PAPER D2

 

                                                                                                                 Purpose: for Decision

REPORT TO THE EXECUTIVE

 

Date:               19 NOVEMBER 2002

 

Title:                APPROVAL OF PROCUREMENT STRATEGY

                       

REPORT OF THE PORTFOLIO HOLDER FOR RESOURCES

 

                        IMPLEMENTATION DATE: 29 NOVEMBER 2002

 


SUMMARY/PURPOSE

 

1.      Procurement is a wide-ranging topic that increasingly is seen as a vital component of effective service delivery. Indeed, all local authorities are being actively encouraged by the Government to develop and improve their procurement practices and policies. In response to this, a Procurement Strategy for the Isle of Wight Council has been produced recently, which seeks to provide an effective framework for achieving significant improvements in the Council’s approach to procurement. The strategy identifies a number of important threads of procurement activity and can only become truly effective with the high level support of the organisation itself. Hence the Executive is being requested to approve the implementation of the strategy and its accompanying action plan.    

 

CONFIDENTIAL/EXEMPT ITEMS

 

  1. None

 

BACKGROUND

 

3.      The need for a Council-wide strategy for procurement has been recognised for some time; indeed the finalisation/implementation of our Procurement Strategy does feature as one of the CPA Inspectors’ (preliminary) recommendations arising from the corporate assessment process. 

                       

The strategy itself is a reasonably ambitious medium-term plan, which recognises that in reality we start from a fairly low base as regards a strategic focus on procurement. Key challenges are to develop the necessary capacity to support and deliver the potential benefits, and to effectively embed the strategy into individual Service Plans and everyday working practices.

 

STRATEGIC CONTEXT

 

4.      The Procurement Strategy itself is intended to help achieve step change in improving procurement practice within the Isle of Wight Council.

 

5.      The Procurement Strategy identifies clear links with the Council’s corporate objectives and its underlying values. It also picks up on a number of key recommendations from the influential Byatt Report (“Delivering Better Services for Citizens – A review of local government procurement in England”), which was published jointly by the Government and the Local Government Association in 2001. 

 

Within the last two months the Government and the LGA have published their formal joint response to the Byatt Report entitled “Towards a National Strategy for Local Government Procurement”. This in turn has led to the formation of a top level, government-led National Procurement Forum for Local Government, the inaugural meeting of which is due to take place during November 2002. It is expected to consider a number of key issues for procurement in local government including capacity, market intelligence, common conditions and training, etc. These themes are certainly consistent with the aims of our own Procurement Strategy and, in reality, it is likely to be some considerable while yet before any genuinely tangible solutions emerge from the national forum.

           

CONSULTATION

 

6.      The strategy has been considered by the Strategic Directors’ group and also received input from a selected officer group. Additionally the District Audit team have undertaken a short review of procurement within the Council recently and roundly endorsed the content of the draft strategy as a framework for improving procurement within the Authority.

 

FINANCIAL/BUDGET IMPLICATIONS

 

7.      Specific costs have not been identified at this stage. In practice, it is anticipated that many of the actions are likely to be met from existing revenue budgets and perhaps a reallocation or reprioritisation of certain existing resources, and these will be reviewed as the strategy implementation progresses. Where more fundamental change is envisaged (e.g. the development of an effective e-procurement solution) then this will be subject to the development of a specific business case in due course.

 

8.      Potentially at least, improved procurement will lead to various value for money improvements (both directly and indirectly), though clearly this remains unquantified presently.

 

LEGAL IMPLICATIONS

 

9.      Whilst procurement is subject to numerous legal requirements and influences (including in the case of the public sector the EU Procurement Directives) there are no direct legal implications arising from the Procurement Strategy itself.

 

OPTIONS

 

10.  It is considered the following options exist:-

 

1.      Approve the Procurement Strategy and accompanying action plan.

2.      Approve the Procurement Strategy, but incorporate any suggestions for further improvement arising from the Best Value Review.

 

3.      Reject the Procurement Strategy and commission a formal thematic Best Value Review of Procurement within the Authority.

 

4.      Note the content and aims of the Procurement Strategy, but decide not to implement it at this stage.

 

EVALUATION/RISK MANAGEMENT

 

11. The Procurement Strategy as it stands is considered to provide the necessary focus to what needs to be done to improve procurement within the Authority, and it provides a suitable framework within which to engender such improvements within the medium term.

 

12. Arguably the biggest potential risk to the ultimate success of the Procurement   Strategy is that the Council fails to adequately develop the capacity to support and deliver the potential benefits, and under-resources what really needs to be done. This is likely to be an evolutionary process.

 

13.  Delaying implementation for whatever reason (e.g. awaiting possible developments from the National Procurement Forum) would merely be a case of avoiding or putting off tackling many of the underlying issues and in all probability would attract considerable criticism from any follow-up CPA or District Audit inspection.

 

RECOMMENDATIONS

 

     14.  It is strongly recommended that Option 2 above be adopted.

 

BACKGROUND PAPERS

 

15.  Copies of the following publications are available from the Purchasing Advice      Office:-

 

·        “Delivering Better Services for Citizens - A review of local government procurement in England” (The Byatt Report)

·        “Towards a National Strategy for Local Government Procurement”

·        “Competitive Procurement”  (published by the Audit Commission 2002)

·        “Procurement in Local Government – The Isle of Wight Council” (Draft District Audit report – October 2002)

 

ADDITIONAL INFORMATION

 

     16.  A copy of the Procurement Strategy is attached as Appendix A.

 

 

Contact Point:            John Spencer             ((823276 or email: [email protected])

                                    Bob Streets                ((823622 or email: [email protected])

 

                                               

 

J PULSFORD

Strategic Director for Finance and Information and County Treasurer

R R BARRY

Portfolio Holder for Resources