PROCUREMENT INVESTING IN CAMDEN

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1 PROCUREMENT INVESTING IN CAMDEN Procurement Strategy London Borough of Camden

2 Contents Front Page Page 1 Contents Page 2 Introduction Page 3 Camden Plan-Procurement contribution Page 4 01 Social Value & Equality- Delivering Local Economy Benefits Page 7 02 Sustainability Page Savings and Efficiencies Page Procurement modernisation Page 20

3 INTRODUCTION Procurement transformation journey The London Borough of Camden spends over 400 million revenue annually on procuring a wide range of works, goods and services. The Council has recognised the importance of effective procurement by adopting a new procurement operating model which was fully implemented in April Procurement has undergone a transformation journey that began with the setting up of the current operating model. Previously Camden Procurement was made up of disparate groups within the services with no overall shared vision and strategic aims. Control over procurement spend and savings was limited and not maximised. The Journey started with Cabinet approving, in 2010, the setting up of a Central Procurement function supporting four hubs co-located with the services. This has helped Procurement to operate as a unified function under a Chief Procurement Officer where best practice and innovative solutions can be identified and delivered. Procurement has moved from a role of policing to that of supporting the services, through early engagement, deliver new and innovative solutions whilst protecting the Council from risks of challenge. Procurement is now a fast moving service that is flexible, adaptable and responsive to the needs of the organisation. Procurement is applying its core commercial skills to support the Council s deliver its strategic objectives as set out in the Camden Plan. This is achieved through working closely and collaboratively with the services and with other boroughs to achieve the goals set out in the strategy paper. Our Vision To be recognised as the leading Borough for Procurement in London and to fully support the delivery of efficient and cost effective services to meet the needs of Camden s residents and businesses

4 CAMDEN PLAN- Procurement contribution

5 Procurement meeting the Camden Plan How Procurement will contribute to the delivery of the Strategic Objectives in the Camden Plan Camden Plan- Strategic Objective 1 Providing democratic and strategic leadership fit for changing times Involve stakeholders in decision-making through a transparent and open approach Engage residents and users as appropriate in contract development and performance Camden Plan- Strategic Objective 2 Developing new solutions with partners to reduce inequality Work with suppliers to create jobs, apprenticeship and work experience opportunities for Camden residents Support the creation of local employment for hard to reach communities Embed equality and social value considerations into our procurement activities Work with NHS partners to develop joint services which reduce health inequalities and promote social inclusion. Camden Plan- Strategic Objective 3 Creating conditions for and harnessing the benefits of economic growth Bring together our key suppliers and local businesses in the business portal - Camden Market Place Promote forthcoming opportunities via local social media and the Council s website Explore alternative procurement processes such as Dynamic Purchasing Systems to assess whether these would enable SMEs to gain more business opportunities Work with partners to create opportunities for Camden businesses Develop a baseline of council expenditure and a commitment to increase spend in the local economy Work with suppliers to create supply chain opportunities for Camden businesses Promote council contracts through a single portal to make it easier for local SMEs to access more procurement opportunities Camden Plan- Strategic Objective 4 Investing more in our communities to ensure sustainable neighbourhoods Support the delivery of Camden s Community Investment Programme (CIP) and embedding employment, training and local supply chain opportunities in our contracts Lead through procurement on the local economy and supporting the delivery of the green agenda such as reducing carbon emissions, household waste recycling and improving air quality Assess whether logistics can be organised differently to reduce carbon emissions Camden Plan- Strategic Objective 5 Ensuring delivery of value for money services by getting it right first time approach Create the appropriate channels for the Service Departments to interface with suppliers and deliver quality services cost effectively through right first time approach Savings and efficiencies- continue to deliver savings whilst ensuring strategic objectives are delivered cost effectively Early engagement of Procurement in strategic decision-making to maximise investment opportunities Procurement modernisation and innovation to support the delivery of the Camden Plan

6 Programme delivery and innovation This is a very challenging programme and Procurement will be developing an action plan to support the delivery of the strategic objectives set out in the Camden Plan. The action plan will phase the delivery of the programme in line with contract renewals, resources and other service priorities. How we will provide innovative solutions to support the delivery of Camden s strategic objectives Investing in local businesses- our vision is to create a market place where local Small and Medium Enterprises and Voluntary and Community Sector organisations can have maximum access to procurement opportunities Market place Collaboration Building stronger relationships- our vision is to lead category management and work collaboratively with other London Boroughs to drive efficiencies and innovative solutions to the way our services are procured and delivered Improving our environment- our aim is to establish an efficient distribution network through a consolidation centre in order to minimise the number of large vehicles entering the borough Transport & Logistics Equality Driving equality- our vision is to support equality in the Borough by maximising employment for local residents and providing apprenticeships and skills development opportunities

