CLG Committee report on Local Government Procurement: Almost deja vu but more ce la vie

Given the Crimea crisis and mystery of flight MH370 it would be understandable if the release of the CLG Committee's report into local government procurement failed to catch your attention. 70 written submissions, 7 oral evidence sessions and a 70 page report - consipracy theorists could have a field day. But sadly, there is little for find within the mysteries of the Committee interpretation of the evidence and their recommendations. To me this was a missed opportunity but hardly surprising if you have read my posts on the CLG inquiry and the Committee failed to heed my initial suggestions of where to look. 

There are some thing worth holding on to:

We conclude that local authorities' focus on meeting the needs of local communities requires councils to retain control over their procurement operations. Local freedom and flexibility would be lost if they were compelled to adopt a centralised model of procurement such as that adopted by central government in its Crown Commercial Service.

That is unlikely to be welcomed by CCS who then have the problem of addressing the following recommendation with little in return:

 We recommend that the Cabinet Office dedicate resources for building procurement capacity in local government and for ensuring that lessons learnt in central government are translated into effective council action where appropriate. 

I do not recall how many times I have heard that councils do not need any more guidance on procurement - it was a regular area of consensus on conference platforms. So I'm sure many will be delighted that the main recommendations appear to congregate around the production of more guidance. The Committee may feel satisfied that guidance will be drafted, consulted upon, endorsed, published and then training will be delivered on it. That should get us past the next election and just in time for the next round.

But the Committee really need to ask why a comprehensive catalogue wasn't provided of the guidance produced since the original National Procurement Strategy - there's a very long list. If they had studied the catalogue they would then realise that it is not the absence of guidance which is to blame but conflicting political priorities sending out mixed messages, and a lack of embedding change.

I think local government can rest easy, the bogey of compulsion has been laid to rest, the report smacks of deja vu and normal service can be resumed. Ce la vie.

Bad Pharma, data manipulation & procurement inquiries

Richard Bacon MP, a member of the Public Accounts Committee, gave a very good interview on the Today programme this morning. I have listened to Bacon during various PAC procurement related inquiries and have always been impressed - to me he grasps key procurement issues very quickly and provides excellent scrutiny and probing. 

Although he did make reference to the NHS being a monopoly buyer, his interview wasn't about procurement but the publication of clinical research, or more specifically, the problems of drug companies withholding information which doesn't suit their vested commercial interests. I discussed some of these issues in my review of Ben Goldacre's Bad Pharma. 

However, he made a number of comments which are particularly relevant to procurement, for example, stating that "The whole point of scientific research is that you take all the data ..." because cherry-picking and just using research which suits your vested interests distorts the truth and leads to false impressions. 

I would like PAC to reflect on that when they consider procurement evidence too.

When the Ministers met the CLG procurement inquiry

At last, I hear you say, we've reached the seventh, and final, oral evidence session of the CLG Committee Inquiry into procurement. The witnesses being Baroness Stowell of Beeston (Parliamentary Under-Secretary at DCLG with responsibility for procurement) and Nick Hurd (Minister at the Cabinet Office). When you recall the central government's CPO reports to the Cabinet Office these witnesses should be in a very strong position to speak with authority on the political objectives of procurement.

The Baroness took an early opportunity to volunteer her view of procurement effectiveness:

They should understand that it is not just about buying the relevant services at the best price possible but that this is also an opportunity to make sure that procurement is a way of getting the best service you can and that it is possible to improve the services that are provided locally. If we start putting a [savings] target on things, the focus then is on that rather than what I would see as the more important outcome, which is a better local service for local people.

It is important to note that this was stated in response to a question on what could be potential savings from procurement as opposed to "what would good look like". The Minister responsible for local government procurement, therefore, sees procurement as not about lowest price but better local services. It is really disappointing that the Committee didn't take the opportunity to compare that view with the Cabinet Office Minister's, as you may recall his boss, Francis Maude, told the Public Administration Select Committee in May of this year: that the "primary objective through procurement is getting the goods and services needed by the citizens at the best price". Is it just me, or are the Cabinet Office and DCLG at odds on what epitomises good procurement?

