London Centre of Excellence Development Programme

Transcription

1 MEETING Finance, Procurement and Property Committee AGENDA ITEM 11 MEETING DATE SUBJECT REPORT 20 July 2006 DOCUMENT NUMBER FEP 889 London Centre of Excellence Development Programme (8 th July 2006) by the Head of Procurement Summary This report provides an update to the Committee on the Authority s involvement in projects with the London Regional Centre of Excellence (LCE). RECOMMENDATION That this report be received INTRODUCTION 1 There are three LCE projects which involve the Authority s Procurement Department. The Department is leading on two projects and is a partner in a third. This report sets out the extent of the Authority s involvement. THE REGIONAL CENTRES OF EXCELLENCE PROGRAMME 2 The Regional Centres of Procurement Excellence programme is a major component of the DCLG/LGA National Procurement Strategy for Local Government and delivery of the Gershon Review. The programme is being managed by the 4Ps for its sponsors the DCLG and the LGA. Centres of Procurement Excellence have been established in the nine English regions, London being one of the nine regions. The Association of London Government is representing the London Authorities and is working in partnership with Westminster City Council and Hammersmith and Fulham, who are the host authorities. CONTRACTS AND RELATIONSHIP MANAGEMENT PROJECT 3 At their meeting on 15 November 2005 (FPP 244), the Finance, Procurement and Property Panel were advised that the LCE Management Board had approved funding of 25K for LFEPA to lead a project on contracts and relationship management. The funding was provided to undertake a status review of contract and relationship management within London Authorities. This included a health check of contract relationship management, as well as making recommendations for improvement. The funding was used to acquire additional management resource to deliver the project. 4 In providing the funding, the LCE has recognised that the Authority s Contracts Management Group (CMG) within the Procurement Department has gained considerable knowledge and experience in this field, due to the management of the PFI contract for vehicles and equipment. 1

2 CMG have developed many best practice techniques and the LCE wishes to make use of our knowledge and experience. This phase of the project was successfully completed and delivered to the LCE before the end of the financial year which was the deadline for completion. 5. The report for this stage of the project identified a number of shortcomings and highlighted that a second phase of the project would be needed so that identified shortcomings can be addressed. As a result of successfully delivering this, the LCE have approved LFEPA leading on Phase 2 with funding of 137K.The programme of further work to support the delivery of improvements to contract and relationship management (CRM) in London will include: Generating awareness by creating a commercial environment for CRM through toplevel management sponsorship; Using this review to inform the development of local authority specific Best Practice Guidance (probably with the Office of Government Commerce (OGC) and Cabinet Office backing); Begin disseminating best practice through benchmarking and mentoring programmes using existing officer interest groups; Development of training and e-learning programmes; Crucially best results will be gained by integrating this work with other LCE projects, particularly on shared services, the efficiency gains in Environmental Services and the OGC/LCE Project on Social Housing (Phase 2 bid under preparation); and Working alongside the roll-out of the pan London Contracts Register Service. 6. The key outcomes for the delivery of the recommended programme are as follows: Develop and deliver LCE Best Practice Guidance; Begin the facilitation of benchmarking and mentoring through special LCE events; Establish pilot centres of commercial excellence in up to two London Boroughs; Integrate the recommended programme with other relevant LCE projects; and Develop plans for a third stage of the project. STRATEGIC SUPPLIER INITIATIVE PROJECT 7. As a result of the work undertaken on the contracts relationship project the LCE has also asked for LFEPA to lead with approved funding of 98K on a Strategic Supplier Initiative project. London local authorities spend 8 billion annually on goods and services. The top 100 suppliers in London account for about 25% of this total and the top 1,000 for nearly 60%. Collectively, London authorities can account for over 70% of the turnover for some of these suppliers and are therefore in a very strong position to ensure the best possible outcomes in terms of quality, value for money and innovation. As a rule, anything over 2% of turnover is considered to be significant in terms of influence. 8. Phase 1 will prove the concept by preparing specific supplier relationship management (SRM) strategies for up to 10 top suppliers drawn from the waste collection, social care, information computing technology (ICT) and leisure services markets. This project is vital to the shared service agenda. This project s objectives are to: Support the achievement of efficiency gains beyond tactical commodity and services; Focus resources on areas of greatest longer term potential; Encourage the management of supplier relationships at the appropriate level (Borough, regionally or sub-regionally); Understand optimum trading mechanisms and collaboration formats; and Embed a more commercial approach to supplier intelligence gathering and relationship management. 2

