# = pounds sterling
HM Treasury New Release
208/98 15 December 1998
--------------------------------------------------------------
TACKLING THE IMPROVEMENT OF
PUBLIC SECTOR PROCUREMENT
Top civil servants and senior business leaders will be questioned
as part of a fundamental review covering all aspects of how
central government departments spend 12 billion Pounds a year on goods
and services, Peter Gershon, the head of the review, announced
today.
Mr Gershon, managing director of Marconi Electronic Systems, was
commissioned last month to bring his experience in major private
sector companies together with senior civil service management
to identify efficiency, modernisation and competitiveness gains
in central government procurement. The review complements the
Government's comprehensive spending review and will help
Departments identify and deliver savings and quality gains to
meet their Public Service Agreements, which will be launched
later this week.
Setting out how he intends to tackle this important task, Mr
Gershon said:
"I have been asked to report my initial findings to the
Prime Minister early next year, with a final report during
March. This is a tight schedule, but I am determined to
press ahead to make sure that Government Departments are
able to start taking the undoubted savings and quality
improvements which can be found as early as possible.
"My report will contain recommendations for the future
roles and relationships within central government
procurement functions. The review will be conducted in two
phases, gathering information from public and private
sector organisations with ideas and expertise to
contribute, followed by analysis of these views and the
underpinning information, and then produce recommendations.
"In many areas of commerce the Government is the biggest
customer in the UK. I intend to address ways in which it
can secure best value for public money as the private
sector does. This will involve making use of the most
efficient models in the UK and abroad and the latest
technology, including electronic commerce. I shall look at
ways in which government departments collectively can deal
with suppliers to get the best possible deal for the tax
payer from this large amount of public money.
"I shall visit a number of Departments and key supply side
executives in the search to win this valuable prize. Given
the 12 billion Pounds spending by civil central Government
Departments, efficiency gains of only 5% would release 600
million Pounds every year. This is a prize which must be grasped
if the comprehensive spending review is to produce in full
the benefits which modern management approaches offer.
"I urge any organisation that is a supplier to the civil
departments of central government to provide me with a one
or two page submission setting out views on how better
value for money and efficiency gains can be obtained
through changes to current departmental approaches to
procurement."
NOTES FOR EDITORS
1. The appointment of Peter Gershon to head the current review
was announced by the Paymaster General, Geoffrey Robinson,
and Cabinet Office Parliamentary Secretary Peter Kilfoyle
on 17 November (HM Treasury press release 193/98).
2. The earlier comprehensive spending review paper "Efficiency
in Civil Government Procurement", published in July 1998,
identified the need to take advantage of electronic
trading, collaboration between departments and coordination
of supplier relations. The Gershon Review will examine
whether the current organisation of procurement practice
supports this and what improvements can be made to deliver
these objectives.
3. The Gershon Review covers central civil procurement only.
Its terms of reference are :
"To review civil procurement in Government in the light of
the Government's objectives on efficiency, modernisation
and competitiveness in the short and medium term and to
report within three months".
4. Peter Gershon, currently MD Marconi Electronic Systems, was
formerly MD GPT and before that, MD STC Telecom and has
held senior positions in the computing industry.
Submissions to Mr Gershon should be sent to him at
gershon.review@hm-treasury.gov.uk, or :
c/o HM Treasury
Room 202/203
Allington Towers
19 Allington Street
London
SW1E 5EB
5. The Chief Secretary to the Treasury, Stephen Byers, will
make a statement and publish a White Paper on Public
Service Agreements later this week.
6. If you have access to the Internet, you can find this press
release and material on other Treasury issues at
http://www.hm-treasury.gov.uk.