Hampshire County Council

Buildings, Land and Procurement Panel Item *

23 January 2007

Corporate Procurement Update

Report by the Director of Property, Business and Regulatory Services

1

Introduction

1.1

General progress reports on corporate procurement initiatives were presented to the Panel in January and June during 2006 and more detailed reports regarding the procurement reviews being undertaken with the Adults Services department were presented to the meetings in July and October. The purpose of this report is to provide Members with a further update on the full range of activity.

1.2

The Corporate Procurement Action Plan does not link to the corporate priorities but requires a decision as it has a positive impact on the management of the Council's resources and on the local economy, by promoting a strategic approach to procurement, and by developing the procurement skills of staff and improving capacity.

2

National Agenda

National Procurement Strategy for Local Government (NPSLG)

2.1

The County Council continues to perform well against the milestones contained within the National Procurement Strategy for Local Government. The target date for the completion of all milestones is December 2006 and the County Council has achieved 90% of these. Compared to the national position this performance is very good. Full detail is shown in Appendix 1.

2.2

The only two milestones not met relate to reducing the lead time between the placement of an advert and the contract awarded for major projects. The County Council's procurement strategy for construction projects is based on the use of framework partnering arrangements and therefore the number of full tender exercises completed for major projects is limited. This means that the lead time for projects which already relatively short and unlikely to be improved upon. Work is currently underway to measure the tender time for a sample of major projects which should reflect well on the County Council, even if it does not directly meet the requirements contained in the milestones.

Collaboration

2.3

The County Council is fully involved with the South East Centre of Excellence (SECE), particularly in relation to the construction workstream. In the area of commodity goods and services, SECE has begun an initiative to `signpost' opportunities for local authorities to join existing contracts that are deemed to offer good value-for-money. Behaviour is likely to change relatively slowly, but there are signs that this approach is encouraging more authorities to consider collaboration with others. The recent decision of West Sussex County Council to participate in Hampshire's contract for temporary workers is in many ways simply an extension of existing relationships in areas such as IT equipment, photocopiers and library books through the Central Buying Consortium, but it does illustrate the kind of changes that are possible.

2.4

The County Council is also involved with other national initiatives, such as the DfES' Centre for Procurement Performance and the National Procurement Programme.

Hampshire Marketplace and shared service

2.5

The Hampshire Marketplace comprising the County Council and eight Districts Councils continues to make progress with five Districts now live. One District has already made £40,000 of cashable savings on its stationery and office supplies procurement. The Hampshire and Isle of Wight Improvement Board has agreed to fund the part-time Marketplace Co-ordinator for the next 12 months to continue to support the partnership, using the Capacity Building Fund from the DCLG. Funding for the co-ordinator post has been provided by County Supplies for the last twelve months as part of the County Council's commitment within the National Procurement Strategy to support smaller authorities in effective procurement arrangements.

2.6

The Hampshire Improvement Board has also agreed a bid for funding from the Corporate Procurement team to carry out research with Hampshire and Isle of Wight Local Authorities on the most effective procurement support arrangements within the region, which may include proposals for a `procurement shared service'. The project is planned to report back on its findings and recommendations at the end of July 2007.

e Procurement Initiatives

2.7

The project to implement a procurement card for payment of catering supplies to HC3S kitchens, which removes the manual processing of over 15,000 invoices a year, has been successfully rolled out to all HC3S kitchens for one of the main food suppliers. Non-cashable savings from this initiative are included in the Annual Efficiency Statement for procurement. Plans will be formulated over the coming months to roll out the project to other establishments and catering suppliers.

2.8

The e-tendering system, which reduces some of the administrative overhead in the tendering process continues to be used for a sample of tendering projects in both County Supplies and Property Services. The process continues to be well received by most suppliers. A more intensive programme of electronic tenders is being planned over the next twelve months to increase the benefit of the system.

2.9

Good progress continues to be made on integrating the SAP electronic catalogue of goods and services (EBP) with the online catalogues of two key corporate suppliers which will make the ordering process more streamlined and accurate for both the County Council and the suppliers. An additional 1% discount has been negotiated with one of these suppliers because of the reduced processing costs arising from this ordering technique. These catalogue links are facilitated by the IDeA:marketplace as part of the `Hampshire Marketplace' project with District Councils. Go-live for this project is scheduled for late January.

2.10

A business case and detailed analysis of the benefits of automating invoicing arrangements from domiciliary care providers using a `lodged' procurement card is being jointly explored with Adult Services as part of the review of the procurement of domiciliary care. The business case will be completed during January.