7 Social Value & 01 Equality- DELIVERING LOCAL ECONOMY BENEFITS

8 01. Theme: Social Value & Equality- Delivering Local Economy Benefits Overview Building Social Value & Equality into Procurement Procurement is actively engaged in supporting the delivery of the social and economic benefits set out in the Camden s Plan and in anticipation of the social value act coming into force in January 13. This will be achieved through embedding Social Value & Equality considerations through our contracts and monitoring through our contract management framework. A summary of the Social Value & Equality work that Procurement is pursuing is listed below:- Links to key organisations Engaging suppliers Embedding employment considerations Leader s Procurement Pledge on Employment and Skills Implement London Living Wage considerations Establish a Camden market place Creating a thriving local economy through Camden s contracts Dynamic Purchasing Systems Implement a wireless concession Employment Promoting local supply chains- SMEs Social Value & Equality Training & Development Voluntary & Community Sector Generating apprenticeship and training opportunities through contracts Work with partners to create local employment opportunities through Camden s contracts Relationships Development Management Information Community run services/right to challenge Enabling access to Camden s contracts

9 01. Theme: Social Value & Equality business growth The Local Economy- business theme will contribute to the Camden Plan strategic objective of Procurement Current position Our aims- Grow local Small & Medium Enterprises (SMEs) and Voluntary & Community Sector (VCS) organisations 1. Business opportunities- identify who our local businesses and VCS organisations are and establish a market place on the Camden business portal where they can access opportunities and our 1 st tier suppliers sub-contract opportunities. Our aim is that this portal will act as a catalyst for Business to Business (B2B) activity to further stimulate opportunities for local businesses. Creating conditions for to Business (B2B) activity to further stimulate and harnessing 2. Generating economic growth- develop and the benefits of implement a Procurement Assessment Tool to economic facilitate embedding local supply chain considerations into our procurement growth A number of barriers are experienced by SMEs and VCS organisations when seeking to access contract opportunities Our Vision Is to view the spend on third parties as an opportunity to invest in Camden and to promote business and supply chain opportunities for local SMEs and VCS organisations by creating conditions to enable them to maximise the amount of business they win. 3. Management Information- the current management information (MIs) on expenditure with SMEs, VCS organisations and others does not adequately meet our needs. Our focus will be to improve our MIs to enable us to know how much business we are doing with those organisations and to identify trends that inform and influence the decision making. 4. Single view of suppliers- this forms part of our management information work set out above. The work seeks to establish a single view of all our suppliers to enable us to have a clearer understanding of spend with all the organisations we do business with including VCS organisations 5. Investigate use of Dynamic Purchasing Systems- SMEs can be locked out of framework agreements for periods of time, so we will: i. identify and analyse which Dynamic Procurement Systems would best meet our needs ii. iii. identify areas where we can apply this approach carry out trials to establish which systems can best enable access by SMEs and VCS 6. Wireless Provision- we will work with colleagues from ICT to implement a Wireless Concession contract for Camden to provide as many businesses as possible with wireless connectivity.

10 01. Theme: Social Value & Equality business growth Actions (continued) 7. Community Investment Programmeensuring that through this programme opportunities are explored for local businesses, VCS organisations, local employment and training and embedded into procurement 8. Small & Medium Enterprises (SMEs) and Voluntary & Community Sector (VCS) relationships- participate in forums for shared learning and experiences to inform strategy, policy, practice and procedures 9. Creating markets- seek to develop further market areas in collaboration with Voluntary Action Camden (VAC) where VCS organisations might be able to participate 10. Support VCS Development- support the development of VCS organisations through collaborative development with Voluntary Action Camden (VAC) to deliver value for money services 11. Guidance & Support- develop a council wide information approach for VCS organisations to guide them through the procurement process and access to Camden s contracts 12. Capacity building and Up-skillingsupport buyers events and workshops that enable local businesses and VCS organisation to bid for contract opportunities successfully 13. Camden s contracts- explore how Voluntary & Community Sector organisations can access Camden s contracts to enable them to achieve value for money goods and services

11 01. Theme: Social Value & Equality business growth Business Growth - continued 14. Transforming Local Infrastructure (TLI)- working collaboratively with Voluntary Action Camden (VAC) to support local VCS organisation with their TLI development. 15. Voluntary Charter- introducing a voluntary charter to encourage our suppliers to adopt Camden s commitments to tackling inequality and economic growth across the borough. 16. Social Value Act- the social value act will come into force in January 2013 which will make Local Authorities consider the social benefits that can be generated from public contracts. Procurement is already leading the way in harnessing the opportunities arising out of the social value act to support the delivery of economic and environmental benefits by building local employment and training, local businesses and voluntary & community sector organisations and environmental considerations into our contracts. Our aim is to ensure through this act that economic and sustainability benefits are generated from our contracts. 17. Outcomes Based Commissioning- Procurement is supporting the establishment of an outcome based commissioning to enable innovation, savings and positive outcomes for Camden s residents.

