Holland aims to save £2bn

6 September 2006
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07 September 2006 | Rebecca Ellinor

Plans are under way to help local authorities save an additional £2 billion by 2011 on the £40 billion they spend with suppliers.

In an exclusive interview with SM, Steve Holland, director of the National Procurement Programme, outlined the strategy developed by the regional centres of excellence.

Procurement groups made up of specialists in the field will help deliver efficiency in certain markets. The result of their pooled expertise will be "how to" guides to help councils buy those commodities and services and list pre-approved suppliers on framework agreements which councils can use.

Holland said: "The Treasury's next spending review will determine the spend to 2010-11. Everyone expects it to be smaller than has been to date. So there will be even more pressure on local authorities to find cash to fund frontline services.

He also highlighted recruitment problems reflecting that trying to recruit the best procurement people in the market is not working because there aren't enough of them. "The behaviour of individual authorities has driven up salaries," he said.

Holland said the National Procurement Programme would use hard facts - price benchmarking and spend analysis - to show key decision-makers that it is better value for money to employ organisations to do much of their procurement for them.

He said this would enable local authority purchasers to concentrate on strategic buying.

There has been some concern that a national buying strategy would damage markets and harm small local suppliers, but Holland said: "We're looking at specific commodities and goods where there is a small number of powerful suppliers - such as energy, IT hardware, fleet and telecoms. We want to increase the buying power of local authorities by aggregating demand but not necessarily on a national basis. It could be regional, so councils can do deals on a stronger footing. We recognise the need to stimulate competitive markets of all sorts of suppliers. We won't select markets that would damage that."

SMsep2006

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