Andrew Smith – 2004 Speech at Age Concern Conference

Below is the text of the speech made by Andrew Smith, the then Secretary of State for Work and Pensions, at the Age Concern Conference on 10 February 2004.

Good afternoon.

I welcome the research you have published today. It demonstrates the huge contribution that older people make to society and the economy.

Too often in politics and the media, images of older people are negative. They’re accompanied by doom and gloom warnings about a potential health care or pensions crisis.

And while I’m clear that we face challenges if we are all to have the income in retirement that we expect – living longer should not be seen as a problem. We’ve spent most of the last century trying to ensure that people can do just that.

Today I want to talk to you about what the Government is doing to extend choice and opportunities for people in how they plan for retirement, and in particular about promoting the employment of older workers.

I’ve been asked of course to speak about the state’s responsibilities, but whatever the state does there will always be a need for the voluntary sector – a vital part of a plural and strong society.

I am interested to hear your views, so I will leave some time at the end for questions.

The policy context

Better healthcare, better hygiene, better living standards and more wealth means that people are living longer than ever before.

Increasing life expectancy means that people can spend a third of their life in retirement – roughly now equal to the length of a person’s youth.

Retirement used to be seen as the twilight phase of a worker’s life – and pensions policy used to be about providing for the last few years.

We now find ourselves facing a much bigger policy challenge – one for a third age.

Our pensions and employment policies need to reflect this.

To adapt an old cliché – life should begin at 50. We should be looking to open doors, not close them.

Our first priority when coming to power was to alleviate pensioner poverty. Since 1997 we have raised the incomes of the 2 million poorest pensioners by more than £20 a week, narrowing the gap between them and society as a whole.

We have also taken action to help people build provision for the future. For example, we have introduced changes to the State Second Pension, so that for the first time those without earnings with caring responsibilities have the opportunity to build up pension rights.

And through Pension Credit we are rewarding saving, for the first time.

The forthcoming Pensions Bill is a major step forward in our drive to improve pension security and restore confidence in the pension system. The Bill will set up a Pension Protection Fund – so that as we move forward people can be much surer that a pension promised is a pension honoured.

A layer cake of regulations surrounds pensions.

This Bill will cut through this complexity – making it easier and simpler for firms to run pensions, helping cut costs and increasing choices for those who want to work for longer.

Underpinning all this – the Bill will also establish a new, proactive pensions regulator will focus on tackling fraud, bad governance and poor administration.

And last week we published our proposals to help people take control of their retirement planning, including regular “pension health check-ups”.

We have achieved a lot, but there is still more to do to tackle the stereotypes that persistently surround ageing and open up choices and opportunities for people to genuinely plan for their retirement.
There are around 10 million pensioners in Great Britain. Over the next forty years or so this number will increase by around 50 per cent – even when you account for the State Pension Age for women being equalised to 65 by 2020.

I don’t need to tell you that this represents a major shift in the make up of the population.

It’s a well documented fact that not only is the number of older people increasing, but people are living longer at a time when birth rates are falling.

Some people have made arguments to move to a higher state pension age, releasing resources for use elsewhere in the pension system.

These arguments can seem persuasive – with apparent easy savings for the Exchequer – and some may argue fit well with the trend towards people living longer, healthier lives.

But we are clear that this is not the solution. And a quick look at some underlying statistics show why. For example, in Manchester the life-expectancy for a man is 71 years – that’s nearly 5 years below the national average.

Not to mention that fact that in some local labour markets over half those aged between 50 and state pension age are not working.

We are clear that the state pension age should remain at 65 – any change to raise it would disproportionately affect the poorest workers, most dependent on the state pension. As well as being forced to work for longer they would, because of lower life expectancy, see a bigger than average slice of their retirement taken away.

I believe work beyond 65 should be a matter of choice.

A choice that will become increasingly attractive to more people as outdated ideas about a one size fits all retirement give way.

That’s why we are taking action to get rid of outdated inflexible rules – so people have the option to draw their pension whilst working part-time.

