Shared service ‘could save £17m’

8 Jun 09
A city council believes it can save millions of pounds for local authorities by developing what it sees as a ground-breaking approach to shared council purchases

29 May 2009

By David Scott in Edinburgh

A city council believes it can save millions of pounds for local authorities by developing what it sees as a ground-breaking approach to shared council purchases.

The City of Edinburgh Council has joined with Scottish Borders Council, Fife Council and Lothian and Borders Police to set up a strategic procurement service across local government in the south and east of Scotland.

It has been estimated that by 2012 more than £17m savings a year will be achieved, with £11.6m predicted for Edinburgh. The initiative is seen as a possible forerunner to the wider sharing of services in local government. South East Strategic Procurement will pool procurement resources, increase purchasing power and look at ways of improving efficiency. It will also aim to increase the quality and capacity of services.

Edinburgh and Fife councils are already members of a Scotland-wide local government procurement service – Scotland Excel. But the two councils and the police authority believe that by providing a local strategic approach to procurement, combined with some radical changes to their own internal management, they can complement the work carried out by Scotland Excel.

Edinburgh council director of finance Donald McGougan told Public Finance that SESP was ‘definitely not a rival organisation’. He added: ‘The difference is that they [Scotland Excel] are negotiating collaborative contracts for councils across Scottish local government, whereas this is about changing behaviour in local authorities and the way they look at procurement.

‘The aim is to merge requirements across the whole council, bringing it together so they can have a strategic approach to the market.’

Officials of SESP believe that their initiative allows the organisation to look more closely at local contracts rather than national ones.

Mike Peterson, head of procurement, said: ‘If we can show that shared services genuinely work and show how one shared service can lead to another shared service then I would say that it can work where there is a desire to make it work.’

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