The challenges facing public sector e-Procurement
Colin Whitehouse while speaking with eGov monitor discusses the progress of the National e-Procurement Project and its objectives while also shedding light on how the project would further the Shared Services agenda.
Q1: What is the main over-riding goal of the National e-Procurement Project this year?
To help Councils to actually achieve their efficiency savings. We believe there are still significant efficiencies to be generated by applying better procurement and modern e-procurement technologies. Even low percentage savings equate to large savings of money, which can be reinvested in important frontline services for the public. One major barrier to releasing savings is the predominance of inflexible, departmental based structures. Councils are at last turning to examining their overall business processes in an attempt to consolidate and rationalise their operations.
Q2: The provision of social care is a priority area for NePP this year. Why?
We want to focus on areas of high spend where we feel that significant savings can be made. It is possible to put in place buying processes which have rigour but which don’t impair the operational efficiencies of critical services. Many Councils have care providers who submit very high volumes of invoices of relatively low value. I recently saw an example where a care provider had carried out £1.1m of business and had submitted some 11,000 invoices. It’s not difficult to see that there are process savings to be made there.
Q3: The way local authorities manage their contracts is also on NePP’s agenda. What are you hoping to achieve?
We would like to see more effective contract management by using electronic methods. Local authorities have tended to put a lot of effort into the contracting process, but the performance management of the contract has not always been done effectively. People specify all sorts of performance indicators, which are then not actively monitored and managed. The idea of electronic contract management is it puts more rigidity and structure around that process.
Q4: Are there any other new priority areas where NePP is hoping to help introduce e-procurement technologies?
Construction is another priority for us this year. We are working with the East Midlands Centre of Excellence and exploring ways in which e-procurement technologies can be used successfully in the construction sector. In a similar ways to Social Care we believe that e-Procurement techniques can be leveraged to generate significant savings.
Q5: What kind of e-Procurement technologies could councils be using to buy construction goods and services?
The whole range of e-Procurement technologies could be bought to bear. Procurement cards could be used for example. They reduce the number of invoices going through the finance system. The number of invoices is traditionally high when it comes to buying building materials and moving to procurement card payments would remove some of the thousands of paper-based invoices that are processed each year within an authority. All the costs typically associated with the payment of invoices such as cheques, envelopes and postage will be removed. Plus it is of course environmentally friendly to help remove all the paper normally associated with traditional buying in the construction field. Collaborative eAuctions and eTendering also have their role to play.
Q6: NePP has just brought out a report comparing the services of five local authority e-marketplace providers. Why?
We’ve created a wide range of products to help local authorities practice successful e-procurement. In the context of the efficiency agenda and the e-government agenda, the National Procurement Strategy for Local Government states that ‘by 2006 every council should be using an appropriate e-marketplace’. Many councils have already achieved this goal or are considering implementing an e-marketplace. If they do chose to implement one, they now face the added choice of which solution to procure. Our report is designed to help them make an informed decision about which solution is most appropriate to their needs. It means that authorities will not have to repeat all the research time and time again but can use our report as a reference to get them started.
Q7: Shared services are high on the Government’s agenda at the moment. Other than through e-markeplaces, is NePP looking at how e-Procurement solutions can be shared?
Yes. The Cabinet Office’s Transformational Government strategy instructs us to examine the provision of shared services across the whole of the public sector. Procurement can help to lead the way. Why shouldn’t different public sector bodies join together to procure their non-specialist goods? We are currently carrying out trials in Portsmouth where the councils, the naval base and educational colleges are examining where they can share contracts and capacity. We are looking at how information can be shared and the possibilities for collaborating effectively on procurement across the City.