Local Government Procurement Report — A Dot to Dot of Key Findings (part 2)

We talked about Collaboration, Best Value Contract Letting, and Standardising PQQs in our comment on the recent Communities and Local Government Committee review of effective procurement practices in local government. These were three of five key areas the committee was considering when urging for improvements to be made in procurement practices and approach. It also pinpointed Outsourcing Management and Fraud.

Outsourcing Management – the report identifies management of outsourcing deals as a key discipline for improvement, stating that recent failures of outsourcing deals highlight the need for proactive controls. What it means in reality is that outsourcing involves risk, so better risk management is a necessary part of the local authority capability and relevant staff should have enough training in that field.

It is a given that outsourcing tasks should not mean outsourcing responsibility for quality and consistency of service; this should remain firmly in the grasp of the local body and be seamless to the end recipient. So, again, we agree with the report that it is vital that councils are equipped to manage complex contracts. We also agree it is sound advice that they fully lay out clarity between themselves and the contractor on precisely where the boundaries of responsibility are shared.

Fraud – The committee found “little hard evidence of significant fraud but widespread unease that as more services are put out to tender, local authorities are at much greater risk.” It urges councils to tackle fraud throughout the lifetime of a contract and not abandon it after the tender phase. Again, the committee calls on the LGA to consider how to “increase transparency of commercial contracts, for example, through disseminating best practice on the use of contract terms to specify how contractors must share and publish information.” And we must ask again – are the LGA’s shoulders broad enough to support all the tasks being generated through this imperative?

Asking fraud officers who detect incidences of fraud to communicate information effectively with other council officers ties nicely back to our opening comment on collaboration.

Clive Betts MP, Chair of the Committee, said: “Procurement is too important to be viewed as a niche function conducted in back offices. It is central to delivering and managing the services that people rely on every day … We need investment now so that staff right across councils gain the skills needed for effective procurement.” We agree -- investment in procurement skills is vital to any organisation, public or private, and, ironically, especially in times of financial constraint. Effective procurement management skills and systems, when it comes to the multi-million pound spend of the public sector, should be seen as a sound ROI, to save costs in the future.

The major resulting recommendations of the report appear to be to produce more guidance. On this, we tend to err on the side of the inimitable procurement and programme management specialist Dr Gordy. The good old mantra of ‘who, what, where, when, why and how,’ comes into play here. The report goes a good way into outlining what needs to be done and why, but doesn’t really get to grips with the ‘how.’

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