And that’s why we will bring forward incentives to encourage people to continue working by offering them a choice if they defer their state pension – to receive either an enhanced pension or a lump sum.

[For a single person (drawing their pension 5 years later) this would be a one-off payment in the region of £20,000 on top of their normal pension, or £30,0000 for a couple.]

Working a few years longer can not only make a huge difference to retirement income – but also provide individuals with the opportunity for a second or third career.

And for business, it promises access to a more experienced, skilled workforce – generally better motivated – at a time when the labour market is increasingly tight.

But people won’t be able to exercise this choice unless we tackle the discrimination that all too often affects employment opportunities for older people.

We need to encourage more and more businesses to respond positively – challenging stereotypes and discrimination – highlighting the benefits of an age diverse workforce.

Research shows that workers over state pension age are more likely to be working for smaller firms – that is companies with 1-10 employees.

In some ways we should expect this. Many smaller firms are amongst the most flexible, responsive and innovative in other respects – so it shouldn’t come as any surprise that they include entrepreneurs who see the sense in making more of what older employees have to offer.

We need to look at why this is the case. What are they doing that other firms should learn from?

We have consulted on a whole range of issues, including mandatory retirement, pay and non pay benefits, recruitment and training, and are currently considering the responses.

Much of this builds on the work we’ve already done since I first launched the Code of Practice in 1999 – with the support of our partners to promote age equality in employment.

And that’s why the Government are introducing new legislation which will bring into sharper focus the need for all of us to change culture and attitudes to older workers.

The message is that discrimination isn’t just unfair it’s bad for business and society as a whole.

And evidence shows that it’s working. The number of firms including an age restriction in recruitment ads is falling – showing that we are already changing attitudes.
Moving forwards we need to take a tough look at age discrimination and as part of that learn from the best practice of the increasing number of employers who are doing without mandatory retirement ages.

And of course our labour market programmes are crucial.

We’ve got a good base to build from – since 1997 – employment has risen by over 1.7 million to a near record level of over 28 million. Both youth unemployment and long term unemployment levels are at their lowest levels for over 25 years.

Older people have benefited from these improvements – the gap between the over 50 and working age employment rates has narrowed.

In fact the number of people aged 50 or over in work has increased by over a million since 1997. This is in marked contrast to the 1980s and 1990s when the proportion of jobless men between the age of 50 and state retirement age doubled.

We are determined to do more. I am pleased to see that your report highlights the need to provide more help for disabled people or poor health to move back to work.

This is a priority that we in Government share. Last October we launched Pathways to Work – to challenge beliefs that people with health conditions are incapable of doing any work.

Indeed more than a million disabled people tell us that they want a job – and we are determined to help them.

We have designed a package to tackle the barriers they face in getting back to work – covering early intervention and support, specialist rehabilitation services, greater financial incentives.

Early feedback is very positive. The success of the pilots will revolve around how effectively we manage to join up services and support at a local level – and make sure that they are targeted on the needs of individuals, so that they actually get jobs.

Conclusion

To conclude my remarks today – I firmly believe that the strategy we are putting into action is the right one.

It is vitally important that we all – Government, employers, trade unions and the voluntary sector – work together to help change attitudes to planning for retirement and open up new opportunities for working longer.

A great deal of progress has been made, but we still have some way to go to make sure that people build up the retirement income they expect.

I will take some questions, and have asked the organisers to pass on to me the key points that have been made today. I hope you have had a successful day and look forward to continuing to work with you all in the future.

Andrew Smith – 2003 Speech to Labour Party Conference

Below is the text of the speech made by the then Work and Pensions Secretary, Andrew Smith, to the 2003 Labour Party Conference in Bournemouth on 2nd October 2003.

[NB, the numbers on this speech have been distorted and are not available]

Conference, this Welfare Reform debate defines the party we are, the values we stand for, and the fight we must win.

Our mission is to win the war on poverty throughout people’s lives.

