes of outsourcing to developing countries? How can they mitigate the risks of reputational damage caused by members of their supply chain?

A. Any company can be severely damaged by failure or malpractice at any point in the supply chain. The relationships and standards must be managed with the same vigour and exactness as an in-house operation.

Q. Do you think procurement operations for overseas aid or disaster relief efforts are sufficiently robust against fraud or corruption?

A. It must be extremely difficult in the circumstances of an emergency to ensure urgent supplies are sourced in ways that exclude the possibility of corruption. But it is important to establish proper accountability from early in the process otherwise those relief efforts will generate cynicism among recipients and donors.

Q. What’s your view on the Bribery Bill and other legislation designed to clean up the operations of British business overseas?

A. I welcome the increasingly tight regimes that have been put in place since the US’s original Foreign Corrupt Practices legislation. That has had, in effect, limitless reach since non-US citizens and businesses have been caught up in it and have had to fear the consequences should they have any dealings in the US or even pass through it. Such laws and sanctions offer the only hope of defeating bribery. 

* Michael Portillo will deliver a presentation entitled Westminster and Beyond as the closing plenary at the CIPS Conference on 23 September at Kings Place in London. Click here to book a table.