Wake-up call for council purchasers

18 July 2001
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19 July 2001

Sir Ian Byatt's review of local government procurement has called for a much higher profile for purchasing departments. David Arminas asks how this can be achieved

There's a stirring of the beast, according to Sir Ian Byatt's 60-page review of local government procurement practice in England released late last month. Among his 39 detailed recommendations, the former director-general of water regulator Ofwat called for a higher profile for purchasing departments and better staffing and training at all levels.

Byatt's report reinforces the argument that procurement is a profession to be reckoned with and which should be attracting high flyers - suitably so for an area where total non-pay procurement spend by local authorities in England for 1998-99 was £42.2 billion.

A quarter of authorities had a formal written procurement strategy, with 50 per cent planning one. But if readers of Byatt's report, Delivering Better Services for Citizens, missed these statistics, it is because they are taken from the companion document Local Authority Procurement, A Research Report, upon which Byatt based his recommendations.

The 110-page research document relies on a postal survey of all English local authorities, a small number of case studies in 11 authorities and four purchasing consortia to establish the baseline of current practice. It notes that more than three-quarters of authorities take environmental factors into account when evaluating tenders. A third of authorities use online catalogues, but only 13 per cent have introduced purchasing cards. Purchasing consortia are used by 67 per cent of authorities and around 40 per cent of authorities award contracts jointly with other authorities.

But less than half - 42 per cent - of councils monitor the performance of their procurement, according to the research. This is despite the fact that 98 per cent of councils monitor performance of their contractors.

Of all the statistics, should this lack of monitoring be of particular importance?

According to purchasers concerned with raising the profile of the profession, monitoring is fundamental to ensuring procurement establishes credibility with senior management and that it attracts the best and the brightest.

High flyers in any profession are the keenest to see how they stack up against their colleagues. It is a trait of these highly competitive people that benchmarks and targets are not there simply to be met, but to be exceeded. Attracting and keeping these people will be of prime importance as best value becomes the norm for procurement, according to Peter Howarth, formerly director of strategic management at Suffolk County Council.

Indeed, these people will be integral to the challenge of change management required for best value, says Howarth, who is now a procurement adviser with the Improvement and Development Agency, set up in 1999 by the Local Government Association as a best practice and skills consultancy.

Local authorities "have made steps", says the research document, towards the use of output-based specifications when inviting tenders, with 56 per cent of respondents requiring them. However, outcome-based specifications are rarer, with 30 per cent of local authorities using specifications based on outcomes.

These specifications mean the purchaser does not necessarily design the widget it will buy. That is left to the supplier. Rather, the purchaser defines the result - or outcome a of using the widget, says Howarth. This is a pillar of the best-value initiative, where the outcomes are improved services for the ratepayers, a performance measurement for best value.

This move from output to outcome thinking requires special training. Sadly, the research report records that it is unlikely for procurement training in general to be part of a local authority's corporate training programme. Only around 25 per cent offer it as such.

Byatt's main report is not controversial in its scope, according to some procurement people. But they agree that it makes an eloquent case for more and better training. Unless this is done, the best and the brightest career professionals will pass local authority procurement by..

* For copies of the Byatt and research reports, visit www.local-regions.dtlr.gov.uk/consult/betterservices

SMjul2001

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