How collaboration can beat the cuts

8 June 2012
When it comes to improving procurement in the public sector, the more knowledge sharing the better. Councils may already pass on efficiency ideas to other councils, and the same goes for social landlords or health trusts. But what can schools learn from emergency services when it comes to combining demand? What can hospitals teach housing providers about compliance? In the past, different parts of the public sector haven’t collaborated. Yet we are all facing similar pressures from state funding cuts. So now is the time to pool ideas, to look outside our internal networks for fresh answers and ideas. Academics at the University of Liverpool and Liverpool John Moores University have researched this concept of external knowledge sharing around procurement. They believe that seeking solutions and ‘social capital’ away from immediate supply chains is the only way to prevent approaches converging and new ideas being saturated. The higher education sector is facing some of the greatest pressure to make savings within the public sector. As a result, university procurement professionals have had to learn lessons fast. That’s why I, someone who has spent their career in university procurement, will be talking to hundreds of social landlords on 12 June at PfH Live. I’ll be sharing many lessons that are highly relevant right across the public sector. One such message concerns collaborative procurement. Universities UK recommended that 30 per cent of university expenditure should be delivered via collaborative agreements. Similar recommendations were made to other public bodies in the National Audit Office’s report on collective buying in 2010. A huge amount of leverage could be found if the higher eductaion, housing and other public sectors combine demand. Not just within their own networks, but right across the public sector. Rogue spend must end. Deviant purchasing within universities and other public authorities is still commonplace. But the climate is changing. If you are meant to buy stationery from a main contract it just won’t be tolerated if someone nips down to the stationery shop. The same attitude is spreading across all parts of the public sector. Behaviour of suppliers has changed. In today’s economic climate, if a supplier loses a university contract it could threaten their survival. The same is true in many parts of the public sector. As a result there has been a huge increase in litigation with suppliers looking for holes to challenge universities on. Public bodies must be transparent to the core in how they communicate and interact with suppliers. The ‘not invented here’ mentality must stop. Some university departments are still resistant to using the procurement function as they feel it is they who hold the most knowledge about products and services. This perception of corporate purchasing must go, and buyers need to ensure that all public sector departments recognise the vital role procurement can play. This is just the start. There is a wealth of highly relevant procurement knowledge that state-funded organisations could share with each other to generate significant process and cash savings. External networking is the key to seeking out that knowledge. ☛ Mike Haslin is deputy director of the North Western Universities Purchasing Consortium. Haslin will be talking about sharing cross-sector knowledge at PfH Live from 12-14 June.
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