Scottish councils eye £4.4m savings with procurement hub

Will Green is news editor of Supply Management
25 August 2016

Three Scottish councils are seeking to establish a combined procurement function to generate savings of millions of pounds.

Aberdeen City, Aberdeenshire and Highland councils are drawing up a business case for a shared procurement service to take on around £1bn of spend on goods and services.

A report to Highland Council’s Resources Committee said savings of 0.5% a year would generate annual savings for the three councils of £4.4m.

“The data analysis has identified 1,746 suppliers with a total spend of £227m where the focus will be, with some 40-50 commodities targeted initially to deliver lower costs greater than 0.5%,” said the report.

The report said the hub could be broadened to take on other services such as council tax and benefits, while the “vision is to create a centre of expertise in the north of Scotland for procurement”.

The hub will take a “more commercial approach and focus on alternative delivery models and income generation”. It will have “expertise in community benefit and benefits tracking” and have “access to a much greater buying power that can drive down prices and achieve greater efficiencies”.

The report said: “The council is aware that its performance in procurement, through the independent external assessment undertaken by Scotland Excel, has been steady rather than progressive, and many other councils have overtaken Highland in procurement best practice.

“Given the significant and ongoing budget pressures facing local government, the council needs to be open to proposals that offer significant financial savings with no impact on front line service delivery.”

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