Does Cameron understand procurement strategy?

A few months ago I drew attention to the imbalance of power between the Ministry of Justice and the legal profession, specifically the threat relating to changes in the Legal Aid system. The changes to Legal Aid mean a 30% reduction in Legal Aid cut in fees paid to barristers.

Yesterday we saw the ironic court scene of Alexander Cameron QC, the Prime Minister's brother, arguing that the trial of a £4.5m fraud case should be delayed as a result of the inability of the defendants to access lawyers prepared to defend them under the new Legal Aid rules. Barristers have effectively said, "if that's what the rate is, no thanks".

The drama is even more bizarre in that Alex Cameron had decided to argue that the case could not continue, without charging for his fee!

From a procurement perspective this reminds us of three strategies:

1. Poistioning relative power of the buyer/supplier relationship. The barristers have the power to sell their services outside the Legal Aid system, so they can walk away without great pain;
2. A focus on price reduction can compromise delivery. The suppliers in this case have said to MoJ the price you are prepared to pay is not attractive enough for us to deliver; and
3. Achieving 'preferred customer' disorts the market in favour of the buyer. In this example, Alex Cameron delivered his services free of charge.

While the MoJ case is of interest and relevant to procurement, there is a real danger we are approaching replication elsewhere in the system. For example, think of the threat of the Care Quality Commission to penalise those who on deliver 15 minute home visits to those with dementia. The buyers should of course specify for longer visits based on outcomes to be delivered as opposed to inputs, and in turn pay a rate which is affordable for the providers. But what would happen if the threat continues and the care providers say "if that's what the rate is, no thanks"? Well, I suspect the health and social services commissioners would be in crisis, the Department of Health have no means to deliver the care, there are no longer sufficient places for public sector residential care in either hospitals or homes. Visualise the political impact if these services started to collapse the week before the election?