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Paper 6 - 24 November 2000 Meeting

ASSOCIATION OF HAMPSHIRE AND ISLE OF WIGHT LOCAL AUTHORITIES

24 November 2000

PROCUREMENT FOR BEST VALUE

Report by the Policy Manager

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RECOMMENDATIONS

(1) That existing joint working arrangements for procurement be noted; and

(2) That District Councils consider whether they can reduce costs by making more use of County Supplies and the Central Buying Consortium.

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INTRODUCTION

1. The Associationís work programme includes facilitating procurement for joint purchasing arrangements between Authorities. Best Value is forcing a radical rethink on contracts and supplies, so the time is right to report progress to Members.

EXISTING JOINT ARRANGEMENTS

2. There is a history of joint purchasing in a wide range of areas e.g.

Telephone and data communications (through the recently-established Hampshire Public Service Telecoms Network)

Waste and Recycling (through Project Integra)

Supplies of basic goods and materials

These arrangements are backed by joint officer working groups - the H/IoW Telecoms Group, Project Integra Strategy Group and Supplies Group. Arrangements for joint contracts are currently being discussed in relation to highway maintenance and "network management".

SUPPLIES OF BASIC GOODS AND MATERIALS

3. The H/IoW Supplies Group has provided the following examples of co-operation within Hampshire and the Isle of Wight from a survey carried out last year:

(1) District Councils and Hampshire County Council:

* In the field of energy purchasing the County Council works in some way with all Districts, with the exception of Winchester. Nine Districts access the County Councilís oil contracts; four Districts include their requirements for electricity at large sites in contracts with the County Council; two Districts include their requirements for gas at large sites.

* The County Council manages a contract for the rental of photocopying equipment which has an annual expenditure of around £4m and all Districts make some use of this. The total number of photocopiers installed in District Councils is around 130, equivalent to approximately 5% of the total County Council contract.

* District Councils also make purchases for office supplies and consumables from the County Supplies to a value of around £30,000 a year.

(2) Portsmouth and Southampton City Councils and Hampshire County Council

In 1998/99 the two Unitary Authorities purchased a total of over £1.6m worth of goods through County Supplies. In addition County Supplies established direct supply arrangements for goods and services ranging from office equipment to classroom furniture and piano tuning to City schools and other units. Direct payments to these suppliers are not included in the £1.6m and bring the overall scope of collaboration to about £4m a year.

CENTRAL BUYING CONSORTIUM

4. Hampshire County Council, Southampton and Portsmouth City Councils, are members of the Local Authority Central Buying Consortium (CBC). This has the largest aggregate purchasing of any group in local government (potentially some £750m a year). The Group consists of 17 County and Unitary Authorities including for example Essex, Kent and Birmingham. Many of the purchasing arrangements used by units of Hampshire County Council, Portsmouth and Southampton City Councils have been established through the Central Buying Consortium and the scale of these contracts has often yielded significant financial savings. Hampshire County Council directs around £17m a year into these arrangements and has derived savings of around £1m for County Council services. The opportunities afforded through the Central Buying Consortium have been opened up to District Councils at the instigation of the Chief Executivesí Group. District Councils are currently reviewing their own operations through a dialogue with Hampshire County Supplies, and it is recommended that Members endorse this approach.

IMPACT OF BEST VALUE

5. Best Value is driving authorities to look at their procurement arrangements. All authorities are preparing Best Value Procurement Plans. Each Best Value Review includes an assessment of in-house or external supplies of goods and services. Some authorities are preparing guidance notes on procurement arrangements and the assessment to be undertaken within Best Value Reviews. The IDeA and others are also producing guidance. The guidance is being assessed and shared through the joint officer arrangements including the H/IoW Best Value Network.

6. In some cases Authorities are including the overall procurement arrangements as a Best Value Review e.g. East Hampshire is reviewing its arrangements in Year One of the Best Value Review programme and Hampshire County Council is looking at this in Year Two.

WORKING WITH OTHER PARTNERS

7. In some cases there are significant opportunities for joint purchasing with other partners e.g. Social Services and Health. The Police and Fire Services make significant use of County Supplies and the Central Buying Consortium.

MANAGEMENT TRAINING AND DEVELOPMENT

8. Purchasing tends to be highly decentralised. Also it is a specialist function and there is room for management development, training and spreading of best practice.

LISTS OF ACCREDITED SUPPLIERS/CONTRACTORS

9. There may also be room for further efficiencies in the arrangements Local Authorities have for lists of approved or accredited contractors. For example, Hampshire County Councilís Social Services Inspectorate provide an accredited list of domiciliary services providers (personal care, domestic support, emotional/social support). It may be much better for District Councils and other Authorities to use the same list rather than to create their own lists, and this particular issue may be developed under the Governmentís "Supporting People" arrangements which come to effect in 2003.

E-GOVERNMENT

10. Opportunities for economies in joint purchasing may well be presented as part of the e-Government arrangements. Portsmouth City and Hampshire County Councils are planning an electronic catalogue of supplies and services. The Supplies Group will monitor the IDeA initiative known as "Market Place" to assess its role in delivering Best Value. We shall also be evaluating the proposals for this aspect of e-Government coming out of the Cabinet Office (see separate report proposing a seminar).

NATIONAL TASK FORCE

11. Some of our Member Authorities will be giving evidence to the National Local Government Procurement Task Force, and we shall be studying the report of that Task Force during the course of the next year.

NICK GOULDER
Policy Manager

Date: 10 November 2000
Annex: 0
Contact: Nick Goulder - 023 8068 8431, E-mail hiowlang@hants.gov.uk

Last update: 23/11/2000
Author: Nick Goulder, Policy Manager

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