2.11

A number of staff have been trained in use of the SECE Business Portal, which is intended to enable publication of tendering opportunities to potential suppliers and a contracts register that will be available publicly, but will also offer more detailed supporting information to local government officers. The objective of the Portal is actively to promote tendering opportunities as recommended by the National Procurement Strategy and to encourage collaboration and joint working between authorities on procurement. The Portal appears to provide a satisfactory mechanism for creating a corporate contracts register for the County Council and consideration is being given to how it will be used in conjunction with our own tendering opportunities information currently available on Hantsweb.

3

Improvement Plans

Savings and efficiencies

3.1

The procurement savings target of £500,000 cashable and £500,000 non-cashable have been met for the current year. As in previous years, the savings schedules are dominated by corporate arrangements managed by Corporate Procurement and County Supplies. Appendix 2 gives further details of the savings for 2006/07. Cashable savings of £404,600 have also been achieved on behalf of schools. As previously agreed, up to £150,000 of the savings may be recovered centrally to fund additional Contracts Manager posts on an `Invest to Save' basis. Two Contracts Managers are currently in post and are undertaking the departmental procurement reviews and projects as outlined later in this report. The allocation of the £100,000 required to fund these positions in 2007/08 has recently been agreed with departments as follows:

Allocation of Procurement Funding 2007/08

Department

2007/08 Allocation £

Adult Services

32,200

Chief Executive

6,500

Children's Services

22,700

Environment

4,600

PBRS

23,100

Recreation &Heritage

7,900

County Treasurer

3,000

TOTAL

100,000

Skills Development, Training and Events

3.2

Following the completion of the planned procurement training and events programme for the current financial year, 775 staff have now received some form of procurement training, awareness or skills development over the past three years. This has led to a greater understanding of the importance of effective procurement.

3.3

More specialist training is currently being delivered to departmental staff on the e-Tendering system and a series of workshops is being delivered to potential suppliers to demonstrate how to receive tenders and submit tender bids electronically.

3.4

The procurement skills development programme for 2007/08 will cover the following specialist topics and their impact on procurement:

· Sustainability

· Equality & Diversity Impact Assessments

· Evaluation & Assessment of the revised Pre-qualification Questionnaire (PQQ)

· Use of the Best Practice Guide.

3.5

It is also planned to complete a skills analysis for those staff (estimated to be about 50 staff) who spend the majority of their time involved in the procurement process to assess current skill levels and development requirements in more detail. A major feature of the development programme for the current year and to complement the launch of the new Corporate Procurement Strategy was the series of events held during a `Procurement Week' in September 2006. A range of topics were identified to emphasise the diverse impact and range of procurement across the County Council.

Supplier Satisfaction Survey

3.6

In June a questionnaire was sent to 2,818 suppliers inviting views on the authority as a business partner. The suppliers were chosen from the County Council's electronic catalogue of goods and services and therefore represented the key contracted and approved suppliers to the County Council (excluding spot purchased social care providers). 822 (29%) suppliers responded, and the detailed findings are shown in a series of charts in Appendix 3. The survey will be repeated regularly to track changes in perception.

3.7

The key results from the survey are:

· Of those expressing a view, most suppliers are fairly or very satisfied with the processes by which the County Council procures goods and services. However, `don't know' was the most frequently occurring answer to a number of these questions which suggests the need for further communication and education to raise awareness of the County Council's procurement procedures and where to find existing information.

· The Council scored well on general working relationships and compliance with contracts, with over 66% of respondents fairly or very satisfied.

· The County Council is regarded as a timely and accurate payer of bills with a good choice of payment methods, over 85% expressed themselves as fairly-or very -satisfied in these matters.

· The survey also collected information on the profile of suppliers.

- 90% employ less than 250 staff, 74% employ less than 50 staff.

- Less than 7% are classified as `ethnic minority businesses'.

- Only 6% were voluntary, community or social enterprises (the survey

did exclude the majority of social care providers because separate

surveys are undertaken in this area by Adult Services).

4

Corporate Procurement Strategy - Outcomes

4.1

The Corporate Procurement Strategy for 2006-2008 was approved at the Panel's meeting in July 2006. The Corporate Procurement Network is currently putting together an action plan to address the key outcomes in the Strategy. The key outcomes are:

· Improvement in capacity and performance in procurement

· The number of procurement partnering arrangements is increased to maximise benefits

· Better value-for-money is achieved through appropriate collaboration

· Procurement projects meet identified needs and provide community benefits

· The efficiency of the procurement process is maximised through appropriate use of electronic procurement.

