New procurement strategy in Haringey will save £1 million but cut jobs

27 May 2011

28 May 2011 | Angeline Albert

Plans to centralise buying at the London Borough of Haringey by the end of June will see the loss of 15 buying positions.

As part of the strategy, staff with purchasing responsibilities who are currently working in the local authority’s business units will be brought under the head of procurement’s management. While some staff will retire, others are discussing voluntary redundancy with the council.

The changes are expected to make a saving of £1 million on wages and through other efficiencies as a result of the centralisation.

Michael Wood, head of procurement at Haringey, said: “We’ve taken a commercial view of the market. We’re centralising the expertise where it’s best deployed. I want to achieve more collaboration not just across the council, but by working with consortia to benefit from better buying power.  We want to avoid becoming an ivory tower and will involve business units in our plans to improve procurement.”

He added a total of 950 council contracts will now be managed centrally and divided into 16 categories of spend.

Wood undertook a major transformation of purchasing operations at the Council after joining as head of procurement in 2003. This early groundwork enabled Haringey to achieve a saving of £12 million in the 2009/10 financial year.

Referring to the function’s effectiveness, Wood said: “Each department was spending money in vertical silos, we weren’t maximising buying power. There was no category management across the council three and a half years ago. Now it’s not just about breaking down departmental silos, it’s about local authority silos. More procurement savings can come from greater collaboration between county councils and district councils for example.”

Total supplier numbers have been cut from 9,500 to 8,000 over the past three and a half years. The use of management consultants have also been have been reduced, from 80 to 16, and temporary workers from 750 to 250 over the same period. The number of recruitment agencies used by the Council has also been slashed from 320 to 150, and are now managed by a single provider.

Around £150,000 was saved in 2009/10 through renegotiation of IT contracts and the number of IT suppliers has also been halved to 50.

A new management information system helped identify print an design spend was £3 million higher than estimated, closer to £5 million than £2 million. Supplier numbers in this area have also been cut in half to 150, and £750,000 annual savings have been realised through the use of a new quotation system.

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