Select Committee on Treasury Third Report



The OGC was created to lead a wide-ranging programme to modernise procurement in central civil Government, and deliver substantial value for money improvements. It is an independent Office of the Treasury with its own Chief Executive appointed at Permanent Secretary level. It reports to the Chief Secretary to the Treasury. The OGC is not an executive agency but it has "a governance structure that allows it to act independently."[3]

The OGC has a Supervisory Board designed to reinforce the nature of its cross-departmental function and purpose, and to give strategic direction. The Supervisory Board, which meets about three times a year, is chaired by the Chief Secretary to the Treasury, is made up of Departmental Permanent Secretaries, the Chief of Defence Logistics, the OGC Chief Executive, the Head of the National Audit Office (the Comptroller and Auditor General) and two senior external representatives. According to the OGC it is a novel formulation in central Government and "provides a very high level strategic steer for the OGC agenda and top-level buy-in."[4]

The OGC told us that there were two principal reasons for its formation as an office of the Treasury. Its procurement policy role is one which is already, in Ministerial policy terms, part of Treasury Ministers' direct responsibility. But more importantly, it is its unusual Supervisory Board arrangement, which has senior representation from all the major spending Departments, that led to its current status as an office of the Treasury rather than that of an agency of the Treasury or some other arrangement.[5] Mr Gershon told us that the role of the Supervisory Board is "to ensure that, basically, what we do is command support from within Departments. ...However, I am not accountable to that Board. ...I am accountable in Civil Service terms, to Sir Andrew Turnbull [Permanent Secretary to the Treasury], as my Civil Service boss and to Andrew Smith [Chief Secretary to the Treasury] as my Minister. ..."[6]

The Department for Transport, Local Government and the Regions (DTLR) told us that, in terms of improvements brought about by the creation of the OGC, the most significant was the setting up of the OGC's Supervisory Board. The fact that DTLR's Permanent Secretary sits on the Board and receives briefings from DTLR officials before attending meetings had raised the procurement agenda within the Department. DTLR also told us that "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."[7]

We note the OGC's unusual status as an "independent Office" of the Treasury and the novel arrangement whereby it has a Supervisory Board containing Permanent Secretaries from the major spending Departments. This structure is designed to ensure that OGC's activities, aimed at modernising procurement and securing value for money improvements, command support from Departments. We intend to return to this subject in the future to examine whether the desired effects have been achieved.

3   Ev 3, Ev 4, paras 3.1, 5.1 Back

4   Q28, Ev 4, paras 5.1, 5.2  Back

5   Q4 Back

6   Qq6, 7 Back

7   Q275 Back

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Prepared 23 May 2002