Then compare, former Local Government Minister Michael Heseltine's view, which has the implied endorsement of the Chancellor:

Celebrity advice, BMJ and lessons for procurement scrutiny

The latest issue of the British Medical Journal includes an interesting paper on the why the public follow celebrities' medical advice. To me, this paper is particularly relevant to the current CLG Committee Inquiry into local government procurement but is also relevant to procurement decision making, in general, when perceived 'experts' (celebrities) provide advice.

The BMJ paper discusses the positive influence which celebrities can have in highlighting health issues, but cautions against celebrity 'quacks' whose advice is listened to, even when it is dangerous, if adhered to. The question is 'Why do celebrities utterances and endorsements carry so much weight even though they lack any evidence, qualifications and specific experience?' The paper draws on economics, marketing, and psychology literature to provide an answer.

One of the reasons is that the public are bombarded with competing information and in order to make sense of that information:

people naturally look for signals that indicate one source as being more credible and effective than another. Owing to the vaulted status of celebrities in society, their endorsements act as signals of superiority that distinguish the endorsed item from competitors, encouraging people to change their health behaviors accordingly. 

[Celebrity] credibility may stem from the halo effect of celebrities' success, which biases people's judgments of celebrities' other traits and gives them a cloak of generalised trustworthiness that extends well beyond their industry or expertise. Celebrities are in turn perceived to have greater credibility than their non-celebrity counterparts, such as doctors, despite having less medical knowledge and experience.  

I don't see the problem of celebrity advice being isolated to the medical world. I also feel that 'celebrity status' can be more widely defined - isn't it something about putting someone on a pedestal. I have frequently observed the advice of procurement specialists being swallowed up in the aura of 'celebrity' status.

CLG Committee procurement inquiry: What are the 10 characteristics of good local government procurement?

Regular readers will recognise that I have been following the CLG Inquiry into local government procurement and have not found the approach to taking evidence robust. Nevertheless, we live in hope, while, the Committee persist in asking witnesses, who probably have really good evidence to give, questions which are beyond their ken and fail to ask 'How could this witness possibly know?'.

And so arrive at the sixth oral evidence session when the Committee should have been able to ask a senior manager from the Audit Commission Information and Analysis Group, the Head of Counter-Fraud at the Audit Commission, and the Director of Cabinet Office and Cross Government Studies at the National Audit, 'What they knew?'.

Now, I think these three witnesses should have been in a position to talk about research method, so it was reassuring to hear, buried within the Chair's opening airing of opinion, the following:

How do we get a real feel about whether local authorities in general are using best practice in the area of procurement?   

Neither of the three witnesses recommended a research approach to the Committee but instead said they were not in a position to answer whether or not local government is adopting best practice. I'm sure you have recognised the difference: the witnesses were being asked about method, which should have been their area of expertise, but answered an entirely different question. We know the Audit Commission's role has changed (previous witnesses have reminded the Committee of that too, and we know NAO has a focus on central government, but that's not what the Committee asked about! Sadly the Committee allowed themselves to be distracted and didn't return to the witnesses specialism, evidence gathering.

CLG Procurement Inquiry could ask 'why bother?'

I have been discussing the oral evidence sessions at the CLG Committee Procurement Inquiry. I assume those of you following my observations can sense my frustration that this excellent opportunity appears to be slipping away. I'm sorry to say the second panel session of the fifth evidence saw some of the same methodological flaws being repeated.

The opening question of this session asked witnesses from the Federation of Small Businesses, Market Dojo, and Bangor University:

Could I just begin with a subject where we have perhaps had slightly different points of view expressed by yourselves and your organisations? It is about trying to achieve greater opportunities for SMEs and micro-businesses to obtain contracts, and the extent to which there is a potential conflict between that and the council getting the best value for money from its contracts.  

