The well documented and seemingly incessant budgetary pressure squeezing the UK public sector tends to be top of every public sector manager’s priority list. Most organisations recognise that effectively managed procurement can be key to delivering savings and greater value. However, if you talk to anybody working in UK public sector procurement some other common themes and challenges will very quickly emerge.
Most public sector organisations are experiencing a loss of experienced procurement staff who are not being replaced. This means that Procurement Teams are juggling ever increasing pressures and expectations from both their own organisations, and national policy makers, to not only deliver efficiency savings, but to deliver a wider range of policy objectives including community benefits / social value, as well as ensuring compliance EU Procurement Directives. If all this sound too familiar, then this short article provides a quick snapshot of how the City of Cardiff Council’s Procurement Team has responded to these competing pressures.
In 2011 the Council strengthened the capability and capacity of corporate procurement resources through the creation of a new corporate Procurement Team. The Team developed, and successfully implemented, a category management approach across all of the Council’s third-party spend, including traditionally hard to reach areas such as social care. The approach delivered and continues to deliver significant savings. The structure of the Team has enabled the Council to develop and ‘grow’ its own procurement staff by investing in training and mentoring to support staff development. This was both an investment in the future and a recognition of the difficulties of recruiting suitably qualified and experienced staff in a competitive local market. This strategy has enabled staff to progress their careers within the Team, with their achievements being recognised through the Procurement Team winning a number of Procurement Awards.
In 2014/15 in response to the Council’s latest difficult budget settlement the Procurement team was given a three-year savings target which would equate to a reduction of eight to twelve posts. However, in line with the McClelland Report on Welsh public procurement, the Council sought to buck the recent trend in Wales by recognising the importance of retaining the expertise. It was recognised that a new approach would therefore be required if the Council was to retain access to skilled and knowledgeable procurement staff within the proposed budget.
The approach was to create one of the first Local Authority Trading Company in Wales, Atebion Solutions Ltd, to deliver procurement and commercial services to both the private and public sectors across the UK. Although the budgetary challenge was the catalyst to developing a new procurement approach the level of support from Councillors and senior managers means that the level of ambition for the company has increased and is seen as a way of not only retaining staff but building the breadth of expertise and knowledge by recruiting additional staff. This includes establishing a graduate programme which will allow the Council to continue to ‘grow’ its own staff for the future. We believe that new opportunities exist in public sector procurement as organisations increasing focus on their key in house procurement competencies and look to bring in specialist procurement expertise as required to maximise their diminishing resources. Atebion Solutions hit the ground running in the summer of 2016 and is already providing a range of service to five English and Welsh local authorities. It continues to be a steep learning curve but Atebion Solutions has already exceeded its income target for year 1 and staff are thriving in this new environment.
Finally, all organisations are at a different place on their procurement journey but from our experiences there some general lessons and things that we think are key ingredients for procurement success. It’s really not rocket science but our tips for success are to:
1. Get Executive support and ownership – demonstrate the added value to the organisation by having an effective procurement team
2. Get a seat at the top table for procurement
3. Be explicit around the role of procurement in delivering significant organisational savings – identify the opportunities and make the business case
4. Ensure that any savings belong and are owned by Directorates
5. Maximise the use of technology and smarter sourcing tools
6. Ensure that there is accurate spend data
7. Build trust by delivering on what was promised – deliver the savings
8. Establish robust governance and project management arrangements
9. Get early engagement with Directorates and ensure that this is maintained throughout the procurement process
10. Establish cross functional teams which the right technical and competence skills
11. Undertake a Procurement Fitness check
12. Collaborate with partners where it delivers clear procurement benefits and savings resulting from aggregation, consistency, reliability of contractors, ease of use and stability for users
13. Ensure that you have knowledgeable / skilled procurement staff and that you invest in their training and development
14. Don’t rest on your laurels continue to look to learn from others
15. Bring in expertise where the skills don’t currently exist in house
Author: Steve Robinson
Date: December 2016