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Review of Public Procurement in Scotland - Report and Recommendations

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8 People and Skills

Background

In any organisation, getting the balance right between staffing levels and outcomes for the organisation is critical. Too many overskilled people represents inefficiency. Too few can look superficially efficient but be ineffective in terms of achieving desired results and other outcomes.

Findings

Generally, the level of procurement people and skills in the Public Sector fall short of the Private Sector equivalent and indeed some exemplary organisations within the Public Sector. This shortfall is inconsistent with the priority required. It impacts on accountability and governance and on the pursuit of Best Value where the return from purchase cost savings is potentially very significant.

In addition, where skills are scarce, nurturing, maintenance and top-up are key attributes of a well architected approach to human resources. Therefore, sound employee development and retention need to be more strongly pursued.

Within the allocated resources there are excellent skilled professionals but their numbers are relatively low compared to levels and diversity of expenditure in the public sector and compared to the equivalent skill levels in the private sector. I estimate that there are just over 250 "professionals" in the sector when, in my opinion, at least twice that number could be required. I emphasise strongly that this potential increase could be offset by better practices, collaboration and improved information systems. This assessment is based on the premise that exemplary organisations in the public sector have approximately one procurement professional per £15m of spend. Most organisations operate well below this level.

Given this situation there is little or no flexibility in resources or skills to handle workload peaks or support improvement initiatives such as procedural or information systems enhancements.

My experience of dealing with similar issues in the private sector is that without adequate resources, skills and appropriate organisation and structure, the prospects of achieving efficiency and Best Value will be poor.

8.1 Recommendation

Each organisation within the Public Sector should review its procurement organisation to establish the adequacy or otherwise of the resources including skill levels dedicated to the procurement activity. This work should identify both the base requirements essential to satisfy the issues previously referred to in governance criteria (Ref. 5) and separately that required to move the procurement operation towards improved performance, superior performance and Best Value. Whilst every procurement operation has some variation from the next one, a useful starting point for this evaluation should be the prospect mentioned above that there should be broadly one procurement professional for every £15m of contracted expenditure (see benchmarking 9.5.4).

8.2 Recommendation

Additions required to staffing and skill levels should be addressed within individual organisations. Recognition should also be given to the potential offsets in resource and skill requirements offered by improving information systems and by more extensive collaborative procurement. (Ref. 12.) Also skill levels of existing staff should be upgraded through extensive programmes of professional training and development.

8.3 Recommendation

First, the resources and skills required to bring standards up to the minimum required for accountability and governance should be injected as an urgent priority.

Secondly, given that procurement results can be tied back to efficient and effective procurement practices, executives and those in governance in the public sector should consider procurement resources and skills as an investment that is capable of providing a relatively short term payback on its cost and therefore progress towards financial savings targets.

8.4 Recommendation

As part of the staff development and skills balancing work, a programme of liaison and career development should be established between the public sector, professional groups such as the Chartered Institute of Purchasing and Supply, SOPO and appropriate universities and colleges.

It will include support for education and training but should certainly incorporate arrangements for further and higher education of existing staff and also the planned provision of new graduate or professional recruitment to fill vacancies and accommodate maintenance of resources and skills.

8.5 Recommendation

Work should be undertaken to establish how a complete, cross-public sector career path or ladder can be established which will facilitate career management and employee development and retention.

8.6 Recommendation

Given the scarcity of skills and difficulty in recruitment, a review should be conducted of job gradings and salary scales to confirm whether these aspects are properly positioned to recognise the quality and experience required in public-sector procurement.

8.7 Recommendation

There is little flexibility within the public-sector to find and assign skilled people to deal with workload peaks as described above.

A centrally co-ordinated pool of skills should be established and deployed on an as required basis to organisations or groups within the sector to supplement existing capability where a special one-time effort or peak workload is causing difficulty. That pool of skills should be established, funded, managed and assigned to priorities by the Scottish Procurement Directorate.

8.8 Recommendation

The programme for Efficient Government within the Public Sector could lead to adjustments in resource levels in some areas. Where redeployment of people is a potential, then strong consideration should be given as to whether and if so how individuals from other functions could be retrained to take up procurement work.