Using procurement for transformation
Dr. Martin Reeves, chief executive at Coventry City Council and national procurement champion for local government, on commissioning issues facing councils.
Reeves is speaking at the Government Procurement Summit in London next week, which will discuss plans to engage SMEs, improve the public sector’s commercial acumen and implement new EU directives.
What, in your view, are the main issues in council procurement at the moment?
There are four main areas I think are critical. Firstly, making savings – there is still an opportunity both nationally and locally to make efficiencies working with the supply chain and big global players in areas like construction and ICT. I reject the binary view that you either have mass economies of scale or local economy, small scale projects. There are opportunities to meld the two and pick out boutique bits of larger frameworks for smaller firms. I think we will see a finessing of this concept over the next five years.
The second area is using every pound we procure to stimulate local economies. Local government, despite austerity, is still a massive commissioner – spending billions on procurement. You can’t always do it, but we can do more to put money back into local economies.
The third issue is around leadership. We need to speak with a single voice to central government to make sure we are all lined up strategically. Commissioning needs to be at the heart of an organisation – not merely seen as a fringe transactional thing. That takes leadership.
The final point is about modernising procurement through things like e-procurement. It is about thinking beyond just the invoicing to make sure it is used through the whole process, including reverse auctions. These initiatives can really take out costs.
Do you think procurement coordination between local government and national government is improving?
There have been some good examples of collaboration but there is still lots to do – and not just around the large frameworks. There is a broader context of localism which should be affecting the way we achieve our broader aims across government. One size doesn’t always fit all and there is a lot of expertise in local government. There have been some very big failures at a national level. I am not saying local government hasn’t had issues but generally we deliver on time and to specification. There are lessons there for national government and they are listening to what we have learnt about derisking contracts.
Why do you think local government hasn’t taken up G-Cloud more enthusiastically?
I think it is variable. There are some areas of local public services which go early and are genuinely innovative – they are keen new tech and ways of procuring. Others will take a long, long time and miss that boat. There is still a very cautious approach in local public services about the way we embrace new platforms – particularly around data integrity. You have a swathe in the middle who are waiting to see how the early adopters get on before dipping their toe in the water. It is not about not looking forward or lack of vision – it might be a bit about risk. Part of my job is to reassure people that he ceiling is not going to fall in if they get involved.
How can councils use procurement to generate income?
In Coventry we had an external contract provider for ICT and insourced it, saving £5m and giving us a unified system. We are now able to think about offering our capacity capability to others. There are opportunities to market services to other councils and even the private sector – they really value that local knowledge and public sector skill base which can help them improve their offer. On the other hand, if half a dozen councils come together and go to the market for provision, it can make sense for them. But the idea that procurement and commissioning is black and white – public versus private – has gone. It is all grey now – there is a continuum of different models, including joint ventures where the private sector provides capital and the public sector provides knowledge and skills. The genie is not going to go back into that bottle.
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