Further reports will be brought to Panel on the content of the action plan and targets to support the outcomes.

5

Departmental Procurement Reviews and Support

Adult Services - Domiciliary Care for Older People

5.1

A review of the procurement of domiciliary care has been completed and a detailed report has been prepared for the Adult Services Department. The project has included a review of the current sourcing activity, business and functional needs, price analysis, comparison of rates between different authorities and across Adult Services area offices, cost analysis, market and supply chain analysis and a review of technical developments in order to make recommendations to increase efficiency and effectiveness on a sustainable and longer-term basis.

5.2

A number of recommendations have been made within the report, along with an assessment of potential benefits, including savings. These recommendations include:

· A shift in focus from local area needs to wider geographical units, recognising that providers operate across area office boundaries.

· A move from a `transactional approach' led by care managers making spot purchasing decisions to a co-ordinated procurement strategy for domiciliary care, which can accommodate individual care needs and geographical variations.

· The need to establish "preferred providers by geographic area" to enable aggregation of care requirements and spend whilst still maintaining competition and enabling future expansion for current and new providers.

· Proposals to maximise efficiency and reduce costs through aggregation of individual care requirements into work packages thus removing non productive time including travel.

· Explore the scope to create greater flexibility in care assessments to facilitate aggregation of care requirements - this will include the wider use of care brokers in identifying the most appropriate provider to deliver the client's care.

· Shift focus from price to cost which will

_ Allow objective assessment of price including recovery of overheads and profit

_ Allow price variances to reflect local differences in pay rates or skill levels

_ Removes market pressure to depress wages and other employment costs

_ Allows targeting of increases arising from legislative and other changes in costs.

· Develop a more robust and consistent `tender' pack and evaluation model for all purchasing decisions including single tender negotiations, contract extensions and renewals and require a detailed cost analysis to be submitted by all approved providers.

5.3

The next step is to jointly work up an action and resource plan with Adult Services, which is likely to require considerable support from the Corporate Procurement Team in the short to medium term. This in turn will impact on the resource available to undertake other review projects.

Adult Services - Other Reviews

5.4

Members agreed four other procurement reviews in Adult Services, which were:

· Analysis of Residential Rates and Costs

· Independent Sector Residential Care Non-Pay Costs

· Use of Assessment Matrix in Learning Disability

· Business process review of the organisation of procurement.

5.5

Due to the priority given to the domiciliary care review, little progress has been made on these additional reviews so far. However, an initial discussion has taken place with the Hampshire Care Association on benchmarking some of their contracts for goods and services against those of the County Council to see if this could help reduce non-pay costs for their members. This work is at an early stage, but could lead to savings being passed through to the County Council.

5.6

An initial analysis and benchmarking of purchased residential and nursing care costs does show that the County Council is in the lower quartile of rates in the South East and further work is required to identify what actions, if any, can be taken to maximise efficiency in the procurement of these services. It is recognised that this work needs to be completed to assist in the annual price negotiations.

5.7

The review team has not yet been able to provide any support to the use of the assessment matrix in learning disability services, although Adult Services are continuing to use the model where appropriate. The South East Centre of Excellence also continues to promote and praise Adult Services' work in this area.

5.8

The Treasurer's consultancy team are assisting with the business and organisational process review. The project initiation document for this review is currently being prepared. Agreement has been reached that a member of the Corporate Procurement Team will be seconded to Adult Services for a minimum period of six months to assist with workload planning and to undertake a number of outstanding contract exercises.

Supporting People Team - Homelessness Cluster

5.9

The strategic review and resultant tendering activity with the Supporting People Team has now been completed. This involved the assessment of existing contracts and a review of the appropriateness of negotiation, single tendering or competitive tendering for these services. In support of these arrangements, new service providers were invited to apply for accreditation and over 20 new organisations have been added to the approved provider list. A provider event was held to announce the details of the strategic review, the resultant tenders and outline the tender procedure. This was well received and there were on average 24 requests for each of the 8 tender packs. The number of submissions actually received was on average 7 for generic floating support and 3 for specialist services.

