Tuesday, 26 November 2013

A tale of two cities for CLG procurement inquiry: Sheffield & Sheffield

The CLG Inquiry into procurement rolled into Sheffield on the 18 November. This initially impressed me as it provided an opportunity to get out and feel the pulse on the ground. I say initially, as it transpired during the evidence that the Committee had pre-purchased tickets for the 3.47 train back to London and therefore couldn’t hear evidence after 3.25. Was such a guillotine a demonstration of good value for money?

Anyway, I would love to have shared the carriage with the Committee as they returned to London, and waited for the “What are we to make of all that?”

The objective of the sortie to Sheffield was “about trying to find out what is really happening on the ground, ..., what is going right, and what is going wrong”. What they heard were mixed messages about procurement in Sheffield; not local government in general, and not local government procurement in Sheffield but a ‘come all ye’ of anecdotes from questionable sources. For example:
  • Single sourcing is leading to an item which would otherwise have cost £10 costing £20, yet no evidence to substantiate that claim was provided;
  •  EU procurement rules require contracts over £250k to be advertised, yet my understanding is that the threshold for councils is actually £173,934;
  •  Contracts under £20k can be awarded on the basis of three phone calls;
  • “people, companies and organisations from outside the area seem to have a better opportunity of obtaining procurement contracts, mainly because they do not have any conflicts of interest or for some other reason.”

My suggestion to the Committee is, if you hear such heresy and factually flawed evidence, treat the informants other evidence with a large pinch of salt.

But the Committee are not blameless in this evidence session,
they should have made clear whether the evidence was ‘the case of Sheffield City Council’ or local government procurement in general.

The Committee also have to bear some responsibility for what appear to have been misunderstood questions. For example, when asked, “Do you think there is scope for more collaboration by your local authorities, either with each other directly or by using procurement organisations, to achieve economies of scale?”, I would have thought the question related to either horizontal cross-council procurement collaboration or even better across wider public authority collaboration. Yet the witnesses seemed to respond to a different question, of the type, “ Do you think there is more scope for vertical collaboration between third sector and businesses with local government?” – that’s an entirely different question so the answers, to me, don’t appear to be remotely relevant to my interpretation of the actual question asked!

Following up on that, the witnesses from Sheffield’s Third Sector Assembly, S&E Yorkshire Federation of Small Businesses, and Sheffield Chamber of Commerce, were asked for their opinion on centralised procurement (what seems to be the only consistently asked question) from a national or regional purchasing organisation. No surprise that they didn’t think that was such a good idea. One of the witnesses shared the insight: “The bigger you get, it always costs more, and costs up to 100% more than it would by going locally and using your own council staff, whom you want to keep employed, to do that”. I have absolutely no idea what evidence has ever been produced to support such a claim. Another witness suggested that “it may be better for them to come together as a number of councils to procurement for the whole of those councils”. Now that really makes me question ‘what’s going on?’ – the next evidence session was to include witnesses from YPO (Yorkshire Purchasing Organisation) who I have always thought were quite an effective buying organisation and well known, how come the local Chamber of Commerce were unaware of them and don’t have a strategy in place for engagement with YPO?

Just as strange, given the organisations the witnesses were representing, when asked about council payment days, the witnesses didn’t seemed able to share their experience. 

It was also fascinating to learn that when one procurement award was probed it was discovered there was a formula error in the spreadsheet used to calculate the score. This seemed to pass the Committee by but if the formula was in a template evaluation model, is it not likely that the same error had been applied to many, many awards? 

What is clear to me is that these key representative organisations do not appear to be fully engaged as stakeholders of the local government procurement – if they were perhaps we would have heard: “... the local authority are uncertain whether or not they want to support consortia to put in bids and then sub-contract. There are mixed messages within the local authority. Sometimes they think it is a good idea and sometimes they think it is not such a good idea, so there are inconsistent messages coming back from the local authority in that respect”.

However, I reserve my quote of the day for:
My last observation is about the way a lot of the contracts are managed. There are some exceptionally anal people in the council who have phenomenally large bits of data that they want us to collect and are very prescriptive as to exactly how we should spend the money delivering the services. We spend a lot of time gathering data. I am not convinced that that data has any use or is analysed when it gets back to the local authority.
Anyway, I would love to have shared the carriage with the Committee as they returned to London on the 3.47, and waited for the “What are we to make of all that?”

But first I will have to share some insights from the local government procurement witnesses who were in before the 3.25 curtain call.

1 comment:

  1. Gord, what are we to make of it indeed. The questions still indicate such a lack of understanding, and the flawed evidence is very worrying.