Government does not know if £250bn procurement spend gets value for money – MPs

The Government is unable to say whether the hundreds of billions of pounds it spends on procurement provides value for money, MPs have said.

In a report published on Wednesday, the House of Commons Public Accounts Committee (PAC) criticised the “poor quality” of published data on Government contracts, saying the lack of information inhibited efforts to ensure value for money.

Dame Meg Hillier, the chairwoman of the committee, said: “The Government’s purchase of goods and services is equivalent to the cost of building multiple HS2 rail lines every year.

“It is therefore clear that public procurement is deserving of the most thorough oversight to ensure value for taxpayers’ money.

“The Cabinet Office needs to act swiftly to dispel any continuing lack of transparency around publicly funded contracts, so that taxpayers are able to see clearly how their money is being spent and not find this hard to discover.

“Departments are also not doing enough to ensure robust competition for their contracts, leaving untold billions in savings every year on the table.”

In 2021-22, the Government spent £259 billion procuring goods and services, with around £100 billion of contracts awarded without a competition process.

The PAC report also accused the Government of failing to use its purchasing power to pursue policy goals such as creating jobs, improving skills or reaching net zero.

Dame Meg added: “Given the change-making impact that public procurement can have, the Government’s approach here is disappointing.

“Be it in tackling climate change, reducing waste, creating new businesses, jobs and skills, or improving supplier diversity, innovation and resilience, we found no evidence that Government is consistently using its purchasing power to shift the dial.

“We hope with the help of the recommendations in our report the Government works swiftly to successfully implement the Procurement Act to achieve far-reaching changes in the public procurement landscape.”

Although the PAC welcomed the opportunity for improvement presented by the new Procurement Act, which became law in October, the committee warned that the Government did not have “a clear plan for the investment required” to ensure the public sector has the necessary skills to improve its procurement efforts.

A Cabinet Office spokesperson said: “Value for money is always the number one priority, and our specialist teams have saved the taxpayer £2.9billion in the last year.

“Our new Procurement Act will also help us to improve data quality and analysis when assessing bids, while our commitment to transparency means all contracts are published online for public scrutiny.

“The report is also misleading as the figure cited doesn’t account for the fact many of these contracts are extensions of existing ones which already went through open competition, or open procurements which had one bidder.”