“It is not always wise to cut” – by John Redwood MP

The following correspondence has come into my hands. I am sure it is meant to be confidential, so please be careful with it. If we do not publish it, there might be more where it came from. It appears to be internal correspondence amongst senior officials in  government departments  I cannot trace .

Dame Lucy Doolittle,

Director,

Unit for co-ordinating cross cutting initiatives and partnerships

Whitehall SW1

Dear Lucy,

            I was relieved to hear your Unit has survived the reorganisations. I had feared that as its title seemed redolent of the last government you might be a casualty. I understand you successfully deployed the arguments that you will be needed for a bit to wind up old cross cutting initiatives and to supervise the reorganisations, spreading best practise. I suspect new Ministers will soon come to see how handy cross cutting is as a means of blurring responsibilities and creating a sense of joined up government. Your unit, after all, has launched a thousand press releases on its own.

                I need your assistance  for our Division of Miscellaneous Projects. So far we are OK. We have pointed out that capital spending is a necessary part of any economic growth strategy. We were greatly helped by the decision to increase transport capital spending compared with the previous government’s figures. We have been able to argue that as capital overall is not taking such a big hit it would be a false economy to wind up a Division which has so much general expertise at project management.

               However, we are getting some probing questions about past performance over cost and timing. As you will be aware, special factors in recent projects displaced the original understated  budgets and optimistic timetables. We were of course asked to bid low to ensure they passed the Treasury tests, and to set tight deadlines to meet media requirements.  I wondered if you had done any work on best practise for Ministerial submissions to adjust base costs and original timetables for more realistic figures without having to say these were errors or upward revisions? What is latest thinking on real cost bases, price escalators and raw material adjustment factors, for example? Should we introduce a devaluation of the pound factor and say the original estimate was based on sterling translated to an SDR equivalence, given how much of Special Project materials and work is imported these days? That way we could add back in the devaluation of the pound. Wasn’t it always clear that timetables did not include reaching the final tollgate on the project when it was up and running, but were internal and partial targets for norm referencing complex projects?

             We also need policy guidance on overseas procurement. We do of course comply with the full range of EU requirements, and have explained to new Ministers that these in themselves increase costs. There is, however, a trickier issue about advertising for a main contractor outside the European Area and the European Journal space as well. What do you think the new government would say if our new procurement for better value scheme which we are working on resulted in substantial procurement from Emerging Market contractors? The scheme is already 170 pages long and will entail some increase in bidding costs as we seek full compliance with global standards  in the documentation and auction process. We need to decide how many languages each tender invitation should appear in, and may need to hire some additional language speakers to complete each set of documents. It is most important not to discriminate against smaller countries with less well known languages. We will of course keep the Overseas  Aid and Trade people fully informed of progress. We do wish to support the new government’s India and China trade initiatives.

                I did think the recent senior businessman  review was most helpful. The conclusions in favour of more centralised purchase and decision taking are just what we need. I have started work on how we might co-ordinate the buying from all departments better, and am designing suitable forms and procurement requests for everything from paper clips to vehicles. I will make sure I give full weight to security issues in the light of the recent dreadful ink cartridge discoveries.

Yours

Roy

Dr Roy Spendlove

Deputy Secretary

Division for Miscellaneous Projects

Whitehall SW1

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