So, ask yourself, if that was the exam question, what would the correct answer look like? Set aside that 'best value for money' is frequently 'in the eye of the beholder'. Were the Committee asking: 'Is the objective of achieving greater opportunities for SMEs and micro-businesses incompatible with the objective of achieving best value for money?'

If that was what the Committee were trying to establish, quite simply, they didn't hear. They heard about a new term for me, 'stickability' (that's the amount of contract value which stays in the local community). They heard that local sourcing can lead to better social cohesion. They heard that local businesses employ a range of employees. They heard that there could be growth in the local economy. They heard that local government procurement processes can act as a barrier to SMEs. They heard that "SMEs are the reason why a lot of large companies fail and yet local government procurement does not take account of this very well in the process" (What on earth is that about?). They heard that councils could not take account of innovation in the award process. But did they hear if the objective of achieving greater opportunities for SMEs and micro-businesses is incompatible with the objective of achieving best value for money?' - in a word, 'No'!

To me this is a serious weakness of the oral evidence sessions - poorly focused questions are being asked and the Committee just aren't extracting what they need to know. There are also opinions being expressed which appear to lack any foundation yet are not tested and lack of clarity of definitions which  mean answers are given but there is no shared understanding.

Social Value Act, social benefit clauses & SRO at CLG Committee Inquiry on procurement

And so to the fifth evidence session of the CLG Committee Inquiry into procurement. The first panel representing the Centre for Local Economic Strategies, National Council for Voluntary Organisations, and The Joseph Rowntree Foundation - all organisations which have previously helped move the procurement improvement debate forward.

To set the witnesses off to a good start and feel relaxed, the Chair started with one of those classic sextuple questions witnesses must, by now, be starting to expect:

One of the things we will be looking at is how procurement might be used for a number of objectives. We will begin by looking at how it might be used by local councils to tackle social disadvantage and poverty. Do you think councils are actually doing this effectively? Are they getting it right, or is there more they could be doing? Who would like to start?

Would anyone seriously have expected the witnesses to answer: "Actually, I think councils are really doing the absolute maximum that could be done". 

That reply wasn't heard but instead we heard that making an impact was down to the culture of officers and how procurement and economic development work together. I agree that there needs to be effective linkage between economic development and procurement but there's a flaw in the answers as they suggest officer driven policy and strategy and made no reference to political leadership. To me, in local government, elected members need to drive and lead the initiative - it is elected members who have to decide on competing priorities and then officers implement and are performance managed. If officers lead, to me, there is a high risk that their own personal agenda are pursued contrary to those of the democratically accountable leadership.

Now, let's reflect on that a bit further, three witnesses and not one of them initially mentions political leadership, yet, in the follow-up question, when political leadership is mentioned by the questioner, surprise, surprise, suddenly: "Political leadership is key, because it tells officers this is a high priority on the long agenda of things they have to deal with..." - call me a cynic, but had the questioner not mentioned political leadership would that key ingredient have been identified?

A tale of two sides of the same coin for the CLG procurement inquiry

On Tuesday I discussed the first of the two CLG local government procurement inquiry evidence sessions at Sheffield held on 18 November. I have been following the oral evidence sessions but the Committee will also take into consideration the written evidence submitted.

The earlier session on the 18 November appeared, to me, to be riddled with anecdotal evidence and unreliable answers to poorly framed questions. Nevertheless, it did suggest that there is an issue with stakeholders perception of what happens in local government procurement. It also suggested that the 8 Principles of Good Commissioning and the Compact are Whitehall theory as opposed to what the market appears to experience in Yorkshire and Humberside. Surprisingly the Committee don't probe these areas.

The second session provided an opportunity to hear from the other side of the coin, two councillors from Sheffield, Sheffield's Director of Commercial Services (also the regional lead on procurement) and  two representatives from YPO.

This session was unusual in that the evidence of councillors was taken. However, we only heard from two cabinet members and there weren't even any questions on how Overview & Scrutiny members might be engaged in strategic procurement.

