Speech by Exchequer Secretary to the Treasury Angela Eagle, MP to the Procurement Solutions Conference on Collaborative Procurement
LONDON. June 11, 2008/3mnewswire.org/-- Check Against Delivery
"1. Good morning everyone, it's a great pleasure to be here.
2. I'd like to start by talking about saving money, because that's the first thing that everyone thinks of when procurement is mentioned and this is obviously a huge and important part of what you do if you are procuring services for the public sector.
3. As a Government, we're determined to give taxpayers the best possible value for their money. Over the last three years we've successfully delivered £23 billion worth of savings - £8 billion of them through improving procurement.
4. Over the next few years we want to achieve a further £30 billion of savings. We also want continue to improve the way that we procure goods and services and we know that improving that will be crucial to achieving our saving goals,especially looking at collaborative procurement. And that means working together to use our combined purchasing power to have better and more efficient and effective solutions. Now that is an obvious thing to do in theory, but slightly more difficult to do in practice, but we are here to deliver it.
5. The Government spends for example £70 billion every year on things that every organisation needs: things like computers, telephones, desks and paper.
6. But at the moment, different departments, organisations and local authorities are all buying these things separately from each other, which means higher risks, more time taken, more costs in the process and less efficient solutions.
7. We are making some progress in being more collaborative, and using our purchasing power more effectively. For example, I went to see an e-auction last year, and you can literally watch the prices fall, and the savings rise on the screen in front of you.
8. For those who don't know how they work, these are live, internet-based reverse auctions held by groups of organisations which all need the same thing. Suppliers are invited, and ranked on quality before the auction starts, and during the auction they can see what bids are being made by rivals - but not who they're from - and then reduce their bids to compete. At the end, the bid and the quality ranking are combined, and the best supplier is chosen.
9. At the e-auction that I witnessed, I saw 24 organisations made a saving of 38 per cent, in this case this was £5.2 million overall, and it was on IT equipment. In the biggest e-auction yet, the savings could turn out to be as much as £100 million over three years - and that was for something as simple as stationery and office supplies.
10. Because the potential gains of collaborative procurement are huge, particularly when they're added up, this is something we have to deliver. Just in the last year through collaborative procurement, we made £650m of efficiency savings - and I know that there will be more in the future.
11. But another point I wish to make today is that procurement isn't just about saving money, important though that is. It's about getting better value for the money we spend too.
12. It gives us the chance as procurement professionals and government to be creative, to find new innovative ways of delivering services. And if that means that a school is better than it would have been, then that can change people's lives; if it means a better run hospital, if could even save lives.
13. Procurement gives us the chance to change lives in other ways, too - by using our spending power to achieve some of our wider objectives.
14. Thinking about sustainability is one good example - and this can bring real savings, as well as helping us to protect our environment. This can mean procuring more sustainable products - like more efficient vehicles, or renewable energy.
15. It's also important to think about what we need to procure. So, our energy framework means departments can meet part of their electricity needs from renewable sources - but we should also be thinking about how we can use less energy in the first place, and about how procurement can help us to achieve that.
16. One example is the campaign that OGC launched last month to encourage the public sector to turn off their PCs when they're not using them, which could save £10 million, and over 55,000 tonnes of carbon emissions, every year.
17. As part of this, DCMS have led the procurement of software that can turn computers off in a specified time, which is now available across Government.
18. To help develop similar ideas, we're now setting up a Centre for Expertise in Sustainable Procurement, and we plan to publish clearer guidance on how you can all take sustainability into account.
19. As well as sustainability, I want us to make sure that our procurement opportunities are accessible to SMEs, so that they can gain public sector contracts which is good for them, good for the development of Britain's small business; and it also means that we can get better choice and better value.
20. We're doing a number of things to help, including through the website supply2gov.uk, which advertises lower value contracts. At the Budget, we announced free trial periods for businesses registering at the site for the first time.
21. We also set up an advisory committee, chaired by Anne Glover, to give us advice on how we can reduce the barriers to SMEs winning public sector contracts; and on whether we should set ourselves a goal of SMEs winning 30% of all public sector business in the next five years. And those of you that have read the media today will notice that Anne Glover has issued a call for evidence on that very issue so if you wish to engage on this issue please get in contact with Anne Glover's Review team.
22. The main thing that I want to talk about today, though, is the way that we can use procurement to achieve some of our social objectives.
23. This Government wants to create a fairer society, and to improve people's lives. And at the same time, we do of course want to get the best possible value for taxpayers' money.
24. But by thinking about social issues in procurement, we can bring the two together; because by achieving our wider objectives, we can get better value for the money that we're spending.
25. So I'm delighted to be launching a new guide today, called Buy and Make a Difference, which explains how we can achieve our procurement objectives and our social objectives at the same time.
26. It emphasises that procurers in the public sector should be thinking about social issues at every stage: from pre-procurement, right through to managing the contract.
27. But it also shows how much easier it is to build these issues in if you think about them early, especially before tendering - so social issues should be a first thought, not an afterthought.
28. One obvious example of what can be done is to think, for example, about using the ability to reserve contracts for 'supported factories and businesses', which have more than half of their workforces made up of employees with disabilities.
29. And public procurement professionals already have to ensure that they meet public sector equality duties, on disability, gender and race - so we plan to publish practical guidance on these shortly.
30. But I also want procurers to be looking at other, more imaginative options. The guide that I have launched today contains a number of examples of what's possible, and I hope that you'll all have a look - there are copies on the OGC stand, and it is also available on the website from today.
31. So, my message today is that while of course we want procurement to save money, we would miss an opportunity if that's all it achieves; and we haven't get the best possible value out of the £160 billion spend on procurement every year if we just look at it in those narrow terms.
32. We need to think creatively about procurement - both about new approaches which can deliver better services, and about ways that we can achieve our sustainability and social goals.
33. If we can do that, we can make a real difference to people's lives. And we can show that procurement can be about far more than just saving money."
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