Pickles berates councils for "cornershop mentality" towards procurement
Some councils have “a supermarket-sized budget but a cornershop mentality” when it comes to procurement, the Communities Secretary has said.
Eric Pickles said councils needed to make far greater use of their collective buying power and technology such as e-auctions. Local government currently spends £42bn a year on outside contracts.
Citing Office of Government Commerce statistics suggesting that only 12% of local government used approved collaborative deals, significantly below the recommended level of 50%, the minister said the approach adopted by councils needed to change.
He said: “Local authorities need to look at where every penny is going and what that money is deliving. Shining a light on spending will help to put savings before cuts. Whilst councils have already delivered significant efficiencies, there is still more excess waste to cut back.
“A renewed and concerted focus on better procurement, greater transparency and shared services that puts the emphasis on productivity above processes will end duplication, wasteful spending and wasteful working.”
The Communities Secretary will next week co-chair a Local Government Association “enhancing productivity” meeting intended to help councils improve value for money, procurement practices and collaboration.
Earlier this month, Pickles urged councils to publish details of all spending over £500 in full and online. This would be a revolution in openness and accountability, and “unleash an army of armchair auditors”. However, it will not yet be a legal requirement.
In May, the National Audit Office and the Audit Commission published a report claiming that public sector procurement was “fragmented, with no overall government”.
Key findings included that there are nearly 50 professional buying organisations as well as individual public bodies running commercial and procurement functions, with many operating framework agreements for similar goods and services.
The public sector also pays a wide range of prices for the same commodities, the report found.
