| Consultation response by the
Consortia Forum on Byatt
The Society of Purchasing Officers called a meeting
of Local Authority Consortia to discuss the Byatt review on
13th August.
The Consortia attending were:
Black Country Purchasing Consortium
Central Buying Consortium
Kent Buying Consortium
Local Authority Purchasing Partnership
Local Authorities South East Region
London Contracts and Supplies Group
North Eastern Purchasing Organisation
North Wales and Wirral Consortium
Welsh Purchasing Consortium
West Mercia Supplies
Yorkshire Purchasing Organisation
All Consortia welcomed the review but felt that the report
had missed an opportunity to encourage Local Authorities to
use existing consortia to develop joint procurement of services.
Consortia have demonstrated over many years (probably more than
any other local authority service) how authorities can work
together successfully through true collaboration.
The supporting paper on Consortia appears to be based on unstructured
commentary rather than structured research. It underlines a
misunderstanding about the constitution of some consortia and
confusion about the way in which many operate. The core values
of Consoria are collaboration, joint procurement and networking.
It is pleasing to note that the main taskforce report 'Delivering
Better Services for Citizens' is selective on what it draws
from the supporting paper.
The section on Buying Consortia in the main report covers a
wide range of issues on which we have the following comments:
The value of local authority spending through consortia (para.
4.16) could be determined by proper research which the Society
would be prepared to carry out.
There may be few examples of consortia taking the lead in commissioning
significant joint service contracts (para. 4.17) but an opportunity
has been missed in identifying this activity. There is also
no mention of the excellence that exists within local authority
consortia and the report tends to trivialise the enormous success
achieved. Serious research into this area would be invaluable
to develop best practice for local government. Local authorities
and consortia should not waste resource in competing with each
other (para. 4.18) but a mechanism needs to be identified for
enabling smaller authorities to gain benefits available through
consortia arrangements.
All consortia have direct delivery arrangements as part of
their offering to their customer authorities (para. 4.19). Some
local authority consortia have had e-commerce methodologies
in place for a number of decades and many are already addressing
the issues of e-procurement and e-commerce and are at the leading
edge of developing such practices in local government.
It may be the experience of the Consortium for Purchasing and
Distribution (a private sector supply company) that schools
do not recognise or accept the benefits of their arrangements
and have stopped using them but this is not true of the public
sector consortia some of whom may have noticed an initial reduction
in use but this has been more than compensated for as schools
return to taking advantage of the benefits of one stop shopping
through a local provider (para. 4.20). The issue of the local
authorities (Goods and Services) Act 1970 and other legislation
(para. 4.21) is important for consortia trading and while it
is recognised that changes are planned to these arrangements
to enable more freedom, it is important that during this period
that the Act is used as a backstop to enable continued trading
as is currently permitted.
Consideration should be given to using consortia more widely
in areas of delivering strategic collaboration between local
authorities in service areas (para. 4.22) and the opportunity
to develop this approach would be considerably developed if
the strength of existing consortia in bringing together local
authorities was used as a lever to bring together authorities
to consider more strategic issues.
The basis of consortia working is one of openness, honesty
and trust in a collaborative environment. The strength of consortia
is by working together for agreed periods of time to ensure
that Best Value is achieved for the member authorities (para.
4.23). If members of consortia were to opt in and out on a frequent
basis the development of centres of excellence and arrangement
of best value procurement opportunities would be considerably
reduced.
Local authorities will work together at a strategic level to
deliver services when they have a shared agenda. The opportunities
that consortia provide should enable like minded authorities
to join together to approach the market for such procurement
and commissioning needs (para. 4.24).
In response to the three key recommendations on buying consortia
we would strongly support recommendation 37.
For recommendation 23, as mentioned previously, not all buying
consortia operate on a joint trading basis and it would be inappropriate
for annual accounts to be published. However there is an opportunity
for performance information to be developed which would allow
local authorities to measure performance. We believe that substantive
research should be carried out to determine useful performance
information to meet this need.
Recommendation 24 assumes that buying consortia wish to win
new business in a competitive environment. Whilst all consortia
are mindful of meeting their customers needs and retaining customers
through providing competitive goods and services it would perhaps
be an inappropriate use of public funds to compete with each
other to provide these services in the public sector. In terms
of meeting the needs of smaller councils there are issues of
funding this activity when often smaller authorities do not
have the resource to support their share of consortia activity.
(e.g. in virtual consortium arrangements). A methodology for
funding activity to meet the needs of smaller councils may need
to be identified to avoid the potential of significant subsidisation.
In summary the Society believes that additional well structured
research is necessary to develop a realistic future development
of consortia procurement in order to meet the aspirations of
the review of local government procurement in England. The Society
would be pleased to arrange for this research to be undertaken
subject to the funding being provided.
Dave Wheller
Chairman of the Society of Purchasers Officers in Local Government
16 August 2001
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