Productivity Procurement and the Potential

1. Productivity Procurement and the Potential Andrew Smith OBE Chief Executive, Hampshire County CouncilLead for Procurement, Capital and Shared Assets Workstream 27 September 2011 Reshaping Public Services

2. Agenda • Progress to date • Lessons and barriers to overcome • Central and local government – joint working • Best practice fundamentals • Open Public Services – implications • Local best practice examples • Risks and opportunities • Connecting the thinking

3. Progress to date • Delivery of Phase 1 of LGG Workstream: 1. Quick Wins 2. Big Wins 3. Proposed strategy to deliver Phase 2 – the NPA • LG examples of best practice – NIEP • CAP thinking • Joint working with Cabinet Office / DCLG / DfE / DfT • Networks and connections improving

4. Lessons and barriers to overcome Barriers are political and cultural – not technical Sovereignty and adoption are key issues People misinterpret localism and leverage The need to compel rather than mandate No current coherent strategy The risk that LG does not get its act together

5. Central and local government - Joint Working • Both sectors need to operate from effective spend and supplier data: becoming a more informed and powerful client sector • Best value from: increased volumes, improved market share, best deals, joint use of technology and capacity, deployment of private sector contribution, SME participation, Working together where it makes sense (e.g. market shaping, best deals) • (Probably) one of the biggest initiatives ever taken in this landscape – ambition of both sides • Delivering government policy through procurement: providing local economic, social and environmental benefit – localism and leverage

6. Collaborative Procurement Models Principal Focus Market aggregation Market making Developing category spend Principal Benefits Maximise buying power of government Delivery of sustainable savings Leveraging capability and volumes Driving policy through procurement

7. Localism and leverage National Procurement Agency would create the interface with the Government Procurement Services Local Authorities have access to a range of arrangements by category of spend Local decision remains with local government Local and Central government bring market strength together – through market segmentation and shaping

8. Collaboration … a proven example

9. Best practice fundamentals • Develop a procurement strategy • Up-skill staff or find capacity • Carry out a spend analysis • Use a category management approach • Develop an asset reduction strategy

10. Best practice fundamentals • Collaborate • Review costs and specifications • Utilise technology • Develop a supplier management plan • Manage demand

11. Category Management Approach • Category management learning from the private sector • Integrating commissioning and procurement thinking

12. Capital and Assets Pathfinder thinking £ benefits • Opportunities • Understand need • Shared services • Assets and capital assessed • Driver for strategic procurement programme – local economic benefit and greening agenda 20%+ Reduced need Construction, procurement, Commissioning approach • Opportunities • Economic development • Inter authority collaboration Joined up programme (multi projects) Joined up programme (multi projects) 10-15% Construction, procurement Opportunities lost as time passes • Opportunities • Better delivery • Predictability One off project One off project One off project 2-5% Construction, procurement 0 Time Elapsed time

13. Hampshire - Pathfinder

14. Hampshire’s Pathfinder – Winchester Case

15. Havant Public Service Village

16. Havant PSP - Outcomes • HCC space reduction 1,000m2 (-30%) • Reinvestment of Capital Receipts - £2.5m • Enhanced space utilisation (circa +20%) • Backlog Maintenance avoided (£2m) • Revenue savings of £70k pa target • Reduced carbon footprint: 35% - 40% • Joined up services – e.g. youth, connexions and housing • Reduced levels of ‘avoidable contact’

17. Open Public Services White Paper • Local government’s strong track record • Well placed to lead – many opportunities for us • Local design and implementation • Commercial and regulatory considerations • Diversity of potential delivery solutions • Outcome focus • Resist urge for bureaucracy • Policy through procurement

18. Local best practice examples - National • Creating SME lots - Yorkshire & Humber Efficiency North • Improving market access - Find It In Birmingham • Social benefit through frameworks – WM Jobs & Skills • Growing capacity – Gateshead Voluntary Organisations Council • Shaping new markets – East Riding External Service Design • Sharing services - Nottingham Joint Service Centre

19. Local best practice examples - HCC • SME and Voluntary free bid support • Children’s Centres • Adult services personalisation • Extra-Care programme • Hampshire Police, Fire and CC shared approach

20. Commissioned services - Risks • Creating post-code lotteries of service provision • Maintaining effective accountability • Managing fall-back positions if a service deliverer fails • Balancing democracy with efficiency

21. Commissioned services - Opportunities • Welcome a wider range of opportunities to meet service need • Develop and shape markets – don’t just be a procurer • Move towards outputs not inputs • Drive policy through procurement • Encourages sharing services and assets • Integrate commissioning and procurement thinking – joint category planning

22. Connecting the thinking

23. Connecting the thinking • Category Plan approach • Capital and asset pathfinder thinking • Policy through procurement • Market shaping • Delivering localism with leverage

24. Practical help … LGG Procurement, Capital and Shared Assets Workstream • www.niepbuiltenvironment.org.uk/documents/PCSAWorkstream-QuickWinsStrategyOct2010.pdf • www.niepbuiltenvironment.org.uk/documents/DraftBigWinsDocument-1.doc Quick Wins Big Wins Michael Lee

26. Thank you