Commission Rates & Value For Money In Government Buying
Background: The NAO’s latest report Efficiency in government procurement of common goods and services (nao.org.uk), sheds much needed transparency on the relationship between commissions, fees and value for money in public procurement. The public sector spent £393 billion, or 14.8% of GDP on goods and services in 2022-23, of which around £125 billion is for common goods and services which are items that may also routinely bought by businesses. The government procured 72% of its large contracts through frameworks in 2021-22 compared to 43% in 2018-19. Some framework operators charge commissions as high as 5-6% are levied, far greater than the average rate of 0.7% levied by the government’s largest purchasing authority Crown Commercial Service (CCS). The NAO’s report identifies six ways the government could tackle some of these issues and save taxpayers money, including: enhancing competition within frameworks; establishing an accreditation regime for framework providers, with few frameworks overall; reducing levies charged on purchases; greater rivalry between framework providers; better data and greater transparency to improve decisions; and system leadership by the CCS for the procurement of common goods and services
Speaker: Matthew Rees is Director of the Commercial Insights Team at the NAO, and has also led the NAO’s corporate finance value for money team. His current focus areas for the NAO include: public procurement, corporate finance and regulation. Recent reports that Matthew led include: efficiency in government procurement of common goods and services, competition in public procurement, managing the commercial lifecycle. He also led the investigations into the collapse of Bulb Energy and into Supply Chain Finance in the NHS. His current outside interests include ICAEW Council Member. He also served as senior NED of an energy-sector consultancy business based in the City of London. Matthew qualified as an ICAEW member at KPMG and has experience of NHS and local authority audit. Post-qualification, he then worked in global investment banking before returning to focus on public sector issues. From his varied career in the public sector, Matthew has extensive regulatory experience in competition and markets. He is also a member of CIPFA and Fellow of the CISI.
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