We supposedly live in an era of competition and public value tests for government services. Yet the message seems not to have reached the FE sector according to a report by the National Audit Office (NAO) – whose motto is, ‘Helping the nation spend wisely’. Last October they released a damning report that showed the large number of contracts awarded without any tendering. If this was just a few paper clips, then it wouldn’t matter, except it isn’t, with individual contracts worth more than £50k being awarded on this basis by almost half of all the colleges surveyed. The NAO report didn’t mince its words saying, ‘Most colleges’ systems, processes and procedures have not kept up with modern procurement practice’.
There have previously been questions asked by the Select Committee on Public Expenditure for Education and Skills; and the DfES has even set up its own Centre for Procurement Performance. From a business perspective, having to go through a complicated tender process for every contract is expensive and favours big suppliers who know the system, so striking a balance between fair competition and value for money is always going to be difficult.
We believe a great deal of the blame should be laid at the door of the Learning and Skills Council, an organisation not noted for being averse to spending money freely. If it set a better standard then colleges would be more likely to follow suit. Internally the LSC has a project that is supposed to save £75m this year, however when you consider that its budget is £10bn+ then this amounts to no more than cutting the quality of the toilet paper used in their head office and certainly won’t deliver the level of savings mandated by the Gershon Efficiency Review. In reality it’s not the LSC who are being asked to save £75m, rather it’s colleges who are being told by the LSC to trying to cut almost 5% of their budgets.
If the £200k taxpayers already pay for Mark Haysom, the LSC’s Chief Executive, isn’t enough of an incentive to fix such a systemic problem, then perhaps the best incentive for Haysom is a clear understanding that if he can’t or won’t, then he’ll be replaced by someone who will.
www.nao.org.uk
