The Effects of the Efficiency and Reform Group on Public Sector Procurement

In a drive to cut the massive budget deficit, the recently formed coalition government has created a joint Treasury-Cabinet Office group called the Efficiency and Reform Group (ERG). The Group’s work is co-chaired by the Minister for the Cabinet Office and the Chief Secretary to the Treasury.

Three senior business leaders that will also sit on the board include:

· Sir Peter Gershon, Chairman of Tate & Lyle, former government efficiency adviser and first chief executive of the OGC;

· Lucy Neville-Rolfe, Executive Director, Tesco PLC; formerly a senior career civil servant; and

· Dr Martin Read, Non-Executive Director of Invensys, Aegis and Lloyd’s of London.

Working on the Selling to the Public Sector project[1], it becomes immediately clear that the decisions from this group will have massive consequences on public procurement and supplier diversity. Since it was created, the ERG has been granted control of the Office of Government Commerce and Buying Solutions, the two major government purchasing organisations.[2] The drive to ‘conduct, centralised procurement for commodity goods and services’ and ‘freeze all new advertising and marketing spend’ are amongst the group’s first priorities.[3]

While several benefits can result from the initiatives of the ERG, including cost cutting measures and increased collaboration between purchasing departments, these initiatives in the field of public sector procurement should be taken with caution. Prime Minister David Cameron stated, during the debates in Birmingham, that Small and Medium Enterprises (SMEs) should be given more opportunities to bid for public sector contracts. However, contrary to this, it seems that the ERG is focusing on major suppliers and combining different public sector purchasing organisations, thus indirectly decreasing the amount of procurement initiatives aimed at SMEs.

In the short term, these policies might lead to public savings due to increased efficiency of public services. However, by overly relying on major suppliers to deliver public sector contracts, the public sector will fail to maximise its potential as an economic driver for SMEs and David Cameron will fail on this campaign promise.

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[1] The Selling to the Public Sector project aims to engage with Corporate Procurement Functions in the public sector and suppliers to develop and create capacity in SME’s in the Leicester City area to access public sector supply chains, whether it is through be-coming an approved supplier or to win a contract.

[2] http://www.publicservice.co.uk/news_story.asp?id=13255

[3] http://www.cabinetoffice.gov.uk/newsroom/news_releases/2010/100524-waste.aspx

Prof Monder Ram Takes on Government Advisory Role on Equality

From the press release:

Professor Monder Ram OBE, Professor of Small Business and Director of the Centre for Research in Ethnic Minority Entrepreneurship (CREME) at De Montfort University in Leicester, has been chosen to sit on a new government advisory group to shape best practice for equality and diversity.

The Department for Business, Innovation and Skills (BIS) has established the Equalities Advisory Group (EAG) to act as an advisory body to the BIS Equality and Diversity Governance Board, responsible for advising and challenging approaches to progressing equality and diversity to support BIS’ strategic priorities and help deliver key outcomes identified.

The EAG consists of invited representatives from key organisations from across the BIS family that reflect its agenda as a whole, as well as key national equality organisations such as DMU’s CREME, the Equality and Human Rights Commission, Black Training and Enterprise Group, the Office for Standards in Education, Children’s Services and Skills (Ofsted), Higher Education Funding Council for England (HEFCE) and the Economic and Social Research Council (ESRC).

Led by Professor Monder Ram, CREME, based within the Leicester Business School of De Montfort University, works collaboratively with policy-makers and practitioners to support ethnic minority businesses, combining outstanding community engagement with a strong commitment to academic rigour.

Professor Ram also has extensive experience of working in, researching and acting as a consultant to ethnic minority businesses. He is a leading authority on ethnic minority entrepreneurship research and has published widely on the subject. His work has been supported by grants from a full range of research funding bodies; including research councils, government departments, regional and local agencies and the private sector.

Commenting on his appointment to the EAG, Professor Ram said: “This is an excellent opportunity to work with a key government department to ensure that diversity features in all its key operations. I'm particularly interested in pursuing this issue in relation to enterprise.”

Professor Ram was responsible for initiating the annual Ethnic Minority Business Conference in 1998, which has developed into the most important event in the calendar for disseminating policy and research on ethnic minority firms. He also holds the positions of Visiting Fellow at the Industrial Relations Research Unit at Warwick University, and the Herbert Felix Visiting Professor at Lund University in Sweden.

Monder served in the former Department of Trade and Industry’s Ethnic Minority Business Forum and Small Business Council. He was also named as one of the country’s most influential Asians by the Institute of Asian Professionals and was awarded an OBE in the 2004 New Year Honours List for his services to black and ethnic minority businesses.