Examination of Witnesses (Questions 266
WEDNESDAY 23 JANUARY 2002
266. Good afternoon, Mr Sykes. Could you introduce
(Mr Sykes) I am the commercial director
for DTLR, and my colleague is the head of the Procurement Services
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,
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
274. I understand that, but I am just trying
to focus on how you are spreading good practice outside the centre
(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
7 See Ev 78. Back