colin cram marc1 ltd tel: 01457 868107 mobile: 075251 49611 [email protected]
TRANSCRIPT
My Background
Director, North West Centre of Excellence- 47 local authorities
Director, Research Councils’ Procurement OrganisationDirector, North West Universities’ Purchasing ConsortiumDirector, Benefits Agency Contracts OrganisationCentral Unit on PurchasingCabinet Office, Treasury, Central Government generally
Senior Adviser to Office of Government CommerceMember of Society of Local Authority Chief Executives -SOLACEFellow of Chartered Institute of Purchasing and SupplyInstitute of Directors: ‘Towards Tesco’
TOWARDS TESCO
1. Public Sector Procurement is Vast A New Integrated Model could Deliver Huge Benefits
2. Outsourcing and Shared Services Is Chaotic and Costly Huge Potential Remains Propositions:
A New Outsourcing Model? A Proposition for Delivery of Public Services
3. Potential Savings of £25bn+
• £220 Billion pa• £3,500 per Adult and Child pa• One Third of Total UK Public Spending• One Sixth of UK Gross Domestic Product (GDP)• 0.75% of Global GDP• Size makes it Critical to Delivery of Public Services• Effective Management is Essential to Reduce Public Spending Deficit and Deliver Government Procurement Policies
EDUCATION PROCUREMENT - £30+bn
Alone would put UK in top 30% of national GDPs
• 65% Non-Central Government• 50% Common Categories, Goods, Services
• Professional Services £35bn• Construction £21bn• ICT £10bn• Facilities Management £10bn• Energy £4bn• Reprographics £3bn• Travel £3bn• Fleet £3bn• Food £2bn
• Some Major Central Government Department Organisations• Some Large Specialist Organisations• NHS Outsourcing• Buying Agencies: 40+• OGC and Category Teams• Several Thousand Small to Medium Procurement Units• 40,000+ Procurement Points• Absence of Mandation
BUT• Increasing Collaboration/Joint Procurement
•Indiscipline
•Different Procedures/Contract Ts and Cs
•Complexity – e.g. Tender Procedures/Ts and Cs
•Multiplicity of Tenders
•Multiplicity of ‘Duplicate’ Contracts and Contract Managers
•Specifications
•Inconsistency of Capability, Expertise, Processes
Furniture 30%
FM/Outsourcing/Major Contracts Up to 35%
Laboratory Consumables Up to 90%
IT 5 – 80%
Construction 5 – 25%
Excellent Construction Management 5 – 15%
Social Care 10%
Legal Services 10%
Good Contracts Management 5 – 35%
© C M Cram
•Right Procurement Structures/Joint Procurement
•Common and Complete Databases
•Common Information/IT Systems
•Common Procedures
•Common Specifications
•Commodity, Markets, Procurement Expertise
•Specialist Management
•Best Practice Procurement Techniques
PUBLIC SECTOR PROCUREMENT IN 5 YEARS TIME?Central/ Major Departments/Buying Solutions
Industry Specific
Regional P Hubs/Medium Depts
Local/Med/Small Departments
Major National Contracts/Suppliers
* *
Common Categories * *Relationship Management * *Market Management * *Industry Specific * *PPIs/Major Project Support * * *
Regional/Large Local Contracts/Suppliers
*
Small Local Contracts * *Discipline/Implementation/Compliance
* * © C M Cram
INDEPENDENCE
COLLABORATION
INTEGRATION
© C M Cram
PUBLIC SECTOR PROCUREMENT: THE FUTURE?
HOW CAN OUTSOURCING AND SHARED SERVICES BUSINESS BE BOOSTED?Eliminate obstacles
High CostsLong TimescalesComplex ProceduresVaried ProceduresDuplicate Specifications
• Create Model Approach• Create Vision for Public Service Delivery
PUBLIC SPENDING £bn
Central Local Total
Pensions 110 110Health/Social Care 117 117Education 28 52 80Defence 38 38Welfare 60 50 110Protection 16 17 33Transport 13 10 23General Government 13 13 26Other Spending 71 32 103Interest 30 1 31
TOTAL 496 175 671
ELIMINATE OBSTACLES: CREATE MODEL APPROACH
Create Range of Model SpecificationsCreate Matrix of Service Providers and Services
that the Public Sector can use without further EU Tendering
Provide those Services through building on Existing Service Centres/Creating New Ones
SERVICES
© C M Cram
SERVICES SERVICE PROVIDERS
1. 2. 3. 4. 5. 6.
Roads √ √
Call Centres √ √ √
HR √ √
Finance √ √ √
ConstructionServices
√ √
ICT √ √ √ √
Legal √
HOW?Create Range of Model SpecificationsFollow EU Procurement Directives to Create
MatrixEvaluation Criteria: CapabilityObtain Indicative Prices?Grow Matrix OrganicallyConsider Dynamic Purchasing System
WHAT SERVICES COULD BE COVERED?ALMOST ANYTHING!
• HR• Payroll• Print and Design• Finance• Internal ICT• Legal Services• Agile Working Solutions• Procurement• Construction• Asset Management
• Roads• Revs and Bens• Debt Collection• Managed CCTV• CRM• Out of Hours Services• ICT Hosting• Data Centre Operations• Environmental health• Elements of Children’s
Services and Adult Social Care
PROPOSITION FOR PUBLIC SERVICE DELIVERY
• What should be Delivered by the Public Sector?• What should be Delivered by the Private Sector?• Benefits of Proposition• Overall Model for Public Service Delivery• Developed by the Outsourcing Industry
VISIONARY – Nothing Ruled Out
MAKING IT HAPPEN
• Outsourcing Industry to Take Lead• Create Steering Group with TORs - membership
private and public sectors• Commission and Fund Initial Work – to investigate
feasibility/sources of funding etc• Draft Programme of Work and Implementation Plan
