1. ‘TOWARDS TESCO’ A NEW APPROACH TO PUBLIC SECTOR PROCUREMENT AND OUTSOURCING
Colin Cram
Marc1 Ltd
Tel:
Mobile:

2. My Background Director, North West Centre of Excellence
- 47 local authorities
Director, Research Councils’ Procurement Organisation
Director, North West Universities’ Purchasing Consortium
Director, Benefits Agency Contracts Organisation
Central Unit on Purchasing
Cabinet Office, Treasury, Central Government generally
Senior Adviser to Office of Government Commerce
Member of Society of Local Authority Chief Executives -SOLACE
Fellow of Chartered Institute of Purchasing and Supply
Institute of Directors: ‘Towards Tesco’

5. TOWARDS TESCO Public Sector Procurement is Vast
A New Integrated Model could Deliver Huge Benefits
2. Outsourcing and Shared Services
Is Chaotic and Costly
Huge Potential Remains
Propositions:
A New Outsourcing Model?
A Proposition for Delivery of Public Services
3. Potential Savings of £25bn+

6. MIRROR TO PUBLIC SECTOR PROCUREMENT What Does It Look Like
MIRROR TO PUBLIC SECTOR PROCUREMENT What Does It Look Like? How Well is it being Managed? How Can We do Better?

7. DOES PUBLIC SECTOR PROCUREMENT MATTER?
£220 Billion pa
£3,500 per Adult and Child pa
One Third of Total UK Public Spending
One Sixth of UK Gross Domestic Product (GDP)
0.75% of Global GDP
Size makes it Critical to Delivery of Public Services
Effective Management is Essential to Reduce Public Spending Deficit and Deliver Government Procurement Policies
EDUCATION PROCUREMENT - £30+bn
Alone would put UK in top 30% of national GDPs

8. FEATURES OF PUBLIC SECTOR PROCUREMENT
65% Non-Central Government
50% Common Categories, Goods, Services
Professional Services £35bn
Construction £21bn
ICT £10bn
Facilities Management £10bn
Energy £4bn
Reprographics £3bn
Travel £3bn
Fleet £3bn
Food £2bn

9. IF IT WAS YOUR MONEY, WOULD YOU MANAGE IT LIKE THIS?
Some Major Central Government Department Organisations
Some Large Specialist Organisations
NHS Outsourcing
Buying Agencies: 40+
OGC and Category Teams
Several Thousand Small to Medium Procurement Units
40,000+ Procurement Points
Absence of Mandation
BUT
Increasing Collaboration/Joint Procurement

10. HOW TO MAKE SAVINGS PUBLIC SECTOR ORGANISATIONS CREATE UNNECESSARY COSTS FOR SUPPLIERS AND THEMSELVES
Indiscipline
Different Procedures/Contract Ts and Cs
Complexity – e.g. Tender Procedures/Ts and Cs
Multiplicity of Tenders
Multiplicity of ‘Duplicate’ Contracts and Contract Managers
Specifications
Inconsistency of Capability, Expertise, Processes

12. SO WHAT IS THE COST OF POOR PRACTICE/MISSED OPPORTUNITY?
Furniture %
FM/Outsourcing/Major Contracts Up to 35%
Laboratory Consumables Up to 90%
IT – 80%
Construction – 25%
Excellent Construction Management 5 – 15%
Social Care %
Legal Services %
Good Contracts Management – 35%
© C M Cram

13. BIG IMPROVEMENTS NEED BIG CHANGES
Right Procurement Structures/Joint Procurement
Common and Complete Databases
Common Information/IT Systems
Common Procedures
Common Specifications
Commodity, Markets, Procurement Expertise
Specialist Management
Best Practice Procurement Techniques

14. PUBLIC SECTOR PROCUREMENT IN 5 YEARS TIME?
Central/ Major Departments/
Buying Solutions
Industry Specific
Regional P Hubs/
Medium Depts
Local/Med/
Small
Departments
Major National Contracts/Suppliers *
Common Categories
Relationship Management
Market Management
PPIs/Major Project Support
Regional/Large Local Contracts/Suppliers
Small Local Contracts
Discipline/Implementation/
Compliance
© C M Cram

15. PUBLIC SECTOR PROCUREMENT: THE FUTURE?
INTEGRATION
COLLABORATION
INDEPENDENCE
© C M Cram

16. HOW CAN OUTSOURCING AND SHARED SERVICES BUSINESS BE BOOSTED?
Eliminate obstacles
High Costs
Long Timescales
Complex Procedures
Varied Procedures
Duplicate Specifications
Create Model Approach
Create Vision for Public Service Delivery

17. PUBLIC SPENDING £bn Central Local Total Pensions 110 110
Health/Social Care
Education
Defence
Welfare
Protection
Transport
General Government
Other Spending
Interest
TOTAL

18. ELIMINATE OBSTACLES: CREATE MODEL APPROACH
Create Range of Model Specifications
Create Matrix of Service Providers and Services
that the Public Sector can use without further EU Tendering
Provide those Services through building on Existing Service Centres/Creating New Ones

19. SERVICES © C M Cram SERVICES SERVICE PROVIDERS1. 2. 3. 4. 5. 6.
Roads √
Call Centres HR
Finance
Construction
Services
ICT
Legal

20. HOW? Create Range of Model Specifications
Follow EU Procurement Directives to Create Matrix
Evaluation Criteria: Capability
Obtain Indicative Prices?
Grow Matrix Organically
Consider Dynamic Purchasing System

21. WHAT SERVICES COULD BE COVERED? ALMOST ANYTHING!HR
Payroll
Print and Design
Finance
Internal ICT
Legal Services
Agile Working Solutions
Procurement
Construction
Asset Management
Roads
Revs and Bens
Debt Collection
Managed CCTV
CRM
Out of Hours Services
ICT Hosting
Data Centre Operations
Environmental health
Elements of Children’s Services and Adult Social Care

22. PROPOSITION FOR PUBLIC SERVICE DELIVERY
What should be Delivered by the Public Sector?
What should be Delivered by the Private Sector?
Benefits of Proposition
Overall Model for Public Service Delivery
Developed by the Outsourcing Industry
VISIONARY – Nothing Ruled Out

23. MAKING IT HAPPEN Outsourcing Industry to Take Lead
Create Steering Group with TORs - membership private and public sectors
Commission and Fund Initial Work – to investigate feasibility/sources of funding etc
Draft Programme of Work and Implementation Plan

24. THANKYOU Colin M Cram Marc1 Ltd Tel: 01457 868107 Mobile: 075251 49611