Two into one won’t go

One of the joys (if that’s the right word) of being an adviser is that one is never short of advisers of one’s own. Much of the advice offered to me assumes that major improvements will be made if the public sector follows the private sector model; but I’ve had a lifetime of experience in the private sector, and the most valuable advice I’ve received has been from people who’ve spent their careers in public service. Things in the public sector are different, and necessarily so. There is latitude available to the private sector that, because of its broader public duty and in the interests of accountability, the public sector cannot emulate.

For example, the private sector will choose a skilled leader to take charge of its development programme, will trust his or her judgement for as long as that trust seems to be well placed, and will allow a considerable amount of discretion in exercising that judgment in whatever way might lead to the best outcome. In the public sector, that kind of authority is rarely going to be vested in an individual. First of all there is no single thing called “the public sector”, and even within individual ministries, the structures through which projects get delivered can be complex and diverse. It was a valuable lesson, for example, to learn how far away the NHS is from being a single organisation - when it is, in reality, a network of organisations acting (on a good day) in federation.

Although, therefore, one might hope for some coherence in the way that any single part of the public sector might approach the marketplace, there are as many differences
of view about procurement policy within and between departments as there are between companies in the private sector - and all of them are the product of a huge amount of personal, organisational and financial investment. The idea of imposing a “one-size-fits-all” model would therefore be misguided, and any attempt to do so will be at the cost of the more realistic aspiration for collaboration and coherence.

Having found the many individuals who make up the leadership of public procurement, there then needs to be some constraint on their powers of discretion. Clearly, discretion is an instrument of judgment, but discretion also opens the door to corruption; and although it would be a sad world if the base assumption were that people will act dishonestly unless prevented from doing so, tax and rate payers are entitled to see transparent structures and processes that allow no hiding places for dishonest behaviour.

Even within those constraints, there are still wider considerations to which the private sector need pay little attention. Taking as an example the current preference for working with fewer players in a supply chain, although individual departments and authorities might do that, a list of the top 30 or so contractors working right across the public sector unsurprisingly (given its share of total construction spend) broadly coincides with a list of the top 30 companies in the industry. If that were not so, then protests could be expected to follow, as it would suggest a degree of favouritism. Furthermore if one were to try and consolidate the work within this cohort of leading businesses, there would be further protest that this disadvantages SMEs and local business - and local business is, of course, the proper concern of constituency MPs.

And all of this, already difficult enough, is wrapped in the riddle that is the EU procurement process, the complexity and bureaucracy of which is so onerous, need we say more? If you are a private sector client be thankful you don’t have to go through it.

Central and local government therefore has, across the whole range of its workload, a vested interest in an industry that is healthy in all of its parts - and, indeed, an economic duty to try and make that so. So to add to all other complexities, the government tends to burden procurement with the expectation that it can serve a range of sometimes disparate policy goals.

As a colleague at the department advised me when I began here, the purpose of government is to provide services to citizens, not to feed the industry. Of course the purpose of business is to provide returns to shareholders. Where these two interests overlap is where we must set our shared agenda.

The question is how a network as huge and diverse as the public sector client base can build a relationship with an industry that is no less diverse, nurturing businesses that are collaborative in their input and competitive in their output, and fostering others to grow into the same position, keeping down the barriers not just to entry, but to each step up the growth ladder.

So there’s the challenge. As to how to guarantee success - well, about that I really would appreciate some advice.

Paul Morrell is the government’s chief construction adviser