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Across local government and the public sector, procurement is starting to get noticed. Previously seen as the team that puts out tenders and cracks the whip when it comes to buying the right stationery, the strategic significance of public purchasers is finally being recognised

As the pressure to make savings mounts; state-funded organisations are increasingly looking to their procurement functions to save significant amounts of cash. But the realisation that buyers can do a lot more than negotiate the lowest price is also taking hold.Procurement is being used to meet sustainability targets. This can mean harnessing public sector spend to reduce carbon emissions but also to create jobs, training opportunities and support small businesses.

There is more recognition that purchasing officers are highly skilled and able to procure a wide range of complex services and products. As a result, compliance across public purchasing has increased, along with value for money from suppliers.
In fact, the capacity of buyers to create value at every step of the supply chain means that many more procurement directors are joining board level discussions about the future of public authorities.

But as government organisations turn to their procurement functions more and more, purchasing officers need to maintain their ability to generate results. Key to this is sharing best practice and ideas right across the public sector. So what can social housing procurement teams learn from their counterparts in hospitals? How can purchasers in schools find solutions from people buying services for emergency services?

Cross-sector learning is the inspiration behind purchasing event Procurement for Housing Live, which takes place from 12-14 June. Social housing and other public sector professionals will hear from local government buyers, NHS Trust sourcing managers, university procurement experts and sustainability academics. The aim is to share ideas and solutions on a wide range of public purchasing issues.

Amid the current economic climate, many lessons in procurement can be learnt from the higher education sector. The cuts agenda has put huge pressure on universities and the sector has had to quickly find new ways to save money. Many of the lessons learnt by universities are relevant to local government and public bodies.The supplier is no longer a friend: Litigation around tenders in the HE sector has increased significantly in the last three years and other parts of the public sector are starting to see a similar situation. Compliance is more fundamental than ever and it is expected that further challenges will arise from unsuccessful suppliers. This will mean that end users must adapt to the requirements of professional public sector procurement. Supplier relationships are evolving too. They must move from ‘cosy’ to ‘collaborative’ as questions are asked as to the merits of the ‘win-win’ relationship now the public sector is seeking higher levels of value for money than ever.

Barriers to collaboration must go: Some departments within universities still hide behind specialisms to prevent procurement playing a big role. They might say that the buying team can’t purchase an item because only staff working in that department know about it. HE institutions are coming down hard on this mentality and the same approach must take place within other public service providers.

Collaborative procurement is the way forward: A report for Universities UK recommended that 30 per cent of university expenditure should be delivered via collaborative agreements. Similar recommendations were made to other public bodies in the National Audit Office’s report on collective buying in 2010. This will require a firm commitment from universities and other public authorities to use collaborative contracts and shared services. There is an equal obligation for contracting authorities to provide framework agreements that offer increased levels of value for money and also provide the necessary scope for the users and suppliers to innovate and deliver savings.

Local government, social housing and other parts of the public sector are good at networking with organisations like themselves. Councils regularly collaborate on procurement, for example. But traditionally, when it comes to cross-sector working, there has been resistance. In the new economic climate there is no place for such resistance. Public bodies must combine knowledge and demand externally in order to survive.

Find out more about cross-sector collaboration at procurement event PfH Live from 12-14 June

Written by Mike Haslin
Tuesday, 08 May 2012 14:02

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