5.10

A short list of providers selected against the written submissions were invited to give a presentation as well as clarify certain aspects of the tender. District councils, PCTs and service users were represented on all evaluation panels. Feedback has been very positive. Out of the five existing services all incumbent providers were unsuccessful. The total cost of the existing services was revised from £924,987 to £723,000 and the change in hourly cost ranged between a reduction of £1.70 (10.76%) to £0.36 (2.07%) where the old and new service is directly comparable in terms of scope. Additional benefits include the identification of key targets against which the providers can be measured and evaluated.

Supporting People - Housing Improvement Agency

5.11

A tender enquiry has been issued to a number of service providers for the provision of HIA services in three areas. This tender has consolidated all of the funding for this service from all of the District Councils, Supporting People and Adult Services.

Hantsdirect - Corporate Contact Centre

5.12

The contract has now been signed with Lagan Technologies for the supply of the Customer Relationship Management and associated technology to support the Contact Centre. The tender was concluded in accordance with agreed timescales and involved a series of evaluations, including an assessment of the written submission, supplier demonstrations and user assessment, supplier and reference site visits. Lagan secured the highest overall scores in the various evaluations and is well proven being used in 84 different local authorities. Lagan's price was calculated at £2.09 million or 14% less than the second placed tenderer.

Children's Services - Local Agreement for Car Safety Seats

5.13

An agreement has now been concluded and the details of the contract including the ordering procedure has been circulated to all Children's Service Area offices. The local arrangement includes:

· Free demonstration and fitting service

· 10% discount for emergency purchases and non standard car seat purchases

· Free checks of an existing car seat installation to confirm it is safely fitted.

· Products can be made available from any of the 22 stores in or around Hampshire

A schedule of discounted prices has been established against a range of seats selected to cover all age groups and to fit in most cars. Savings range up to £33.32 per seat or between 14 % and 48% off list.

Children's Service - Reparative Justice Services for Wessex YOT

5.14

Expressions of interest have been requested for reparative justice services. The specification and associated tender documentation is currently being prepared with area managers. The key priority is to have specific targets against which the service provider can be measured in order to negate any potential reoccurrence of performance issues with the elected provider. The tender is due to be issued this month.

Children's Services - Fostering Services

5.15

Following discussions with the Deputy Director of Children's Services and her team it has been decided to meet with a number of independent fostering agencies to discuss how and to what extent opportunities may exist for the County Council to assist agencies in reducing costs and any inefficiencies in the process. Exploratory meetings with independent fostering agencies have been scheduled for January 2007.

Environment Department - Passenger Transport Group (PTG)

5.16

Comprehensive reports were prepared during April 2006 and these outlined recommendations for enhanced procurement of home-to-school and social care taxi (and other transport) provision. Detailed discussion of the analysis resulted in agreement to conduct a pilot tender across the North East of Hampshire for taxis and public service vehicles/minibuses for a five year period. The PTG are naturally concerned that the pilot should not have an adverse effect on existing service provision and the effective date of the new contract is likely to be between February and June 2008. This means that a pre-qualification questionnaire (PQQ) will be sent out at Easter 2007 and an invitation to tender in November 2007. In terms of scope, the tender will be extensive, and likely to cover in the region of:

· 400 suppliers at PQQ stage

· 450 children and 80 escorts

· 160 routes and 80 incumbent suppliers

· a current spend in excess of £10,600,000

Environment Department - Procurement Innovation Group

5.17

A Procurement Innovation Group has been set up by the Environment Department to look at improvements to procurement practice for contracts with an expenditure of £50 million p.a on highways maintenance, specialist resurfacing, and capital improvement works.

5.18

Positive results have come out of the research undertaken by the group including the recommendations that supplier incentivisation and a formal Performance Measurement System should feature in the new contracts. The group's work has also included a review of options for the new term maintenance contract.

Postal Services

5.20

A Postal Services Procurement Group (PSPG) was set up early in 2006 to provide corporate guidance to departments in response to the introduction by the Royal Mail of `pricing-in-proportion'. To date, total savings in Postal Services procurement activities exceed £60,000. This arises from savings franking equipment (£50,449) and mail delivery (£10,591).

5.21

Advice was given by the PSPG to all departments on the optimum sizing of envelopes and packages, and the appropriate folding of contents. Generic and local instructions were written, and an information article was included in the SupplyBase magazine. The aim was to avoid the widely predicted increases in postal costs of up to 43% (source: www.neopost.co.uk) that may have occurred if no action had been taken.

5.22

Encouraging results have been received from 3 departments in the first quarter since pricing-in-proportion was introduced. Despite an increase in the volume of mail, the County Treasurer's Department and the Environment Department have achieved a neutral impact in real costs. Even more impressively, the Chief Executive's Department, with the second largest

mail volume of all departments, has achieved a 37% decrease in costs, equating to £10,591. These savings will be recurring and figures from other departments are currently being collated.

