Transforming government procurement in our public services to match the global pace of change: John Healey

John Healey MP, Financial Secretary to the Treasury, today unveiled a range of public procurement reforms to equip the UK with the capability to deliver world class public services in the face of the growing challenges of global competition, changing demographics and increasing pressures on the environment.

'Transforming Government Procurement' sets out the scale, complexity and diversity of public procurement. It offers a clear mandate - and challenge - to raise public sector skills to develop innovative procurement methods and solutions, thereby ensuring that procurement drives the delivery of public services in a way that matches the high expectations of the public, he said.

Launching the document at a London Best Value in Public Sector Procurement Conference, John Healey said:

"We must remain uncompromising in our pursuit of value for money for the taxpayer. The Government intends that, in the next Comprehensive Spending Review round, procurement will drive the delivery of public services in a way that matches the global pace of change."

"This Government has successfully delivered substantial increases in public sector investment since 1997. Transforming public procurement in a sustainable way is now a major challenge."

"Innovative procurement methods and responsive solutions set alongside the public sector's capability and skills are key to ensuring the UK can speed up the delivery of world class public services and meet the global challenges we face."

Measures to be introduced in delivering this government vision include:

reforming the Government Procurement Service, raising its status within government departments and increasing the skills of procurement professionals, to make it more flexible and focus resources where they are most needed;
raising procurement capacity within departments and introducing procurement capability reviews to assess whether they meet the demanding standards required to deliver value for money now and in the future;
making greater use of the Government's collective buying power and market engagement in collaborative approaches to innovative procurement;
broadening the Major Projects Review Group to ensure complex procurement projects are subject to effective scrutiny at key stages, such as approval of the business case.

To drive forward this transformation, the Office of Government Commerce will be given powers to set out the procurement standards departments need to meet, monitor departments performance against them, require inter-departmental collaboration where appropriate, and to support the Major Projects Review Group.

To ensure that it is properly equipped to exercise those powers and oversee the changes needed across government, the OGC will be given a clear focus to drive better value for money in central government procurement, on major complex acquisition programmes and projects, and on estates management. It will become a smaller, higher calibre organisation.

John Healey continued :

"Procurement in the public sector is responsible for securing the means to help secure vital delivery - supporting people in the health sector; providing better education; making the streets safer and making our buildings and vehicles cleaner.

"Over the next decade, procurement will become more fundamental to achieving both value for money for taxpayers and in delivering sustainable world class public services. What we now need is a procurement service that is better equipped with an increased capability to help ensure central government meets these challenges."

John Oughton, Chief Executive of the OGC, said:

"Today's announcement represents both an opportunity and a challenge for us. This is the first major re-shaping of the procurement agenda since the OGC was established. The procurement agenda is central to the government's purpose. I am confident that the new OGC will be better placed to support the delivery of the transformation."

Notes to Editors

The 2006 Pre-Budget Report announced that the Government would draw up detailed plans to make the step change required in its procurement capability to deliver world class public services. These are set out in today’s publication 'Transforming government procurement'
The paper also explains the Government’s record on procurement so far, including how it is using innovative procurement techniques such as e-auctions to reduce transaction costs, innovative technologies to deliver more responsive public services that offer value for money, and embracing energy saving technology to reduce carbon emissions and at lower cost.
The document 'Transforming government procurement' can be found on the Treasury website.
Press enquiries should be addressed to Malcolm Graves in the Treasury Press Office on 020 7270 5238 and to Adrian Ient in the OGC press office on 020 7271 1366.
Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk
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