Rachel Reeves is, understandably, concerned to see that the public sector gets the biggest, best quality bang for its buck.
One improves the Value For Money of (public sector) procurement by improving the quality of one’s procurement processes not by adding an additional inspection process after a contract has been awarded.
Reeves and Starmer say they want to work in partnership with business, but they show little desire to really engage with it or learn about modern business practice.
If Reeves and Starmer want to know how it is done, they need look no further than Maroš Šefčovič, the European Commissioner for Interinstitutional Relations and Foresight.
He went to Northern Ireland; spoke with folk there, including business people; listened to what they said and on returning to Brussels, crafted proposals to ease the working of the Northern Ireland Protocol that reflected the discussions he had had with the locals.
It is sound business practice in 2021 to build quality assessment into a process, like procurement.
Labour’s new approach would seem to be to put in place an additional check of the quality of public sector procurement contracts after they have been awarded.
Labour is now the party for business?
It is, if we were living in 1979 not 2021 and Labour, British Leyland not Toyota at Burnaston.
Toyota builds quality assessment into its production processes so as not to end up with 100s of 1,000s of cars at the end of the production line that do not meet their high quality standards.
“Toyota didn’t play suppliers off against each other in pursuit of lower costs. Toyota’s head of procurement was equally astonished and replied to say that his job required him to understand the complete chain of work, from raw materials through to finished production. Only from that position could he consider the contribution of suppliers.
Further, he only sought one supplier for each component as the supplier was to work as part of the Toyota system. To move between suppliers for reasons of cost was the wrong way to think about cost. It could only make costs go up. The way to drive costs out of operations was, he knew, to manage value, not cost. In Toyota – an exemplar of supplier management – this means working in close co-operation to the common end of better quality; lower costs being a consequence rather than the raison d’etre.”
There is a perception in some quarters that one must choose between quality and quantity when delivering a service or producing a good, although Toyota mass produces 150,000 cars per year to bespoke standard at Burnaston by focusing on continuously improving the quality of its product.
Toyota manages to compete on both price and quality.
It is very Anglo-Saxon Business School of Management to think that a top quality good or service must be expensive to produce or deliver and that conversely a poor quality product must be, by definition, cheap to churn out.
And Rachel Reeves with her MA in Philosophy, Politics and Economics from New College, Oxford; her MSc in Economics from the London School of Economics, shades of Jim Hacker; her cocktail parties at the British Embassy in Washington, DC not Tyne and Wear; her meetings in the hallowed halls of the Bank of England and her four years in the head office of Halifax in Leeds, is very Anglo-Saxon.
Back in the mid 2000s, a friend and colleague of mine was establishing a restaurant in Ludlow, a gourmet’s paradise. Naturally, as much as possible of the raw ingredients for its kitchen were to be sourced locally.
Grown and reared locally hard by Ludlow, but in at least a good few cases bought in Birmingham at the wholesale market there, some 42 miles away from where they were to be served up. Individual businesses around Ludlow preferring to deal with a wholesaler rather than sell retail to individual customers.
It may sound like a minor detail, but not if the central plank of your economic policies is to buy, make and sell more in Britain (whilst meat carcasses are being sent to EU for butchering amid UK worker shortage).
Rachel Reeves’ big idea.
It is this poor grasp of detail that rather undermines Reeves’ credibility for me.
“You cannot train up, say, a UK based HGV driver workforce in the longer term (in competition, by the way, with every other sector of UK economy facing growing labour and skill shortages) when the people you want to train up in UK were not born in UK 20, 30, 40 … years ago.”
Some members of the Commentariat have rather taken a shine to Rachel Reeves in the last month or so, just stopping short of likening her to David Lloyd George at the height of his powers as Chancellor of the Exchequer.
Some sotto, and not so sotto, voce, even speak of her as the next leader of the Labour Party, its first female leader.
I am afraid that in reality she seems to me to be more akin to Winston Spencer Churchill on one of his bad days as Chancellor of the Exchequer.
Rachel Reeves promises another inspection of the bolt of the public sector procurement stable door after the horse has well and truly bolted and is a county or more away.
More inspection to improve a process, how very 1970s, how very BL.
Never mind the quality of our checks, just feel their quantity?