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U.K. Lawmakers Seek Economy-Boosting Procurement Revamp

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U.K. Lawmakers Seek Economy-Boosting $345 Billion Buying Revamp
Investigations announced last week into G4S Plc and Serco Group Plc receiving payments for electronic monitoring services that were not delivered are just the most recent example of "the stream of procurement and contract-management failures," the report said. Photographer: Chris Ratcliffe/Bloomberg

July 19 (Bloomberg) -- The way the U.K. government buys 227 billion pounds ($345 billion) a year of goods and services is slow, overpriced and fails to focus on results, an all-party panel of lawmakers said.

The civil service should improve its procurement skills, if necessary by abandoning its salary cap for senior officials, and concentrate on buying goods and services to boost the British economy, the House of Commons Public Administration Committee said in a report published in London today.

“The government has failed to set out a clear strategy for public procurement,” Bernard Jenkin, a lawmaker from Prime Minister David Cameron’s Conservative Party who chairs the committee, said in an e-mailed statement. “In the EU we all operate under the same rules, but the U.K. government seems to take the longest and we fail to maximize the benefit of public procurement for our own economy.”

The German and French governments have been more successful than the U.K. in securing contracts for domestic companies, the panel said. It cited the failure of Bombardier Inc., which has a factory in Derby in the East Midlands, to win the contract for trains on the Thameslink line through London, which went to Siemens AG of Germany.

Investigations announced last week into G4S Plc and Serco Group Plc receiving payments for electronic monitoring services that were not delivered are just the most recent example of “the stream of procurement and contract-management failures,” the report said.

A government decision to require anyone paid more than the prime minister to have their salary approved by the Treasury makes it difficult to recruit and retain the professionals needed for procurement, the panel said. The Ministry of Defence is looking at contracting out its purchasing in part to get around the salary restrictions.

“No other civil service in a comparable country operates on the basis that the prime minister’s salary should be a maximum,” the committee said. “Such a myopic policy makes the U.K. civil service internationally uncompetitive.”

To contact the reporter on this story: Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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