05 August 2005
Local government must step up its efficiency drive by adopting bigger and bolder strategies, the sector's procurement champion Tim Byles has told Public Finance.
Byles, chief executive of Norfolk County Council, insisted that much more extensive collaboration on procurement between authorities would dramatically reduce costs.
'Joint procurement is not in any way a challenge to the autonomy of local authorities. But I do see it as a big opportunity,' he said. The Gershon review called on the sector to find £6.45bn of savings, half of which should be cashable, by 2007/08. Figures released in June showed that councils were making total efficiency gains of £1.218bn, exceeding the government's target of £1.035bn.
Byles' own authority of Norfolk has managed to deliver its own three-year efficiency target in the first year, he said, adding that the challenge now was how to maintain this level of improvement. 'As local government is ahead of the target, we've won the opportunity to be a bit more brave. I want to encourage people to think more radically,' he told PF.
Byles' view echoes that of local government minister David Miliband, who last month told the Local Government Association conference that opportunities for joint procurement needed to be explored if councils were to cut costs.
But a report published this week warned that councils could be missing a trick if they chose merely to aggregate contracts rather than use the Gershon programme as an opportunity to reinvest in the local community.
Public spending for public benefit, a guide to public procurement, produced on August 1 by the New Economics Foundation, urged local authorities to source more of their contracts locally. According to the NEF, if just 10% of everyday public sector spending were focused on the country's most disadvantaged areas, this would result in £12.5bn of income in a single year, 15 times more than the £835m spent on regeneration.
The think-tank has secured an agreement from the Northeast Centre of Excellence, the regional body charged with encouraging effective collaborative procurement, that it will draw on the lessons of the report.
Justin Sacks, the report's author, said that even back-office services, often an obvious target for efficiency savings, could be used as vehicles for regeneration. 'Public spending should maintain happy, healthy communities, yet all too often the focus is on short-term cost-cutting rather than real best value,' he said.
PFaug2005