12 01. Theme: Social Value & Equality- Local Employment The Local Economy- employment, training and skills theme will contribute to the Camden Plan strategic objective of developing new solutions with partners to reduce inequality and creating conditions for and harnessing the benefits of economic growth Procurement Current position The employment, training and skills of local residents are not adequately considered in our procurements. Our Vision To develop key partnerships and embed employment, training and skills considerations into our procurement processes to tackle inequality and support economic growth. Delivering the Equality Agenda Local employment, training and skills 1. Local partnershipsi. Leader s Procurement Pledge- creating the conditions, internally and externally, to support the delivery of the pledge made by London Council Leaders to create employment and skills for London residents. ii. Establish a pilot scheme- with Jobcentre Plus to recruit our key suppliers to engage local residents. Establishing a robust mechanism to generate local employment through promotion with local Jobcentre Plus and other employment and skills agencies iii. Hard to reach and long term unemployed- build into our contracts an employment strategy for the hard to reach and long term unemployed Camden residents. Work with the Employment & Skills Network to promote jobs and skills opportunities to Camden residents & vulnerable groups. 2. Creating local employment, training and skills opportunitiesi. create employment, training and skills opportunities ii. iii. iv. through contracts. These will include work placements, training, work experience and any other suitable programmes expand opportunities to include other business sectors not considered before such as Leisure, IT, Care Services, transport etc The aim is to provide more effective methods of reaching unemployed local residents Working with other Boroughs and the Skills Council to create an apprenticeship programme for those seeking a career in Procurement. 3. London Living Wage- ensuring that LLW is considered in all our contracts and paid as appropriate to our contractors and sub-contractors employees who deliver services on our behalf. 4. Workforce standards- work closely with Camden s suppliers to ensure that equality, fairness and development are applied to all their employees delivering services for Camden residents. 5. Management Information-developing MIs to enable us to have a clearer view of employment opportunities in our contracts and to ensure these opportunities are being provided through our contracts.

13 01. Theme: Social Value & Equality- delivering local economy benefits Social Value & Equality - key deliverables Leader s Procurement Pledge- Support the delivery of local employment and skills through working with Jobcentre Plus and other employment agencies to advertise jobs arising out of our contracts. Local employment- Pilot with Jobcentre Plus-Work closely with Jobcentre Plus to create a pilot for creating local employment where possible through Camden s contracts Voluntary Charter and Contract Clauses- Draft a Voluntary Charter and contract clauses (where permitted by law) to commit our suppliers to the Camden Plan s strategic objectives of tackling inequalities and delivering economic growth and sustainable neighbourhoods. Procurement Assessment Tool- Will be used to embed Social Value considerations such as local employment, sustainability and supply chains into Camden s contracts Social Value Act- Develop social value impact assessment to identify opportunities that will enable Camden to realise the social benefits that can be derived from our contracts Camden Market Place on Business Portal- Aims to bring together our 1st tier suppliers and local businesses and VCS organisations together to provide access to contract opportunities Management Information- review and improve access to information on spend with Voluntary & Community Sector organisations, Small & Medium Enterprises, employment & training Investigate use of Dynamic Purchasing Systems- to ensure SMEs are not locked out of framework agreements for periods of time Wireless Provision- provision of wireless connectivity to local businesses through a wireless concession contract. Support VCS Development- Support the development of VCS and local SMEs through training and development workshops This is an ongoing activity Planned completion March 13 Planned completion December 12 Planned launch January 2013 Planned launch January 2013 Development work with IT on-going. Planned completion March 13 Planned completion Mar 13 Planned completion March 13 Planned contract award Feb 13 This is ongoing work

