Procurement update Presentation to the Best Value Committee Wednesday 22 nd September 2004

1. Procurement update Presentation to the Best Value Committee Wednesday 22nd September 2004 Stuart Rowe – Assistant Head of Finance - Strategic Procurement

2. The agenda ………. • Background • Update on the national perspective • The past six months • Progress

3. Background • The Graham Davies report - 2002 • National procurement strategy (Sir Ian Byatt) • Sets targets to be achieved for 2004/2005/2006 • Key strategy themes: • Procurement matters • Cultural shift • Providing leadership and building capacity • Partnering and collaboration • Doing business electronically • Stimulating markets and achieving community benefits

4. General comments …. • Robson Rhodes review • SAP review • Areas of key work: • Information • Organisational financial control framework • SAP systems • Organisational alignment • Draft Audit Commission report

5. An update on the national strategy…. • Regional Centres of Excellence : • Kent lead for the South East in partnership with Surrey, Hampshire and the Berkshire Unitaries • Management Board set up • Director appointed • Business case in draft to the ODPM • 6 work streams • David McKibben leads the Transport work stream • Gershon – an extended role

6. My key objectives … • Get agreement to a corporate procurement strategy: • Reviewing the current arrangements for procurement • Challenging the status quo • Creating a strategy to achieve best value and best use of revenue resources • Set performance targets (Benchmarking) • Develop e-procurement within the Council • Deliver the planned Council procurement savings targets • Develop partnership and collaborative working opportunities • Meet the National Procurement Strategy targets

7. What are we doing corporately Draft • There is a national strategy for procurement • The Audit Commission are gong to major on VFM • We are establishing a Strategic Procurement Board • We are developing our own strategy • It’s in draft – we need to consult • It has to involve a lot of people • It has to balance a number of priorities

8. Setting clear priorities – our work plan Setting clear priorities – our work plan

9. We spend our money, broadly, in two ways … This description of expenditure is important, as modern strategic procurement models / thinking and tools and techniques seek to manage this spend in different ways, this has implications for the level at which the spend is managed and the way in which the spend is managed. Direct spend: direct spend is important to service delivery and can have a high degree of service and financial risk, it can be of high financial value and more importantly in most organisations, it is customer facing. This type of procurement is normally undertaken with significant technical Directorate level input with central support from procurement / commercial / legal specialists. In-direct spend: In-direct spend however is not normally directly customer facing and represents an overhead to the organisation, this type of spend is usually consolidated and aggregated and managed in a category management framework at a central point within the organisation. The purpose of this being to consolidate and aggregate volume to be able to get the best deal and to manage product standardisation and increase variety reduction and manage the supply chain efficiently.

10. Wave 1 work plan ….

11. What procurement cost savings have been made so far ? • Other procurement VFM review areas in the pipeline: • Stationery • Paper • ICT consumables • Printing and marketing spend • Telephony • Social and Healthcare • Agency staff • Training venues • Hotel and accommodation

12. Capacity - what are we doing

13. Suffolk County Council …

14. Capacity - what resources do we now have

15. Priorities

16. Priorities – an update on progress