People matter, results count.
Collaborative Procurement The Opportunities and Challenges
The Local Government Group & Cabinet Office Seminar on Public Sector Reform
Andrew Smith and John Collington
Points to Cover in 35 Minutes
Progress and Lessons • Central Government – JC
• Local Government – AS
Common Emerging Themes• Collaborative Procurement Models
• Joint Interests
• Making it Real
• Risks and Issues
Q & A and Discussion
AS
Changes to Central Government Procurement Landscape
UNCLASSIFIED
Jun ‘10
> Commitment to Procurement at highest levels
> Greater focus on cost reductions - emergency budget
> Crown negotiations with top suppliers
> Centralised Procurement – Target Operating Model
> New central category strategies - being implemented
> Government Procurement Reform strategy produced
> Government’s first CPO position appointed
Jul ’11
> Launch of
JC
Government Procurement: Mission - 2011/13
Reform Government Procurement through centralisation of common goods & services spend, to fund improvements
in technology, processes and Government wide procurement
resources, to better manage total procurement spend, in support of
Departmental cost reduction targets.
UNCLASSIFIED
Mission
JC
Procurements Contribution to First Year Savings
£800m through renegotiating contracts and £360m from
centralised procurement
£870m on consultancy (down 70%) and £500m on agency
staff (down 40%)
£400 million on advertising and marketing
spending
£300 million from smaller Civil Service (17,000 FTEs
down)
£90 million from property controls and 10%
carbon emission reduction from Government
estate
£400 million from reviewing major projects and £300 m from ICT controls
Savings in 2010/11 – Communicated by MCO and COO
UNCLASSIFIED
JC
£2.5bn of the £3.75bn
Lessons and Barriers to Overcome - CG
In spite of progress and Ministerial commitment
There are still too many cynics and sceptics
Data integrity remains an issue
Inertia/reluctance to changing practice
JC
Spend Under Management
Sustainable Savings
Investment to Improve
Which if unaddressed will impact:
UNCLASSIFIED
Progress in Local Government Delivery of Phase 1 of LGG Workstream
• Quick Wins
• Big Wins
• Proposed strategy to deliver Phase 2 – the NPA
LG examples of best practice – NIEP
• CAP thinking
• Joint working with Cabinet Office / DCLG / DoE / DfT
Networks and connections improving
AS
UNCLASSIFIED
Lessons and Barriers to Overcome – LG
AS
Barriers are political and cultural – not technical
Sovereignty and adoption are key issues
People misinterpret localism and leverage
The need to compel rather than mandate
No current coherent strategy
The risk that LG does not get its act together
The risk that political aspirations with CG cannot be aligned UNCLASSIFIED
Points to Cover in 35 Minutes
Progress and Lessons • Central Government – JC
• Local Government – AS
Common Emerging Themes• Collaborative Procurement Models
• Joint Interests
• Making it Real
• Risks and Issues
Q & A and Discussion
AS
Collaborative Procurement Models
Principal Focus:• Market aggregation• Market making• Developing category spend
Principal Benefits:• Maximise buying power of government • Delivery of sustainable savings • Leveraging capability and volumes• Driving policy through procurement
AS
Collaborative Procurement Models
Localism & Leverage
i) National Procurement Agency would create the interface with the Government Procurement
Services
ii) Local Authorities have access to a range of arrangements by category of spend
iii) Local decision remains with local government
iv) Local and Central government bring market strength together – market segmentation and shaping
AS
Joint Interests
AS
• Both sectors need to operate from effective spend and supplier data: becoming a more informed and powerful client sector
• Best value from: increased volumes, improved market share, best deals, joint use of technology and capacity, deployment of private sector contribution, SME participation, Working together where it makes sense (e.g. market shaping, best deals)
• (Probably) one of the biggest initiatives ever taken in this landscape – ambition of both sides
• Delivering government policy through procurement: providing local economic, social and environmental benefit – localism and leverage
Making It Real
JC
Complexity
Sav
ings
Pot
entia
l
• Dependent on a willingness to share and leverage knowledge, experience, data and commitment !
Risks and Issues
JC
Local Government does not get its act together
Central Government falters from the strategy
Political aspirations on both sides cannot be met
Adoption!
Invest to save approach
Importance of governance
Risks and Issues
High Level Indicative Governance Model
AS
Governance
NPA GPS
Joint Venture
Private Sector Markets Category Sharing Business Best Deals Management Development
LGG & ERG
16
Thanks for listening
Any questions??
UNCLASSIFIED
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