Cutting costs is a priority for all councils. In Devon, a joint procurement officer for the districts has helped, says Nicola Bulbeck
Times are getting tighter for councils. Increased pressures for efficiency gains in the context of delivering value-for-money, high-quality services which meet public expectations means that across the country, councils face announcing unpopular decisions to a sceptical public and media.
In Devon, the issue is compounded by the pressures of the Devonwide concessionary fares scheme – a project we’re all keen to promote. A chronic lack of targeted government funding has left some councils facing huge budget black holes. In Teignbridge, an extra £1.5M this year alone.
So, how have we taken control of the situation in order to make savings, increase income and keep improving services to our customers? One of our solutions is, like many good ideas, simple in theory.
Local government is a huge consumer of resources, from paperclips to power provision, and everything adds up, so one solution was to get smarter with spending. Employing a full-time procurement officer may not always be viable for smaller authorities, as the cost can outweigh the gains. However, the need to meet targets and deliver savings remains ever present.
In south Devon, Teignbridge decided to build on our existing shared services partnership with neighbouring South Hams DC and employ a joint procurement officer. Our next step was to include West Devon BC in the programme, getting maximum efficiency from a single post across an area of 1,050 square miles with more than 265,000 residents. Our search and selection panel drew on the existing expertise of the wider Devon Procurement Partnership to ensure we attracted the highest calibre of applicant. We were looking for a blend of expertise complemented by go-getting, challenging and inter-personal skills – and we recruited from Devon and Somerset Fire and Rescue Service.
Already a joint programme of work is under way, looking both at value for money with purchases and also entire systems of buying. Curbing back-office costs is preferred to any cut in services, staff, or resources, and with the right kind of action, the three councils stand to save hundreds of thousands of pounds. For example, research has found more than 70% of orders are for items of less than £500 value, and it has been known for orders to be raised for items costing £10 or less. It doesn’t take a procurement officer to point out that with orders costing £25 to raise, this is hardly economical.
New initiatives include a greater commitment to electronic tendering, thereby dramatically cutting office costs, the enhancement of combined spending with our partners, and re-examining whether our current goods and services offer the best value for money by benchmarking against other consortia contracts. For example, to send a tender and all the associated paperwork in the traditional method costs in the region of £40, compared with £5 if sending the information electronically. Electronic tendering is fast and efficient, removes administrative costs for our suppliers, and ensures a robust and transparent process with a full audit trail.
A full spend analysis from April 2006 to March 2007 highlighted that the three partnering councils utilise the same suppliers in at least 20 instances, across diverse areas such as insurance, utilities and mailing services. By buying smarter we will create the leverage the councils need to generate savings.
By focusing on quick and big wins in the short term, we aim to make the savings necessary to implement a longer-term vision which, in a single common policy, will encompass our contracts, combine our buying power, and help the three councils compete in a large, competitive marketplace.
Through the work of our joint procurement officer, our involvement in the wider Devon Procurement Partnership, and a strategic group of managers from the three authorities working together to oversee the project, we are certain of delivering short and long-term savings and, crucially, ensuring we don’t compromise on service to our customers. w
Nicola Bulbeck is chief executive of Teignbridge BC
In Devon, the issue is compounded by the pressures of the Devonwide concessionary fares scheme – a project we’re all keen to promote. A chronic lack of targeted government funding has left some councils facing huge budget black holes. In Teignbridge, an extra £1.5M this year alone.
So, how have we taken control of the situation in order to make savings, increase income and keep improving services to our customers? One of our solutions is, like many good ideas, simple in theory.
Local government is a huge consumer of resources, from paperclips to power provision, and everything adds up, so one solution was to get smarter with spending. Employing a full-time procurement officer may not always be viable for smaller authorities, as the cost can outweigh the gains. However, the need to meet targets and deliver savings remains ever present.
In south Devon, Teignbridge decided to build on our existing shared services partnership with neighbouring South Hams DC and employ a joint procurement officer. Our next step was to include West Devon BC in the programme, getting maximum efficiency from a single post across an area of 1,050 square miles with more than 265,000 residents. Our search and selection panel drew on the existing expertise of the wider Devon Procurement Partnership to ensure we attracted the highest calibre of applicant. We were looking for a blend of expertise complemented by go-getting, challenging and inter-personal skills – and we recruited from Devon and Somerset Fire and Rescue Service.
Already a joint programme of work is under way, looking both at value for money with purchases and also entire systems of buying. Curbing back-office costs is preferred to any cut in services, staff, or resources, and with the right kind of action, the three councils stand to save hundreds of thousands of pounds. For example, research has found more than 70% of orders are for items of less than £500 value, and it has been known for orders to be raised for items costing £10 or less. It doesn’t take a procurement officer to point out that with orders costing £25 to raise, this is hardly economical.
New initiatives include a greater commitment to electronic tendering, thereby dramatically cutting office costs, the enhancement of combined spending with our partners, and re-examining whether our current goods and services offer the best value for money by benchmarking against other consortia contracts. For example, to send a tender and all the associated paperwork in the traditional method costs in the region of £40, compared with £5 if sending the information electronically. Electronic tendering is fast and efficient, removes administrative costs for our suppliers, and ensures a robust and transparent process with a full audit trail.
A full spend analysis from April 2006 to March 2007 highlighted that the three partnering councils utilise the same suppliers in at least 20 instances, across diverse areas such as insurance, utilities and mailing services. By buying smarter we will create the leverage the councils need to generate savings.
By focusing on quick and big wins in the short term, we aim to make the savings necessary to implement a longer-term vision which, in a single common policy, will encompass our contracts, combine our buying power, and help the three councils compete in a large, competitive marketplace.
Through the work of our joint procurement officer, our involvement in the wider Devon Procurement Partnership, and a strategic group of managers from the three authorities working together to oversee the project, we are certain of delivering short and long-term savings and, crucially, ensuring we don’t compromise on service to our customers. w
Nicola Bulbeck is chief executive of Teignbridge BC