The Tories gave the poorest families just � a week to cover the cost of a child.  Through record increases in child benefit and tax credits, Labour has increased that to �.

Where the Tories left over 4 million children in families on under �0 a week Labour has cut that by one and a half million.

But it’s right that as Labour’s most ambitious goal we want to see not just fewer children in poverty, but no child in poverty.

It’s about more than income alone.  It’s about education, housing, and health, with freedom from crime, drugs and abuse.  Sure Start is transforming the life chances of Britain’s poorest children.

Giving children the best start also means helping hard working parents.  Eight times as many people are getting help with their childcare than under the Tories, with the new tax credits giving up to �0 a week for childcare.

But we need to make more places available.  It’s ridiculous that so many school buildings stand empty after hours and in the holidays.

So conference, I can announce today that from April we will offer in 3 areas school-based childcare -available 7 to 7, 50 weeks a year, to ensure good care for children and the chance to work for parents.

We will also pilot payments to help lone parents move into work – an extra � a week to look for a job and an extra � a week when they get one.

Conference, we will keep driving forward with welfare to work. It’s one of Labour’s greatest achievements that even in a turbulent world with unemployment rising elsewhere, Britain has not only more people in work than ever before but the lowest unemployment for a generation.

That is not down to chance but to the choices of a Labour Government committed to economic stability and active steps to help people into jobs.  It’s not something to be taken for granted.

Britain must never go back to those Tory days where  three million unemployed were their “price worth paying” with the young condemned to idleness  and older workers thrown on the scrapheap.

So where the Lib Dems and Tories would  axe  the New Deal, Labour will extend it, with extra help for those who need it most, because we are determined to achieve our goal of full employment in every region.

That means removing barriers which still stand in the way of ethnic minorities.  We must ensure that training recruitment, and promotion depend on ability and not the colour of people’s skin. We will challenge racial disadvantage and racism wherever it occurs so that full employment really does mean employment for all.

That also means helping the million disabled people who want to work. This month we start new programmes combining focussed help in finding work, better NHS rehabilitation and extra payments of � a week for those who get jobs.

If everyone is to make the most of their potential, we must change the whole approach to disability from one based on what people can’t do to one based on what they can.

Disability rights is about more than jobs.  It is about people’s equal worth as individuals so they are not disabled by the preconceptions of others.

In years to come the treatment of disabled people typical of the last century – and still too often the case today – will be seen as an affront to their humanity.

This is a great cause of emancipation of our time. Labour wants Britain to lead the world on the rights and opportunities of disabled people.  We will extend anti-discrimination law and publish this year a Draft Bill, to fulfil in this Parliament our manifesto pledge to the full civil rights of disabled people.

Thanks to health and safety reps and workplace partnership, industrial deaths were down 10% last year. But we must do more. I am announcing today a new Challenge Fund, working with unions and employers, to extend workplace safety advice in small and medium size businesses, and we support the Freedom from Fear campaign, because we believe every worker has the right to workplace safety.

As people live longer, opportunities for older workers are critical.

1.2 million more people over the age of 50 are now in work than in 1997 but too many still face barriers.  For young and old alike it is wrong to base opportunities on age rather than aptitude and it’s right that we press ahead to outlaw age discrimination.

Our pensions consultation shows that people want flexible options for retirement.

We will change the rules so people can draw down a pension and continue working for the same employer.

Where people choose to take their state pension later, they deserve a better deal.

So I announce today, we will offer people the choice – for the first time ever – of a lump sum, as much as �,000 where they defer for 5 years. So poorer pensioners can get sums which until now have been the preserve of the better off.

We are giving people more choices.  But it would be wrong to force longer working on the least well off, often with the hardest working lives and the shortest retirement to look forward to. We reject putting up the State Pension Age.

Conference, partnership should be the basis for security in occupational pensions.

We have set up the Pension Commission; it’s work will include the case for greater compulsion.

