Today, local government is under more pressure than ever before. Budgets are tighter, targets are being imposed and citizens are demanding more. Yet councils already have the resources they need to deliver quality front-line services.
Overhauling procurement and realising the savings that are there for the taking is one of the most practical ways councils can free up resources.
Two years on, Best Value Procurement has produced its own report: The state of local authority procurement in England today: a common sense case for radical change, which shows that many of Sir Ian's recommendations have yet to be implemented. In fact, we conservatively estimate there may be £430m of unrealised savings, adding £20 to every council tax bill.
Unlike private sector organisations of the same size, which frequently have a procurement director, we found 80% of councils did not even have a corporate procurement officer, leading to poor
co-ordination and communication within the councils. Where supply contracts were put in place - achieving economies of scale and favourable terms - they were ignored or unpublicised .
Inefficient processes led to councils paying more for goods and services than they needed to. Orders were sent or placed by different means within councils - post, fax, telephone, or various unlinked IT systems - resulting in the need for repeated manual transfers of data from one system to another. Besides this duplication being inefficient, it is also a source of errors, all of which must be later corrected, leading to a further drain on resources - in one county we found the equivalent of three and a hal f full-time staff dedicated to correcting them.
Councils did not have an accurate picture of where purchases were being made. Two of the councils assessed could provide no purchasing data whatsoever. Without information, improvement is made impossible.
It is time for a revolution in council procurement. IT has its part to play, but only as part of a much broader campaign for improved procurement.
It will require a complete overhaul of the way councils manage their purchasing, an end to disorganised processes and endless paper trails, and the appointment of corporate procurement officers able to manage purchasing properly. Most of all it will require chief executives to start treating procurement as a priority and free up resources to improve front-line services.
Managing director, Best Value Procurement