Liverpool City Council (LCC) is undergoing a “procurement transformation” after its policy was described as “fragmented, overly complex and poorly understood”.
LCC said a mix short and longer-term measures would be implemented to make procurement “more integrated and collaborative” after a Best Value Inspection in 2021 concluded change was required.
Actions will be “implemented immediately to deliver rapid and tangible improvement” while a new target operating model will be presented to the Cabinet in quarter one of 2023-24 “following the development of a change programme”.
An LCC spokesperson told Supply Management the authority would “develop an operating model that is much more integrated and collaborative, with commercial thinking embedded throughout”.
The work follows a review by procurement consultants 4C Associates that came in response to the Best Value Inspection, which identified a series of opportunities to tackle inefficiency in the city’s procurement process.
The review described current procurement practices as “fragmented, overly complex and poorly understood”.
The review covered £550m of spend across the procurement process from the initial stages of commissioning, tendering, contract management, decision-making and general internal processes.
LCC said the International Association for Contract and Commercial Management had estimated that poor procurement and contract management costs companies 4-9% in lost revenue, which shows “changes have the potential to deliver significant financial benefits”.
It said it will monitor and work with suppliers to prioritise social value while holding them to account on social value commitments, including through success measures within contracts.
The spokesperson continued: “We have to work with our delivery partners to secure the best value and, crucially, the social, economic and environmental priorities the council has set.
“It is imperative that we engage with the market and our delivery partners in the voluntary and community sector more strategically and in good time for them to shape our thinking and to respond fully to our needs. This will be an organisation wide transformation – affecting not only our processes, but ways of working and culture.”
Cllr Frazer Lake (Lab), assistant mayor with responsibility for procurement, said: “This is a key part of our improvement journey to tackling the issues raised in the Best Value Inspection.
“At a time when we face significant financial challenges, it is more important than ever that we are making the most of every pound that we spend.
“Liverpool City Council is one of the biggest organisations in the city, spending large amounts of money on contracts and services. We have the power to shape that spending in a way that delivers huge benefits for local residents and communities.
“It is a key part of the mayor’s triple lock to make sure every decision we make is seen through the prism of the impact it has on people, planet and equality.”
