Transcript London Borough Of Newham NRF Kickstart Project Final Report

Local Authority
e-Procurement and SMEs
Opportunity or Threat?
Martin Scarfe
National e-Procurement Project
London Borough of Newham
Background
• The move to e-Procurement by local authorities has already
had an impact on smaller local companies
• A further move to shared service e-Procurement will add
momentum to this, bringing more spend into regional or
national contracts with major suppliers
• Government has recognised the damaging affect this could
have on local SME businesses that supply the authorities
• The National Procurement Strategy for Local Government
and the Priority Services Outcomes targets set out
requirements for authorities to ensure that local businesses
are included in all relevant procurement policies, for the good
of the local community
• So how are we doing?
The Statistics
(Spikes Cavell Observatory)
No
No of
Value
No of Trade
of
Trade
of
Trade with
Orgs Suppliers Trade Invoices SMEs
National
93
London
19
165,981
SMEs at Risk
%
Companies
Employees
£10bn
8.26m
59%
8%
7,827
110,710
45,363 £3.4bn
2.15m
56%
9%
2,460
34,761
Survey of Supplier Adoption
•
•
•
Carried out to assess the progress being made by English
local authorities in addressing supplier adoption issues
125 Counties, Metropolitans and Unitaries participated
Scope of research:
1. Compliance to National Procurement Strategy requirements
2. Achievement of Priority Services Outcomes “Excellent” egovernment outcome for e-procurement
3. Status on Supplier Analysis
4. Progress with Supplier Portals
The NPS requirements
–
–
–
–
–
–
–
–
Publish a Selling to the Council guide (website)
Relationship of procurement to community plan
addressed
Workforce diversity, equality and sustainability issues
addressed
Diverse and competitive supply market encouraged
Sustainability built into procurement strategy, processes
and contracts
Concordat for SMEs and voluntary sector compact
concluded
Invitation to bidders to demonstrate effective use of
supply chain included
Give bidders option to specify benefits under community
plan
PSO “Excellent” e-government outcome
• Shared Service / National Priority:
– promoting the economic vitality of localities
• “Excellent” e-government outcome for e-procurement:
– Inclusion of Small and Medium Enterprises (SMEs) in eprocurement programme, in order to promote the
advantages of e-procurement to local suppliers and retain
economic development benefits within local community
Supplier Analysis
•
Identified as one of the key first steps in improving an
authority’s procurement performance
Best practice is for a group of authorities to use an external
analytics service provider to obtain a full analysis
This should ideally include data on:
•
•
–
–
common suppliers
local SMEs at risk
Supplier Portals
•
•
•
•
Being planned or implemented by most authorities
But little agreement on what a Supplier Portal should do, for
the buying organisation and for its suppliers
Considerable confusion and variation across the sector
A review of Supplier Portal systems has been undertaken
Summary of Results
• 48% of councils scored reasonably well across the four
supplier adoption questions
• + 25% report that they have plans to bring their supplier
adoption programmes into line with national targets
• 27% !!!!!
– 71% compliance to the supplier adoption requirements of the
NPS averages across the country
– 52% are meeting the PSO ‘Excellence’ target but 25% have no
plans to do so and many did not know what they were!
– 42% are using the data from supplier analysis to develop
collaborative contracts and assess local SME supplier risk
– 28% have achieved a some level of interaction with suppliers via
a web-based supplier portal
Regional Status
• Leading overall:
North East (63%),East (58%)
• South West and East Midlands
are close behind with 56%
• In third place are West
Midlands and Yorks & The
Humber, at 54%
• In the last group are London
(49%), South East (46%) and
North West (42%).
• The role of Regional Centres is
emerging as key to progress
Summary Table
AVERAGE
EAST
EM
LON
NE
NW
SE
SW
WM
Y&H
% of authorities
responded in sample
82%
70%
70%
81%
100%
77%
95%
93%
71%
73%
Compliance to NPS
71%
84%
63%
75%
83%
63%
64%
76%
73%
86%
Achievement of PSO
52%
57%
68%
52%
75%
38%
45%
58%
60%
64%
Supplier analysis
42%
57%
43%
43%
33%
34%
47%
56%
43%
39%
Supplier portal
28%
33%
49%
26%
62%
31%
27%
33%
40%
26%
Overall
48%
58%
56%
49%
63%
42%
46%
56%
54%
54%
Some Common Views
• Concerns about SMEs being squeezed out of collaborative
contracts - 30% is local spend & voluntary sector – RCEs not
working on this
• Confusion and conflict in EU regulations - can’t use the word
‘local’ (OGC Social Issues paper). Clarification and guidance
needed – also assistance on wording of contracts
• How do you monitor and measure benefit/value of
encouraging local firms?
• Reluctant to publish prime contractor details - data protection
issues and fear of poaching
• Self-registration, PQQ online etc - Data Protection issues and
fear of overload
• Need for national supplier portal, linked to regional and local
Newham KickStart Project
Why?
• 59% of the borough’s trade suppliers are SMEs, a quarter of
which are based in Newham - this has already dropped by 9%
in a year as Newham shifts to using larger suppliers
• Taken together, Newham, Tower Hamlets and Waltham Forest
buy £42m of goods and services from Newham-based
suppliers, around 20% of which are significantly at risk as
local authority supplier rationalisation continues
• Nearly £11m of Newham’s spend is with suppliers based in its
Stratford Ward alone - with the local multiplier effect, the loss
of this could mean up to £50m ultimately drained from the
local economy
Newham Kickstart Project
Outcomes
• The Newham KickStart project was set up to enable the
council to maintain a sustainable level of local suppliers,
while still meeting procurement improvement targets
• It has been successful in raising e-enablement among
SMEs:
KickStart Outputs:
SMEs influenced
2,150
SMEs e-enabled
152
% increase in e-enablement
among local SMEs
7.1%
SME Inclusion
What Now?
• It is important that councils, particularly in London, ensure that
their small local businesses benefit from the build-up to 2012
• But if we exclude them from public sector trading, many won’t
be there to take advantage of the opportunity
• The success of the KickStart project has confirmed that it
needs to be made an integral part of how councils can help
and support their business communities
• A scheme costing under £120k pa would provide support for
200 local SMEs every year
• These schemes could not realistically be self-funded
– we need further funding!!!