We are missing the important point on procurement
Systemic dysfunction is far more important than individual failures
Nearly forty months after the last lockdown restrictions were lifted, the COVID-19 pandemic continues to linger around British politics like a bad smell. This is unsurprising, given that its baleful economic consequences form the topography of our new political landscape. Rather than clearing the air, different bits of the establishment are keen to use the memory of the calamity to settle some scores, and set the official record to their own preferred version of events.
It’s in that spirit, the government has announced that an inquiry is to be held into a number of controversial procurement decisions that were taken in the early stages of the pandemic in 2020.
Regardless of the rights or wrongs of the rest of the pandemic response, the consequences of the inquiry will impact the way that government responds to the next national or global calamity which demands rapid decisions, which may be anything from a military or cyber-security threat to a wholesale failure of our energy system.
That said, the decisions which the inquiry will be examining cannot be separated from the febrile political climate of the spring of 2020. With over half the workforce either furloughed or working from home, and almost all social activities rendered impossible, even those who were still going to work every day spent far more time than they normally would watching television news during the early weeks of the pandemic. Mainstream broadcast reporting seemed to be designed to be deliberately aggravating, led by political correspondents whose objective seemed always to be to land a “gotcha” type point against whichever minister had been tasked with delivering the daily briefing.
As a result, there was precious little in the way of testing the logic, the data or the assumptions on which decisions were being made, as perhaps might have been the case had scientific or specialist medical reporters been given centre-stage. Instead, point scoring would usually focus either on the government’s inability to confirm some future decision that was dependent on variables that were as yet unknown, or that it had changed its mind about something.
This style of reporting condensed decision-making around the pandemic to an absurdly reductive set of binary questions, without any consideration of trade-offs. Positions that various people had actually held only weeks previously were flippantly rewritten to make the chronology of events fit the simplistic narrative which fed the media consensus and received wisdom.
Unfortunately, rather than taking the opportunity to examine the way that scientific advice was translated into practical policy, the main inquiry into the government’s handling of the pandemic turned out to be nothing more than a long and costly exercise in laundering these fatuous media narratives into an official finding. None of the main premises of the consensus were actually examined during the inquiry, but its core assumptions underpinned the whole process from the start.
That locking down earlier, harder and for longer was a cost-free solution to the coronavirus was baked into every angle of the investigation. Indeed at one point, while cross examining then prime minister Rishi Sunak, the Counsel to the Inquiry Hugo Keith appeared to be visibly puzzled by the concept of trade-offs and second order effects in policy making. The entirely back-to-front notion that there was a unified consensus of scientific advice to the government at the outset in favour of lockdowns also seemed to guide many of the choices that inquiry made regarding its witnesses and lines of questioning, so as to avoid upsetting the approved wisdom that Boris Johnson and Dominic Cummings resisted it due to ideological libertarianism.
As with the main inquiry, an inquiry into emergency procurement failures could, if conducted seriously, draw out useful lessons from the pandemic response; in this case about the way the British state buys the goods and services that it needs, and about the way that it cultivates and deploys expertise. However, if it is conducted along the same lines as the main inquiry, this opportunity will be missed, and it will be used instead as another chance to take a lazy media narrative as a starting point and, without really examining its fundamental assumptions, launder it into an official finding.
I think it is improbable that the inquiry will find — or will even attempt to find —- the sort of outright corruption that some commentators have insinuated on the part of ministers. Perhaps a supplier might have been able to get hold of a minister’s WhatsApp number via a mutual contact and pitch for business, but the most that a minister will have done with this is pass it off to the relevant official. In the heat of the crisis, the actual decisions being taken on which suppliers were selected will have been signed off by senior civil servants or managers in the NHS.
Instead the inquiry is likely to focus on the cases where the procurement failed; where contracts were given to suppliers who couldn’t deliver, and where public money was ultimately wasted. It will also focus on cases where contracts were awarded to suppliers who turned out to have connections to ministers which have subsequently caused embarrassment and undermined public trust in government integrity. Recommendations will be made to ensure that this doesn’t happen in the next emergency.
This might sound reasonable enough at first. In reality, though, carrying out these kinds of checks is the normal business of public sector procurement. It’s a slow, laborious process of due diligence, examination of companies past records, checks to ensure that they don’t have political exposure et cetera. That’s how officials would normally avoid giving a contract to a supplier who can’t deliver, or to a company that turns out to have some link to the Secretary of State. That’s why public sector buyers do their best to keep to tight Preferred Supplier Lists (PSLs) and to put requirements out to lengthy tender processes; so that officials can justify the commercial decisions they’ve made according to a set list of criteria, and nobody can allege impropriety, even if something goes wrong and the contract fails.
In spring 2020, the cabinet made a decision to give the NHS and civil servants the temporary authority to circumvent all of these processes to ensure that the UK got hold of critical supplies that we were short of, and in some cases that the whole world was short of. When push comes to shove, the British state should be able to leverage huge economies of scale and purchasing power, and if necessary to push smaller buyers aside and secure access to stockpiles that are mandated by suppliers’ contracts with private sector buyers. However this market power can only be leveraged if the British state is able to act in an agile and assertive manner, otherwise it will be quickly outmanoeuvred by private sector buyers and foreign governments.