We learnt that Sheffield, thankfully have moved from a position of building cost inflators into contracts. I have to say I have never before come across a system where contractors are guaranteed annual price increases.

A tale of two cities for CLG procurement inquiry: Sheffield & Sheffield

The CLG Inquiry into procurement rolled into Sheffield on the 18 November. This initially impressed me as it provided an opportunity to get out and feel the pulse on the ground. I say initially, as it transpired during the evidence that the Committee had pre-purchased tickets for the 3.47 train back to London and therefore couldn’t hear evidence after 3.25. Was such a guillotine a demonstration of good value for money?

Anyway, I would love to have shared the carriage with the Committee as they returned to London, and waited for the “What are we to make of all that?”

The objective of the sortie to Sheffield was “about trying to find out what is really happening on the ground, ..., what is going right, and what is going wrong”. What they heard were mixed messages about procurement in Sheffield; not local government in general, and not local government procurement in Sheffield but a ‘come all ye’ of anecdotes from questionable sources. For example:

• Single sourcing is leading to an item which would otherwise have cost £10 costing £20, yet no evidence to substantiate that claim was provided;
•  EU procurement rules require contracts over £250k to be advertised, yet my understanding is that the threshold for councils is actually £173,934;
•  Contracts under £20k can be awarded on the basis of three phone calls;
• “people, companies and organisations from outside the area seem to have a better opportunity of obtaining procurement contracts, mainly because they do not have any conflicts of interest or for some other reason.”

My suggestion to the Committee is, if you hear such heresy and factually flawed evidence, treat the informants other evidence with a large pinch of salt.

But the Committee are not blameless in this evidence session,

What will CLG Committee recommend on tackling fraud and corruption?

Last month we discussed the perceived rise in procurement fraud and corruption. On 11 November the Communities and Local Government Procurement Inquiry took evidence on tackling fraud and corruption. This was the third of oral evidence sessions, two of which I have already discussed. I expected the evidence to go some way to answering the following questions:

1. Is fraud in local government procurement increasing or decreasing?
2. Is corruption in local government procurement increasing or decreasing?
3. How does UK local government procurement compare with the world best in tacking fraud and corruption? 
4. What would an effective strategy for tackling fraud and corruption strategy in local government procurement look like?
5. In what ways are councillors part of the problem and the solution?

Unfortunately those questions weren't asked. Why?

Constructive comments when CLG Inquiry focus on construction procurement

After three sessions which left me quite despondent, the CLG Inquiry then focused on Construction. I have to say that the witnesses from Civil Engineering Contractors Association, KeepMoat, and Federation of Master Builders were quite impressive, constructive and, to me unbiased.

Sadly, there was a view that while there is some best practice, there is also some practice which is 20 years out of date. Now that should give both LGA and CIPS something to think about!

I also found it disappointing that the witnesses weren't probed on the lessons which could be learnt from the former Local Government Taskforce and Constructing Excellence initiatives - is it a sign of my age that I can recall the investment which was made in those improvement programmes? Anyway, unless we can learn from what worked and what didn't in the past, we are not only doing the previous investments a disservice but also at risk of trying to reinvent the wheel - the Committee really need to start probing these lessons.

So what did I think was helpful in their evidence?

1. There needs to be an improvement in the writing of Briefs - that's a foundation for success;
2. If councils provide better visibility and certainty of what is required then councils can expect better prices;
3. The skills deficit could overcome if a  peripetic 'flying squad' were set up which travelled from project to project - I think this was envisaged as a more 'hands on' service than the type formerly provided by the 4Ps;
4. PQQs were not seen as a 'bad thing' but there could be standardisation.

Then we had what has become a common question (so a warning for all those yet to give evidence): "Do you favor central government mandating greater centralistion of procurement in local authorities?" , my view was that the witnesses were not in favor, however, constructively, they felt there could be:

• a mandate to provide a procurement pipeline;
• a standardised PQQ;
• a consistency in approach and standard models.

As I say I felt this was the best session so far.

Collaboration just doesn't sit well with strategic procurement functions in local government?

