Local buying can create savings and improve communities

20 May 2011

20 May 2011 | Angeline Albert 

Buyers should focus more on local purchasing to improve communities, a policy researcher has said ahead of next month’s Public Procurement Show

Matthew Jackson, head of research at independent think tank Centre for Local Economic Strategies (CLES), believes buyers can do more to drive value in local areas and will explain why at the event on 14-15 June at London’s ExCel venue. He believes purchasing professionals can balance the need to make efficiencies and cost savings with buying locally.

The CLES, a policy research firm focused on local economic development, conducted studies of Manchester City Council’s annual £357 million procurement spend to find out how much is spent locally. It discovered 51 per cent is spent on organisations in the city. The CLES’s survey of top suppliers to the council revealed 25p in every £1 received by providers was re-spent in the greater Manchester economy. This compares positively to studies undertaken by CLES in Swindon (16p in every £1) and West Lothian (18p in every £1).

Jackson said purchasing departments could have better relationships with other departments at their local authority and with suppliers, to drive local economic, social and environmental benefits. He recommends that councils set buying teams clear targets to encourage efforts to positively impact local communities and work with supply chains to develop and drive the policy. He has helped establish a networking group between buyers and local suppliers in Manchester and believes there must be “more engagement between local buyers and local suppliers right across the country”.

In terms of the coalition government’s welfare issues, Jackson believes procurement could be part of the solution with support for local labour and apprenticeships through the supply chain helping foster positive change in communities. He said this is something the construction sector does very well. He accepted that EU procurement law can be a barrier to local purchasing but said suppliers could tender their bid response to include efforts to help local communities, by for example offering apprenticeships.

Jackson said buyers’ knowledge of local businesses in the area and what they can offer should be developed. And pointed out that collaborative purchasing between one or more organisations can shut out local suppliers who may not have the capacity or skill set to handle large volumes of work. Splitting contracts up into manageable chunks may be one solution.

☛ Jackson will be speaking at The Public Procurement Show, where Supply Management is an official media partner, in London on 14-15 June.

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