By David Williams
23 July 2010
Ministers should consider scrapping the procurement body for fire service equipment as it has cost twice as much to set up and run than it has saved, according to the National Audit Office.
Firebuy has cost almost £17m since being established in 2006, but has saved only £8.5m, an NAO report says today. It condemns the body for failing to measure the savings it has generated, which it says undermines the agency’s credibility.
Firebuy was set up by the Department for Communities and Local Government to reduce the costs of buying equipment such as fire engines, protective clothing and breathing apparatus.
The NAO also criticises the department for failing to ensure that fire services made use of it; many services still do their procurement in-house or use other organisations, the auditors found.
Firebuy’s contracting arrangements were also singled out, as they use a wide range of suppliers, allowing complex packages of goods tailored to the requirements of an individual fire service. However, this means it is less likely to bring about economies of scale through bulk orders.
So far, only 5 of the 15 contracts Firebuy has designed are used by more than half of fire and rescue services. The agency is also more expensive to run than its peers in the private sector, and its forecasts for future income and savings are ‘unrealistic’.
The report concludes that Firebuy represents ‘poor value for money’. NAO head Amyas Morse said the DCLG ‘must quickly make a decision about whether it is sensible to continue with a nationally directed central procurement body’.
If a central agency is to be used, the NAO says, the DCLG must make sure it has a robust mechanism for measuring savings, and use a limited number of suppliers to enable more bulk buying.
Alternatively, says the report, Firebuy’s role should be transferred to an outside agency or a single fire and rescue service with enough capacity.
23 July 2010
Ministers should consider scrapping the procurement body for fire service equipment as it has cost twice as much to set up and run than it has saved, according to the National Audit Office.
Firebuy has cost almost £17m since being established in 2006, but has saved only £8.5m, an NAO report says today. It condemns the body for failing to measure the savings it has generated, which it says undermines the agency’s credibility.
Firebuy was set up by the Department for Communities and Local Government to reduce the costs of buying equipment such as fire engines, protective clothing and breathing apparatus.
The NAO also criticises the department for failing to ensure that fire services made use of it; many services still do their procurement in-house or use other organisations, the auditors found.
Firebuy’s contracting arrangements were also singled out, as they use a wide range of suppliers, allowing complex packages of goods tailored to the requirements of an individual fire service. However, this means it is less likely to bring about economies of scale through bulk orders.
So far, only 5 of the 15 contracts Firebuy has designed are used by more than half of fire and rescue services. The agency is also more expensive to run than its peers in the private sector, and its forecasts for future income and savings are ‘unrealistic’.
The report concludes that Firebuy represents ‘poor value for money’. NAO head Amyas Morse said the DCLG ‘must quickly make a decision about whether it is sensible to continue with a nationally directed central procurement body’.
If a central agency is to be used, the NAO says, the DCLG must make sure it has a robust mechanism for measuring savings, and use a limited number of suppliers to enable more bulk buying.
Alternatively, says the report, Firebuy’s role should be transferred to an outside agency or a single fire and rescue service with enough capacity.
