Local Government Procurement – Communities and Local Government Committee (part 2)

Continuing our review (not a verbatim record - and part 1 here) of the Communities and Local Government Committee from earlier this week, looking at local government procurement and quizzing three execs from collaborative procurement bodies -

  • Ian Taylor (runs NEPO,  collaborative body owned by 12 authorities in North East)
  • Ed Walsh (director of ESPO, another collaborative body but one that runs warehouses, trucks etc )
  • Mark Robinson, (SCAPE, Midlands based collaboration in construction)

How many challenges do you get from unhappy suppliers?

Walsh – ESPO get about one challenge letter a week, but rarely comes to court.

Taylor / Robinson – We don’t get any!  (Walsh makes disbelieving noises off..!)

(To Walsh)-  Why do you think you can run warehouses and fleets of lorries – in effect be a wholesaler - better than the private sector? (Interesting question!)

Walsh - Good question. That’s only a small part of our business now, we will reduce fleet of vehicles, but don’t want to get out of that business entirely.

You’re offering free Xmas Crackers as an incentive  – how is that good for the public sector - aren’t you just another wholesaler?

Walsh – I didn’t know our new marketing team were doing that, I’ll take a look at it! But we want to make a difference – it’s not consumables that are the important things we do, it is major frameworks on energy, IT etc.

Why don’t the collaborative bodies merge, save money on Chief Execs, etc?

Taylor – We don’t have a warehouse operation. But get strength from being regionally owned, hard to get collaboration anyway, being owned and based regionally helps and gives strengths which a national organisation wouldn’t have.

Robinson - We could have a national body. But maybe start with one category like construction or social services. Save 20% plus.

What if central government mandated centralisation of procurement, would that have an impact?

(Great idea! So why not mandate centrally the salaries for council managers? The fees for councillors? Why not mandate the square footage of office space for council employees? The time spent on social care visits? Why not have a five year plan for tractor production? Why is it only procurement that seems to go through this sterile debate?)

Robinson – It would save a lot in terms of bidding costs.

Taylor - Aggregation at national levels just wouldn’t work in some categories like social care. No national players, unknown consequences in areas like that.

Walsh – Different depending what we’re procuring.

What are the obstacles to centralisation?

Walsh – Localism is a barrier (gets a bit esoteric about having to change the Local Authorities Goods and Services Act 1970 – I’m not convinced the Committee know what he’s on about but they all nod knowingly...)

Robinson  - We build in ways of helping local economies even with economies of scale. We do it. Control and power in local authorities is a barrier – procurement is 30% of their spend - not sure how you could take that power away from them  (so why are you suggesting centralisation? And in some authorities, procurement is 60-70% of spend!)

Could we integrate more with third sector and other bodies?

Sorry, getting bored by now, but everyone is trying to do more with other organisations.. but this is  interesting:

Walsh  - People want to collaborate but don’t want to share liabilities / risk. We wanted to do to real joint procurement with Government Procurement Service. They were reluctant to do that.

What about encouraging SMEs (small firms)?   

Robinson - SMEs can’t bid for much of our work as its higher value but it’s OK as they can work through the supply chain, we have a portal.

Taylor – We're tracking data better now, NEPO Business Club, offer training in how to win business, also  innovative route to market for professional services providers (might need to look at that more closely, sounds interesting).

WalshBreak contracts into Lots, advance warning of opportunities, require Primes to apply same payment terms to sub-contractors and advertise (good stuff).

Should organisations delivering public services be subject to greater scrutiny e.g. FOI?

All - Yes. (I’m summarising here)

D*mn right they should – a good way to finish.

Well done guys – lay off the sales pitch a bit, Mr Robinson, we’d suggest, but all three witnesses made some good points and came across well... we’ll come back and explore some of the issues raised  further at some point.

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First Voice

  1. Dan:

    The questions raised by the committee have inspired me. Since larger contracts always lead to economies of scale, why don’t we have a single, centralised supercontract? Then we’ll get everything cheaper, and maybe even free!

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