A waste of collaborative buying expertise
Why, when government is touting centralisation as the answer to all its spending ills, is it disbanding collaborative buying groups?
Firebuy has gone. The UK’s nine Regional Improvement and Efficiency Partnerships (RIEPs) are on the way out. At least one NHS joint buying hub has already been given the chop. And other such bodies, such as the National Policing Improvement Agency (NPIA), are under review.
Things are always being changed in the public sector – that’s a given. And nobody would argue there wasn’t room for change, but the government says the change it wants is more centralisation and collaboration: so why wipe out so many bodies that do just that? And what’s to replace them that’s so much better?
Today, the Cabinet Office has been delighted to announce it has more details of how much it spends with certain suppliers – having published information about deals over £25,000 online on Friday. Cabinet Office minister Francis Maude said: “We found the eventual aggregated spend with one company tended to be 20 times more than what we thought.”
So it recognises that having all such information in one place is vital to negotiate better deals.
Again, it leads me to ask, why get rid of the central bodies that hold that information, or have at least made a start on all this work, some of which have won awards and national recognition for their progress?
Improve them or amalgamate them if they‘re not working. But to just disband them and lose all that data and intellectual property knowledge is a real waste.
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Perhaps the government is going to come up with one single super-sized buying agency?
These buying groups will continue in one shape or another if they really are delivering the benefits they tout in their award applications.
Alternatively, private organisations will spot the opportunity and step in to provide the necessary technology and services to support collective purchasing. I fail to see why central government funding is needed – they should be paying for themselves many times over.
I surmise that these bodies will come back, re-labelled to support better collaborative purchasing. But, at the end of the day, if the data/information isn’t centralised, and it’s not, and if it isn’t made readily available in a collaborative manner, and it’s not, ready for analysis, then all government bodies will not realise the full potential of collaborative procurement. Let’s wait and see what the government’s next move is. Until then, time is money that could be saved.
Kind regards,
Lance Mercereau
Rosslyn Analytics
Centralisation is not an answer although concept of having centralised data is.
Hubs are dissapearing precisely because they are not paying for themselves. If they were we would not have an issue in the first place.
From a Procurement perspective, the hubs are trying to do what any procurement officer worth his/her salt would be trying to do anyway – look to aggregate spend and maximise buying power, but recognising that sometimes bigger isn’t better. Collaboration is hard to achieve in the face of intransigent budget holders and I find it sad that it takes hard economic times to break down some of the barriers. I wish those at the RIEPs well and hope that the spirit of working together will be embraced by others.
From a supplier perspective, the fact that these shared procurement hubs have not been mandated in the past has arguably made them less effective. My company has tendered for contracts and frameworks historically, where we have negotiated down on price based on the premise of volume, only to find that there is significant off contract spend with buyers using their preferred suppliers.
This completely negates the effort, time and expense tendering for the business in the first place. Hence, we fully support John Collington and his Efficiency Reform Group’s drive for centralising certain category procurement, and more importantly mandating this.
Regards
Chad Horne
Procurement Lead
Badenoch & Clark
020 7367 1860
Collaborative Procurement is becoming a dirty phrase (made up of two not so dirty words). Its effectiveness is seriously in doubt. What level of savings has actually been delivered? What level of compliance is achieved on collaborative framework contracts? Are they used as little more than benchmarks for maverick buyers? I count around 80 public sector entities (including two consortia of consortia and the RIEPs) leading the charge on collaborative procurement in the UK and only in Wales and Northern Ireland does it seem to be organised effectively. Elsewhere it’s disjointed and might be better termed as “Competitive Procurement” with most of these organisations tackling the bottom left hand corner of the famous strategic procurement matrix. As Nick Clegg said during the election campaign, focusing on pot plants and paperclips won’t address the budget deficit. There are too many of these groups (some good and some not so) and too much overlap. It’s great to see some rationalisation (throughout the UK) but let’s hope that it’s structured. And let’s see the resources re-directed to individual bodies where, given their training and experience, they can really make a difference. To be fair to Firebuy, it appeared to have a front-line focus (as you’d expect from the emergency services) and it’s to be hoped that this work will be absorbed into CLG at some stage.
Take a situation where an agency can mandate the spend of a number of the organisations that it represents for a given good or service, and award it to the lowest number of suppliers that it practically can, then you have effective collaborative procurement.
Take a situation where an agency is one of a number to claim a capability to influence the same spend, yet has no mandate and can not guarantee volume, and at the same time wants to secure contract pricing from all of existing providers, and you have something that adds little or no value.
Both types exists. The trick for the government, is, of course, to identify and secure one type and eliminate the other.