With the public sector spending more than £175bn per year with external suppliers, procurement must play a key role in meeting the challenge of funding cuts.
In our work with local government, we have encountered recurring themes.
Partner organisations often cannot agree on a common approach or specification, resulting in delays or in councils opting to ‘go it alone’.
This should not prevent a focus on the opportunities for collaboration. The day when large councils have a shared procurement function across a sub-region should be here now.
In the private sector, the finance director and procurement teams are usually accountable together for third party expenditure. In the public sector accountability is spread across the organisation creating a major barrier to delivering efficiencies.
Councils make a distinction between ‘commissioning’ and ‘procurement’ but greater efficiency is achievable by integrating these activities.
The Roots review recommended “early engagement with likely suppliers” but procurement departments often don’t get involved with client directorates until publishing the tender. By this time it’s too late to engage with potential suppliers.
Historically procurement departments have been concerned with enforcing the Public Contracts Regulations and consequently staff don’t have the experience to deliver commercial benefits.
Councils that address these themes are likely to deliver most efficiency and cost saving from their third party spend.
Charlie Whitworth, local government procurement lead, KPMG