10 May 2011 | Lindsay Clark
Rather than feel threatened by cuts, now is the time for public sector purchasers to showcase their skills and achievements, the experts tell Lindsay Clark
The day of reckoning has come. After a great deal of talk about deficits and public spending, the cuts have arrived in local government.
From the beginning of last month, councils entered a world of shrinking budgets. Over the next four years they will see contributions from central government fall by 28 per cent, according to a plan set out in the comprehensive spending review.
Although individual councils’ response will vary, this period undoubtedly presents a critical test of procurement in local government, says John Charters, service manager, corporate commissioning and procurement at Bristol City Council.
“We are the makers of our own futures. If we achieve the things that we promise, then there’s every reason for confidence that we will have an enlarging role. If, on the other hand, we turn out a mediocre performance, then we deserve what we get,” he says.
Together with Bath & North East Somerset Council, Bristol is forming a shared services approach to procurement. “Suddenly it’s imperative for both of us that we collaborate even more closely than we ever have before,” he says.
Over the next 18 months, volume buying and jointly developed approaches to market could lead to savings of up to £1 million.
Bristol is not alone. Research by the Local Government Association (LGA) in March showed that 200 shared services projects were either already up-and-running or under consideration in the 419 member authorities in England and Wales.
The fear among procurement teams is that they are seen as merely a back-office function, which will have its total headcount slashed once departments previously serving separate authorities become shared.
This is only the case if procurement stands still. If it can make a case to take on greater scope and address larger spending, jobs could be preserved.
Paul Bettison, leader of Bracknell Forest Council offered some assurances that mass job losses are not on the cards. “It’s natural that
at first view, procurement people might appear to be working hard to make themselves redundant, but there is no evidence of this because if anything, we still see a larger demand for these people, even when authorities share.”
Councils are not looking for savings in procurement headcount when they look to share services. Instead, they are hoping to find more work for the precious purchasing skills they have, says Bettison, who works with the LGA on improvement and efficiency.
“The fact that procurement is becoming an essential skill within a well-run council – that is what has taken over,” he says. “Far from feeling threatened, those procurement professionals should actually now feel that their time has come. These people can be the real heroes.”
This view is certainly supported by another study by the LGA, which showed the work for procurement to do. Responses from chief finance officers at 131 authorities showed that 61 per cent were in the process of saving money by renegotiating or changing contracts or contractors.
Meanwhile, the cut in central government funding is creating a much greater awareness from councils’ political leaders that procurement can help them, says Bettison.
“If you can make efficiencies then you don’t have to make cuts [in services]. Speaking as a politician, that’s music to my ears.”
Bettison is also chairman of Improvement and Efficiency South East, an authority-led organisation designed to aid public sector transformation. He says the organisation has helped save £200 million over the past three years, without attracting any complaints from the electorate. “You cut £200 million of services and you would have a small army of residents up in arms,” Bettison says.
Yet this upsurge in activity will only protect procurement roles for so long, says Ian Claydon-Butler, head of procurement at Oldham Council. “Ultimately my view is that we’re going to have fewer public sector procurement people.
“I do think they will find greater reach, but I don’t think it will be with the same or more staff, I think it is going to be with less because once you start to collaborate, the only argument to have more staff is if the savings are needed faster.”
Despite this, it was still a “time to shine” in procurement in councils because there is an imperative to save money, Claydon-Butler says. “In general, some people are [concerned about jobs], but actually because of all the cuts, the more we can save, the more frontline services we can protect. We see it as a real opportunity for procurement to be on the map.”
Bristol’s Charters agrees that the cuts are improving the influence of procurement within the organisation. For the first time his council is implementing category management across the board and will be able to challenge buying decisions, and bring aligned markets together.
“Procurement people see [the cuts] as a lever to get into places they have not gone before,” he says. “It is that ability to get in front of people and start challenging things and looking at alternatives: then the benefits of category management start coming through.
“Previously there has not been the pressure about saving money,” he says. There was not always an understanding of large-scale procurement, because it was seen as a process, “a backroom thing”, Charters says.
One area procurement can expand into is commissioning. The function has struggled with its definition, and has often become synonymous with a service – such as children or adult social care.
In fact, commissioning has a lot in common with procurement, says Claydon-Butler, who runs a team which does both commissioning and procurement.
“More procurement people need to get aligned into commissioning, because a lot of commissioning is really having a procurement strategy,” he says.
Meanwhile, over the past 18 months Bristol has also been developing a much more fleshed out and consistent approach to commissioning, Charters says. “People are quite excited about getting on and looking at this.”
But to bring procurement and commissioning together, the teams first have to get over some misunderstandings, he says.
“There was a great deal of apprehension from both sides, we had some quite useful exchanges. Traditionally, procurement has been seen, particularly by commissioners, as quite hard-nosed and very focused on metrics. And purchasers tended to see commissioners as much more focused on making sure that an individual’s needs were cared for and money was irrelevant. Those are two unfortunate views, but we had to get them expressed before we could overcome them.”
Although his procurement team does not commission care itself, they are the “custodians of the rules” and provide training and development, Charters says.
“We’re agreeing a programme of intervention where they are looking at the skills that we have, which perhaps they have not developed. They want us to take over things like all negotiations with commercial providers and even the third sector. Also supplier relationship management – changing the way providers behave. They’re not comfortable doing that, but we are.”
Although some buyers in his team are fully qualified with CIPS and Prince 2 project management credentials, some were seeking training in commissioning to bolster their careers.
With these options, procurement professionals could have a life in the public sector of greater influence, even if numbers are cut. But to face this new dawn the profession needs confidence.
“If we become more confident, assertive and responsive, we’re difficult to ignore,” Charters says.
“This is not just about technical skill, this is about the rounding of a person to assume a greater role. That’s what we have to do with local authority staff.”