Ministry of Housing, Communities & Local Government
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Greater council savings possible with smarter procurement - Roots review
Councils can make even greater savings through improved procurement processes and give council taxpayers even greater value for money finds the independent Roots Review published today.
The Review of Arrangements for Efficiencies from Smarter Procurement in Local Government, carried out by Bill Roots, former Westminster City Council Chief Executive, examines the procurement of goods, services and capital purchases to identify ways to make further efficiency savings.
The Roots Review finds that there has been improvement in procurement practices in recent years, but that it is very apparent there is scope to further improve value for money and reduce the £42bn spent on external contracts by local government in 2007.
The report challenges councils to 'spring clean' their procurement systems and recommends substantial practical support for councils, including the appointment of a new local government procurement champion and greater support from Regional Improvement and Efficiency Partnerships (RIEPS) by increasing the practical procurement advice and 'best buy' information they hold.
Bill Roots said:
"Significant savings from smarter procurement is central to the £4.9bn of efficiencies expected of local government. Improvements have already been made in recent years but there is still more than could be done.
"I believe a 'champion' within local government is needed to lead and co-ordinate procurement efficiency, and Regional Improvement and Efficiency Partnerships (RIEPs) are ideally placed to become one-stop shops for expert advice and 'best buy' information.
"The recommendations I have set out will help drive forward the work to make local government procurement practices even more efficient and give council taxpayers greater value for money."
The key recommendations of the Roots review set out specific steps that will help councils improve the efficiency of their procurement processes and deliver greater value for money.
The report recommends that RIEPs:
* Act as a hub and catalogue for best deals information using the available expertise within Government.
* Promote better working between councils and Small and Medium Enterprises (SMEs).
* Provide online advice on model contracts; EU procurement rules; market intelligence; and best practice.
* Make much more transparent to councils the impact of falling below 'best practice standards' on procurement
* To identify, in collaboration with the LGA improvement board, the size of savings lost by non-collaborative work or non-open-market competition.
* Provide an annual report on efficiency achievements.
The report's other recommendations include:
* Appoint of a Procurement Champion to co-ordinate the sharing of best practice and focus efforts on key spend areas including construction, IT and energy procurement.
* Promote a 'horses for courses' approach that removes the tendering barriers for smaller suppliers.
* Local Authorities to develop further links with VCS, SMEs and social enterprises, which can bring real benefits.
* Local Authorities encouraged to carry out annual procurement arrangement reviews
* Private sector to be encouraged to offer solutions to known issues, not just await tendering processes before responding.
The Comprehensive Spending Review (CSR07) tasked English councils to collectively make £4.9bn of cash saving efficiency gains with the expectation that nearly 60per cent (£2.8bn) would come from smarter procurement. The last assessment of local government procurement took place in 2001, and given the credit crunch an update was urgently needed.
Notes to Editors
1. Full details of the Roots Review of Arrangements for Efficiencies from Smarter Procurement in Local Government can be found at http://www.communities.gov.uk/publications/localgovernment/rootsreview
2. CSR07 arrangements for local government efficiency are set out in a Value for Money Delivery Plan, negotiated with HM Treasury, and supported by £0.5bn funding over the three years. There are separate arrangements for the Fire and Rescue Services (including a National Procurement Strategy for that sector) and the housing sector.
3. Under the National Improvement and Efficiency Strategy (NIES), agreed with LGA, the Department has set out indicative funding of £185m for the nine RIEPs and, through Revenue Support Grant top-slice, the Department contributes to the funding of programmes delivered by specified bodies in the LGA Group (including 4ps and IDeA). The Department has also announced a £115m capital Efficiency and Transformation Fund.
Published on behalf of the Roots Review by Communities and Local Government
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