Transformation at Essex helps buyers beat target

31 March 2011

31 March 2011 | Angeline Albert

Purchasers at Essex County Council have exceeded their savings target this year by £5.9 million, after achieving a £38.3 million reduction in costs.

A decentralised purchasing team and a more knowledgeable group of buyers has helped it surpass procurement’s £32.4 million target, said head of procurement operations Steve Ede.

The transformation of the function, which began in March 2008, involved recruiting new staff with a broad range of experience and knowledge, with procurement qualifications only one aspect that was considered. Furthermore, all procurement policies were refreshed in 2010 with new guidelines for each category published online, which included the names of relevant purchasing contacts for business units to access.

“Recognition of purchasing’s role has been reinforced and is high among other parts of the organisation thanks in part to buyers being deeply embedded within key business units,” said Ede.

There are more than 80 staff working in the adult social care department responsible for some buying who report into the council's central procurement team. In addition, there are around 15 to 20 working in children’s social care and a large number in the environment directorate. As a result, most direct buying is decentralised. “We now have a more structured approach, and early engagement with stakeholders means we understand and are in a position to challenge business units. We initiate the whole process and look at how we spend and why,” said Ede.

A new approach to category management was also launched with a lead appointed for every category and teams set up which included purchasing advisers for areas such as finance and HR.

The council has a target to save £300 million over a four-year period by March 2013. Procurement is helping in part by rationalising the supply base. Vendors for road maintenance have been reduced from nine to one, and the number of providers for school and social care transport is also being cut. In addition, by reducing the amount of rubbish sent to landfill over the past two years, the council has managed to deliver a £8.1 million saving on the £30 million it usually spends on disposing waste every year.

Ede said procurement’s profile as a cost-cutter is being helped by the public sector’s belt-tightening activities. “We are no longer seen as a tendering operation but a commercial partner. The need for spending reductions helps in terms of changing people’s mindsets and driving different behaviour.”

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