Councils should take stock of what happened during the pandemic and start planning for the future, writes the Chartered Institute of Public Finance & Accountancy’s solicitor and procurement adviser.
The pandemic, the global supply chain chaos and the need to achieve the government’s net zero agenda will soon require local government to change the way it goes shopping.
Mohamed Hans, Cipfa solicitor and procurement adviser
Local government procurement has largely escaped the scrutiny and critical stories we have seen about central government procurement during the coronavirus pandemic. This was not just down to luck, but rather the intricate and detailed policies and procedures that have been developed and practised over many years. Since the Gershon Review in 2004, local authority procurement teams have been at the forefront of helping authorities streamline their procurement operations and achieve efficiency savings.
The last 18 months have been a rollercoaster ride for procurement practitioners, who made use of various tools and technologies to deliver contracts in rapid timeframes. Due to the desperation of the situation and the confined new way of working, councils used direct-award contracts more often, rolled over many contracts that were due for retender and cancelled existing agreements in record quantities.
Increased transparency and digitisation
Authorities now need to take stock of what has happened and start planning for the future. In the process, they will need to introduce a range of improvements and optimisations to manage their vast procurement expenditure. As a result, they should be far better placed to deliver both their wider strategic objectives and value for money for the taxpayer.
For too long, most councils have had management structures that do not give senior procurement colleagues a loud enough voice on the top table
If local government is to become a better buyer, it needs to embed a genuine vision of increased transparency and digitisation throughout the procurement process – from the initial planning phase to making procurement more agile, accessible and inclusive for all types of potential suppliers.
For too long, most councils have had management structures that do not give senior procurement colleagues a loud enough voice on the top table. A chief purchasing officer commanding a multi-million-pound budget will have a firm place on the board of directors, while a head of procurement with a similar budget is generally a few rungs lower. It’s an uphill struggle to bring about major procurement transformation from a relatively low place in the management hierarchy.
Recent public enquiries into questionable contracts and poor procurement choices throughout the pandemic have now set the stage to build a new era of public procurement culture. This requires the sector to firm up its procurement governance and audit arrangements and strengthen policies relating to anti-corruption and conflict of interest.
We need a clear and transparent approach, with easy access to contract data including what has been spent and with which supplier. By publishing all documents and data, it will be possible to detect waste, fraud and other abuses much sooner.
Preparing to decarbonise
Councils also need to improve their internal processes such as how budgets are set, and bring about an end to the annual scramble to use budgets in the last few weeks of the financial year – often at the expense of value for money. The future should involve councils setting up multi-disciplinary commercial teams that pave the way for innovative services and products to deliver better outcomes.
Relationships and engagement with strategic and local small and medium sized enterprises and micro-businesses need to adapt
With COP26 now behind us, councils will need to start delivering on plans to decarbonise their assets while developing the transport infrastructure to protect, adapt and enhance the natural environment. These plans will require procuring niche products and services and cutting-edge technology solutions. It will no doubt be very challenging for councils to deliver this within traditional departmental set-ups because of the necessary skills, diverse experiences and timely interventions that will be required.
Relationships and engagement with strategic and local small and medium sized enterprises and micro-businesses also need to adapt. The national procurement policy statement, issued earlier this year by the Cabinet Office, is welcome as it supports the concept of developing procurement pipelines over the next couple of years. The sooner this can be implemented, the sooner that suppliers will have a clear strategic roadmap of what the authority expects to procure over the next three to five years.
Local government and the wider public sector need to move to a place where citizens and suppliers have access to open data to drive greater accountability. Procurement teams need their capacities expanded to include expertise on data analytics and benchmarking to support making rapid cost savings, as well as staff who can manage complex contracts and ensure suppliers deliver all that they have promised.
Embracing the shock of the new will surely be the best way that procurement is made successful and sustainable for the next generation.
Mohamed Hans, solicitor and procurement adviser, Cipfa
