CLES deputy chief executive Matthew Jack said the results highlight the importance of understanding procurement spend ©123RF
CLES deputy chief executive Matthew Jack said the results highlight the importance of understanding procurement spend ©123RF

Manchester saves £65m with new procurement policy

7 March 2017

Manchester City Council (MCC) is playing a “pioneering role” by reinvesting spend back into the local economy through its progressive procurement policies, according to an independent think tank.

The Power of Procurement II, published by the Centre for Local Economic Strategies (CLES), identified key changes in procurement policy and processes that had been undertaken by the city council over the last 10 years to benefit Manchester residents and businesses.

CLES, which describes itself as a “think and do tank”, worked with the city to implement the changes.

The study found establishing a new corporate procurement department had led to over £65m of efficiency savings and the proportion of total procurement spend based in, or with a branch in, Manchester had increased by 22.1% in seven years from 51.5% in 2008-9 to 73.6% in 2015-16. 

It also found re-spend by suppliers back into the Manchester economy had increased from 25p per £1 in 2008-9 to 43p per £1 in 2015-16.

CLES deputy chief executive Matthew Jackson said working with MCC to make the changes had seen extensive benefit for the local economy.

“The work demonstrates the importance of understanding where procurement spend goes, linking procurement to economic development and influencing the supply chain to enhance their social value,” he said.

“The work must continue with more progressive procurement being at the heart of devolution and public service report across Greater Manchester.”

In addition the report found that last year the top 300 suppliers to MCC created or offered in Manchester an estimated 262 apprenticeships, 334 employment opportunities for hard-to-reach individuals and 1,481 jobs.

Councillor Carl Ollerhead, who chaired the task and finish group that produced the council’s ethical procurement policy, said the figures were encouraging for the area.

“As a council we are determined to ensure that anything we spend delivers the maximum social and economic benefit for Manchester—our ethical procurement policy obliges us to bear this in mind whenever we are buying goods or services,” he said.

“These figures are extremely encouraging and suggest that we are continuing to make good progress and helping to support thousands of jobs in Manchester.”

Last year the town hall budgets in Greater Manchester were cut by £160m, bringing the total amount of cuts since austerity measures were brought in 2010 to £1.9bn.

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