- Every organisation needs to give procurement its relevant importance and ensure there are qualified, professional staff with the appropriate level of seniority and influence
- Collaboration across the public sector to aggregate procurement and optimise scarce skills - some high-value commodities and services should be provided by National Contract for the whole of the public sector in Scotland
- Introduce Centres of Procurement expertise for NHS Scotland, local authorities, Scottish Higher and Further education and for the Scottish Executive Departments, Agencies and NDPBs
- Introduce a Charter for Suppliers to the public sector in Scotland
- Establish a Public Procurement Reform Board to oversee implementation
Finance and Public Service Reform Minister Tom McCabe said: "I welcome this report - and thank John for the hard work and expertise he has brought to bear on this important issue. His report confirms why we needed to review public sector procurement.
"While the public sector is doing well in many areas, there is undoubtedly room for considerable improvement. Action is needed to ensure we drive up standards in the way the public sector procures goods and services to ensure we spend taxpayers' money as wisely as possible.
"Urgent action is also required to ensure we use improved procurement practices to help deliver the efficiency savings we expect. I believe we can still exceed the targets we have set - but urgent action needs to be taken now.
"There is also no doubt we also need to make it easier for suppliers to do business with the public sector, this is particularly important for SMEs. The report makes the important point that collaborative procurement need not necessarily mean going for a single contract with a major supplier.
"We will, of course, have to study the report in detail and establish the views of public bodies in Scotland. Every public body has a responsibility to deliver best value for the taxpayer. But I am sure they will want to grab the opportunity it presents to deliver a win-win scenario for taxpayers and businesses.
"To get work started quickly on improvement, I have asked John to chair a Public Procurement Reform Board to drive implementation and a Public Procurement Advisory Group will be set up alongside the Board which will include representatives from business organisations.
"All this work is underpinned by wider Executive work on reforming our public services to ensure they meet the expectations of the people of Scotland."
Mr McClelland said: "There have been real improvements in public sector procurement over the last three years - but there are still weaknesses in people skills, structure and practices in many areas.
"Public sector organisations need to raise their performance and improve their procurement business processes. At the moment, not every organisation is meeting the minimum governance and accountability standards.
"I am encouraged by the way the Executive has responded to these findings and its clear commitment to improving procurement practice in the public sector. I believe that with swift action, substantial savings can be achieved while at the same time making it easier for suppliers to do business with the public sector in Scotland.
"I look forward to working closely with business organisations, the public sector and the Executive in taking forward these recommendations and driving up procurement standards in Scotland. That is what taxpayers and businesses expect and deserve."
Review of Public Procurement in Scotland By John F. McClelland
A summary of the recommendations
Some significant improvements have been made in the last 3 years but there are still, in many areas, weaknesses in resources, skills, organisation structure and practices.
Every organisation within the public sector should be obliged to meet the minimum governance and accountability standards. Specific actions include:
- An upgrade of resources, skills and practices is needed
- Each organisation ensuring that it has a Head of Procurement and procurement function with appropriate seniority and influence
- Placing authority to procure with qualified procurement officers and ensuring that no contractual commitments are made by staff without that authority
- Publication of a single set of "Business Conduct Guidelines" setting out how contact and business with outside parties should be conducted
- Strong professional leadership from the Scottish Procurement Directorate including development and training of professional staff
- Publication of a Procurement Policy Handbook for the public sector in Scotland
- Procurement policies should address corporate and social responsibilities
Public sector organisations need to improve their procurement business processes:
- Minimum reporting requirements and Key Performance Indicators for procurement should be agreed and used in all organisations. SPD should co-ordinate and collate the reporting
- Performance benchmarking for procurement must be developed
- Techniques such as the use of procurement cards and payment on receipt should be widened rapidly and innovative techniques for procurement pursued
- eProcurement Scotland should be adopted as the standard for all of the public sector in Scotland
One of the most significant financial opportunities is collaboration across the public sector including aggregating and optimising the considerable public sector spend:
- A small number of high value commodities and services should be provided by National Contract for the whole of the public sector in Scotland
Centres of Procurement expertise to lead collaborative procurement should be established for each of the following:
- NHS Scotland
- Local authorities
- Scottish Tertiary Education System
- Scottish Executive Departments, Agencies and NDPBs
For commodities and services not meriting consolidation at national level there are additional opportunities for local procurement and in some cases regional consortia led by the relevant local authorities.
The high level of dissatisfaction amongst suppliers with the procedures and practices operated by public sector organisations should be addressed by:
- Establishing a Charter for Suppliers to the public sector in Scotland
- Standardisation of terms and conditions required by the public sector
- A single "electronic portal" should be established to enable suppliers to access all essential information on opportunities and status on specific tenders in progress
- There should be total transparency in procurement decisions
- Suppliers should have a single point of enquiry within the Scottish Executive to which they can address concerns related to public procurement
- Each Centre of expertise should conduct "supplier forums"
- There should be a special effort to develop regional suppliers and to create opportunities for local suppliers to bid.
There are further opportunities to improve performance in Estates, Construction, other Capital Projects, Outsourcing, procurement of Information Technology, and PPP by adopting best practice.
The savings set out in the Efficient Government programme, rising to £200 million in 2007-08 can only be met by urgent attention to the issues raised in this report. If this is done, £400 million is a realistic target for 2008-09 and £600 million for 2009-10. This would provide savings over 5 years of close to £1.5 billion.
A special focus is required to address implementation. A Public Procurement Reform Board should be established to oversee implementation. Strong Ministerial support is required to overcome any inertia or lack of commitment within the public sector for the pursuit of implementation.
Quelle: Publictechnology, 17.03.2006
