UK Government appoint a Chief Procurement Officer

1. It is insane that this post did not exist before. I am sure the government will argue that it actually did but in a different guise. We have seen purchasing agencies appointed by the government; we have also seen some degree of centralization of purchasing through their consulting relationships, specifically on the technology side, this I am sure is what they will argue. However, their biggest procurement successes (measured in savings over time) have occurred when they centralized procurement of goods and/or services themselves. Not outsourced. Not by accident. But with direct energy and focus. In one instance they were able to save up to 500m over 4 years on the procurement of just two services – gas and electricity. The lesson – if you focus on savings, you make savings. If you don’t, you don’t.
2. To describe the government purchasing power as significant is a monumental understatement. The government spends on its largest four categories (salaries, utilities, facilities and IT) make it in the top three largest spenders in those categories in the UK. In most places it is the number one. I figured out that purely on the basis that it is the largest single employer in the UK it would likely be the number one entity in terms of spend in the four areas I mentioned. Therefore it is incredible that a more commercial approach was not taken to procurement some time ago (I am using different words to restate point one). Imagine the government purchasing leverage if it flexed its purchasing muscles? Suppliers covet their status where the GOVT is concerned so would trip over themselves to craft creative deals that give the taxpayer value for money in return for a longer term relationship. This is the basis of commerce in the private sector, why did it take so long to realize that this practice would be most powerful if applied by the entity spending the most money? I am no genius and I figured it out (so maybe I am a genius?). The lesson – the government purchasing power is a huge ‘Ace’ card. In poker you don’t save your ‘Ace’ for the next hand because you may not get to play it.
3. The amount of tax John Public pays in the UK has gone up exponentially over the last fifteen years as a result of net increases in taxation as well as the introduction of a number of new types of tax (council tax or London’s congestion charge for example). This is not news. Over time, tax will likely continue to increase and continue to take more of the money we all spend our time earning. I am actually ok with this theory. The place where it breaks down is where you take the taxpayers money and allow it to be wasted through a lack of centralization or focus, then as a result come back and take even more to cover your losses. Again I am no genius but I have seen this movie before, but in the version I saw it was the banks who wasted money on bad bets and then kept making bad choices to cover its mounting losses leading to the global economic meltdown destroying companies, jobs and families. How about we cut tax payers contributions until the govt prove it spends the money we are already paying in a responsible way, especially in this procurement domain under the leadership of a single procurement executive and buying strategy, and when we see that delivering value, we as tax payers get to feel comfortable investing more, this is also how commerce works (and is also wishful thinking on my part, but I can dream right) 

So, it is interesting to me for these reasons. But, I do not want to take the easy road of criticizing the government for introducing something that is actually excellent and will almost certainly delivery value, just because they didn’t do it ten years ago. Instead, as a taxpayer I commend the action; centralized procurement delivers savings and controls costs. The government only has a bottom line to worry about so fiscal efficiency is almost the only measure of success for them, so this move, is almost genius and I wish John Collington every success in his new role as CPO. At KDS we are of course ready to help him in this initiative with our T&E suite of applications, in particular the KDS exec suite that will help him avoid cost before it even happens. Cost containment and avoidance is core to what we help our customers in the private sector do as well as a handful of govt entities. We would happily extend this at a central government level, perhaps even on a success based engagement. Why not? 

Lets see what happens. One steps at a time. For now.