5.23

Careful and thorough analysis limited the purchase of upgraded and replacement franking machines to just 10 out of a total population of over 100 in use. Negotiations with the two suppliers produced £50,515 of efficiency savings, equating to 52% of the list price of these 10 items. There has also been a substantial improvement in the maintenance and consumable costs for the equipment.

5.24

The second phase of work on Postal Services is well underway, and has a focus on the costs of mail delivery. Initially, this is being confined to the County Treasurer's Department as it has the largest mail volume. Discussions have been held with the Royal Mail and UK Mail. Other suppliers including TNT and DHL will be contacted in January 2007. A detailed analysis is required to ensure that the solution meets the operational requirements of the department, and that savings are genuine, transparent and long-term.

5.26

The Regional Centres of Excellence have issued publicity material suggesting that an `average' County Council can save £200,000 pa through a review of postal services. Little detail is available, but they do state or imply that the pre-requisites include centralisation of mail collection points; addressing all envelopes in one standard font, bar-coding of letters, using Council staff to pre-sort, bundle and bag mail; and the use of clean databases to ensure 100% accuracy. These wide-ranging and extensive changes to working practices would form the basis of a substantial `efficiency review' of back-office services.

6

Conclusion

6.1

The procurement agenda continues to be very diverse and is characterised by

a wide range of initiatives. Good progress has been made against the NPSLG and the revised Corporate Procurement Strategy has been launched effectively. The team have also delivered cashable savings in excess of £0.5 million for departments and a similar amount in non-cashable savings.

6.2

The established team in Corporate Procurement and County Supplies was strengthened some 12 months ago with the appointment of two new Contracts Managers and they have been involved in a range of procurement projects with good results. The programme of joint reviews with departments is well under way and the initial review of domiciliary care with Adults Services is approaching completion. As was reported in June, the team has been invited to become involved in a number of areas that were not originally part of the programme and this support to departments has been very well received. The work completed with the Supporting People team is a particularly good example of how effective these arrangements can be.

6.3

Some projects are not running as quickly as had been hoped and this reflects the complexity of the work, the limited additional capacity that has been put in place and the ability of departments to support the review process whilst continuing to manage ongoing workload and service commitments. In this context, discussions are taking place with the Director of Property, Business and Regulatory Services regarding the size and focus of the review programme and about the next steps to be taken in developing procurement capacity and leadership within the County Council.

Recommendation(s)

That the Buildings, Land and Procurement Panel advises the Executive Member for Policy and Resources that the progress on the corporate procurement action plan and on the programme of departmental procurement reviews be approved.

LINK(S) TO CORPORATE STRATEGY

Yes

No

Hampshire safer and more secure for all

x

Maximising well-being

x

Enhancing our quality of place

x

This proposal does not link to the Corporate Strategy but, nevertheless, requires a decision as it has a positive impact on the management of the Council's resources and on the local economy, by promoting a strategic approach to procurement, and by developing the procurement skills of staff.

National Procurement Strategy Milestones

HCC Actions

Met?

1

Corporate Strategy developed, owned by chief executives, members and senior officers

Achieved: Corporate Procurement Strategy 2006-2008 developed and owned by chief executives, members and senior officers.

Y

2

Health Check against National Strategy

Review of procurement, including health check completed and report published in September 2005. Key recommendations from the Health Check have been included in the Corporate Procurement Strategy.

Y

3

Centres of Excellence involved

Engaging in all works streams of the SE Regional Centre of Procurement Excellence. The County Council is leading the regional Construction Procurement work stream.

Y

4

Approach to partnering in construction and service delivery set out in the Corporate Procurement Strategy

Clearly set out in Corporate Procurement Strategy 2006-2008. The County Council manages a Partnership Portal on its intranet, which includes guidance on partnership working and a partnership database.

Y

5

Approach to collaboration and new trading powers set out in the Corporate Procurement Strategy

Clearly set out in Corporate Procurement Strategy 2006-2008.

Y

6

Appraisal of service delivery models included in Best Value reviews

Best Value Review Process Guidance covers this aspect and is in place. Available at: http://www3.hants.gov.uk/bestvalue-2/bestvaluereviews/bestvalreviewprocess.htm

Y

7

Average time from OJEU notice to award reduced by 10% for major projects of more than one year's duration

Currently under review

N

8

All councils co-operating regionally via networks of centres of excellence

Engaging in all works streams of the SE Regional Centre of Procurement Excellence. The County Council is leading the regional Construction Procurement work stream.

