Councils failing to grasp e-procurement, investigation reveals

Three quarters of all councils in England cannot identify savings achieved from reviews, improvements or best practice adopted in the two years since the launch of the National Procurement Strategy, a Freedom of Information request has revealed.

The National Procurement Strategy was unveiled by the Local Government Association at its annual conference in July 2014, setting out a vision for best practice across all local government procurement in England, with ‘making savings’ one of the four key areas to target.

But two years on, an investigation of English councils by enterprise platform blur Group, has revealed that three quarters that that have reviewed their procurement procedures since the strategy was launched have either failed to identify savings or had no record of savings achieved.

The investigation also found that just a quarter of the councils that highlighted making changes actually included the adoption of digital technology like the use of e-procurement portals and e-tendering, despite the National Procurement Strategy specifically calling for councils to increase efficiency and productivity through appropriate e-procurement solutions.

This is despite councils having to find £10bn in savings, as they deliver on a 40% cut in funding from central government, according to the Local Government Association.

Lack of awareness

According to the findings, councils also do not appear to be identifying or be aware of procurement fraud. In fact, 97% of councils stated that they were not aware of a single incident of procurement fraud relating to their organisation since the launch of the National Procurement Strategy.

Yet, the Government’s Annual Fraud Indicator for 2016 estimated annual fraud loss in the UK public sector at £37.5bn. Of this, some £2.2bn (excluding benefit fraud) represented fraud against local Government, including an estimated £876m lost through procurement fraud.

Some good news 

The picture isn’t all negative however, with Lincolnshire County Council, Salford City Council, Lancashire County Council, Hereford City Council and Shropshire County Council amongst the local authorities providing detailed information on reviews, including adoption of best practice such as using digital procurement platforms, and evidence of savings achieved, including savings within individual service areas and project delivery.

The FOI request, which saw 312 English councils respond in April and May this year, found that the average size of a council procurement function has remained relatively unchanged in the last two years, slipping from 7.99 to 7.84 full-time equivalents.

Philip Letts, CEO, blur Group: said: “At a time when councils are pushing for greater control of finances and devolution of powers from central Government, it is vital that they show they are doing all they can to effectively manage their spend.

“Some 15-20% of organisational spend is unmanaged, often uncontracted and so uncontrolled. That’s an incredible amount of public money. When looking at their procurement strategy, councils can no longer consider going digital as optional. It has to be done. This shift to digital will allow councils to tap into bigger and better supply bases, speed up sourcing and delivery of services, whilst immediately cutting costs without cutting public services.”

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