Council deals often flawed from start

14 Apr 05
Local government procurement is being hobbled by 'naivety and lack of honesty' on the part of both purchasing authorities and private contractors, the Society of IT Management has warned.

15 April 2005

Local government procurement is being hobbled by 'naivety and lack of honesty' on the part of both purchasing authorities and private contractors, the Society of IT Management has warned.

The body said that the lack of plain dealing between the parties while contracts were being negotiated meant that partnerships were often flawed from the outset and destined to fail.

Councils were keen to keep bidders in the competition for contracts as long as possible and, consequently, were less than frank about their exact requirements.

At the same time, suppliers made promises they could not keep and allowed only previous successful projects to be inspected by potential clients. The result was deep-seated mutual distrust.

Socitm's gloomy assessment of procurement practice comes as the market, which it currently values at £4bn, is set to expand massively as a result of Sir Peter Gershon's efficiency programme.

Its hard-hitting report, A marriage of convenience?, was due to be published on April 14, just one day before the deadline for all councils to submit their annual efficiency statements to the Office of the Deputy Prime Minister.

The statements will spell out how each authority intends to make efficiency savings of 2.5% per year until 2008, which underpins local government's overall target of £6.45bn annual savings by the same deadline.

More efficient procurement of goods and services lies at the heart of the Gershon programme. But Socitm's research, which was co-funded by CIPFA, suggests that the target may be under threat.

When deals were signed, it found, contracts were often managed by project teams in councils that were 'inadequately resourced' and did 'not have the necessary skills'.

The result was a rising number of failing contracts, which in many cases meant that the anticipated efficiencies did not materialise.

Peter Eckersley, adviser to CIPFA's Improvement through Technology Network, told Public Finance that the key to successful procurement was recognition of its importance at senior management level.

'IT managers need to be right in the vanguard of what authorities are doing in this area. They should be given a seat at the top table and the authority to take a strategic, corporate approach.'

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