Y

9

Average time from OJEU notice to award reduced by 25% for major projects of more than one year's duration

Currently under review.

N

10

Appropriate e-Procurement solution implemented

SAP and electronic catalogue of goods and services rolled out to appropriate staff. Activity statistics collated monthly.

Y

11

Using government procurement card or suitable alternative for low value purchases

Review of procurement cards undertaken, benefits not substantial enough to implement at this time. The County Council is focusing its efforts on developing and improving its electronic catalogue of goods and service (internal e-Marketplace) and electronic links with suppliers as providing the greatest benefit to the County Council. GPC has been implemented for catering suppliers.

Y

12

Accessing an appropriate e-Marketplace

Internal marketplace established. IDeAMarketplace being used in partnership with District Councils, with the County Council having integrated SAP with the IDeAMarketplace to benefit from XML punch-out links to suppliers.

Y

13

Staff consulted on employment issues in procurement processes and contracts. 2003 Act and 03/2003 Circular built into processes and contracts

Appropriate contracts clauses already in use. Guidance issued and being addressed and monitored via the Corporate Procurement Network. Covered in the Corporate Procurement Strategy 2006-2008.

Y

14

Publish a Selling to the Council Guide (website)

Business Opportunities Website and Selling to the County Council Guide published.

Y

15

Ensure corporate procurement strategy is addressing sustainability and equality issues, helps to achieve the community plan and involves the voluntary sector

Policy, achievements and future actions are included in our Corporate Procurement Strategy 2006-2008.

Y

16

Sustainability built into procurement strategy, processes and contracts

Policy, achievements and future actions are included in our Corporate Procurement Strategy 2006-2008. Standard contract clauses in place. Best value tender evaluation includes sustainability and other quality issues, whole life costings being implemented for major projects.

Y

17

Conclude a compact with the local voluntary and community sectors

Compact developed and in place

Y

18

Procurement processes for partnerships should include:

· Information Memorandum to prospective bidders included in procurement processes

· Invitation to bidders to demonstrate effective use of supply chain included in procurement processes

This is included in our Corporate Procurement Strategy 2006-2008. A limited number of procurement partnerships are currently in existence.

Y

19

In invitations for partnerships:

· Give bidders option to specify benefits under community plan in procurement processes for partnerships

This is included in our Corporate Procurement Strategy 2006-2008. A limited number of procurement partnerships are currently in existence.

Y

20

Concordat for SMEs and voluntary sector compact concluded

Hampshire County Council's Concordat published in December 2005. Compact concluded.

Y

Appendix

Two

Procurement Efficiencies and Savings Monitoring

: Corporate Procurement and County Supplies

January 2007

Cashable Savings - Already Achieved for 2006/07

Description

Contracted Value (£ p.a.)

Total Annual Cashable Saving £

Corporate Share (excl. schools)

Cashable Corporate Savings (£)

Cashable Schools Savings (£)

2006/07

2006/07

Venues and meeting facilities: average savings from new contract (net of commission) on lowest rates previously achieved by departments. Quality of service unchanged as same venues are being used.

1,500,000

75,000

25%

18,800

56,200

Warehouse Items: prices held at previous year prices, therefore average inflation saving of 2.5%.

5,062,500

126,600

25%

32,100

94,500

Gas supply: reduction in prices compared to previous contract. 7 month part year effect.

4,100,000

362,000

20%

42,200

169,000

Folding Furniture - price savings compared to previous contract.

120,000

9,600

5%

500

9,100

Flooring Services - inflation saving compared to previous contract as prices held.

500,000

12,500

20%

2,500

10,000

Water Coolers - price reduction compared to previous contract with different supplier. Quality and volume of service unchanged.

200,000

6,200

20%

1,200

5,000

Salary sacrifice schemes - Phase I - NI saving for the County Council. 6 month part year effect.

n/a

40,000

95%

19,000

1,000

Procurement Efficiencies and Savings Monitoring

: Corporate Procurement and County Supplies

January 2007

Cashable Savings - Already Achieved for 2006/07

Description

Contracted Value (£ p.a.)

Total Annual Cashable Saving £

Corporate Share (excl. schools)

Cashable Corporate Savings (£)

Cashable Schools Savings (£)

2006/07

2006/07

Recruitment Advertising - price reduction compared to previous contract with different supplier. No change to level, quality and type of service.

