The public sector has a lot to learn from university procurement - Supply Management

The public sector has a lot to learn from university procurement

Paul Tomany
posted by Paul Tomany
18 March 2015

Higher education in England and the UK as a whole has become one of the great success stories of recent years in terms of procurement and efficiency.

In many ways it has set an example that others, particularly in the wider public sector, can learn from.

Latest research shows £153 million was saved during 2013-14 thanks to efficiencies achieved through lower prices, procuring better quality goods and services and improving or streamlining processes.

Overall, better procurement accounted for £435 million of the £1 billion in efficiency savings achieved in the past three years, according to the final report to government by Sir Ian Diamond on higher education efficiency and effectiveness.

Key to this has been collaborative procurement on an unprecedented scale. Across the 22 institutions that my own organisation - NWUPC - serves, the majority have exceeded Diamond’s original target for 30 per cent of non-pay spend to be delivered through collaboration.

Universities are highly complex organisations and it’s been a long journey to get to the point where the role and potential of procurement is truly recognised. Indeed, some still have quite a way to go.

Regional consortia like my own have been around for over 40 years – gradually evolving from buying clubs to not-for-profit companies capable of helping guide institutions down the path to better procurement. It’s given higher education stability, engendered trust and is a recognised brand that’s often been absent in other sectors.

The adoption of Procurement Maturity Assessments (PMAs) since 2011 has accelerated those improvements, enabling universities to understand where they are in comparison to others and to put an action plan in place to develop the efficiency and effectiveness of their procurement functions.

They allow you to gauge the clout that procurement has at a senior level and the steps that need to be taken to advance its standing and extend its influence over greater levels of spend. Universities are competitive by their nature, which has acted as an added impetus to achieve the highest possible PMA rating. NWUPC has recently undergone its own second assessment and has reached the top quartile – superior. This is a 12 per cent improvement over the past two years.

Could PMAs be applied to other sectors? Scotland’s equivalent, the Procurement Capability Assessment, is already used by local authorities and other public bodies to drive greater efficiency and value for money and a similar process has started in Wales. Why not in England?

Paul Tomany is managing director of North Western Universities Purchasing Consortium (NWUPC), one of England’s four regional higher education purchasing consortia

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