28 March 2002
Nearly three-quarters of local authorities are failing to carry out effective procurement two years after a major review programme was launched, the local government spending watchdog has warned.
In a hard-hitting report, Competitive Procurement, the Audit Commission attacks the "defensive" purchasing culture at many authorities.
It says nearly two-fifths of councils have a purchasing strategy, but that 80 per cent of these are "incomplete, untested or deficient in one or more key areas".
But councils hit back, saying it takes time to overhaul procurement and many smaller councils lack the resources to do so.
The report, which analysed 114 best-value inspections, says 70 per cent of councils are not conducting effective competitive procurement and treat it as a threat rather than an opportunity to improve services.
Best value was introduced two years ago in a drive to improve council services. A third of the reviews in 2001 focused on procurement.
A report last year found that three-quarters of councils had difficulties in implementing the inspectors' recommendations.
The latest report identifies a four-stage procurement process, and criticises councils' "limited" market analysis. It urges them to talk directly to potential suppliers at open days or workshops.
Paul Najsarek, project manager at the commission who compiled the report, said councils that do not challenge themselves in best-value reviews cannot produce real change in their performance. He said many authorities underestimate the centrality of procurement to best value.
But David Wheller, chairman of the Society of Purchasing Officers in Local Government, said there was a lack of resources and skills at smaller councils.
"About 70 per cent of councils are very small, and they don't all have professional procurement people in place," he said.
Sarah Wood, director of finance and procurement review at Birmingham City Council, said the findings were unfair as it was too soon to judge.
"To change the culture is likely to take three years from laying the foundations for change through to reaping the benefits."
Birmingham merged its procurement functions into a central unit in November, and publishes its first annual procurement plan and manual next month.
The council aims to reduce its supply base after a best-value review last year said its procurement service was failing and unlikely to improve.