The public sector rarely makes use of its power as a mass purchaser of goods and services, as countless government reports down the years have concluded.
In part, that failing is down to a lack of collaboration, procurement experts say. Speaking at a recent seminar run by Wax Digital, Glen Gooch, an associate director of NHS South West Essex, said the health service's 150 primary care trusts (PCTs) must start buying more things jointly.
"To a certain extent they are quite autonomous, and they do their own thing," he said. "That can't be the most efficient way of doing things."
Gooch believes that when it comes to, say, utilities like gas and electricity, there should be just one national contract for all public bodies. That's going beyond collaboration into what procurement experts call 'aggregation' – bundling up individual needs into one big public sector demand.
"We'd all sign up to collaboration, but it doesn't always deliver results," says Jonathan Jones, the manager of a 74-council joint procurement hub in the west midlands.
"What we're talking about here is bringing the volumes together."
Taking that idea to its logical extreme implies more mergers of local bodies. In five years' time, Gooch says, his PCT could have merged with one of its neighbours or even a local council.
"We have five PCTs [in Essex] so we do things five times over. We could bring that down to two organisations, I think."
Others, however, are sceptical. "We have had some quite difficult experiences in collaboration," says David Pointon, Portsmouth city council's head of procurement.
His council has spent three years trying to launch a joint contract for plumbing and other building maintenance work with nearby public bodies.
"Initially there was appetite for it, but as soon as it gets into the politics of the organisation and the effect on people's jobs – that's when it starts to get unpicked."
Others have similar stories. Wax Digital's Richard Mullins tells of one county where four Labour district councils are working together "but they are not sure the fifth can work [with them] because they are not Labour."
Collaboration
Jane Whiteman-Turl, a specialist interim head of procurement, says collaboration falls down because many public bodies don't think about what they will need to buy even a year in advance. "It's all reaction, reaction," she says.
The London Contracts and Supplies Group – bringing together the 32 London boroughs and other major organisations – took 25 years to agree on a contract for rock salt to grit the roads, she adds.
"Twenty-five years! In the end it took the force of one individual's personality to say, 'This is what we're having [and] this is the price I can get you.'"
Even if these problems can be overcome, not everyone believes that aggregated contracts are always the way to go. Pointon says it's good to have them as an option; then, procurement officers "have to be accountable for not going with the large central contract".
But, he adds: "In some cases they are [value for money], in some cases they are not." The expertise of small local firms can be worth 1-2% on any tender "because you are going to get a better quality of person, better quality of service. There's a place for regional contracts ... but it is not one size fits all."
From Bubb's Blog
From Whitehall Watch
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