Achieving Value for Money in Procurement

Stephen Archer

Schools Commercial Team

Public Sector Procurement Reform

Efficiency and Reform Group (ERG) works in partnership with HM Treasury and government departments to deliver:•savings by ensuring that government acts as ‘one customer’ – through combining government’s buying power and increasing our pool of suppliers to government (including small and medium-sized enterprises)•assurance on the delivery of government’s most significant projects, on time, within budget and to a high quality•support for UK growth by allowing a wider range of UK businesses to bid for government contracts and making new commercial partnerships and businesses, including support for public service mutuals

How?

What does it look like?D

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Efficien

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Collaborate to deliver £12bn savings

Centrally manage procurement of goods and services

Collaborate to deliver £12bn savingsDepartments to Focus Departments focus on truly unique commercial activity

Strengthen the procurement profession

Collaborate to deliver £12bn savingsDepartments to Improve Commercial awareness

Collaborate to deliver £12bn savingsDepartments to Simpler More flexible EU procurement rules

SMEs have access to government contract opportunities

Contract management – drive value from contracts

Review of efficiency in the schools system

https://www.gov.uk/government/publications/review-of-efficiency-in-the-schools-system

Procurement aspects

Benchmarking

Identifying new deals and driving uptake to existing contracts and arrangements.

save money get better value for money

be accountable for what you

spend

follow the law

How can procurement help you….

Managing Public Money

Is there a requirement for public bodies to achieve value for money?

Yes and do so following EU Treaty principles of transparency.

proportionality, equal treatment and non-discrimination.

The competitive process:• Helps ensure value for money• Helps demonstrate transparency

From 1st January 2014 EU Procurement Directives and

The Public Contracts Regulations 2006

For Schools thresholds are:

•£172,514 Goods & Services

• £4,332,012 Works

Regulations do not apply in full when the estimated value of contract is below threshold

but Treaty principles do

EU Financial thresholds

Revised directives agreed by EC June 2013. Anticipated to be UK law by end of 2014.

Changes to UK public sector procurement regulations will be highlighted to schools in BuyWays

Cabinet office training

www.gov.uk/transposing-eu-procurement-directives

New EC Procurement Directives

Core changes to the new Directives

‘Most economically advantageous tender’ (MEAT) will become the standard award criterion replacing “lowest price”.

This includes : •Quality, •Environmental & social•Innovative characteristics•Transparency in sub-contracting•Rules on abnormally low bids.

“Light Touch” regime for Education & Social Services

• We have negotiated an exemption for Education & Social Services (& Health) that enables us to use a “light touch” regime for services under 750,000 Euros.

• The UK is required to put in place “appropriate procedures” for the award of contracts under this process in the UK Regulations

• The Cabinet Office has consulted on this & we await their proposals

The current climateImportance of efficiency and financial management

Variation in back office spending

• Analyse expenditure

• Review your contracts

• Identify opportunities for rationalisation

• Deliver admin savings

• Collaborate across key strategic spend areas

• Benchmark and compare

What can you do?