14 Sustainability 02

15 02. Theme: Sustainability The Sustainability theme will contribute to the Camden Plan strategic objective of Investing in our communities to ensure sustainable neighbourhoods Procurement Current position Facing challenges to embed environmental sustainability requirements into our contracts and to use our spending influence to reduce our carbon footprint and ensure that sustainable resources are used Our Vision Our vision is to become the lead borough in London in developing policies and strategies that will increase our influence over the way our suppliers work with us to help meet our sustainability targets Actions to achieve our aims 1. Embedding sustainability into new contracts - develop and implement a Responsible Procurement Assessment Tool to facilitate the embedding of sustainability requirements into our contracts 2. Incorporating sustainability into existing contracts working with contractors who do not have sustainability requirements included in their contracts to encourage the sustainable delivery of these contracts and services 3. Logistics and transportexplore setting up efficient distribution networks and consolidation logistics in order to minimise the number of required deliveries so as to reduce vehicle emissions. Business case to test viability will be produced and submitted for consideration 4. Ensuring green products are supplied wherever available- increasing the number of sustainable products purchased across the Council while reducing the overall number of products purchased 5. Ensuring delivery working with contractors to ensure that all of Camden s contracts meet mandatory sustainability requirements as a minimum and where possible exceed these- we have reviewed our top 50 suppliers and will extend this to the top 100

16 02. Theme: Sustainability Sustainability key deliverables Procurement Assessment Tool Will be used to embed responsible procurement considerations such as local employment, sustainability and supply chains into our contracts Logistics and Transport Produce business case to explore setting up an efficient distribution networks and logistics and building requirements into contracts requiring deliveries to be minimised through consolidation Ensure green products are supplied wherever available- increasing the number of sustainable products purchased Management information- develop MIs on commodity products to identify number of green products purchased and how these can be increased Review top 100 suppliers and products to ensure that our top suppliers and goods bought are from sustainable sources Planned launch January 2013 Planned completion March 13 Aspiration is to achieve 100% of green products within 3 years Monitoring tools are under development. Planned completion March 2013 Aspiration is to achieve 100% compliance within 3 years

17 03 Savings and Efficiency

18 03. Theme: Savings and Efficiencies The Savings and Efficiencies theme will contribute to the Camden Plan strategic objective of delivering value for money services by getting it right first time Procurement Current position A category management approach has been adopted to identify and deliver savings. Procurement not engaged early enough in pre-procurement discussions. Our Vision To become an effective and commercially focussed procurement organisation delivering savings, efficiencies and Social Value through collaborative working and category management Our Aims 1. On-going savings- complete delivery of the current 15m procurement savings target for 2011/12 to 2013/ Future savings- work collaboratively with the Service Departments to identify joint savings and efficiency targets for the next 3 year Medium Term Financial Strategy period 2014/15 to 2016/17 and deliver these. To continue to undertake a detailed spend analysis of each area of activity (see Category Annual Spend Graph on next page) using spend analysis tools to identify where improved service or savings and efficiencies might be achieved and minimise off-contract spend 3. London-wide and sub-regional category management- participation and lead on collaborative procurement opportunities to deliver savings and reduce duplication of work. i. Pan-London- Camden is fully participating in pan-london category management work and is leading on the pan-london collaborative category management of ICT, with the aim of achieving 5% savings on London ICT, expenditure. ii. Sub-regional work- Camden is playing an active role in the work of the North London Strategic Alliance (NLSA) 4. Commercial approach- Procurement will increasingly provide Service Departments with commercial advice to assist them to achieve efficiencies and drive maximum value from contracts. This will be achieved through early engagement in decisions such as: i. supporting services with their Make or Buy decisions and advising on the most effective commercial approach ii. Identifying and considering alternative commercial models iii. supporting services with their contract management skills to drive maximum value from existing contracts. 5. Savings and Social Value- striking a balance between delivering the social value agenda and continuing to deliver the savings through working collaboratively and innovatively with our suppliers.

19 03. Theme: Savings and Efficiencies Top areas of spend by category for 2011/12 financial year Category Annual Spend 2011/12 Works - Construction, Repair & Environmental Services Social Community Care Supplies & Human Resources Facilities & Management Services Education Information Communication Technology Consultancy Building Construction Materials Street & Traffic Management Financial Services Housing Management Healthcare Public Transport Catering Category 12,269 10,222 8,562 7,122 6,463 5,949 4,203 3,525 2,798 2, ,989 90,594 81, , ,000 40,000 60,000 80, , ,000 Annual Spend 000 Note this is based on Pro-Class expenditure categorisation

