Local government procurement pledge
In May and June 2012 the LGA launched a local government procurement pledge for consultation with the sector: Our spend, at about £62 billion each year, is significant, and we want to achieve value for money for taxpayers together with the best possible outcomes for our citizens and service users.
We are doing this to emphasise the sector's commitment to supporting economic growth, and by extension to UK companies. We want the business experience of contracting with councils to be a positive one: fair, and as easy as possible.
To get good outcomes, innovative and cost effective solutions, it is very important that councils work with all suppliers – big multi-nationals, small and medium-size enterprises (SMEs), and the voluntary sector – for both parties to understand what is both wanted and can be delivered. It is essential to reduce the cost of bidding for public sector work by minimising the bureaucracy involved.
We also want to work with central government in trying to improve the ‘culture' of all public sector procurement.
Central government have for some months been asking the LGA to be co-signatories to a procurement pledge, or concordat. The LGA has declined to do so, taking a formal position at its Improvement Board meeting of 20 March 2012.
There have been a few technical reasons for this reluctance, chief among them:
- Government's pledge was geared, we believe, much more towards big business. In contrast, local government purchases a much greater percentage of goods and services locally, and often up to 80 per cent or more from SMEs
- The Government pledge asked the LGA to sign up on behalf of local government to completing all procurements in 120 days – we considered this to be unrealistic.
The Government pledge asked us to produce ‘pipelines' of future work (purchasing intentions) on behalf of the sector, in areas such as Highways, Children's and Adults Social Care, Waste, and so on. We were reluctant to do this because:
- we believe the various regional ‘portals' produce this kind of information already
- we are not convinced that ‘lists' of future purchasing intentions are very realistic/useful, given the average 28 per cent reduction in funding for councils, and confirmation that there will be further cuts in the next Spending Review.
- we are concerned that ‘pipelines' could work against local purchasing
- in some areas pipelines would be completely inappropriate: for example, in Adult Social Care where the sector's focus is on achieving much greater personalisation of service.
However, these issues aside, the LGA supports entirely the key objective behind central government's initiative: the need to use public sector procurement to support economic growth and ‘UK Plc' more widely.
The key message in the LGA's pledge is:
"Any initiative that helps procurement to drive efficiency savings, achieves better outcomes, and makes it easier for councils and local providers to do business by reducing bureaucracy and simplifying processes has the support of the sector".
25 July 2012