Procurement Strategy (Hansard, 22 May 1995)

§ Mr. Kenneth Clarke

I am today presenting to Parliament a White Paper entitled "Setting New Standards: A Strategy for Government Procurement", Cm 2840. Copies of the White Paper are being placed in the Libraries of both Houses.

With the development of the Government's policies for private finance, market testing, contracting out and internal markets, Departments are doing more of their business than ever before through procurement as against in-house provision. The annual spend is now about £40 billion a year and, in addition, purchasing authorities in the national health service internal market spend more than £20 billion. These policies have brought immense benefits to the country. Their full potential has still to be realised. The more procurement there is, the more important it becomes that Government Departments should make a first-class job of it. The Government owe nothing less to citizens, taxpayers and suppliers. Ten years have passed since the Government's first major statement on procurement strategy, in 1984. That statement, which came to be known as the Government's purchasing initiative, was an excellent beginning but much has happened since then. The Government now need a new strategy to carry it forward for the next 10 years and beyond. "Setting New Standards" provides this strategy. Key points from the strategy include: A clear objective throughout Government, and at all levels of management, to achieve world-class standards in procurement. A broader interpretation of procurement to cover all non-pay, non-transfer expenditure. A continuing emphasis on fair competition, as being the cornerstone of good procurement, coupled with constructive co-operation between customers and suppliers. 468W Emphasis on integrated procurement processes focused on whole-life costs and benefits, non-short-term lowest price, and on intelligent management of risks. A step change in professionalism and skill development among officials with procurement responsibilities. A clear pinning of responsibility on contract managers and project sponsors, supported by multi-disciplinary teams. An agenda for benchmarking of processes and performance to world standards. A new statement of good practice designed to promote fair competition, constructive co-operation between customers and suppliers, and world-class suppliers.

The objectives of Government procurement are to achieve best value for taxpayers' money and to increase the competitiveness of their suppliers. The strategy set out in "Setting New Standards" is therefore an essential part of the Government's commitment to improved competitiveness, described in "Competitiveness: Forging Ahead", Cm 2867, which my right hon. Friend the President of the Board of Trade is publishing today.