20 Modernising 04 Procurement

21 04. Theme: Modernising Procurement The Modernising Procurement theme will contribute to the Camden Plan strategic objectives of ensuring delivery of value for money services by getting it right first time and providing democratic and strategic leadership fit Actions to achieve our aims 1. Collaboration- our strategy is built on taking a very pro-active involvement in procurement work across London. We are involved at a number of levels: i. London-wide, sub-regional, local and crossboundary. As lead for ICT Category Management in London we will engage with the key ICT suppliers to London Boroughs. for changing times ii. A range of local community services are procured on behalf of the NHS Camden and a number of these are jointly funded health and social care contracts. An initial procurement project is also being undertaken on behalf of the NHS public health service. Procurement Current position Perception in some cases that procurement is bureaucratic, risk averse and compliance driven. There is a lack of recognition of procurement as a strategic partner and how to maximise the benefits of early engagement. Our Vision Our vision is that through the modernisation programme we will be recognised by Services for our value adding and supportive role in the delivery of Camden s Plan. 2. Contract management- implement tools and techniques that will support our Service Departments to drive more value from our contracts and ensure benefits intended from procurement are realised. 3. Supplier Relationships Management (SRM)- continue to explore new ways of improving our relationship with selected strategic suppliers to deliver Right First Time solutions and realise benefits. 4. Continuous Improvement- continue to meet the transparency and equalities principles, simplify our processes and remove barriers to doing business with the Council 5. Restructuring Procurement- the restructuring of procurement is based on 3 phases. This will result in the Procurement costs of 2.7m prior to the introduction of the new Operating Model being reduced to 2.05m, a reduction of 650K. The phases and options that will be considered are set out on page 24 Continued.

22 04. Theme: Modernising Procurement..Continued Actions to achieve our aims - become a must go to service that is value adding, innovative, efficient, effective, responsive and supportive by 6. Being more commercial and strategic- deliver value for money contracts and explore investment opportunities for Camden; early engagement of procurement by the services to maximise the benefits of our commercial skills at service review stage 7. Being performance driven- have a better understanding of our performance and the Council s return on investment. Benchmarking to ensure we continue to be best in class procurement service 8. Responding to internal and external change- play a proactive role in leading a strategic approach to procurement across Camden and London and be flexible and responsive to changing market priorities 9. Learning and development- provide support, learning and development opportunities to all staff engaged in procurement processes to ensure they deliver effectively and are empowered to deal with any procurement issues 10. Benchmarking- compare our performance to others. 11. Early Engagement- the involvement of procurement at the earliest phase of a project will deliver greater commercial benefits to Camden as shown in the Graph below. Procurement modernisation programme is predicated on early engagement and aims to shift from tactical to strategic and commercially driven procurement. For all make or buy decisions it will be expected that Procurement are engaged from the outset in the decision making. 12. Public Health- reviewing the procurement undertaken on behalf of NHS Camden and ensuring that the shared benefits of joint procurement are maximised Class 1 cost estimate Class 2 cost estimate Class 3-4 cost estimate Procurement Influence Scope & definition Project (including Supplier Initiation selection and (shaping the conditioning) bright idea) PID submission PIP approval Supplier commitment Value opportunity curve Procurement Process/Time

23 04. Theme: Modernising Procurement The reorganisation and modernisation of Procurement is based on 3 phases as set out below: Phase 1: New Procurement Operating Model By: 31/3/11 Status: Implemented Savings: 300K Phase 2: Adjustments to Operating Model By: 31/3/13 Status: On target Savings: 200K Phase 3: Review alternative options By: 31/3/14 Status: Work started Savings: 150K Outsource some or all of Procurement function Establish a Mutual or other vehicle to provide services to others Phase 3 Options Join West London Alliance or East London Solutions Hubs As part of Project Athena share procurement Services with Islington and Hackney Seek to establish a North London Strategic Alliance Hub Further restructuring

24 04. Theme: Modernising Procurement KEY DELIVERABLES Modernising Procurement - key deliverables Restructure Procurement- restructure to deliver Camden s Plan and other priorities. Establish the risks and prioritisation of programme of work to reflect these changes. Continuous Improvement- continue to simplify our processes and remove barriers to doing business with the Council Contract Management- implementation of new contract management principles Collaboration- Work closely with London Boroughs and other organisations to collaborate on procurements where this provides clear benefits Supplier Relationship Management- examine ways of improving our relationship with selected strategic suppliers those that are vital to our service delivery to realise cash savings from our budgets and improve quality Early engagement- Procurement team will continue to work closely with Service Departments to ensure we are able to provide commercial advice on make or buy decisions Transparency principles- continue to ensure that Procurement policies and procedures comply with the transparency agenda Benchmarking- compare ourselves to others in both public and private sectors Phase 1 March 2013 On-going to maintain leading edge Planned launch Jan 13 On-going activity On-going activity On-going throughout the lifecycle All advertised contracts are now published on contracts register On-going to inform procurement performance Phase 2 March 2014

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