On the Monday the CLG Committee Inquiry into procurement shifted its focus to collaboration. Yet again the Committee struggled to prise information from the witnesses, for example, a simple and predictable question kicked it off "What proportion of councils are up to speed with best practice and, if not [up to speed], what are the barriers?" Correct me if I'm wrong, but I don't think Messrs Taylor, Walsh or Robinson actually provided an answer!

However, we did learn from one of the witnesses a useful nugget "... the last national procurement strategy gave rise to a proliferation of a number of strategic procurement functions, so most councils have got a strategic function". Now that struck me as quite a good thing until Ed Walsh continued: "as a consequence they don't think with any form of collective mentality very easily, so looking at efficiencies and the benefits of economies of scale isn't something that comes easy to local authorities". Sorry, I just don't get that. I don't get it because councils have been collaborating on purchasing for over 50 years; I don't get it because organisations like NEPO and YPO and ESPO and Pro5 all exist. I don't get it because that same national procurement strategy which is praised, or was it criticised, for leading to the introduction of strategic procurement functions in councils, also had a complete section on collaboration!

Then we heard there's the potential for billions of pounds worth of savings in councils - I wonder what the LGA will make of that and what will be the strategy for achieving those savings if, on the strength of that evidence, the Committee advocated further cuts of billions of pounds to council budgets? But then again the Committee were told of evidence that suggests SCAPE in 1,200 local government procurement projects have delivered average savings of 14%.

Now that last savings claim gave Ian Taylor some cause for concern and he cited his own viewed, based on spend analysis, of the potential scope for collaboration, namely, 10-15% of spend was suitable for national buying, +/- 25% suitable for regional buying, and +/- 50% required local buying. I don't know how accurate those figures are but they do strike me as quite reasonable.

So what's the solution? Well the Committee could take on board one of the witnesses suggestions and put in place a centralised national buying organisation, or perhaps a regional structure - hold on though wasn't that what the RIEPs tried to do in partnership with Pro5? Or, as another of the witnesses suggested, the Committee could sort out the fear of failure which is pervasive in local government as a result of potential EU challenges.

My own suggestion is that the Committee will have enough on its plate trying to reconcile the first two days of oral evidence and how to stop local government procurement witnesses undermining anymore the good work of the sector.

I suspect I may return with more comments on the oral evidence but that seems like enough to think on for the time being.

The UNISON v NOA bout at CLG Committee Inquiry on procurement

On Friday I discussed the evidence of the local government panel witnesses to the Communities and Local Government Committee Inquiry into procurement. My main issue was the reliance was the absence historical evidence which should have been easy for LGA to access. My second criticism was the danger of hubris, ripping up the rule book and believing you alone have discovered the Holy Grail - passion in your work is great but it will not count for much when hindsight is what judges you, if not the legal profession.

So that was the first witness panel's evidence, the second panel gave evidence from UNISON and the National Outsourcing Association - as you would expect these two opponents traded unhelpful blows with each other on outsourcing.  It did strike me as strange though that the earlier session hadn't sought answers from the local government witnesses on outsourcing. Equally, why didn't the Committee follow through with UNISON and NOA on the local government witnesses evidence on social value - absolutely no triangulation of the evidence!

I cringed when the UNISON spokesperson referred to the DeAnne Julius report as "outdated and largely based on CCT" - now let me think, wasn't CCT led to rest nearly ten years prior to the report?

What drives local government procurement improvement?

I'm sure many of you have been eagerly awaiting the evidence sessions on local government procurement to the Communities and Local Government Select Committee. On Monday the Committee  had its first session of oral evidence which is now published.

I had previously highlighted what I felt may be worth exploring, but it doesn't really look as if either the  Committee or LGA have spent anytime learning from history and would rather listen to some suspect assertions.