To be truly useful to the public … the inquiry ought to focus on how government procurement struggled to adapt to the sudden emergency
Casting aside the usual processes of sound procurement comes with financial and reputational risks. However, the government took the decision that critical shortages were an even greater liability, and that desperate times called for desperate measures. Any credible offer was to be taken advantage of, and if that meant that the odd hundred million pounds was lost to people who couldn’t ultimately deliver, then that was the kind of risk that the state is there to take in life or death situations. Perhaps I’m being unduly pessimistic at this early stage, but it wouldn’t surprise me if the outcome of this latest inquiry will be to tie the hands of future governments so that they can’t take these kinds of steps in future emergencies.
To be truly useful to the public — both in its taxpaying and public service-consuming forms — the inquiry ought to focus on how government procurement struggled to adapt to the sudden emergency, and how that ought to be done more seamlessly and coherently next time it needs to do so. Ideally, this would then lead us onto broader questions about the way our government operates, both in emergencies and in normal times.
Taking these questions from last to first; the routine response of UK government organisations during an emergency of any kind is to declare a particular “crisis”, so that the relevant officials from across Whitehall can be removed from their day-to-day responsibilities, and be thrown together into one large room to focus on the crisis at hand. These war-rooms are structured in a deliberately hierarchical manner to facilitate the clearest and quickest means of getting decisions made and signed off by the right people at the right level. Once up and running, theoretically any official at the right seniority can be thrown into the room with minimal background briefing in order to provide sufficient staffing, as a cog in a well-oiled machine.
Given the nature of modern government, especially in Britain, this model of crisis management is prioritised around public communications, with the bulk of the decision-making relating to information that goes out to the media, or to “stakeholders”. Answers to questions appearing in public fora are drafted by junior officials, and then sent up the chain to seniors for sign-off.
The crisis hub model had the context-specific failure in COVID-19 — as it would presumably have in any airborne pandemic scenario — that it suddenly became highly undesirable to put large numbers of people together in one room. More generally, the focus on escalating decisions up to senior officials quickly so that they can be cleared for release to the media means that the room is necessarily dominated by generalists rather than specialists, as generalists are what you find when you go up the chain of command. Obviously, clear, timely and effective communication with the public and with the relevant institutions is an important part of the government’s response to any serious situation; however it does sometimes feel as if this can crowd out all other priorities when it comes to the modern British state.
Government departments do not generally have procurement as a core specialism in the way that large private sector organisations in retail or manufacturing do. Highly motivated or ambitious people looking to achieve seniority in the civil service do not throw themselves into something as specialised as procurement as a means of demonstrating their abilities or resourcefulness — they are far more likely to try to put together the traditional “well rounded” set of experiences in policy, communications and in ministers’ outer offices.
Procurement in government is seen as far more of a clerical, administrative task — in stark contrast to the parts of the private sector in which it’s a core activity, every bit as ruthless and commercial as sales. People working solely on procurement in government departments are likely to be at relatively junior grades, and to stay there unless they broaden their professional experiences out to include skills that are regarded as being more “executive” in nature across Whitehall.
This means that government procurement is far more process-oriented and risk averse than in organisations where more senior people have the specialisation and the experience to test alternatives and take chances. In the context of routine government work, this is both to be expected and to some extent beneficial, especially given the imperative of avoiding scandal. However it often also means that government departments end up getting stuck with incumbent suppliers; inevitably the largest and most complacent organisations in their sector, who end up reflecting the bureaucratism of their public sector customers back at them. Inevitably, the individuals managing the relationship on the supplier side are often far more senior within their own organisations, and more commercially sophisticated, than their individual counterparts on the government buyer side.
… most of the experienced personnel were too junior to take risks, and the seniors lacked the experience and contacts in the relevant markets, or the commercial acumen
In a crisis scenario, like the PPE or medical equipment shortages at the outset of the pandemic, this lack of a serious procurement discipline within government meant that there were no senior professionals who could go out on a limb and leverage relationships built up over decades of buying in a particular sector to call in favours, and to offer prices and terms aggressively to secure results. Instead, most of the experienced personnel were too junior to take risks, and the seniors lacked the experience and contacts in the relevant markets, or the commercial acumen.
Ideally, the inquiry would examine this gap in a key skill set across government. However, if instead it pours over individual examples of failure, it seems more likely to make the next set of generalist senior officials tasked with emergency procurement even more risk averse and cautious. And thus more likely to stick with the the major multinational on the PSL who will make them wait a month for a consignment, rather than take a chance with the fly-by-night looking agent who happens to know that there are a hundred thousand boxes of inventory at a warehouse near Heathrow, about to go out to a private foreign buyer.
It’s obviously not only in emergency scenarios when the public sector has trouble selecting the right suppliers or managing contracts; we have seen chronic failures over the years in everything from major IT contracts to consultancy services to rail franchise operators.
This inquiry potentially offers an opportunity to examine the shortcomings of the government’s approach to procurement across the board, in the context of a once in a generation global emergency. It would be a waste to squander it in order to put one last boot into the long-dead political career of Matt Hancock.
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