Local authorities could save between 10 and 20 per cent of their expenditure on energy, telephony and solicitors simply by procuring differently. This is the conclusion of a White Paper released by Opera Solutions last Friday.
I was initially sceptical about the papers focus, though the figure for savings seemed very accurate. I am very much a believer that councils need to be focusing on redesigning their services and making choices about what they provide. The fear is that if councils just concentrate on how they can provide the same service for less they will miss a big opportunity to reform public services.
However, councils would need to purchase the services featured in the report whatever their model of service provision. It is important to recognise that redesigning services and securing better value from existing private suppliers are not mutually exclusive. It is therefore well worth looking in to how they could be provided more cheaply and this paper is a good place to start.
The data currently released does not allow accurate cross local authority comparisons. This is a big problem. Managers need data which will allow them to see the deals other comparable authorities have achieved with suppliers. They can then use this information to negotiate cost reductions. This data is provided by companies such as opera solutions – hence why they produced this report.
For example, to assess whether your phone service is expensive or cheap you need to categorise the cost of the phone service across the council and have other authorities do the same. If telephone expenditure is recorded as part of a general contract with a supplier who provides other services such as refuge collection or legal or human resources services you cannot compare costs effectively.
Opera Solutions analysed data from three local authorities and three expenditure items, which were telephony, solicitors and energy. They believe that councils can achieve significant savings without affecting core public service delivery. To do this councils need to get the clarification of spend data right and negotiate better deals with suppliers.