A good starting point was the Committee trying to establish what drives procurement improvement? Sadly, the LGA spokesperson had to have that question broken down into bite-sized chunks before the Committee came to his rescue. Then we heard, what I consider to be absolute nonsense, that the electorate are driving change through the ballot box. Thankfully the Committee had enough sense to question that assertion too. Having interviewed hundreds of local government procurement stakeholders this was the first time I have ever heard anyone suggest there is something in a manifesto about local government procurement. It's all about campaigns and the X factor in one council it seems.

We heard that the LGA have been working on a national procurement strategy since 2006 - why so little progress? Well perhaps, and I quote, "I am not sure a national framework is terribly helpful". We may be in a better position to judge whether a national procurement strategy would be helpful if they considered the evidence of the impact of the first NPS - there were annual impact assessments completed, why weren't they drawn upon? There were also some academic papers and from memory a ODPM financed impact assessment.

Local government procurement - what goes around comes around

How many of you recall the 2001 Byatt Review of local government procurement  or the subsequent 2003 National Procurement Strategy for local government. The impact assessments suggested they were effective. Of course I'm biased - I spend many years within IDeA supporting the NPS.

Now we find the Communities and Local Government Select Committee of the House of Commons have issued a call for submission of evidence on the effectiveness of Local Government Procurement.  The areas they hope to explore have a touch of deja vu echoing Byatt and the NPS which were a decade ago, yet I honestly wonder if those involved in the inquiry are aware of those antecedents.

I find it amazing that having dismantled almost the whole local government procurement support structure someone has now decided to find out what's going on. But I suppose if you think of the timescales involved the outputs could be timely for a new government.

If the Committee mean business they need to take a wider perspective, be forensic and ask:

1. What were the lessons learnt from the implementation of the NPS?
2. What was achieved through the NPS? (The impact assessment should be used as evidence)
3. What happened to the library of local government procurement indicators, procurement skills programme, the Passport2Procurement eLearning tool, the sustainable procurement guidance, gateway reviews, Fitness Checks?
4. Has local government procurement gone backwards since the implementation of the NPS?
5. What was the impact (costs and benefits) of dismantling the procurement support provided by the IDeA, 4Ps and RCEs?
6. What was the impact of the Small Business Friendly Concordat?
7. Why is it that local government has been able to collaborate on purchasing since 1957 and other parts of the public sector find it so difficult?
8. Where is local government now positioned against the milestones of the NPS?
9. What were the lessons learnt from high profile failures, for example Wiral and Lancashire major service contracts, 
10. Why has central government appeared to learn so little from local government procurement?
11. What does world best of bred local government procurement look like?

The Inquiry provides a wonderful opportunity to learn and improve the delivery of public services - let's hope the Committee hear and don't bury their heads in the sand.

What's the truth about the state of English local government procurement?

I'm afraid I missed this year's SOPO Conference but I picked up some of the key messages via Twitter postings.  Now I find it fascinating that two entirely different messages were presented to delegates.  Jon Hughes, Chairman of Future Purchasing, and co-author with Professor Mark Day of a recent high profile report on public procurement (which can be downloaded at www.deficit-reduction.com), was tweeted by @AngelineAlbert, to have told the local government buyers that demonstrable procurement competence is thin on the ground. Then this morning @Steve_bagshaw, editor of Supply Management tweeted that John Connell, Head of local assets and procurement at DCLG said words to the effect "Whitehall's view of local government buyers must change, because it is local and not central government purchasers who 'lead the way in best practice".

Can these two commentators versions be reconciled?  If not which is true?  If Jon Hughes' version is incorrect does it compromise the weight which should be given to his earlier assertion that public procurement has hugh potential but is under-utilised.  

Personally I have always held Jon Hughes in high regard and one of the most articulate thinkers on procurement.  But having spent many years looking at local government procurement myself I think I can safely say some of local government practice is truly exemplary, but some is lacklustre.

The real challenge to SOPO is to engage with Future Purchasing and the wider research community and provide the demonstrable evidence of exemplary practice which Connell champions.  This needs a change of culture and willingness of SOPO members to engage with researchers, something they have not been that enthusiastic about.  That engagement could help correctly position local government procurement, for better or for worse.