While we applaud those employers taking tough decisions to meet their pension commitments, we condemn those who walk away from their responsibilities, short-changing workers who saved all their lives. They can’t claim workers’ loyalty, then dump them in retirement. Labour is in government not just to challenge such injustice but to do something about it.

So we will change the law …

– To stop employers walking away from their obligations.

– To stop companies using take-overs to scrap pensions; and,

–  To stop firms changing schemes without consultation

A pension promise made must be a pension promise honoured. When a firm goes bust, it can’t be right that workers see their life savings destroyed. So, conference, our Labour Government will legislate for a Pension Protection Fund…

We build on the improvements we have already made –

–  with the state second pension, extending pension rights to 20 million low paid workers, carers and disabled people, most of them women

–  free TV licences for the over 75s; and

–  the winter fuel payment,  going up to �0 for the over 80s.

And where the Tories want to privatise the state pension, Labour has increased it by �a week more than inflation and will continue to build on it as the foundation of security in retirement.

Labour has already raised the incomes of the 2 million poorest pensioners by more than � a week,  narrowing the gap between them and the society as a whole.

But the system has until now penalised those who’ve put something by for their retirement, with each pound of income knocked straight off benefits.

On Monday we change that. The new Pension Credit – the most significant increase in help for a generation – not only guarantees a minimum income but rewards those who have saved and so often missed out in the past.

It is straightforward, awards are backdated and half of pensioner households – the poorest half – gain, by an average of �0 a year.

From next week – as the Tories debate privatising state pensions – already more than 1 million pensioners will see their income rise with Pension Credit and that number will go up with every passing day.

It’s a key dividing line for the next General Election.  The Tories and Lib Dems will have to explain why they plan to take �0 off half the pensioner households in the country.

So let us get out there, campaigning to ensure pensioners get, and keep, what is rightfully theirs.

And let’s thank all the staff of  the new Pensions Service, the first ever dedicated service for pensioners, just as we value all the New Deal Personal Advisors, the Disability employment workers and the child support staff. They are the front line troops in the war against poverty – and we’re proud of them.

– progress on full employment,

– child and pensioner poverty,

– occupational pensions, and tackling discrimination

– it all shows the difference Labour is making – and how much more Labour can do.

So let’s go from here proud of our achievements, clear in our vision, confident in our purpose to build a Britain of fairness and opportunity, where no-one is left behind.

The campaign for social justice is at Labour’s heart.  It’s what brought all of us into the Labour Party. It is changing Britain for the better and it will be our inspiration until the job is done.

Andrew Smith – 2002 Speech at Lancaster House

Below is the text of the speech made by the then Chief Secretary to the Treasury, Andrew Smith, at Lancaster House on 26th March 2002.

Just a few years ago, The Government set out its thinking on how Public Private Partnerships (PPPs) could be used to create new businesses – with both the public and the private sector involved.  I am very pleased to see, from the wide range of speakers here today, that these ideas are becoming a reality.

Through the Wider Markets initiative (WMI), we have entered into a new type of partnership: not changing the responsibility for, or the funding of, public services, but liberating the underlying potential.

WMI is about enabling public sector workers to realise their full potential and about getting the full value out of public sector assets.

WMI is not about transferring assets, or the responsibility for assets, from the public sector to the private sector. Rather, it is about generating commercial activities from public sector assets in addition to fulfilling their public sector purpose.

The best of our Government agencies, research institutes, armed forces facilities and hospitals are, as we know,  a match for any in the world.  Our scientists, our technicians, and our managers, some of the people I see in the audience today, are highly motivated, highly trained, and ready to embrace change and modernisation.

They recognise that PPPs – and the WMI – are not about transferring responsibility out of the public sector, they are about bringing the public sector’s ideas and expertise to commercial markets so we can realise their full potential.  This is all about getting additional value from the assets and ideas that underpin the delivery of services, services that are with, and will remain within, the public sector.

The aim is to allow the entrepreneurial talent in the public sector to flourish.  It is about public enterprise. That is why public bodies and the private sector are entering a range of public private partnerships – creating new activities and generating value by bringing together their respective skills and assets.

