Procurement and Commercial's Impact on the Public Sector Growth

Tim Cummins
Posted: 03/21/2013

Interview by Tim Cummins, International Association of Contract and Commercial Management

In this short interview with IACCM, Alastair Merrill, Director of Procurement and Commercial for the Scottish Government, describes the growing role and contribution of Procurement and Commercial in delivering public sector growth. He also responds to questions about the ability of Government procurement to adjust to the contracting and commercial models needed in today's dynamic and fast-changing economic and business environment.

How is Procurement and Commercial's role seen in the Scottish public sector?

A Merrill: Procurement and Commercial is extremely important in the Scottish Government's agenda for delivering sustainable economic growth in the Scottish economy. That's the national purpose of the government in Scotland, and procurement is one of the key strands in the government's economic strategy. Increasingly, it's seen as a strategic enabler of both policy development and service delivery. With over £9 billion a year spent on goods and services in Scotland that can have a huge economic impact if it's used wisely as a lever to promote sustainable growth.

That's a really interesting perspective, and one that many governments have recognised to be important, but few seem to have been able to turn that perception into real action. I was talking this morning with a major provider to government, and he was observing that he feels, in many cases, government procurement is struggling to adjust to the need for new contract and commercial models; that it's a little bit stuck in the dark age of rigour around procedure and feelings of constraint by public procurement policy. He was highlighting, particularly, areas as examples, where he was talking about, for instance, cloud computing or agile development projects or, indeed, the whole move to big data. And that the model and the processes didn't seem to be able to adjust and adapt to that very much more dynamic environment. What are your thoughts on that challenge?

A Merrill: We have a very distinct model of public procurement in Scotland that's been developed over six years since we began our procurement reform programme. That's based around a number of very simple, but very powerful concepts. Procurement reform in Scotland is led by government, but it's owned by the whole of the public sector. That means that all public sector bodies are signed up to the same high level commitments and objectives in procurement reform. It's based around the concept of value of money in procurement being about three things. Not just the usual cost and quality, but also about sustainability; environmental sustainability, social sustainability, and economic sustainability. Procurement in Scotland is also underpinned by a standard set of processes and e-commerce tools, which means that we're able to take a much more agile and flexible approach, and use procurement opportunities, not just to deliver value to the taxpayer, but also to deliver growth and promote innovation in the Scottish economy.

That's a fascinating set of ideas and one that is, in some respects, made a little easier by the relative size and scale of operation. As you say £9 billion is not a trivial sum of money, yet in comparison with some budgets, it's perhaps been more practical to try and turn this around and to introduce those new ideas and concepts than it would be in a much larger-scale operation.

A Merrill: I think scale is important. Scotland is a small country; five million people, 32 local authorities. So having that size and having those communications means that you can align people more readily behind a common agenda. Not to say it's easy. Sometimes it feels a little bit like herding cats, but the progress that we've made shows just what can be done if you take that kind of agile and flexible approach. Some of the principles would be just as applicable in a larger economy as they would be in a small economy like Scotland's.

Alastair will be speaking at the upcoming 10th Annual IACCM Europe Forum, taking place 23 – 25 April 2013. For more information, visit www.iaccmforumeurope.com, email enquire@iqpc.co.uk or call +44 (0)20 7036 1300 for more details.

Tim Cummins
Posted: 03/21/2013

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