Meeting documents

1.1 The existing Procurement Strategy, approved by Members in September 2000, needs to be updated to reflect developments in procurement best practice and to respond to a range of central government drivers and guidance on the contribution effective procurement can make to efficiency improvement. Examples include the Egan report, Byatt report, the National Procurement Strategy for Local Government and The Independent Review of Public Sector Efficiency (Gershon report).

(1) Approve the revised Corporate Procurement Strategy

(2) Approve the Action Plan to implement the strategy

3.1 The adoption of the Corporate Procurement Strategy is an important tool in order to achieve efficiency gains identified in the Financial Plan.

3.2 Resource implications have been identified where currently known and a resource plan drawn up to deliver the procurement strategy action plan. We anticipate that the action plan will require reallocation and re-prioritisation of existing workloads in order to meet the costs of implementation from within existing resources.

4.1 The Corporate Plan identifies the improvement priorities of the organisation, and the Procurement Strategy aims to support the delivery of these and Council services through a framework that will:

(1) Ensure that the Council has the right knowledge and capacity to make informed procurement decisions that will provide the best services to the community.

(2) Introduce sustainability practices as one of the means by which the Council can achieve organisational shift and headroom

(3) Complement improvement projects with selected expenditure reviews to highlight productivity gain and cost reduction

(4) Encourage new approaches to procurement, including more collaborative working across services to eliminate internal duplication of effort, and on a wider regional level closer alliance with other parts of the public, private, social enterprise and voluntary sectors.

(5) Make more effective usage of the Council's resources through the introduction of electronic procurement systems designed to provide greater transparency, reduce transaction costs and speed up procurement timescales

(6) Ensure compliance with legislation and operate within the statutory framework

(7) Comply with National guidelines on Procurement best practice and assist staff in developing appropriate skills and experience to implement the strategy

4.2 The National Procurement Strategy for Local Government (NPSLG), issued by the ODPM in 2003; provides detailed guidance on establishing a coherent procurement strategy and details a range of milestones Local Authorities are expected to meet over the period 2004- 2006.

4.3 The more recent Gershon review sets out a range of efficiency gains that all parts of the public sector are expected to implement. Improved procurement is identified as a key factor in achieving these efficiencies. Central government funding decisions will rely on these efficiencies being achieved.

4.4 Five themes are identified within the NPSLG, which Local Authorities are asked to address in their strategy:

(1) Cultural shift - how changes will be managed

(2) Providing leadership and building capacity - leadership commitment, controls and continuous improvement

(3) Partnering and collaboration - sustainable partnerships and implementing the Local Government Taskforce report on `Rethinking Construction'

(4) Doing Business Electronically - using electronic systems creatively to achieve efficiencies

(5) Stimulating Markets and achieving community benefits.

4.5 For each theme, a project team has identified key objectives, stated the current position, the key issues that need to be addressed and the targets required to achieve the objectives.

4.6 Currently Procurement decisions are devolved to each Service within the regulatory constraints of Contract Standing Orders, Financial Regulations, etc. The Strategy does not propose to change this structure by enlarging the central corporate procurement function but looks to improve efficiencies by using the function to facilitate more collaborative working (both internally and with external agencies, authorities and voluntary organisations). An important aspect of this collaboration will be the involvement the Council has secured with the Regional Centre of Excellence, established in Dorset and supported by Central Government initially to drive procurement efficiencies but now with a wider remit to support Gershon Review efficiency initiatives.

4.7 Realising the improvements implicit in the strategy will require a strengthening of compliance with corporate contracts and procurement related policies and for this reason the strategy calls for mandatory compliance. Exceptions may, however, be sanctioned by Directors if there are sound business reasons for non-compliance.

4.8 Achieving all of the objectives identified in the strategy could lead to some potential conflicts. For example the plan to centralise the list of approved suppliers into an approved pre-vetted database for staff to use as their primary source of supplier selection for specified services and commodities could disadvantage smaller companies. The recommended strategy resolves this tension by setting a threshold below which use of the database is recommended but not mandatory.

4.9 The wide range of actions that have been identified will be challenging to implement within the government's milestones but much of the supporting policies and activities have already started.

4.10 The intention is to review this strategy on an annual basis in line with service planning and any other directly influencing factors. Any significant adjustments to timescales or indicated actions will be subject to separate reporting

6.1 In order to inform the recommendations, the options were prioritised by stakeholders according to their impact on the following three criteria:

(1) Contribution to achievement of Corporate Plan

(2) Fit with Community Strategy and other approved Council strategies

(3) Capacity to meet the recommended milestones of the National Strategy

7.1 Through consultation with relevant stakeholders, a comprehensive list of options was drawn up to address the issues identified. Options that did not fit the above criteria were rejected.

8.1 The project was informed by existing material and information including:

· Guidance from IDeA, ODPM, LGA, 4P's and Local Government Taskforce

· Service specific issues as identified by project team

· Bath and North East Somerset Council Procurement Staff Survey,

· Best practice from other public and private sector organisations

· The present procurement strategy

8.2 The following additional specific consultation has been carried out:

· Consultation with Directors' Group to agree approach to strategy development.

· Survey targeted at all staff involved in procurement activity to identify issues & aspirations.

· Presentation to Resources Overview and Scrutiny Panel (further consultation planned).

· Regular consultation with cross service Steering group (Membership nominated by Director's Group)

· Further contact with Directors and Heads of Service

· Procurement leads in services

· Consultation with the Executive Member for Economic Development as a member of the Procurement Steering Group which has met 4 times in 2004

· Consultation with the Executive Member for Sustainability and the Environment

· Improvement and Development Agency (IDeA) consultancy review

· SW Procurement Federation consultation (peer review)

· Trade Unions