Headlines: December 6th, 2004

Local councils and housing associations across the south west region of the UK have joined up to share information about companies who supply their goods and services. Making sure that suppliers have a track record of quality and delivery and are financially viable is a crucial part of procurement. In a move to cut in-house costs and reduce risks in procurement the group have set up a partnership with Exor Management Services to provide a supplier Accreditation Scheme.The suppliers of each member of the partnership are being vetted by Exor to establish their track record, examine company accounts, check that they have insurance – in areas such as construction, and ensure they comply with health and safety requirements. Up to 130 checks are required in the most complex cases. A database is being set up with the results of the vetting which Exor will continually update. Members of the partnership have access to the database.

The database will also provide information that will allow partners to see if they have sufficient suppliers, in relation to the money that is being spent on particular categories of goods or services.

The benefits to partnership members is that the accreditation burden will be removed and for suppliers they will no long have to submit voluminous evidence for accreditation when they are bidding for a contract with a member of the partnership.

Research from the Department of Trade and Industry has found that although most public sector organisations prefer to buy from large companies there is considerable benefit to be obtained by buying from small and medium enterprises (SMEs). The DTI believes that “SMEs are the engine of the economy but for too long they have been overlooked when bidding for public sector work. New research will look at how public organisations can save money by using the increased innovation and productivity that SMEs can offer. The researchers will use cost-benefit analysis techniques to assess the benefits of hiring SMEs and examine the broader benefits to the economy as a whole.

Procurement was identified in the Gershon review of efficiency as a key area for making savings and the latest research confirms that 1.1bn pounds of cost savings can be made nationally by local authorities as a consequence of modernising their processes. The target is that all councils should have e-procurement solutions in place by the 31st December 2005. This should include a minimum paperless ordering system and invoicing and payment scheme.