Leading transformational change through procurement
Source: PSE Feb/Mar 17
Liz Welton, chair of the Society of Procurement Officers in Local Government (SOPO), tells PSE’s David Stevenson why there are lots of opportunities for public sector procurement professionals to become transformational change agents in the future.
Back in 2014, the National Procurement Strategy (NPS) for local government in England was launched, setting out a vision for procurement and encouraging all councils to engage with the delivery of outcomes in four key areas: making savings; supporting local economies; leadership; and modernising procurement.
Although procurement across local government remains somewhat patchy, Liz Welton, chair of SOPO, who sat on the advisory group to the national strategy, argues that it is helping to drive improvement, as “it provides people with a framework against which to benchmark themselves”.
“I think the problem we have in local authorities is that there are so many different stages of development in procurement,” she said. “There are real pockets of excellence, but when we get to some of the smaller local authorities, like districts who may have an overall budget of about £20m, they will struggle to have bespoke procurement people in their service.
“Again, it will be patchy as to what quality of procurement is delivered. But if they have something like the NPS to demonstrate what their aspirations should be, and what they should be thinking about, then they can weave it into their own procurement strategy and help to change their own organisations.”
Discussing the challenges facing the procurement profession in the coming years, Welton, who is also the associate director of procurement at Coventry City Council, suggests the biggest issue is attracting a skilled workforce.
“I don’t know if it is a West Midlands thing, but all of us in the region are struggling to recruit quality staff,” she said. “Traditionally, and I’m going back about 20 years now, procurement was seen as the supplies team who knew how to follow the rules to let tenders and didn’t do the whole procurement process.”
Welton argued that there are numerous factors influencing the skills drain: “sometimes there is a very good local private sector organisation that can pay more than we do and can attract the good people, or the skills aren’t being developed in-house in local authorities to get the quality of people we are looking for”.
“In Coventry and Solihull we’ve been trying to grow our own in-house talent through apprenticeships and get people with the rights skills, able to do that cradle-to-grave procurement,” she said, adding that this is an approach that could be adopted more widely across local government.
Despite the recruitment problems, Welton argued that procurement is a great career in local government: “I do think there are going to be lots of opportunities for procurement professionals to be transformational change agents, much more than just transactional operatives turning their hand on the tender machine.”
Digital and shared services
Discussing the move towards procuring digital services, Welton noted that another issue facing local authorities is being able to afford the things that they would like to do.
“It is back to the patchiness,” she said. “Those that are the most developed in local government are certainly moving in that [digital] direction. We all have the requirement that, by September 2018, we have to be able to do electronic invoicing. We are all moving towards that, some have it already and others are on track. But it is very rare now that authorities do not have e-tendering services.”
In the making savings outcomes section of the NPS, it noted that the move towards “shared procurement services and shared procurement posts should allow all councils to recruit, develop and retain the best procurement resource and avoid unnecessary competition between individual councils for procurement expertise”.
Welton told PSE that everybody understands the logic of having a shared procurement service “in that if one person lets a contract on behalf of three, four or five authorities, then there is a saving to be made”.
“The issues that we’ve come across, and I’ve been running a shared service since 2009, is that if the authorities are structured very differently, then it is far more difficult to get that joint contracting off the ground,” she said.
“To give you an example, Coventry has an in-house cleaning service, but Solihull’s service is external. So you do have the advantage that you could compare the costs. But if the requirements of the specifications are very different, it is difficult to standardise on a specification when their existing specification has worked for them for a long time.”
She also noted that local government officers are probably more concerned about their job security than they have ever been.
“If you start talking shared services then you need less senior people running them,” said Welton. “It then becomes a little bit of ‘turkeys voting for Christmas’. It is the same for heads of services. If you are trying to take a joint asset management approach you only need one person leading it, not three or five. There are all those personal issues for people to overcome as well.”
Social value through procurement
Councils are expected to maximise the economic, social and environmental benefits to communities from every pound that is spent, the NPS stated, and suggested that spending with SMEs and VCSEs can make a very significant contribution to local economic growth.
Social value in procurement, argued Welton, is a big opportunity that “we didn’t have before the Social Value Act to make a difference to try and regenerate our local economies and communities whilst we are procuring”.
She added that by asking questions about social value, evaluating on social value and encouraging firms to be delivering social value when they are providing services, councils have a great chance to deliver positive change.
“If we have large contractors in the area then finding different ways of working with them, so that when they are letting contracts in the community that they are thinking about social value, is important,” said Welton. “They may have volunteering schemes in their companies. So if we could get them, as local authorities, to volunteer in areas where we think there is need then that would also help develop our local communities, and maybe take some of the pressure off our increasing social care costs.”
Welton explained that social value in the West Midlands is something being considered not just at individual council level, but through the combined authority. For instance, there is a West Midlands Social Value Group that has been set up to see how local government can deliver better social value when spending the money that is being delegated to the city-region.
While admitting that there are pressures facing procurement departments within local government, the chair of SOPO was also optimistic, reiterating her claim that her colleagues up and down the country could become “transformational change leaders” in their towns and cities.
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