18.12.15
National procurement strategy – one year on
Source: PSE Dec/Jan 16
Cllr David Simmonds CBE, who chairs the LGA’s Improvement and Innovation Board and is deputy chair of the LGA, explains the work going on at councils to improve procurement processes.
The National Procurement Strategy for Local Government (NPS) was launched in July 2014, setting out recommendations for all councils in England to help them make savings, support local economies, modernise procurement and gain recognition from the top about the strategic importance of procurement.
Local government has seen a 40% reduction in its core funding from central government, with a further 24% real-terms cut by 2020, so getting value from the £38bn of revenue funding spent with suppliers has never been more vital. Managed correctly, procurement and commissioning in local government can save significant sums while improving services for our communities. By working with councils and responding to recommendations made by the Commons Communities and Local Government Committee, we were able to make sure the NPS provided the right guidance and the right recommendations to improve procurement across all authorities.
Results
One year on, we’ve asked councils how they’re getting on. While 95% of respondents knew about the NPS, just under two-thirds (61%) had committed to implementing the recommendations. This is a good start, but the LGA and the National Advisory Group – a group of senior procurement officers from each of the regions – will be working hard over the next year to bring more councils on board and make sure they’re getting the best value from their spending.
One of the most positive results showed that councils of all types were considering social value in all contracts, even below the EU threshold. This goes further than the Social Value Act requires, and demonstrates councils’ commitment to getting additional economic, social, and environmental benefits for their communities, as well as making savings on prices. This is an area where councils can reap huge community rewards, and we’ve seen councils securing jobs for residents, apprenticeships and local contracts through their procurement processes. The YORbuild framework, for example, makes sure that local opportunities for training and apprenticeships are included in construction contracts in the Yorkshire & Humber region.
There’s also some great feedback in terms of councils helping small and medium-sized businesses bid for work – some councils’ providers are now 90% SME – showing how hard they’re working to support their local economies. One example is the Cornwall Supplier Development Programme, which helps SMEs bid for work and makes sure they’re informed of upcoming opportunities.
Getting it right
There’s also been a strong commitment – especially among upper-tier councils – to network effectively, champion procurement and for procurement staff to work with commissioning colleagues, while a high proportion of all councils have invested in training. The West Midlands heads of procurement have joined together to commission further training and development in contract management, to achieve even better value for money. It’s clear that councils know the importance of getting it right, and are taking the steps needed to do so.
When it comes to reducing spending, 72% of upper-tier authorities reported making savings through category management, which simplifies purchasing and combines spending across an entire organisation. Councils – especially districts – are also doing great work partnering with others. As we see more and more shared services and collaborations with other public sector organisations, this will only increase further, and we’ll be looking at whether councils should be setting targets for savings through partnering and collaboration to really make the most of those arrangements.
More needs to be done to engage councillors in procurement and contract management, giving elected members the skills to ensure their councils are getting the most value out of new and existing contracts. The LGA’s Commissioning Academy for Elected Members provides specialised training, and more useful information can be found at the below website.
We also have some work to do to persuade our major suppliers to share details on costs and performance. This is a sensitive one to tackle, but incredibly important if we’re to make sure that councils are getting the best deal for taxpayers, both in terms of costs and delivery.
It’s been great to see so much work going on at councils to improve procurement processes, and now we know where the gaps are, we’re well-placed to give councils the support they need before we take stock next year and look at raising the bar with new recommendations.