PAPER

3. At the last meeting, I reported that there appeared to be a reversal of the previous trend during the current financial year with the amount of work being done internally beginning to increase in relative terms compared to that which is externally procured. Whilst in the process of further research, I have identified that more work than was previously estimated is actually being done by outside firms (although this does include a sizeable element of design work). Despite this, Table 1 below does continue to confirm that the trend is for a greater proportion of work to be done in house compared to the previous two financial years.

Table 1 – Pattern of printing – In-House v External

	In House			External
Financial Year	In- house Work (Value) £	Work for non-IWC customers £	In house work for IWC £ (%)	Estimated outsourced Value £ (%)	Total Estimated Value £
2000-01	264,092	40,708	223,384 (38)	369,968 (62)	593,352
2001-02	251,191	42,753	208,438 (30)	491,468 (70)	699,906
2002-03	226,678	21,854	204,824 (26)	589,093 (74)	793,917
2003-04 (9 months only)	183,126	20,845	162,281 (33)	330,200 (67)	492,481

ANALYSIS AND FINDINGS

4. As a way of identifying some of the reasons for work being sourced from outside, a sample of invoices was selected for further analysis focussing upon those that the Print Unit Manager was unaware of. The analysis included:

(i) seeking explanations as to why the printing had been procured outside;

(ii) asking whether that included a referral to the Print Unit;

(iii) ascertaining the level of awareness of the Council policy to source all printing through the Print Unit;

(iv) discussing particular or special requirements in relation to the item;

(v) obtaining a copy of the particular item;

(vi) asking the Print Unit Manager for a judgment as to whether his Unit might have been able to do it and at what cost. The following table (Table 2) gives a summary of the results.

Table 2 – Comparison of a sample of printed items

Item No	Estimated In House Cost £	Actual cost (external) £	% diff +/-	Comments
91a	1016	1050	- 3
91b	165	125	+ 32
59	1458	1046	+ 39
68	1632	1216	+ 34
109	659	684	- 4
49	159	195	- 18
40	1158	1323	- 12
54	190	285	- 33
56	250	355	- 30
55	233	230	+ 1
116	265	835	- 68	This was for another public sector body
88		8839		) These items were all items which the
78		5607		) Print Unit Manager has said the Unit
47		3646		) cannot produce.
57		3895		)
58		1875		)

5. From the above table it can be seen that the Print Unit does not always produce the cheapest printing, but at least on 4 of the items sampled (25%), savings of between 12 and 20 % would have been achieved, and the policy of routing all such work through the Print Unit Manager would have successfully achieved this. In addition, if the Print Unit Manager is consulted on each occasion (again in a way consistent with members wishes), he can also play a role in deciding where external printing is best sourced – assisting service departments in seeking competitive quotes and using his expertise to see better opportunities, including aggregation and greater efficiencies. There has not been sufficient time to conclusively show that this will be successful, but on one recent example , the Print Unit Manager obtained the following range of quotes on behalf of one of the Council’s visitor attractions:

Company Price for 50,000 Price per 1,000 run-on

A £1,598 £23

B £2,284 £38

C £2,541 £34

D £3,249 £48

E £3,420 £147

6. This indicates that taking some care over the choice (and more relevantly, using competition) can pay significant dividends, and again this is the role that can be potentially played by a central point, such as the Print Unit.

7. The conclusion overall is therefore that there is sufficient evidence to suggest that sourcing printing requirements via a central point such as the Print Unit has the potential to deliver significant savings either by directing printing work towards the Council’s own in-house unit at lower cost or by obtaining competitive prices if the work goes outside.

8. Members should note that this does not mean necessarily that better prices will be achieved on every occasion. There is already some very good procurement practice within departments, and there are some very specific circumstances which make the cost of printing a secondary issue. The latter are, for example, in services like Wight Leisure , where the sourcing of printing has more to do with the department’s marketing strategy and the availability of sponsorship than it has to do with the cost of printing. There is also a need to promote and publicise the existence of the Council’s Print Unit and its capability as it became apparent in discussions with some outlying establishments that they were not aware of what it could do and how it might meet their needs in a more cost effective manner.

