Leicester to use purchasing spend to support local economy

27 September 2012

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27 September 2012 | Adam Leach

Leicester’s elected mayor has vowed to strengthen local economic growth and social inclusion by using public sector procurement more strategically.

Sir Peter Soulsby told an audience of current and potential suppliers to Leicester City Council yesterday that he was determined to make public contracts more accessible and transparently promote potential opportunities.

Opening a ‘meet the buyer’ event at Welford Road Stadium in the city, Soulsby described the £350 million the city spends on goods and services each year as “money that should be used to generate jobs and growth”.

He identified improving the value of procurement to the city as one of his priorities when he was elected 18 months ago. Explaining his motivation, he told SM: “When you’re running an organisation that is spending the equivalent of £1 million a day on suppliers and services, you need to be using that more cleverly. Both in terms of value for money, but also ensuring we do what we can to support the local economy.”

Jayesh Joshi, managing director of Zon Business Associates, who is leading the procurement transformation at the City Council, explained the authority is looking to drastically reshape the way procurement is carried out.

Most significantly, it is moving to a centralised model where a team of 20-25 procurement professionals will manage buying, whereas currently, more than 400 individuals have the power to sign contracts. Further changes include: cutting the number of PQQ questionnaires down from 14 to one; boosting transparency by publishing contract opportunities online; and increasing the amount that buyers engage with the market, particularly in relation to SMEs and voluntary organisations.

A total of £870,000 contracts have been let under the new operating model and it has driven suppliers to engage, with 80-90 per cent of vendors new to the supply chain. This has also delivered an average saving of 21 per cent.

Speaking to SM, Joshi explained engaging with suppliers in a more collaborative and less prescriptive fashion enabled the team to identify better solutions. “We’ve found out things we didn’t know anything about before, for example we were buying gully covers that, unknown to the company we were using originally, corroded more quickly because they were a different kind of metal to the one they were placed into. We weren’t aware of that until we went to market and got feedback from suppliers. So procurement has acted as a window into different things.”

Explaining the motivation behind the ‘meet the buyer’ event, Joshi, said: “This event is like ringing the bell and saying to potential suppliers, it doesn’t matter who you are, you’re going to have to compete, but if you’ve got something to offer, we want to hear from you and not just through the procurement process.”

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