In Government, we want more of these PPPs to be formed. That is why we have established Partnerships UK as centre of expertise with a specific remit to help the public sector generate new sources of commercial income.  That is why we have published new guidance on forming joint venture companies: making it easier for the public sector to set up new businesses and new partnerships across the whole range of economic activities, including science and technology.

This conference is about making it happen.  Across the public sector, in the BBC, in the Centre for Environment, Fisheries and Aquaculture, and at the Radiocommunications Agency, there are already a number of success stories.

There is a responsibility on all of us to make sure these stories get heard, and to write the next chapter, deploying successful approaches across the public sector.

Our approach brings together the WMI and Governments policies more generally on PPPs.

WMI encourages public sector bodies to exploit their assets – physical and intellectual, enabling them to undertake commercial activities that are additional to their core function as public sector organisations.

The public sector owns over £274 billion of physical assets.  That is £274 billion of latent energy.  Liberating the potential in these assets, and in the knowledge base and intellectual excellence of the public sector, will mean more money for public investment and higher levels of productivity across the entire economy.

It is vitally important that we improve the commercial uptake of ideas and technology coming from public sector, and in particular for research establishments.  We need to bridge the gap between the supply of ideas and assets that flows naturally from the delivery of public services and the demand in wider markets.

That means a tailored approach, providing for different forms of partnerships which meet the particular objectives of a project.

The form of PPPs range from joint ventures to licenses, concessions and other partnership arrangements. There is no ‘one size fits all’ approach.  The aim is always to ensure that the taxpayer gets their fair share of the rewards while at the same time protecting public sector interests.

In some cases the public sector is major partner, in others it plays a minor role. We are developing ideas across the entire range of Government activities and assets: property, equipment and facilities, skills and expertise, databases and IT systems, research and scientific developments.

So there is no ‘one size fits all’ approach – but there are guiding principles. The aim is to ensure that all partnerships:

– align public and private sector interests

– extract best value from assets and investments

– generate activities which develop, not detract from, delivery of core public services

– provide the desired level of public sector control.

Bringing together wider markets and PPPs, we are in fact creating whole new businesses – developing new commercial activities as well as supporting traditional public services.

Over the course of this conference we will be hearing about a vast array of value-generating PPPs.  Success stories which show our approach does work:

– how the BBC has brought in investment of around £350 million to market its programmes internationally through its joint venture with Discovery;

– how the Centre for Environment, Fisheries and Aquaculture (an agency of DEFRA) and the Army Training and Recruitment Agency have managed through WMIs to build up their revenues from virtually nothing to well over £5 million per year from their wider markets activities

– how best estimates suggest the Radiocommunications Agency has achieved annual savings of around £1 million in its IT systems through a joint venture with CMG.

This is revenue on top of that raised through taxation, and of course savings that are recycled back into public services.  This extra money will be used to improve the quality of public services with benefits too for the working conditions of public sector staff.

Accordingly, the wider markets initiative is:

– encouraging public sector workers to develop and demonstrate their entrepreneurial expertise by building new businesses; and,

– training staff in the new skills needed to enter commercial markets.

We are opening up new vistas of opportunity for public sector staff.  We value public sector workers, the effort they make, the ideas they have, the ethos that drives them – WMI is about giving them more opportunities.

Entering partnerships with the private sector to commercialise public sector ideas and assets can benefit staff at all levels in an organisation.

Through its commercialisation activities, the Centre for Environment, Fisheries and Aquaculture has been able to maintain and enhance its reputation as a world class research institute, attract more staff, and improve morale through enhanced training and opportunities for interchange with private sector partners.

It is quite simple: WMI means a better deal for public sector staff.

PPPs generate additional value: increasing revenue for the organisation; enhancing opportunity for the staff.  To release that value, working together, there are a number of things we have to get right. We have to :

– make sure we have the right incentives in place

– manage and distribute risk appropriately

– safeguard the public interest and the reputation of the public sector because trust is in itself a valuable commodity

– create a more entrepreneurial culture in the public sector: this will not happen overnight, and we have to make sure we have the right staff with the right skills to make it happen.