1,500,000

26,100

100%

26,100

0

e-Tendering System - residual saving (net of annual maintenance costs) on stationery, postage and photocopy costs, after reinvestment in system costs. (business case contains full detail of costings).

n/a

3,100

100%

3,100

0

Asbestos Testing - average reduction in costs compared to previous contracted arrangements.

638,000

72,000

100%

72,000

0

Whiteboards and Notice boards - price reductions compared to previous contract for same/similar products.

417,000

37,500

10%

3,800

33,700

Sandwiches - price reduction compared to previous contract.

180,000

31,500

90%

28,400

3,100

Procurement Efficiencies and Savings Monitoring

: Corporate Procurement and County Supplies

January 2007

Cashable Savings - Already Achieved for 2006/07

Description

Contracted Value (£ p.a.)

Total Annual Cashable Saving £

Corporate Share (excl. schools)

Cashable Corporate Savings (£)

Cashable Schools Savings (£)

2006/07

2006/07

Mobile Phones: transfer of Mobex phones to CBC O2 contract (approx. 2,500 handsets). This allows for a continuation of the existing numbering plan and continued use of the Mobex facility but at reduced tariffs. Recurring saving, part year effect from 1 August 2006. Quality cross-check: quality of service unchanged, transfer will be seamless for end users.

80,000

95%

50,700

2,600

Procurement Efficiencies and Savings Monitoring

: Corporate Procurement and County Supplies

January 2007

Cashable Savings - Already Achieved for 2006/07

Description

Contracted Value (£ p.a.)

Total Annual Cashable Saving £

Corporate Share (excl. schools)

Cashable Corporate Savings (£)

Cashable Schools Savings (£)

2006/07

2006/07

Collection and Disposal of Sanitary Waste. A large proportion of the service arises from residential care homes with high frequency and volumes of medical and incontinence waste. The contract offers a range of product and collection frequencies. Comparison of rates on the new contract compared to the previous contract for standard monthly sanitary bin collection is £16.64 compared to £21.24 previously (22% reduction) and incontinence bin weekly collection is now £123.76 compared to £129.48 (a 5% reduction). On average it is estimated that this provides an overall saving of £35,000 per annum for those establishments moving from the previous contracted supplier to the new supplier. Some establishments were with the new contractor already but on non-contracted terms. A further £40,000 per annum will be saved by these establishments when comparing contracted with non-contracted prices. Part year effect from 1 October 2006. Quality cross-check: Service quality and options are unchanged.

300,000

75,000

75%

28,100

15,700

Procurement Efficiencies and Savings Monitoring

: Corporate Procurement and County Supplies

January 2007

Cashable Savings - Already Achieved for 2006/07

Description

Contracted Value (£ p.a.)

Total Annual Cashable Saving £

Corporate Share (excl. schools)

Cashable Corporate Savings (£)

Cashable Schools Savings (£)

2006/07

2006/07

Occupational Health Services. The contract charging mechanism is based on a day or half-day rate for either consultant or physician. Demand volumes are difficult to predict and the main caseload comes from teaching and care staff. Prices for all services, day and half-day for consultant, physician and court appearances (expert witnesses), were reduced compared to the previous contract by an average of 7%. The largest reduction, for example, is the day rate for a consultant where the previous contract rate was £1,150 a day, in the new contract this falls to £998 per day (13% reduction). Contract start date 1 July 2006. Quality cross-check: Service quality and options are unchanged.

85,000

6,000

70%

3,200

1,300

Procurement Efficiencies and Savings Monitoring

: Corporate Procurement and County Supplies

January 2007

Cashable Savings - Already Achieved for 2006/07

Description

Contracted Value (£ p.a.)

Total Annual Cashable Saving £

Corporate Share (excl. schools)

Cashable Corporate Savings (£)

Cashable Schools Savings (£)

2006/07

2006/07

Catering Equipment: This contract is a Framework Agreement awarded to five contractors, two of whom are suppliers of prime cooking equipment and were also suppliers under previous agreements. Of the other three suppliers of commercial refrigeration equipment, two had been under previous agreements, with one being a completely new contractor. On a like for like comparison, the prices for models from this new third supplier are between 10-15% less than the models used by the existing suppliers. Other authorities are indicating that quality and durability are similar between these new models (manufactured in Italy) and the more traditional models from Northern Europe. The savings estimate is a prudent one assuming a low level of take up of the new models. If take-up of the new models were to increase, savings could be up to £20,000. Contract start date 1 July 2006 (3 years +1) Quality cross-check: increased range of models offered, quality and durability same or increased.

