Transcript Cabinet Office - Local Government Seminar: Better

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
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
JC
> Launch of
UNCLASSIFIED
Government Procurement:
Mission - 2011/13
Mission
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
JC
Procurements Contribution to
First Year Savings
£2.5bn of the £3.75bn
£800m through renegotiating
contracts and £360m from
£870m on consultancy (down
70%) and £500m on agency
centralised procurement
staff (down 40%)
£400 million from reviewing
major projects and £300 m
from ICT controls
£300 million from smaller
Civil Service (17,000 FTEs
down)
£400 million on advertising
and marketing spending
£90 million from property
controls and 10% carbon
emission reduction from
Government estate
Savings in 2010/11 – Communicated by MCO and COO
UNCLASSIFIED
JC
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
Which if unaddressed will impact:
Spend Under
Management
Sustainable
Savings
UNCLASSIFIED
JC
Investment
to Improve
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
UNCLASSIFIED
AS
Lessons and Barriers to Overcome – LG
 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
AS
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
• 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
AS
Savings Potential
Making It Real
ICT &
Professional
Services
Social Care
&
Emerging
Products
Common
Simple
Goods &
Services
Complexity
• Dependent on a willingness to share and leverage
knowledge, experience, data and commitment !
JC
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
Governance
NPA
GPS
Joint Venture
Private Sector
AS
Markets
Category
Management
Sharing
LGG & ERG
Business
Development
Best Deals
16
Thanks for listening
Any questions??
UNCLASSIFIED