We have taken decisive action to move forward on all of these issues.

In 1998 we introduced a framework for WMI, ensuring that Departments automatically retain the benefit of money generated by sales into wider markets – creating the incentive to innovate. We have given Departments delegated powers of approval over the majority of projects – creating a flexible and responsive system. The framework aims to ensure each Department has a wider markets officer – creating a single point of contact, enabling expertise to develop and spread best practice.

The right incentives, a flexible system with authority delegated downwards, and a central point of contact in each Department.  It is all about making sure we getting extra value out of the Government’s assets without detracting from the responsibility for or the delivery of the services on which we all rely.

To make sure we do, we are scrutinising carefully the National Asset Register – identifying where the opportunities are. We are making the move to resource accounting – so the true cost of capital is reflected in the value of fixed assets.  And we are utilizing Departmental investment strategies as a means of reviewing new and existing assets – considering their potential for generating commercial revenues.

Behind the success of the wider markets initiative stands Partnerships UK – a dedicated organisation working solely for the public sector with the objective of supporting the implementation of PPPs.

Their team works on science and technology commercialisation, and wider markets, helping us to release the potential of public sector staff and assets.  Acting as a central point of contact, PUK provides a free support service, helping with anything from simple enquiries and troubleshooting to support in taking a PPP from an abstract idea to making it a commercial reality.

Partnerships UK is also producing guidance and best practice materials for the Treasury – helping us develop a body of expertise on wider markets. The first major document, guidance for public sector bodies forming joint venture companies with the private sector, was published in November last year.

With the ability to share development costs and invest in a PPP, alongside the public sector, Partnerships UK will be a powerful catalyst as we take forward our programme of public sector reforms.

This is a programme of reforms for the public and for the public sector staff. Getting extra value out of public sector assets is good news for both. WMI means the freedom for staff to innovate, to develop new ideas, and to reach their full potential.

And it is good news for the public as:

– WMI leaves responsibility for funding and delivery of public services unchanged

– commercial activities releases extra resources for priority areas such as health and education

– the flexible use of assets releases stored potential and boosts productivity across the entire economy.

Andrew Smith – 2001 Speech to the Government Procurement Service

Below is the text of a speech made by the then Chief Secretary to the Treasury, Andrew Smith, to the Government Procurement Service conference held in Brighton on the 4th December 2001.

Introduction

1. I am very glad to be here today.   As Chief Secretary, it is quite rare for me to be out of London addressing conferences, but I am here today because of the importance of your work.

2. From the election through to last week’s Pre-Budget Report, from the Prime Minister and Chancellor downwards, we have been stressing the importance of delivery of our service commitments – and that means not just more money but also better use of money.

3. But to make sure the money we invest is used wisely, we must also invest in the capacity of our public sector systems, workers and management to ensure our public services are efficient, effective and professional.

Office of Government Commerce

4. All of you, the Government Procurement Service and the Office of Government Commerce, have an important role to play.

5. We established the OGC to act as a catalyst to improve the quality of procurement, with an important role in improving the quality of investment by the public sector. It is encouraging the use of modern techniques and a cross-Government approach to procurement. These professional approaches are already proving successful – generating savings that can be invested in our priorities.

6. Procurement has moved up the Government agenda, with active and growing political interest and support, and increasingly visible involvement of Departments at the highest level. This reflects the priority we give to improving the quality of public services, with a strong emphasis upon both successful delivery for the public, and value for money for the taxpayer.

Government Procurement Service

7. In 1997, we realised that, whilst we had good commitment of public sector staff, in some areas the capacity to spend taxpayers? money efficiently was frequently worse than it should be. Procurement was too often the poor relation of the civil service: orders had to be placed, invoices had to be matched, and bills had to be paid, but that was about the extent of anyone’s interest.  We wanted to change all that.

