Transcript DEVELOPING THE NORTH WEST ECONOMY: SERVICE …

Colin Cram
Marc1 Ltd
Tel: 01457 868107
Mobile: 075251 49611
[email protected]
www.marc1ltd.com
My Background
 Director, North West Centre of Excellence





- 47 local authorities
Director, Research Councils’ Procurement Organisation
Director, North West Universities’ Purchasing Consortium
Director, Benefits Agency Contracts Organisation
Central Unit on Purchasing
Cabinet Office, Treasury, Central Government generally




Senior Adviser to Office of Government Commerce
Member of Society of Local Authority Chief Executives -SOLACE
Fellow of Chartered Institute of Purchasing and Supply
Institute of Directors: ‘Towards Tesco’
TOWARDS TESCO
1. Public Sector Procurement is Vast

A New Integrated Model could Deliver Huge Benefits
2. Outsourcing and Shared Services
 Is Chaotic and Costly
 Huge Potential Remains
 Propositions:
 A New Outsourcing Model?
 A Proposition for Delivery of Public Services
3. Potential Savings of £25bn+
• £220
Billion pa
• £3,500 per Adult and Child pa
• One Third of Total UK Public Spending
• One Sixth of UK Gross Domestic Product (GDP)
• 0.75% of Global GDP
• Size makes it Critical to Delivery of Public Services
• Effective Management is Essential to Reduce Public
Spending Deficit and Deliver Government Procurement
Policies
EDUCATION PROCUREMENT - £30+bn
Alone would put UK in top 30% of national GDPs
• 65% Non-Central Government
• 50% Common Categories, Goods, Services
• Professional Services £35bn
• Construction £21bn
• ICT £10bn
• Facilities Management £10bn
• Energy £4bn
• Reprographics £3bn
• Travel £3bn
• Fleet £3bn
• Food £2bn
• Some Major Central Government Department Organisations
• Some Large Specialist Organisations
• NHS Outsourcing
• Buying Agencies: 40+
• OGC and Category Teams
• Several Thousand Small to Medium Procurement Units
• 40,000+ Procurement Points
BUT
• Increasing Collaboration/Joint Procurement
•Indiscipline
•Different Procedures/Contract Ts and Cs
•Complexity – e.g. Tender Procedures
•Multiplicity of Tenders
•Multiplicity of ‘Duplicate’ Contracts and Contract Managers
•Specifications
•Inconsistency of Capability, Expertise, Processes
Furniture
30%
FM/Outsourcing/Major Contracts Up to 35%
Laboratory Consumables
Up to 90%
IT
5 – 80%
Construction
5 – 25%
Excellent Construction Management 5 – 15%
Social Care
10%
Legal Services
10%
Good Contracts Management
5 – 35%
© C M Cram
•Right Procurement Structures/Joint Procurement
•Common and Complete Databases
•Common Information/IT Systems
•Common Procedures
•Common Specifications
•Commodity, Markets, Procurement Expertise
•Specialist Management
•Best Practice Procurement Techniques
PUBLIC SECTOR PROCUREMENT IN 5 YEARS TIME?
Central/ Major Industry
Departments/ Specific
Buying
Solutions
Major National
Contracts/Suppliers
*
*
Common Categories
*
*
Relationship Management
*
*
Market Management
*
*
Industry Specific
PPIs/Major Project Support
*
Regional
P Hubs/
Medium
Depts
*
*
*
*
Local/Med/
Small
Departments
Regional/Large Local
Contracts/Suppliers
*
Small Local Contracts
*
*
Discipline/Implementation/
Compliance
*
*
© C M Cram
PUBLIC SECTOR PROCUREMENT: THE FUTURE?
INTEGRATION
COLLABORATION
INDEPENDENCE
© C M Cram
HOW CAN OUTSOURCING AND SHARED
SERVICES BUSINESS BE BOOSTED?
 Eliminate obstacles
 High Costs
 Long Timescales
 Complex Procedures
 Varied Procedures
 Duplicating Specifications
• Create Model Approach
• Create Vision for Public Service Delivery
PUBLIC SPENDING £bn
Central
Pensions
Health/Social Care
Education
Defence
Welfare
Protection
Transport
General Government
Other Spending
Interest
TOTAL
110
117
28
38
60
16
13
13
71
30
496
Local
52
50
17
10
13
32
1
175
Total
110
117
80
38
110
33
23
26
103
31
671
UK PUBLIC EXPENDITURE






£bn
Total Budget
671
Cost of Public Spending (ex Welfare/Pensions)
451
Annual Procurement Spend
220
Estimated Annual ‘Back Office’ Outsourcing Spend
20?
Estimated Potential O/S Spend IT/Back Office
35?
Theoretical Total Additional Outsourcing Potential* 100-200?
* Includes front line services
ELIMINATE OBSTACLES: CREATE MODEL APPROACH
 Create Range of Model Specifications
 Create Matrix of Service Providers and Services
that the Public Sector can use without further EU
Tendering
 Boost the Shared Services/Outsourcing Market
 Provide those Services through building on
Existing Service Centres/Creating New Ones
WHY IS NOW THE RIGHT TIME?
•
•
•
•
Public Spending Deficit
Increasing Focus on ‘Efficiency = Cash’
Improved Service Demands
Managing this ‘Squeeze’:
– Shared/Joint services
– Outsourcing
– Transferring Work from High to Low Cost Areas
– Third Party Spend/Procurement
– BPR and Lean
– Cutting Services
SERVICES
SERVICE PROVIDERS
1.
Roads
2.
3.
√
√
Call Centres √
√
HR
√
√
Finance
√
√
Construction
Services
ICT
Legal
√
4.
5.
√
√
√
√
√
√
√
√
6.
HOW?
 Create Range of Model Specifications
 Follow EU Procurement Directives to Create
Matrix
 Evaluation Criteria: Capability
 Obtain Indicative Prices?
 Grow Matrix Organically
 Consider Dynamic Purchasing Sytem
WHAT SERVICES COULD BE COVERED?
ALMOST ANYTHING!
•
•
•
•
•
•
•
•
•
•
HR
Payroll
Print and Design
Finance
Internal ICT
Legal Services
Agile Working Solutions
Procurement
Construction
Asset Management
•
•
•
•
•
•
•
•
•
•
Roads
Revs and Bens
Debt Collection
Managed CCTV
CRM
Out of Hours Services
ICT Hosting
Data Centre Operations
Environmental health
Elements of Children’s
Services and Adult Social
Care
MAKING IT HAPPEN
• Create Steering Group with TORs
• Commission and Fund Initial Work – to include
–
–
–
–
–
Wider Discussions with Public Sector, Ministers and Industry
Discussions with other bodies e.g. CLG Advice re Dynamic
Purchasing System
Identify Possible Sources of Funding
Identify Team to Do Work
Identify Possible ‘Hosts’, e.g. BIP
• Approve and Fund Work to create OBC
• Draft Programme of Work and Implementation Plan
PROPOSITION FOR PUBLIC SERVICE DELIVERY
• What should be Delivered by the Public Sector?
•What should be Delivered by the Private Sector?
•Benefits of Proposition
•Overall Model for Public Service Delivery
•Developed by the Outsourcing Industry
VISIONARY – Nothing Ruled Out
Colin M Cram
Marc1 Ltd
Tel: 01457 868107
Mobile: 075251 49611
[email protected]
www.marc1ltd.com