Sir Neville Simms
David Allaby talks to Sir Neville Simms, chair of the Sustainable Development Task Force, about the government’s procurement challenge and finds out why goals are being set but not delivered on.
Sir Neville Simms has the mellow tone of a man blessed with patience, a characteristic not always apparent in one with the pioneer spirit to drive through modernisation in the construction industry, conceive the Private Finance Initiative and now head a major energy enterprise.
A year ago, under his chairmanship, the Sustainable Procurement Task Force presented government with ‘Procuring the Future’, a report aimed at a fundamental advance in sustainable public procurement and raising the UK among EU leaders in the field by 2009. Backed by annual spending power of £150bn, the public sector has the responsibility to lead by its own procurement, to create a catalyst for sustainable supply, demand and innovation across the UK economy. At least, that’s the vision from the top.
The former Tarmac and Carillion boss, now chairman at International Power plc and the Building Research Establishment Trust, is now an interested independent observer who might wonder if the vision may yet fade under the vagaries of Whitehall’s pass-the-parcel leadership or take a pounding in the autumn as the Comprehensive Spending Review squeezes budgets further for the next three years.
There is no dodging the issue for Sir Neville. “Effective procurement and sustainability go hand in hand,”he says.“It is about supporting the wider social, economic and environmental objectives in ways that offer real long-term benefits”, he says in his report introduction. “Anything less means that today’s taxpayer and the future citizen are both short-changed.”
Reaction to the direction and pace of post- Simms progress varies among former task force colleagues. After months of growling over “wobbly procurement policy”, and in particular a reluctance to embed sustainability into performance frameworks, the chairman of the watchdog Sustainable Development Commission and Ethos guest editor, Jonathon Porritt, feels Whitehall has at last taken “a significant step forward” with its procurement action plan, its latest response to Simms, in the spring.
Slow pace of change
“Political statements don’t necessarily cause anything to happen,” says Sir Neville. “People are saying the right things at the top. We are on the move and it will move more rapidly three to five years on from the task force. People are still trying to understand what sustainability is about and to incorporate it into decisions underneath government’s policy umbrella. All the time, trying to draw on – here was the point of the task force – the experience of the best businesses who got this somewhat earlier than national government.”
Members of the task force also considered possible changes that might accelerate progress, including more focused cross-departmental procurement. This is starting to happen but Sir Neville points out that this is not a single business operation, the Prime Minister is not the chief executive and the range of commercial issues alone is wider than anything encountered in the private sector. The business value of sustainability makes sense; the City says it is an imperative for investors, and major retailers are now vying to outdo each other on how green they can be. On his task force tours, Sir Neville found leaders and laggards in business and government. “The best of the best companies got it five, even ten years ago, on an environmental level, and advanced with social responsibility into a full sustainable agenda. Equally, there are some great public sector champions,” he says.
Kirklees Council in Yorkshire, for instance, created a loan system in 1998 to fund and save on its utility consumption. Departments conduct an audit, target improvements and estimate savings before applying for a loan. They pay back half the expected savings each year until the loan is repaid, and in doing so make financial savings during the repayment period. The fund has saved more than £500,000 for this one authority.
“Many in the public sector are pressing against the marzipan layer and just need the extra impetus from the centre to break through. In business, there are still huge numbers that won’t get it until they see government leadership,” he says.“ Secretaries of State tend to be moved around rather too much, so it’s mostly a message that has to be kept to the fore by champions in civil service and in local government. People like Sir Ian Andrews at the Ministry of Defence – he chairs the Sustainable Operations Board and believes in this passionately. He sets targets and push, push, pushes to make them happen.”
The task force highlighted that government is not bad at setting targets; what is lacking are the systems to deliver them and the acceptance that sustainable procurement is part of the day job in an organisation that consumes more electricity than Birmingham and Liverpool combined and four times the water used by Greater London; it spends £3bn on food and £5bn on waste treatment. Procuring efficiently is not something that can be grafted on, and the task force offered tools and methods to prioritise the action.
Must be able to measure
Government’s latest response to Simms promises senior-level accountability with a restructuring of the Office of Government Commerce to focus specifically on procurement.“ There must be some sort of measurement,” urges Sir Neville. “An annual report should show what each body has achieved through sustainable procurement, where it intends to be next year and beyond, and then have some level of sanction.”
The calculations can be complex.“ We are being asked to quantify things that have different timescales in terms of environmental or social impact and to come up with a price now. We couldn’t answer that in our limited time, so we advised that a model was created that Treasury believed in.”
He sees ‘Building Schools for the Future’ with its 15-year £45bn programme as an ideal showcase. “You can’t imagine anything that could do more to establish sustainable procurement, government reputation and the training of millions of children to develop a more sustainable world for the future. Yet it’s been a battleground to embed basic standards in many projects.”
The lead must come from the Treasury in the all-important spending review and from further positive action. “They say the right things and believe them at the top, but when it comes to hard decisions on how much we spend and on what and when … the Treasury is designed to care about the pound-note answer.
“Do I think Treasury is fully converted to sustainable procurement? No. The good news, though, is we are surrounding them. They may be the last wagon standing. It’s important that change is driven from the financial centre of government. We are among Europe’s leaders and I am positive that government is doing the groundwork that will take the action plan forward, but if I’m wrong, there is such an appetite abroad that we will quickly be overtaken. I have kept in my locker the possibility that I might be back to assess progress before 2009.” Here is a resolute character who stays the course. Interview done, he was off to celebrate his mother’s 90th birthday. Perhaps it’s in the genes.
DAVID ALLABY is the editor of Public Servant
KEY TASK FORCE RECOMMENDATIONS
(WITH SIMMS’ MID-TERM VIEWS)
01 Government to lead by example. A lack of consistent direction has been a barrier. Clear leadership needed, with progress scrutinised from outside – “There’s encouraging progress but it will take three to five years to see significant results.”
02 Set clear priorities. Government should rationalise policies and guidance through a single framework and a new early stage Gateway process – “They are trying to give a degree of empowerment to areas such as local government.”
03 Raise the bar. Existing minimum standards should be properly enforced and extended to the wider public sector, and priority areas identified – “More for the future, once the momentum is rolling. In business, forward targets are the way to drive progress, but not so in government.”
04 Build capacity. “You can’t do this without training people. Government procurement career development has been very low in the pecking order. There’s a need for a centre of excellence. Few procurers could move out of government to the private sector elite at this stage.”
05 Remove barriers. To put in place the right budgetary mechanisms (for whole-life costing), plus a review of big capital projects – “Treasury is working on it.”
06 Capture opportunities. A Forward Commitment process would improve risk management and realise benefits to help penetrate the market –“Innovation is happening, with scope for more dialogue to stimulate suppliers.
