Local authorities are “not taking advantage” of procurement advice they are receiving from central government, a committee of MPs was told.
Baroness Tina Stowell, parliamentary under secretary at the Department for Communities and Local Government (DCLG), said there was “disappointment” that local authorities were not collaborating more on procurement. She gave the example of wheelie bins and a ‘bin summit’ involving DCLG and local authorities that took place earlier this year.
“Despite making the authorities aware that recycling black bins with coloured lids are £5 per unit cheaper, quite a few local authorities went ahead and bought more expensive brightly-coloured bins,” she said.
“There is a role for us in showing some leadership and reinforcing the importance of better procurement, but at the same time when we are informing councils of this we are sadly seeing examples of councils not taking advantage of the advice we are giving them.”
Baroness Stowell told the Communities and Local Government Select Committee (CLGC) local government procurement spend was £58 billion in 2012/13, down £3 billion compared to the £61 billion spent in 2009/10.
She said she was “reluctant to put a hard target” on what the level of spend should be, but savings of two per cent would equal £1 billion a year.
“I think the most significant point is there is real scope for us to go further,” she said. “That is what local authorities should be focusing on doing.
“It’s not just about buying the recommended service at the best price possible. This is an opportunity to make sure procurement is a way to get the best service you can.”
Nick Hurd, minister for civil society in the Cabinet Office, said procurement skills in local government were a problem.
“There is a massive issue around capability across government; increasing commercial skills is a priority,” he said. “I don’t think we’re anywhere near where we need to be.
“There is a real recognition, particularly against the backdrop of changing regulations and reform, we are not where we need to be in terms of capability.”
The CLGC has been investigating local government procurement since July.