Stephen Timms – 1999 Speech at Launch of Management Consultancy Best Practice Statement

The speech made by Stephen Timms, the then Financial Secretary to the Treasury, on 10 November 1999.

Introduction

1. I am delighted to launch this Statement of best practice working relationships between Government and the key consultancy associations. The Statement is a clear demonstration of this Government’s intention to work more closely and more effectively with its suppliers. I would particularly like to welcome the three parties who have worked so hard together to get this far: The Management Consultancies Association (represented by Chris Harrison, Vice Chairman), The Institute of Management Consultancy (represented by Richard Popple – President) and the Treasury’s Procurement Group (represented by Mike Burt).

Procurement

1. Improving procurement is part and parcel of this Government’s wider modernisation programme for the public services. Central Government is the largest buyer of goods and services in the country. Our procurement budget totals £13 billion, and that includes half a billion pounds a year spent on consultancies. So there is a lot at stake.
2. The need for change has been given new urgency by the rapidly changing nature of the public sector’s relationship with the private sector.
3. The Government’s dealings with the private sector have increased both in number and in complexity so the Government’s procurement activity has also become more complex.
4. Take for example the enormous investment process that is now underway in IT. Or the opportunities posed by the Internet and electronic commerce, for organising Government activities in new, innovative and more effective ways. All of these changes demand a new emphasis on professional procurement and a new approach to it too.
5. The private sector recognised long ago that procurement processes and procedures were central to the strategic planning and policy of any organisation. The public sector should be no different. Indeed without change in the public sector there will continue to be adverse consequences for the private sector, not least for the suppliers and consultancies with whom we do business.
6. The problems in Whitehall’s approach to the procurement of committee projects and our procurement are well-known – poor projects definitions, poor project management, poor contract management and poor management of suppliers.
7. We have also had some nasty surprises. There have been a number of major projects both in fields such as construction and IT which quite frankly have simply gone wrong. They raised the question as to whether the public sector had the professional skills required to define and manage major capital projects of this sort.

Office of Government Commerce

1. That’s why towards the end of last year we asked Peter Gershon, Managing Director of GEC Marconi to conduct a review of the structure of procurement and to tell whether we had the organisation, the skills, the processes and procedures that would see us into the next Millennium. His report which we endorsed in July, provides a recipe for swift progress.
2. The report recommended the setting-up of the Office of Government Commerce which will, on the principle of subsidiarity, support departments by doing things centrally that are best done centrally, while leaving individual units freedom to pursue their individual interests locally where it is clearly best to do so.
3. The Office of Government Commerce will be responsible for defining the electronic procurement agenda. It will oversee the management of supplier relations and it will be a source of project management skill which will be world class and which it will make available to departments. It will be a single source of authoritative guidance and will manage up the skills available across Whitehall. 

Best Practice Statement

1. This Statement is one of the first practical demonstrations of this Government’s commitment to improving its relations with its suppliers, as set out in Peter Gershon’s procurement review. It also puts into practical effect the call by the Modernising Government White Paper for modern and effective Government business. This is the first statement of its kind and I believe can be the model for other expressions of best practice relationships.
2. It is a clear expression of how client departments and consultants should work together to achieve a mutually beneficial relationship and outcome. It sets out the best practice standards which should be adopted at every stage of the procurement and delivery of the contract. It reflects the real need for both sides of the contract to put behind them the confrontational and adversarial approaches which have too often been a feature of past working relationships and which deliver neither value for money nor the best results for either side, nor ultimately for the taxpayer.
3. I bring a good deal of conviction to the task of commending the Statement because of my experience of working as a management consultant. I knew well the potential for management consultancy to make an enormous contribution to problem solving in a creative way – but also how much achieving that potential is dependent on a good relationship between client and consultant.
4. We have developed the Statement with other Government Departments, the Management Consultancies Association and Institute of Management Consultancy on behalf of their members. But if it is to have real impact, its principles must be disseminated to everyone in Government involved in procuring consultancy services and to every consultant employed to deliver those requirements. And I look to everyone present here today to play their part in making this happen. We also recognise the need for its adoption and application to be monitored and fed back to those who will be responsible for reviewing, amending and refining the statement. So we will be putting in place the means for achieving this
5. Working together with business has been a key theme of this Government. This Statement clearly demonstrates those values. Consultancies, the Government and the taxpayer all stand to gain. With your support, we can ensure that the Statement delivers tangible results, becoming the “yardstick” for modern procurement practices across the UK.
6. Thank you.