3 9. In the first phase of the project, a Project Team will deliver a programme of work to support the delivery of better deals for London local authorities by: Generating awareness by creating a commercial environment for strategic supplier intelligence through top-level management sponsorship; Obtain vital management information from CRS (the Contracts Register System already being implemented by LCE that will gather and process data about existing contracts across all London Boroughs); Categorising suppliers and contractors according to levels of expenditure, risk and criticality to determine those types of contract, supplier or market that need proactive management and can prove the concept; Gaining the collaborative mandate from London Boroughs using established officer interest groups and consortia in key service sectors; Determining risks for London Boroughs in key supply markets such as relative strengths or vulnerabilities of players, market conditions, financial failure, political, logistical, contingency planning, etc; Compiling separate Supplier Relationship Management strategies for up to 10 principal suppliers to prove the concept; Recommending where these strategies are best owned and implemented (Borough, regionally or sub-regionally); and Integrating this work with other LCE projects and the work of the OGC Supplier Relations Division to attain the best results, and demonstrating the opportunities for significant improvements in quality and value that can be gained if authorities collaborate and secure a mandate for these SRM strategies. GREEN/ENVIRONMENTAL/SUSTAINABLE PROCUREMENT 10. Camden is the lead Local Authority on a 2-year project for the London Centre of Excellence on sustainable procurement. Developing sustainable procurement is an important national policy priority. The 2005 UK Sustainable Development Strategy announced the UK s goal of becoming "a leader within the EU" on sustainable procurement by The LCE is tasked with championing a number of sustainable procurement themes in London Boroughs including sustainable energy, sustainable food, sustainable waste, sustainable timber and minimum product standards. 11. The main objectives of the Sustainable Procurement project are as follows: To implement the use of sustainable procurement tools and approaches into three significant London authority procurement processes and contracts between To develop model specifications for use in these procurement exercises. To develop and deliver training and awareness-raising on sustainable procurement among procurement professionals and senior policy officials in London in the context of these procurements. To improve the capacity of London authorities to identify and engage suitable suppliers with relevant credentials through the establishment and operation of a supplier engagement forum. To promote more effective communication of sustainable procurement experience across London authorities through the creation and use of an information sharing mechanism 3

4 12. In addition to LFEPA, the Board for this project comprises representatives from LB Camden, GLA, London Sustainability Exchange, LDA, IDeA, London Remade, London Food Link, LB Lambeth and LB Croydon. Involvement with the LCE project complements work in this area already being undertaken in conjunction with GLA initiatives as set out in the report GLA Group Sustainability Policy (FEP 868) received by the Authority at its meeting on 22 June BENEFITS TO LFEPA OF LCE PARTICIPATION 13. LFEPA will obtain significant benefits from its involvement in the three LCE projects as set out above. Principally these include: Keeping up to date / leading on latest developments in procurement. Ability to use knowledge gained to ensure best practice in the Authority s areas of activity. Provision of extra resource to develop a best practice contract and relationship management guidance manual. This tool will be a user friendly practical manual aimed at contract managers for all contracts. It will be particularly useful in disseminating best practice standards throughout other areas of the Authority which currently do not have access to this expertise. Building a network of contract management expertise within London s local authorities. Raising the profile of the Authority s Procurement Department and the Contracts Management Group and recognising its expertise in this specialist field. Attracting and retaining high quality procurement staff, in an area where there is currently very high demand for good staff Assist in the medium term to identify areas for savings and efficiencies in LFEPA Able to influence decision making in key areas Improved status of LFEPA. 14. There are no costs to LFEPA from its involvement with these projects other than some staff time. To oversee work on the project the former Head of Procurement in Surrey County Council who has a high reputation in procurement has been engaged from the project funding provided. 4

5 LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 List of background documents PFI vehicles and operational equipment project As stated in the report Proper Officer: Terry, Brewer Head of Procurement Contact Officer: M Atkinson Head of Contracts Management Group Room 714 HH London Fire Brigade HQ, 8 Albert Embankment SE1 7SD mark.atkinson@london-fire.gov.uk FREEDOM OF INFORMATION ACT 2000 LFEPA Publication Scheme This document appears in the publication scheme under: It also appears in the publication scheme under: Category: Topic: Class: Category: Topic: Class: Information Access Team infoaccess@london-fire.gov.uk Contact: FEP889 FEP 889 fep889 fep 889 Management arrangements and decision making Authority, committee and panel meetings Committee agendas, minutes, reports and decisions Management arrangements and decisions Our links to local government and other stakeholders Relationship with other agencies and stakeholders 5