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New CBI research on public procurement reveals that while firms welcome recent Government reforms in the sector, progress on the ground remains slow. Lack of commercial skills, inconsistency across Government departments and a short-term approach to commercial contracts are key concerns amongst businesses.

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The CBI welcomes the appointment of a new senior leadership team at the Crown Commercial Service tasked with improving the public sector’s commercial skills and getting better deals with external suppliers. Our survey shows that CBI members believe improving the public sector’s commercial skills is essential to transforming the procurement process. But 61% of respondents saw “no change” in evidence of improving commercial skills, during the last year, and 21% saw a deterioration in skills.

Other key findings of the report include:

• 67% of firms feel Government’s performance in standardising procurement processes is poor
• 67% say lowest cost is still driving most contracting decisions, with only 2% saying contracts are decided on whole-life costs
• The Crown Commercial Service’s Mystery Shopper facility is helping market performance but smaller firms remain unaware of it
• The new EU Procurement Directive will help simplify many procurement processes and reduce complexity for UK firms.

With £20 billion of central government spend lying with just 39 suppliers, building a more diverse supplier base is another important strand of procurement reform. Failing to standardise procurement processes across the public sector leads to higher costs for businesses, making it more difficult for smaller firms to compete.

Jim Bligh, CBI’s Head of Public Services said:

“We know public procurement reform takes time, but progress has been painfully slow. “The Crown Commercial Service must complete its radical overhaul of the process and tackle inconsistency and poor standards. To make this happen Ministers must get behind the reform process to deliver competitive, accountable and transparent markets right across Government.”

We are keen to hear from businesses and other stakeholders about ideas for meeting future challenges facing the UK's public services - Find out more here.