Press Release - Commercial skills for complex
government projects
06 November 2009
The National Audit Office has warned that the
value for money of 43 major government projects worth around £200
billion is at risk because of significant weaknesses in the
Government’s commercial skills and expertise. But there is an even
greater risk to many other complex projects where skills shortages
are not being assessed systematically.
The private sector has an increasing role in
delivering public services. It is, therefore, critical that
Government has staff with the commercial skills and experience to
interact with the private sector. However, departments continue to
experience a shortage of staff with the commercial skills and
experience needed to design and deliver complex projects
successfully. A 2009 review by the Office of Government Commerce
(OGC) found that 44 per cent of Senior Responsible Owners of major
projects did not have any substantial commercial experience.
The biggest skills gaps for Government are in
contract management, commissioning and managing advisers, risk
identification and management, and business acumen.
The Government has attempted to fill its
skills gap with temporary staff and consultants. Thirteen
departments have provided information showing that over a third of
their staff spending in Commercial Directorates is on temporary
staff. Some departments also rely heavily on the support of
specialist advisers. While both can make a valuable contribution,
over-reliance can lead to higher project costs and loss of
knowledge when temporary staff and advisers move on.
The Government is not using its scarce
commercial staff resource to best effect. Departments lack
information on the expertise, skills and availability of staff and
there is no formal mechanism to allocate staff and expertise across
government departments.
Pressure to reduce public spending can
conflict with the need to invest in staff with the commercial
skills to deliver complex projects. The culture of staff frequently
moving positions within a department often leads to commercial
experience and expertise being lost by projects and by
individuals.
Fourteen of 16 departmental commercial
directors believe OGC has done little to address skills gaps within
their department, although ultimate responsibility for commercial
skills remains with departments. The OGC has introduced a number of
initiatives aimed at improving commercial skills, such as
Building the procurement profession in government. But OGC
and departments are not working together effectively and are having
limited impact. As a result, the value for money of the £1.5
million a year that OGC has been spending on initiatives is at
risk. OGC needs to work with departments to establish standard
approaches to dealing with the commercial sector.
Mr Amyas Morse, head of the National Audit Office, said
today:
"Commercial skills are essential to success in
complex projects and a great deal of money rests on this; but there
is still not a coherent system for providing skills across
government or for using the existing skills as efficiently as
possible."
Notes for Editors
-
The NAO report defines a project as
complex when, at the outset, there is no obvious route to
delivering the project outcome or the project has aspects that have
not previously been encountered. A project may also be defined as
complex if there is a high level of change during the project’s
lifetime in the outcome required. As at September 2009, HM
Treasury’s Major Projects Portfolio contained 43 of the most
complex projects and programmes in Government, with a value of
approximately £200 billion.
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OGC’s skills strategy ‘Building the
procurement profession in government’ has been largely endorsed by
departmental permanent secretaries. It includes a commitment to
reducing the number of interim staff holding posts in core
procurement teams to no more than 10%.
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Press notices and reports are available from
the date of publication on the NAO website, which is at http://www.nao.org.uk/. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
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The Comptroller and Auditor General, Amyas
Morse, is the head of the National Audit Office which employs some
900 staff. He and the NAO are totally independent of
Government. He certifies the accounts of all Government
departments and a wide range of other public sector bodies; and he
has statutory authority to report to Parliament on the economy,
efficiency and effectiveness with which departments and other
bodies have used their resources.
Press Notice 56/09
All enquiries to Phil Groves, NAO Press Office:
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