Session 19 - Strategic Procurement For Members

HOW SHOULD LOCAL AUTHORITES’ PURCHASING IN NORTH WEST ENGLAND BE ORGANISED?

Colin Cram Regional Director North West Centre of Excellence

AGENDA PROCUREMENT IN THE NORTH WEST THE NWCE APPROACH STRATEGIC PROCUREMENT HOW SHOULD WE ORGANISE NW PROCUREMENT?

WHY IS PROCUREMENT IMPORTANT NORTH WEST LOCAL GOVERNMENT: £6.5BN PA £900 PER ADULT AND CHILD 45% OF LOCAL AUTHORITIES’ COSTS 2 - 2½ TIMES COUNCIL TAX REVENUE

NEW CHALLENGES COMPREHENSIVE SPENDING REVIEW • 10% + IN 3 YEARS – CASH SAVINGS GOVERNMENT POLICIES • SUSTAINABILITY, LOCAL ECONOMY, SOCIAL • SUPPORTING INNOVATION TRANSORMING GOVERNMENT • DELIVER IMPROVED/TRANSFORMED • SERVICES/PERFORMANCE

THE NWCE APPROACH RESEARCH SHORT TO MEDIUM TERM GAINS (5%) TRANSFORMING PROCUREMENT - 12.5% PA BENEFITS WITHIN 5 YEARS - PROCUREMENT STRUCTURE - ADVANCED PROCUREMENT PRACTICES - PROCUREMENT COMPETENCIES AND EXPERTISE - PROCUREMENT STRUCTURE

FACTS AND FIGURES ABOUT THE NORTH WEST • PURCHASE SPEND ANALYSIS • PURCHASING PRICE ANALYSIS • COST OF LETTING PURCHASING AGREEMENTS • BETTER CONTRACTS MANAGEMENT

ON WHAT IS THE MONEY SPENT? CONSTRUCTION HEALTH AND SOCIAL CARE COMMODITIES GOODS AND SERVICES WASTE TRANSPORT TRANSPORT (EXCLUDING PTES) AGENCY STAFF, CONSULTANCY STATIONERY CONSUMABLES

25% 18% 18% 7% 5% 5% 0.1%

FACTS AND FIGURES  15% OF SPEND WITHIN LOCAL AUTHORITIES’ BORDERS  70% OF SPEND WITHIN NORTH WEST  40% OF SPEND WITH SMEs  60% OF SPEND WITH SUPPLIERS COMMON TO MORE THAN ONE LOCAL AUTHORITY  1% OF SUPPLIERS ACCOUNT FOR 60% OF SPEND  0.1% OF SUPPLIERS ACCOUNT FOR 25% OF SPEND

‘‘MORE FIGURES’’  PURCHASE TRANSACTIONS – 3.5 MILLION  40% OF TRANSACTIONS BELOW £100  15% OF CONSTRUCTION TRANSACTIONS BELOW £11

STRATEGIC PROCUREMENT OBJECTIVES • MAXIMISING PURCHASING LEVERAGE • USE OF ADVANCED PROCUREMENT TECHNIQUES • SUPPORT FOR PFIs, PROJECTS, OUTSOURCINGS AND MAJOR CONTRACTS • MARKET MANAGEMENT • RELATIONSHIP MANAGEMENT AND EFFECTIVE CONTACTS MANAGEMENT • IDENTIFICATION AND EXECUTION OF OPPORTUNITIES TO DELIVER IMPROVED VALUE FOR MONEY

STRATEGIC PROCUREMENT OBJECTIVES Continued 7. CONTRACTING FOR GOODS AND SERVICES 2. DELIVERY OF PURCHASING POLICIES E.G. LOCAL ECONOMY 4. CONSISTENT AND COST EFFECTIVE PURCHASING PROCEDURES AND PROCESSES 10. HIGH LEVEL OF SERVICE AND QUALITY

PRE-REQUISITES FOR STRATEGIC PROCUREMENT INFORMATION LEVERAGE EXPERTISE SUSTAINABILITY – OF ORGANISATIONS RIGHT STRUCTURES

HOW SHOULD PROCUREMENT BE STRUCTURED? 1. EACH LOCAL AUTHORITY ACTS INDEPENDENTLY 2. COLLABORATION ON COMMODITIES GOODS AND SERVICES 3. GEOGRAPHICAL PROCUREMENT HUBS 4. SPECIALIST PROCUREMENT HUBS 5. SUPER-HUB WITH GEOGRAPHICAL AND SPECIALIST HUBS

NORTH WEST PROCUREMENT STRUCTURES STRUCTURE OBJECTIVE 1. 2. 6. 7. 8. 9. TOTAL

1

2

3

4

5

NORTH WEST PROCUREMENT STRUCTURES STRUCTURE OBJECTIVE

1

2

3

4

5

1.

1 1

1 1

2 3

4

4

4

3

3

3

2. 6. 7. 8. 9. TOTAL

WHAT SHOULD NORTH WEST AUTHORITIES’ PROCUREMENT LOOK LIKE? STUDY TO REPORT BY END OF YEAR VIEWS TO [email protected]