175,000

5,000

90%

3,400

400

Procurement Efficiencies and Savings Monitoring

: Corporate Procurement and County Supplies

January 2007

Cashable Savings - Already Achieved for 2006/07

Description

Contracted Value (£ p.a.)

Total Annual Cashable Saving £

Corporate Share (excl. schools)

Cashable Corporate Savings (£)

Cashable Schools Savings (£)

2006/07

2006/07

Team Teach Agency Staff (Cornerstone via Manpower): Charges from 18 July are £15.65, compared to between £16.70 per hour for a pre-booked shift and £20.50 for an 'emergency rate' (booked out of hours).Average monthly spend on previous rates was £48,400, will now be £45,300, a £3,100 saving per month, based on an average of 362 shifts per quarter. Part year effect at 8 months x £3,100 per month. Quality cross-check: An additional 19 team teach staff are also now available from Manpower.

540,000

37,200

100%

24,800

0

Public Notice Advertising - estimated total price reduction of 14% compared to previous contract with different supplier, based on quoted publication brief costs, weighted by historic use of each specified publication, plus 2.5% inflation saving. Contract start date 1 September 2006. Quality cross-check: service quality unchanged as publications are the same, although supplier may vary size as long as it is legible.

210,000

34,650

100%

20,200

0

Procurement Efficiencies and Savings Monitoring

: Corporate Procurement and County Supplies

January 2007

Cashable Savings - Already Achieved for 2006/07

Description

Contracted Value (£ p.a.)

Total Annual Cashable Saving £

Corporate Share (excl. schools)

Cashable Corporate Savings (£)

Cashable Schools Savings (£)

2006/07

2006/07

Corporate Contact Centre: saving on final contract price compared to approved budget. Five year contract of £2.1m compared to budget of £2.4m. Part year effect assumed as 1/10th of total contract cost. Quality cross-check - specification met as part of evaluation and contract award.

n/a

60,000

100%

30,000

0

Corporate Print Press (provisional item): saving compared to budget on new print press. Annualised saving over 7 year lease. Quality cross-check: specification met.

n/a

86,000

100%

12,000

0

Supporting People: reduction in cost of service provision in Basingstoke due to retender and reconfiguration as part of the strategic review. Part year effect. Quality cross-check: service improved at reduced cost.

203,000

54,000

100%

13,500

0

ICT Hardware: additional discount due to electronic ordering. Part year effect. Quality cross-check: requirements and items unchanged.

1,600,000

16,000

90%

2,400

300

Pricing in Proportion Equipment Replacement - savings against list price due to negotiation and aggregation.

n/a

36,000

100%

36,000

0

Fruit & Vegetables: saving on prices for new contract compared to previous contract with a different supplier. Contract start date 1 October 2006, part year effect. Quality cross-check: service specification unchanged.

260,000

54,000

90%

24,300

2,700

Non-Cashable Efficiency Savings Achieved for 2006/07

Description

Contracted Value (£ p.a.)

Total Annual Non-Cashable Saving £

Corporate Share (excl. schools)

Annual Cashable Corporate Savings (£)

Annual Cashable Schools Savings (£)

2006/07

2006/07

Government Procurement Card - Catering Suppliers. 15,000 invoices replaced by GPC, savings based on national studies which indicate that at least £28 non-cashable savings are achievable for each invoice replaced by GPC. Part year effect with start date of 1 July 2007.

n/a

420,000

100%

315,000

0

e-Tendering System - full business case available which is based on national studies on staff time saved @ c. £130,000 a year based on full rollout to all departments. Pro-rata savings based on phased rollout from October 2006.

n/a

130,000

100%

26,000

0

Temporary Staff Cost Avoidance - Manpower annual increase. 3% salary increase requested by 2nd tier suppliers, equating to £0.34 per hour on outreach and specialist and £0.37 on other. Based on 10968 hours per month @ £0.34 and 3234 hours per month @ £0.37 = £59, 232 per annum.

£6m

59,200

100%

59,200

0

Construction - c. £500,000 savings on Enhance and other major framework contracts over a three year programme from reduced design time, aggregation gains and reduced cost per m2. Pro-rata estimate for 2006/07 is £160,000 Further detail included in SECE bid and reports to BLaPP.

n/a

160,000

100%

160,000

0

Total

560,200

0