9. In the last report, I asserted that for larger printing procurements, the Council had successfully used competitive tendering to achieve the best result for the Council. Members will be interested to know that as an illustration, competitive tendering has produced the following result in relation to the printing of Wight Insight:

Company Tenders received Per annum cost

(For two years)

£ £

A 81,726 40,638

B 91,212 45,606

C 99,504 49,752

D 114,444 57,222

E 119,280 59,640

F 148,165 74,083

(Previous cost = £135,600 over two years , or £67,800 per annum. Headline savings from tendering therefore are £27,000 pa)

10. Members should be reassured that the Council is achieving best value from this route. Nonetheless, some review by the Council’s Procurement team in conjunction with using the Print Manager’s expertise may well deliver even better results.

11. Members were also interested to know more about the trend of photocopier usage, printer usage and what the impact of email might have been. This would be the subject of a much wider study which is beyond the scope of this report and would require more time and resource to complete. Members might, however, like to consider that the Council produces an estimated 25 million copies per annum from its 196 photocopiers, including those situated in schools. The 4 copiers situated in the corridors of County Hall alone produce 0.75 million copies per annum, but this is much reduced from a peak of in 1992 of 1.38 million. The underlying cause of that reduction is unknown for certain but probably the biggest factors are both the growth of copiers situated in individual offices, of which there are 16 in County Hall, and the increasing use of printers within offices (there is at least one in every office, I would estimate) – both representing a simple substitution. The advent of email may well have impacted on the use of photocopiers, but we cannot say to what extent without more research.

CONCLUSION

12. In conclusion, it would appear that if implemented correctly, the policy of sourcing all Council printing requirements through a central point has the potential to achieve significant savings for the Council. The Portfolio Holder for Resources has charged the Head of Policy & Communications with the responsibility for ensuring efficient and effective central procurement of printing and the central procurement team will provide support to develop the process which will deliver that objective. Once agreed, the process needs to be re-iterated once again to all Council managers and employees and there is also a need for the Unit’s capabilities to be promoted.

13. The Head of Policy & Communications is proposing to commission a further study on the future positioning and role of the Print Unit. As part of that review, or as a separately commissioned study, this Committee may wish to consider some of the issues already raised, including:

(i) determining the appropriate balance within the ‘mixed economy’ of internal and external printing, including the level of operation of the Print Unit;

(ii) how to maximise the full benefits of sourcing printing through a central point;

(iii) whether it is appropriate to consider the related issues of photocopying, use of PC printers and the operation of the variety of graphic design staff employed by the Council, as part of a more comprehensive study

RELEVANT PLANS, POLICIES, STRATEGIES AND PERFORMANCE INDICATORS

14. Print Unit Service Plan

The Executive Committee’s policy that all printing should be sourced through the Council’s Print Unit approved on 26 March 2002.

CONSULTATION PROCESS

15. In addition to consultation with the Print Unit Manager and the Head of Policy and Communications, there has been extensive discussion with individual officers within service departments concerning their printing needs and the particular circumstances which make their requirements different.

FINANCIAL, LEGAL, CRIME AND DISORDER IMPLICATIONS

16.The findings of this report indicate that there is some potential for achieving savings for the Council if the policy of sourcing work through a central point is enforced. If that is to be the Print Unit, this will have an impact on the time available to the Unit’s Manager and the contribution that he currently makes to the Unit’s productivity, and this needs to be acknowledged in some way. Savings will accrue to service budgets but the extra burden will fall on the Unit.

17.In keeping with all other Council services, there is a duty under the Local Government Act 1999 to achieve Best Value in procuring printing services, whether internally or externally sourced.

APPENDICES ATTACHED

There are no appendices to this report.

BACKGROUND PAPERS USED IN THE PREPARATION OF THIS REPORT

Print Unit Performance Monitoring reports

Invoices for external printing work

Analyses of Photocopying usage

Contact Point : Bob Streets, Compliance & Risk Manager, ( 823622,

mail to:[email protected]

PAUL WILKINSON JOHN BENTLEY

Chief Financial Officer Head Policy & Communications

PAPER C

REASON FOR SELECT COMMITTEE CONSIDERATION