Examination of Witnesses (Questions 266-279)
MR MARTIN SYKES AND MR MIKE ACHESON
WEDNESDAY 23 JANUARY 2002
266. Good afternoon, Mr Sykes. Could you introduce yourself, please?
(Mr Sykes) I am the commercial director for DTLR, and my colleague is the head of the Procurement Services Division.
267. We have had a look at your memorandum, which is a little thinbrief perhaps, but also a little thin. What we were looking for was some indication of the impact of OGC's first year and a bit on the Department. Throughout the memorandum, you tell us you "welcome" what the OGC is doing. Would you like to add to that?
(Mr Sykes) The brevity is probably because my history is three years in the Civil Service and 35 years in the private sector, and I tend to keep the words fairly short and to the point, but yes.
268. For example, other departments have set out exactly how much they do spend but there are no figures in your memorandum at all?
(Mr Sykes) Right.
(Mr Acheson) We can provide lots of figures.
269. Help us here. What we need is information. How much do you spend on goods and services?
(Mr Acheson) At the moment in the current financial year up to the end of December we have spent £335,212,683.66.
270. How do you organise procurement in your Department? That is not clear from the paper.
(Mr Sykes) In the DTLRC, that is the centre of DTLR, we have just revised our system of delegations. We have controls and procedures where spending divisions within DTLRC are given authority depending on the level of qualification and competence of their staff and, where they prefer it, then we do central procurement for them through Mike's Procurement Services Division.
271. That is for the centre?
(Mr Sykes) Yes.
272. How do you ensure that local government procurement, for example, meets the best practice that you are laying down for yourselves?
(Mr Sykes) The accountability for local government is not within our brief. We have contributed to the Byatt report on local government procurement and we contribute on an invited basis into helping the Local Government Association and our colleagues in the Department and Local Government Directorate in helping with local government procurement. For example, on Monday of this week, I gave a presentation to the local government task force on how the Gateway process might be applied in local government.
273. So you are trying to spread good practice?
(Mr Sykes) We are definitely trying to spread the good practice: we are not accountable for the expenditure within local government.
274. I understand that, but I am just trying to focus on how you are spreading good practice outside the centre itself.
(Mr Sykes) We have as part of our strategy this year analysed the way the centre for the Department spends its money and the way our resources are allocated. In the past, 70 per cent of our resources have been focused on maybe 30 per cent of the expenditure. Our strategy is to increase delegations and increasingly to use collaboration with other departments on what I would call commodity purchases, so that we can use our limited number of skilled people to spread out into the more strategic areas in the way the Department spends its money.
275. The OGC has been going for nearly two years now and we are trying to get a handle on what kind of impact it has had. Could you give us some examples of the improvement that has been brought about because the OGC was created in your centre?
(Mr Sykes) I think the most significant issue is the way the governance of the OGC has been set up. We have the supervisory board on which my permanent secretary, as well as other permanent secretaries, sit on a regular basis and that, above all else, has raised the procurement agenda in my Department and has given me an in into my Department to take forward a message that this is really very important. My permanent secretary receives briefings from me before he goes to the supervisory board meetings; I sit on the OGC chief executive's advisory group which meets at least four times a year, where people of my equivalent from departments and agencies work with Peter Gershon's team on developing the policies and strategies that go forward in OGC. So I think, summarising, what we have seen with the setting up of OGC is a far more collaborative and inclusive process where departments and agencies are included in the process of designing future policy and future strategy, as opposed to history, where it tended to be the centre deciding something and imposing it.
276. You have described a cultural change that is taking place, but are you yet able to give us perhaps one specific example of improvement in the Department, apart from procedural?
(Mr Sykes) In our Department?
277. Yes. Has there been a spectacular example?
(Mr Sykes) I think the Gateway review process has already shown benefits and will increasingly show benefits in the future. That is one example of a product which has come out, and it is important to know that, as a product, that is something that has been developed in collaboration with departments, and, in fact, in the first five or six Gateway reviews, I led one of the Gateway reviews which started to build best practice and develop the guidance which has now rolled out. Since then I have led Gateway reviews on projects in two other departments, from which I get great benefit in terms of improving my skills. My evidence to date is that the departments receiving the reports have been appreciative of the advice and guidance that they have in defining their projects and setting them up so they have a greater chance of being successful.
278. Going back to your £335 million figure, how much do you spend centrally of that £335 million?
(Mr Acheson) That is the central department spend.
279. What are the offshoots? What else are you responsible for as a department?
(Mr Sykes) For example, the Highways Agency is about £1.5-1.6 billion.
7 See Appendix 8. Back