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The leaked findings from the government's efficiency review put councils firmly in minister's sights for billions o...
The leaked findings from the government's efficiency review put councils firmly in minister's sights for billions of pounds of savings.

Local government is an easy target on procurement. Over 400 councils spending time and money on procuring furniture, energy or care home places diverts resources away from front-line services.

Many councils have significant room for improvement. Government figures show just 20% have effective procurement strategies, and too many are hindered by party politics or historical rivalries from setting up joint buying arrangements with their neighbours.

Many of the proposals from Office of Government Commerce chief executive Sir Peter Gershon chime with existing developments, notably the ODPM's national procurement strategy.

Councils are increasingly choosing to work together through a number of procurement consortiums, such as the Central Buying Consortium, which covers 17 councils across the South.

But some of Sir Peter's ideas go much further, such as the creation of four super-agencies to handle procurement of everything from pencils to care home places.

Such an approach is fraught with difficulties.

Huge procurement consortiums will tend to contract larger firms, undermining councils' ability to promote local businesses and employment. A standardising approach to services like social care would leave only one or two major players able to bid for huge contracts, perhaps covering an entire region, and runs the risk of ignoring knowledge of local market conditions.

Nonetheless, do councils really want to pick over the minutiae of yet another IT contract, when the lawyers in the next-door council are doing exactly the same? Although the idea of a Whitehall-run procurement agency may sound like a disaster waiting to happen, councils should do more to collaborate, simplify and drive down costs, so they can focus their resources on what really matters.

Sir Peter's interim report is no anti-council tract. Its most radical proposals include a bonfire of central regulations, ring-fenced grants and bidding systems, and its most damning criticisms are aimed at a bloated Whitehall.

Local government should try to regain the initiative on procurement by the time Sir Peter finally reports this summer, while lobbying hard to deliver the cuts in rules and regulations the review highlights. And we all look forward to Whitehall leading by example.


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