07 June 2001 | Robin Parker
Birmingham City Council's procurement service is failing and unlikely to improve, according to a damning review by the Audit Commission.
Its Best Value Inspection Service claims that out-of-date, insufficiently detailed contractor practices are overburdening suppliers on the council's 1,000-strong approved list. Only 140 of the suppliers have won contracts in the past year.
The review found late payments were common, with some companies waiting for 32 months to be paid. The council could not supply a figure for its annual purchasing spend, which inspectors said could be as much as £1 billion.
Procurement is a complex issue for a council the size of Birmingham's, in which one in four of the 10,000 staff are involved in the activity at some level. The inspectors found a fragmented service with little use or awareness of procurement guidelines.
Councils determine the scope of their reviews. Choosing procurement highlighted its importance to Birmingham City Council, said Paul Kirby, central region director at the Audit Commission.
"But it only looked at a traditional approved list of contractors, rather than procurement across the council. Because the review's scope was so narrow, it didn't leave enough room for future improvement."
The procurement division was stung by the report's conclusions. "It identified directions that are already part of our service improvement plan, such as faster processing of contractors' applications and greater use of IT," Bob Carmichael, principal officer for approved lists and insolvencies, told SM. "This made it all the more surprising that they branded us 'unlikely to improve'."
The authority is to merge its strategic procurement service and its city supplies organisation by the autumn, as well as simplifying low-level purchasing in order to concentrate on larger strategic spending. But the commission's inspectors claimed that while this would ease backlogs, it was not customer-driven and would not solve the core problem of slow processing. However, Carmichael said these issues were under review.
The inspectors recommend that the council develops a strategy and vision for procurement, including stronger partnerships with contractors. The council already plans to hold an open day in July for contractors and potential contractors, added Carmichael.
Procurement services at Mendip, as well as Brighton and Hove, are currently the subject of similar best value reviews. The findings are due to be published in the next few weeks.