Productivity Procurement and the Potential

Andrew Smith OBE Chief Executive, Hampshire County Council

Lead for Procurement, Capital and Shared Assets Workstream

27 September 2011

Reshaping Public Services

Agenda

• Progress to date• Lessons and barriers to overcome• Central and local government – joint working• Best practice fundamentals• Open Public Services – implications• Local best practice examples• Risks and opportunities• Connecting the thinking

• Delivery of Phase 1 of LGG Workstream:

1. Quick Wins

2. Big Wins

3. Proposed strategy to deliver Phase 2 – the NPA

• LG examples of best practice – NIEP

• CAP thinking

• Joint working with Cabinet Office / DCLG / DfE / DfT

• Networks and connections improving

Progress to date

Lessons and barriers to overcome

• Barriers are political and cultural – not technical

• Sovereignty and adoption are key issues

• People misinterpret localism and leverage

• The need to compel rather than mandate

• No current coherent strategy

• The risk that LG does not get its act together

Central and local government - Joint Working

• Both sectors need to operate from effective spend and supplier data: becoming a more informed and powerful client sector

• Best value from: increased volumes, improved market share, best deals, joint use of technology and capacity, deployment of private sector contribution, SME participation, Working together where it makes sense (e.g. market shaping, best deals)

• (Probably) one of the biggest initiatives ever taken in this landscape – ambition of both sides

• Delivering government policy through procurement: providing local economic, social and environmental benefit – localism and leverage

Collaborative Procurement Models

Principal Focus• Market aggregation• Market making• Developing category spend

Principal Benefits• Maximise buying power of government• Delivery of sustainable savings• Leveraging capability and volumes• Driving policy through procurement

Localism and leverage

• National Procurement Agency would create the interface with the Government Procurement Services

• Local Authorities have access to a range of arrangements by category of spend

• Local decision remains with local government

• Local and Central government bring market strength together – through market segmentation and shaping

Collaboration … a proven example

Best practice fundamentals

• Develop a procurement strategy

• Up-skill staff or find capacity

• Carry out a spend analysis

• Use a category management approach

• Develop an asset reduction strategy

Best practice fundamentals

• Collaborate

• Review costs and specifications

• Utilise technology

• Develop a supplier management plan

• Manage demand

Category Management Approach

•Category management learning from the private sector•Integrating commissioning and procurement thinking

£ benefits

Time0

Elapsed time

Commissioning

approach

One off

project

Joined

up

programme

(multi

projects)

Joined

up

programme

(multi

projects)

One off

project

One off

project2-5%Construction,

procurement

10-15%Construction,

procurement

20%+Reduced need

Construction,

procurement,

Opportunities• Understand need• Shared services• Assets and capital assessed• Driver for strategic procurement

programme – local economic benefit and greening agenda

Opportunities• Economic

development• Inter authority

collaboration

Opportunities• Better delivery• Predictability

Opportunities

lost as time passes

Capital and Assets Pathfinder thinking

Hampshire - Pathfinder

Hampshire’s Pathfinder – Winchester Case

Havant Public Service Village

Havant PSP - Outcomes

• HCC space reduction 1,000m2 (-30%)

• Reinvestment of Capital Receipts - £2.5m

• Enhanced space utilisation (circa +20%)

• Backlog Maintenance avoided (£2m)

• Revenue savings of £70k pa target

• Reduced carbon footprint: 35% - 40%

• Joined up services – e.g. youth, connexions and housing

• Reduced levels of ‘avoidable contact’

Open Public Services White Paper

• Local government’s strong track record• Well placed to lead – many opportunities for us• Local design and implementation• Commercial and regulatory considerations• Diversity of potential delivery solutions• Outcome focus• Resist urge for bureaucracy

• Policy through procurement

Local best practice examples - National

• Creating SME lots - Yorkshire & Humber Efficiency North • Improving market access - Find It In Birmingham • Social benefit through frameworks – WM Jobs & Skills• Growing capacity – Gateshead Voluntary Organisations

Council• Shaping new markets – East Riding External Service Design• Sharing services - Nottingham Joint Service Centre

Local best practice examples - HCC

• SME and Voluntary free bid support• Children’s Centres• Adult services personalisation• Extra-Care programme• Hampshire Police, Fire and CC shared approach

Commissioned services - Risks

• Creating post-code lotteries of service provision• Maintaining effective accountability• Managing fall-back positions if a service deliverer fails• Balancing democracy with efficiency

Commissioned services - Opportunities

• Welcome a wider range of opportunities to meet service need

• Develop and shape markets – don’t just be a procurer

• Move towards outputs not inputs• Drive policy through procurement• Encourages sharing services and assets • Integrate commissioning and procurement

thinking – joint category planning

Connecting the thinking

Connecting the thinking

• Category Plan approach

• Capital and asset pathfinder thinking

• Policy through procurement

• Market shaping

• Delivering localism with leverage

Practical help …

LGG Procurement, Capital and Shared Assets Workstream

• www.niepbuiltenvironment.org.uk/documents/PCSAWorkstream-QuickWinsStrategyOct2010.pdf

• www.niepbuiltenvironment.org.uk/documents/DraftBigWinsDocument-1.doc

Quick Wins Big Wins

Michael Lee

Thank you