8. The Treasury and Cabinet Office commissioned the Public Expenditure Committee to report into ?Efficiency in Civil Government Procurement?. Their work, completed in 1998, focussed on a set of targeted measures, enabling government to maximise procurement efficiency. One of the key recommendations was to establish a new, professional, GPS. This was part of a package of measures designed to recruit, retain and motivate professional procurement staff.

9. That report, together with Peter Gershon’s rigorous analysis of the problems with procurement, provided the basis for action. We moved decisively to accept and implement the recommendations. We established the GPS, under the able guidance of Brian Rigby, in April 1999.

10. The GPS brought together the 1,500 procurement staff working across Government into one professional body. The aim is to enhance your contribution to the achievement of Government objectives by:

ensuring the availability of staff with appropriate skills, experience and qualifications to deliver professional, good quality and legally compliant procurement processes;

providing departments and members with best practice guidance on training, career development, and related issues to help ensure the best match of procurement staff to posts; and

offering members the information on employment opportunities and support they need for more effective career management.

11. So we have established procurement as a professional discipline within Government: acknowledging the valuable contribution that you make and raising the profile of your work across Whitehall and beyond.

12. By improving the career opportunities, training and status of hard working procurement professionals we will ensure that your effort is rewarded and your contribution is recognised. With the support of the GPS you will come to play a more important part in the life of your Departments. You will help us to achieve our three-year target of £1bn in value for money improvements.  And your Departments, in their turn, will play a more effective role in delivering on our public service commitments.

Reform of procurement

13. To deliver that improvement in our public services we have to reform the way we think about procurement.  We need to move procurement towards higher value added activities, such as:

building partnership with the private sector – using procurement to lever in business efficiency, innovation and expertise;

developing adult approaches to supplier management – working with third party providers to standardise procurement process, increase competition in the market for government business, and drive down the costs for all parties; and

considering the whole life cycle of projects in the procurement process – working with stake holders to identify desirable outcomes early in the day, and considering the whole life cycle of a scheme when identifying our Best Value objectives.

14. That is how we will improve the management of complex spending programmes, fulfil our responsibilities to the taxpayer, and deliver on our commitments to the consumer of public services.

15. These are ambitious goals. To achieve them we will have to work hard and we will have to work together. Working together means ensuring that you, the procurement professionals, have the skills and expertise to drive forward your departments spending programmes.  We need to make sure you have got that.

16. In the past, the capacity to achieve value for money savings through better Government procurement practice was simply not there. There was no political commitment, there was wasted expertise, and there were no resources to support efficient purchasing procedures.

17. The first step was to revitalise the skills of the government purchasing community. Great strides have been made towards educating procurement professionals and informing departments about the value you can add.  We are entering into an era of continuous professional development for staff at all levels.  For those of you who have just achieved your qualification this is only the beginning.

18. We are Investors in People: we will work tirelessly to ensure that you have the opportunities to develop and grow. You will attain the skills necessary to advance your careers and at the same time contribute to the advancement of your Department’s objectives.

19. I would like to say a big thank you to Chris Howard and his colleagues on the GPS management board for their hard work on the programmes for professional development.

Achievements so far

20. Higher standards of training, better opportunities for development, and greater levels of professionalism all add up to a massive boost for the procurement agenda.  We are already beginning to see the results.

the Government Procurement Card (GPC) – reducing transaction costs wherever it is used;

the Gateway process – helping us manage complex projects; and

collaboration between Government Departments – hard working professional working together to deliver on our shared objectives.

21. The GPC was introduced in 1997 and has already delivered £30m in efficiency savings. It has enabled Government Departments and agencies to streamline their purchasing processes, realising these dramatic savings both in time and costs incurred by standard administrative processes.

22. Today’s launch of the consortium of VISA banks? fourth annual report into the use of the GPC, audited by KPMG, confirms that the 2001 target of £150m spend on the card has been exceeded by 7.5%.

