There needs to be some ‘sense and centralisation’ brought to the procurement process, according to the chair of Parliament’s spending watchdog, the public accounts committee.
Speaking at the Chartered Institute of Public Finance and Accountancy (CIPFA) conference in Birmingham last week, Margaret Hodge said: ‘There is a tension between localism and value for money. We could get better deals if we all worked together… but that goes against localism.’
She called on local government to consider centralised procurement and contract letting, in a bid to use councils’ joint buying power more effectively.
She claimed localism caused a ‘fragmentation’ of services which would make it increasingly difficult to monitor value, particularly in the absence of the Audit Commission.
The National Audit Office, the Government’s remaining spending quango, ‘was set up to look at big contracts, not fragmented local services’, she said.
Ms Hodge lamented the waste of public money in central government, citing examples such as the recent delays to commissioning aircraft carriers. ‘This week we took evidence on the FireControl service. That was basically £500m down the drain on a white elephant,’ she said. ‘And that’s not atypical.’
Ms Hodge also claimed there was ‘always insufficient finance professionals in central government’.
She told delegates central government was hampered by a lack of skills, and constantly changing personnel at a senior level.
The result, she said, was huge costs, run up in hiring consultants to fill the gaps, and no-one took responsibility for failures and overspends.
She listed the challenges facing public sector finance professionals, including:
the speed of change
the tension between localism and value for money
the lack of proper data available
a short-term approach to finance
a lack of skills in government
the risk of unintended consequences.
