Managing the changes to deliver effective procurement in a District Council
Managing the changes to deliver effective procurement in a District Council

North Hertfordshire District Council is situated about 40 miles north of central London and encompasses the towns of Letchworth (Garden City), Hitchin and Baldock. As with all local authorities it is having to review all its services to ensure that they are cost effective and that revenues due are collected promptly. In 2006, following a (then) IDeA health check, they agreed to share a procurement officer with neighbouring East Hertfordshire District Council.

Andy Cavanagh (Head of Finance, Performance and Asset Management) was keen to establish the effectiveness of this arrangement and whether, given the Council’s decentralised commissioning led approach to contracting, opportunities to save money and improve contractor performance were being taken.

What happened?
Andy Cavanagh contacted the East of England LGA having been made aware of the services and support they offer their members via their Talent Bank (www.eelga.gov.uk/talent-bank). Eddie Gibson (Senior Manager at the East of England LGA) said “the Council already had access to the services to an experienced procurement officer, but were concerned about the level of resource that they had in place and whether they were managing contracts effectively. They were aware that most costs are incurred after a contract was signed”.

Ken Cole a member of the East of England LGA Talent Bank, from procurement and commissioning transformation specialists, SPS Consultancy Services Ltd led the study on behalf of the East of England LGA.  The fixed price review, known as a “Procurement Challenge” lasted six weeks and included a full expenditure analysis / category mapping, a facilitated workshop and interviews with key budget and contract managers. The report included 19 recommendations covering seven key result areas. Summarising the position Ken said,   “North Herts is typical of many tier 2 local authorities – highly efficient already and well thought of by local residents but finding it challenging to do even better with limited resources. The main findings were related to managing changes in terms of enhancing systems, effective market engagement, upskilling people and balancing risk management with the need to improve outcomes.”

The client, Andy Cavanagh, was delighted with the outcome from the study and just how cost effective it was. The introductory workshop summarised the value of the study for Andy. “Having people from different departments and disciplines in the same room reminded us of the need to share a common vision and approach for the way we commission from external organisations, and make best use of our limited staff resources. We learned very quickly the need for effective and consistent management of the commercial cycle, particularly where we are letting large contracts”.

What next?
The report was signed off and endorsed by the Council’s senior management team. Many of the recommendations are being implemented quickly as they involve no cost and the East of England LGA / SPS have been able to provide information based on work undertaken from previous studies. For example, one recommendation regarding changes the Terms of Reference and focus of the existing Contracts and Procurement Group took less than an hour to do, but allows the Group to focus on strategic rather than tactical issues. Rachel Cooper (Payments & Reconciliations Manager) is overseeing work on systems improvement. “We are aware just how important it is to have access to good quality procurement as well as financial information in our systems”, she said. The Council has also ran an in-house one day Contract and Relationship Management programme for 17 people, also sourced from the East of England LGA and which achieved an average of 90% approval from attendees.

The East of England LGA  is now working with Andy to ensure that the recommendations become a reality and that the Council is able to keep abreast of developments and opportunities for improvement across the region.

Outcome Assessment
Andy Cavanagh has been delighted with the way the study was conducted and the value it offered. He explained, “this was a very helpful process and offered great value for money thanks to the East of England LGA and the SPS team. We were particularly pleased that the study addressed strategic issues rather than focusing on procedural and tactical items, which can sometimes be the case when reviewing procurement”.

Eddie Gibson was also pleased with the outcomes: “Having a strong and integrated commissioning and procurement function which can deliver outcomes based contracts and manage the subsequent relationships with contractors is essential in the current financial climate. Some District authorities either do not see its full significance or fear that it will take up far too much resource to achieve. The experience at North Herts proves that this does not have to be the case”

Contacts
For more information about the Procurement Challenge, please get in touch with Eddie Gibson, Senior Programme Manager, East of England LGA, eddie.gibson@eelga.gov.uk, 01284 753310

For more information about SPS Consultancy Services Ltd, please get in touch with Ken Cole, Director of Projects and Practice, ken.cole@sps-consultancy.co.uk, 01784 895040.

This was a very helpful process and offered great value for money thanks to the East of England LGA and the SPS team.

Andy Cavanagh - Head of Finance, Performance and Asset Management - North Hertfordshire DC