23. In just four years, over 155 departments and agencies have implemented their own card programmes, and the number of cards issued has risen by over 50% in the last year. A landmark was reached in April of this year when we saw the millionth transaction. That is a million transactions where money was saved, costs were driven down, and extra resources were freed up for investment in crucial public services.

24. The Monitor Card? – which is accepted in over 12,500 outlets and accounts for 100 million litres of motor fuel – is already delivering similar savings in Government procurement of motor fuel. The NHS and Ministry of Defence provide branded fuels cards for their own fleets. Many Departments are organising similar initiatives and the number of corporate travel cards is set to increase dramatically.  These cards drive down costs, reduce administrative overheads and allow higher levels of control.

25. Delivering on priority areas often means working over longer time scales, managing large amounts of money, and achieving objectives through collaboration with a range of different partners. In the past there has simply not been the capacity to manage this type of project. That is why I launched the Gateway review process in February this year.

26. The Gateway review process is a technique for developing and delivering complex projects based on proven private sector practices, designed to ensure value for money improvements in major Government programmes.  Through the Gateway, experienced senior staff, separate from the schemes, consider their development at crucial stages – helping to guarantee the taxpayer a return on their investment.  So far 70 projects – or £18bn of Government investment – have benefited from the Gateway process.

27. The pilot projects we ran saved around £150m, and once the scheme is in full operation we anticipate savings of around £500m a year. These savings are not kept by the Treasury, but are available to be spent elsewhere, where they can deliver further benefits to front line services.

28. This is an achievement of which we can all be proud. We are planning to build on this success and roll out the process to a wider public sector audience.

29. Gateways are just one of the ways in which we are reforming our procurement processes. The deal you reached with Vodafone for the supply of cell phones to the entire public sector has exceeded all expectations. I know that arrangements are in hand to develop similar deals for the supply of Government vehicles, hotel accommodation, and energy supplies.

30. These framework agreements realise value for money savings for the taxpayer, reduce the costs of doing business with Government, and release valuable procurement resources – your time and effort – to concentrate on areas that really matter. This is a win-win situation.

31. Professionalism in procurement and in the delivery of public services also means closer working between Government Departments and agencies. As we develop the capacity of the procurement community to work towards our shared objectives, so we must build the capacity in Departments and agencies to work together, generate economies of scale, spot the synergies, and realise the value for money savings.

32. The OGC is leading the way in joining up procurement programmes across Government. The happy marriage between the OGC Buying Solutions catalogue and the Procurement and Supply Agency of the NHS is just one example.

33. In the short term the results will be value for money savings that can be recycled into the NHS, adding to the extra £1bn the Chancellor announced in the Pre-Budget Report. In the longer term we want to see more successful partnerships, delivering greater cost savings, and freeing up even more resources for investment in front line services.

Conclusion

34. In conclusion, let us take stock of what we have achieved:

the GPS – more opportunities for you to develop, greater professional expertise for your departments to draw upon;

the GPC – improving transactions, freeing resources and achieving value for money savings;

the Gateway Review – facilitating the delivery of large and complex projects, already producing results and savings; and

collaboration between Government Departments – pooling expertise and pooling public sector purchasing power.

35. On skills, already this year we have seen a 20% rise in the number of GPS staff either fully qualified or moving in the right direction. You all have the skills, expertise, and commitment to take the procurement agenda forwards, and soon 83% of you will have the certificate to prove it.  This year, 98 students have gained their Certificates of Competence, bringing the programme total so far to 855.  In addition, I know that another 98 students were studying for the graduate diploma of the Chartered Institute of Purchasing and Supply.

36. So, a lot done, still a lot to do. We need to diffuse procurement expertise even more widely around Whitehall. The Wider Skills agenda will develop the skills to manage IT, programme delivery, and procurement across government departments. We are sowing the seeds of change and modernisation, bringing cohesion to our wider commercial agenda. I am taking a close personal interest in this project and I look forward very much to seeing how it develops.

37. I thank you for all you are doing and wish you a very successful conference.