Extracting a princely sum

The first civil servants were groups of clerics who served Britain’s Saxon Kings, advising them on expenditure and the management of public money. The Normans centralised this function – and the current government is keen to follow historical precedent. In 2011, it alluded to procurement’s royal past by appointing so-called ‘crown representatives’ – who are responsible for managing government relationships with private sector contractors. Like their Norman forbears, these people are also part of the centre of government, working out of the building that stands on the ruins of the Whitehall Palace – the Cabinet Office.

Two years on, government has added to this cadre with six new crown representatives, who join Whitehall from the world of business. The Cabinet Office has confirmed no conflicts of interest exist between the new crown reps, their new role and their involvement in business. They have agreed to inform government should this change in order to agree “a way forward”.

All departments have to channel business through them when a new contract, an extension or a dispute with a supplier is worth more than £5m. With the vast majority of government contracts exceeding £5m, there is little scope for departments to get around them. “The departments have no choice,” says chief procurement officer, Bill Crothers, who leads the team of crown reps. “But I can’t imagine why the departments wouldn’t want the crown reps’ help.” This move is also in line with the Cabinet Office’s Capabilities Plan, which aims to break down “departmental silos” and signals a further shift towards more centralised procurement.

Crown reps have already delivered hundreds of millions of pounds in savings, starting even before they were formally crowned. In the first 10 months of the coalition government, the civil servants who would become crown reps renegotiated government contracts to save £802m in 2010-2011 and £437m in 2011-12. Their work has meant government is not only “spending less overall, but spending taxpayers’ money better” – according to minister for the Cabinet Office Francis Maude. The additional six business leaders will “supplement the existing capability”, Crothers adds. “We wanted to bring in some private sector expertise.”

Crown reps generally have responsibility for an area of business totalling billions of pounds, except for two, who have broader responsibilities such as stimulating the government’s engagement of small businesses or the voluntary sector. Crothers says they are not only tasked to bring in cash savings, but also allow government to achieve better quality in service and performance, which can mean changing the way services are delivered across departments.

Like the existing ones, the new crown reps have been chosen to work alongside departments to engage early with suppliers, improve relationships and negotiate the best contracts on behalf of government. Areas of responsibility are likely to be re-distributed between all crown reps, the Cabinet Office has told CSW and new portfolios will be determined over the coming weeks.

Although the new crown reps will be working part-time, Crothers believes their minds are likely to be occupied by their new jobs around the clock. “They will be with us a couple of days on average per week, but we have found from experience that we have them 24/7, because the problems are so interesting, challenging and complex that they tend to be thinking about them all the time.”

So who are these people, joining government from business in order to represent Whitehall to the private sector? To find out more about the six new negotiators, CSW spoke to some of their past and present colleagues.

James Hall is joining the team from a varied business background. He spent 30 years with global management consulting, technology services and outsourcing company Accenture, where he became UK managing partner. He has also worked as chief executive of the Identity and Passport Service, where he was in charge of Labour’s controversial, and now abandoned, national ID card scheme. He retired from his role as chief executive in 2010 and has since diversified his career to include roles such as chairman of SAVE Britain’s Heritage – a charity he has been involved in since the late 1980s. Clem Cecile, director at SAVE Britain’s Heritage, says Hall “is very good at taking strategic risks and realising the payoff. He is very assured and reasoned and incredibly diplomatic.”

A chartered accountant, Ian Tyler has held various senior roles in his career. Last month he left construction giant Balfour Beatty, where he spent 16 years, the last eight as chief executive. His intention to step down was announced in January this year, just two months after the firm issued a surprise profit warning. A spokesman for Balfour Beatty has told CSW that his retirement could not be linked with the profit warning, which, according to the spokesman, was “more about market conditions than issues to do with Balfour Beatty specifically”. In his resignation announcement, Tyler said he was “looking forward to exploring new opportunities”. He is also chairman of the construction industry’s homelessness charity CRASH, whose chief executive Francesca Roberts describes his style of leadership as “intelligent, inspiring and empowering”. She adds: “He brings to the role great commitment and insightful knowledge of the construction sector which is the lifeblood of the charity.”

Michael Wade has a background in the insurance sector. He has been involved in the industry since 1975 and has experience in listed PLCs, most notably at Lloyd’s of London. He established Holman Wade in 1980, which specialised in reinsurance contracts for members of Lloyd’s. He ran his third successful start-up, investment management group Rostrum Group, and held a portfolio in the insurance space until 2005, including chairing Bowood Holdings, Optex Group and Besso Insurance Group. Andrew Martin, senior executive officer at Optex, has known Wade for more than 25 years. He describes him as “an ideal choice for this role in government”, adding: “He does business very well and has tremendous integrity. Michael is as honest as the day is long.”

The government has also hired two IT experts: David Jephson has a history of merging IT systems and cutting costs. He retired in 2010, following a 30-year career in IT and has worked for a range of national and international brands including British Steel, Coca-Cola Schweppes Beverages, Eastern Electricity, which later became part of TXU Europe, and Imperial Tobacco. At Imperial he headed up the global IT function, successfully integrating IT systems and cutting costs to just 1.2 per cent of revenue. At TXU, over a three-year period, he reconfigured the entire IT infrastructure, reducing headcount from over 800 to just under 200, and cutting total IT costs by over 60 per cent.

Graham Jackson has worked in the procurement, supply chain and commercial sector for 32 years, mostly in IT and telecoms, though he also worked in the oil industry for seven years. His last permanent full time role was as UK and Ireland head of commercial contracting for Compaq, now HP, where he was responsible for all procurement and sales contracting. He has also been an interim manager for businesses like Verizon, Telefonica and Sophos since 2001.

And Rob Wilmot was one of the three founding executives at Freeserve, which was the UK’s largest internet company and is now part of Orange. He was the founding chief technology officer and left the company in 2001. Since then he has invested in a number of ventures and sits on several corporate and public sector boards including bcsAgency, a marketing and communications consultancy, and the Government Procurement Service.

Up to nine more crown reps will join these new recruits. And as departments seek further savings to meet the targets set out in the Spending Review, government is clearly hoping that tougher procurement negotiation will lessen the cuts required by the frontline. Crown reps have a regal title and, indeed, a clerical heritage, but their modern role sees them join the efficient part of the English Constitution: squeezing suppliers through tough negotiations to make real savings.