Surrey slashes £27 million with cost-cutting deals

13 December 2011

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13 December 2011 | Angeline Albert

Buyers at Surrey County Council are on course to save £30 million this financial year after driving harder bargains with the authority’s contractors.

The purchasing team expects to meet the target because it has already secured savings of £27 million for the 2011-12 financial year, which finishes at the end of March 2012, thanks to a variety of cost reduction measures.

The team has renegotiated contracts coming up for renewal and also targeted the council’s top 25 high-value suppliers over a nine-month period to cut costs. Andrew Forzani, head of procurement and commissioning, said the authority has taken a different approach to the efforts employed by central government to reduce costs with its top suppliers.

“Surrey doesn’t have the leverage of central government and most of the procurement is for services, the majority of which are social care. We did put some pressure on suppliers, but it was an intelligence-led, partnership approach,” he told SM. “Our discussions with suppliers were led by spend data and reassessment of cost models, to see if there were areas where we could take cost out for suppliers.”

For example, to reduce costs from a contract for mobility equipment, Surrey’s centralised procurement team – made up of around 50 purchasers – found physiotherapists offered service users “too wide” a variety of mobility equipment, such as wheelchairs and zimmer frames. Reducing the variety of products offered by therapists saved £300,000 a year.

And a renegotiated road maintenance contract with infrastructure support provider May Gurney saved £4.1 million annually, when compared with the previous deal.

 Purchasers also worked to find £3.1 million of savings with supplier Babcock 4S which provides schools with personnel, grounds maintenance and technology support.

The council is also sharing procurement and estates staff with Hampshire County Council to benefit from joint savings from property procurement and the construction of schools.

Since 2010, Surrey County Council has saved more than £100 million. The authority has set itself a target of saving £200 million between 2012 and 2017.


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