We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!
Presentation is loading. Please wait.
Published byEve Crooker
Modified about 1 year ago
April 2010 © ProcurementExcellence 1 The Deficit, OEP and what it means for FE College Procurement * (* and everyone else in the UK) Peter Smith Tel
CIPS Past President CPO NatWest, DSS etc Founder of Procurement Excellence Non-executive Director of Remploy Developed OGC Procurement Capability Review model Worked with local authorities, Departments, Trusts, NAO, Audit Commission etc. Blogger and author Peter Smith April 2010 © ProcurementExcellence 2
News, views and opinions from the world of procurement and supply chain Lots of public sector stuff including “The Perfect Storm”; our view of the future of public procurement Also the monthly album review! Peter Smith April 2010 © ProcurementExcellence 3
Buying Professional Services April 2010 © ProcurementExcellence 4
Agenda for today Government efficiency and ‘savings’ The current economic position What it means to you April 2010 © ProcurementExcellence 5 Plus time for questions and discussion
History of efficiency in Government Gershon – 2004 Efficiency Review CSR 07 Operational Efficiency Programme April 2010 © ProcurementExcellence 6
History of efficiency in Government Operational Efficiency Programme The reviewed areas and lead advisors were: back office operations and IT, led by Dr Martin Read collaborative procurement, led by Martin Jay asset management and sales, led by Gerry Grimstone property, led by Lord Carter of Coles local incentives and empowerment, led by Sir Michael Bichard April 2010 © ProcurementExcellence 7
History of efficiency in Government Operational Efficiency Programme Key procurement findings: Increase scope of collaborative activity More collaboration, more use of Buying Organisations Need better information Transparent collaborative business models and governance £6 billion savings estimate through greater collaboration April 2010 © ProcurementExcellence 8
History of efficiency in Government Government makes huge claims for savings: “ Building on the SR04 Efficiency Programme, which successfully delivered over £26.5 billion in savings, and on plans to deliver another £35 billion in savings as part of the CSR07 value for money programme….” etc. The NAO says: 25% of savings are real 50% some doubt 25% not real April 2010 © ProcurementExcellence 9
History of efficiency in Government But up to now...it hasn’t really mattered. If real efficiencies were made, great; organisations could re-invest those savings If they weren’t made, or weren't real, the organisation still had enough funding to do what was planned anyway April 2010 © ProcurementExcellence 10 THIS IS ALL ABOUT TO CHANGE
Don’t like to worry you but.... JUNE 2007 © ProcurementExcellence 11 The Conservatives require cuts of £63.7 billion from an ‘unprotected’ spend of £241 billion That is OVER 25% spend reduction by 2014/5 Identified cuts (inducing freeze on public sector pay, pensions changes etc) account for about £11 billion £52.5 billion (over 80% of total) is not yet identified. 2010/15 to be the tightest 5 year period for government spending since (at least) WWII (all data from the Institute of Fiscal Studies)
April 2010 © ProcurementExcellence 12 Economic position “ The UK economy will “crawl” this year and expand less than previously forecast “ The new government must introduce deeper spending cuts and greater tax hikes” “ Bank of England Governor: poll winner will be out of power for a generation” “Taxes could rise by six pence in the pound over the next 10 years to slash public borrowing” “ Hung parliament 'could tilt Britain into Greek-style financial turmoil' “ a cut of £6bn in public spending this year would mean 30,000 public sector workers getting the sack”
Effect on colleges (and pretty much everyone else) It’s going to be bloody ‘Efficiency savings’ will be exposed if they are not real Cuts to services and jobs will be necessary; but genuine procurement savings will minimise the pain April 2010 © ProcurementExcellence 13 There is no panacea – that includes ‘collaboration’
Saving money through procurement Cost reduction is only one aspect of improving value Others include getting more (quantity or a higher specification) for the same money But REAL CASH COST REDUCTION is what is going to matter And there are only a few ways to deliver that April 2010 © ProcurementExcellence 14
The solution “The only way in which the required savings can be delivered will be through relentless attention to the whole spend management process.....public procurement should re-focus on this wider picture, and re-brand public ‘procurement’ as ‘spend management’. That will require effort in promoting proactive demand management to cut off spend at source; in rationalisation of specifications; in aggressive and commercial contracting; and in skilful and value driven contract and supplier management”. (“The Perfect Storm” White Paper, Procurement Excellence 2010) April 2010 © ProcurementExcellence 15
Saving money DEMAND MANAGEMENT SPECIFICATION MANAGEMENT MARKET MANAGEMENT COMMERCIAL MAMNAGEMENT TRANSACTIONAL MANAGEMENT April 2010 © ProcurementExcellence 16 5 ways to save money
Demand management Buy less Reduce or eliminate the need for the goods or services Travel video conference IT life-cycle Control professional services, contractors Monitor consumables usage April 2010 © ProcurementExcellence 17
Specification management Buy a ‘cheaper’ or more appropriate specification of product of service at lower cost Down-spec on IT or other equipment Reduce frequency of cleaning, maintenance Look hard at travel and other policies ‘No frills’ approach to everything April 2010 © ProcurementExcellence 18
Market management Change supplier to one who can offer a lower price for equivalent goods or services Understand the market Consider collaborative options Do include the cost of change in your assessment April 2010 © ProcurementExcellence 19
Commercial management Negotiate a better deal from current suppliers That may mean them reducing their margin or coming up with ways to reduce their own cost base Not always easy in the public sector April 2010 © ProcurementExcellence 20
Transactional management Reduce the cost of the overall transaction Elements of cost lie in letting the contract, ordering, invoicing and payment, management of the relationship.... Consider use of GPC, electronic catalogues Collaboration helps here April 2010 © ProcurementExcellence 21
WARNING Collaboration, developing huge procurement organisations, or even more use of current collaborative ventures will not IN ITSELF lead to cost reduction You should look hard at collaborative options – but remember that you can buy very expensive things – and lots of them – from consortia! You have to “do stuff” in your organisations to make cost reduction happen April 2010 © ProcurementExcellence 22
And remember.... Every pound you save helps towards maintaining another public sector job and sustaining strong public services So...consider yourselves “SPEND MANAGERS” And good hunting! April 2010 © ProcurementExcellence 23
April 2010 © ProcurementExcellence 24 Peter Smith Tel Thank you
An Introduction to professional services. Professional occupations Actuary Here are some examples of professional occupations. Some may be more familiar.
1 LEADING IN A DOWNTURN LARRY ETTAH GROUP MANAGING DIRECTOR/CEO.
Setting a political budget Councillor Alan Waters, Deputy Leader, Norwich City Council Learning & Development Manager LGIU.
Stuart Hollis SKILLS FOR SUSTAINABLE GROWTH Consultation on the future direction of skills policy Mark Ravenhall, Director of Operations.
Insert your company logo here (on slide master). Insert your company logo here (on slide master) Developed by the Department of Communications, Information.
AGGREGATE DEMAND (AD): The quantity of real GDP demanded at different price levels. -The price level is measured using the GDP deflator. -The quantity.
AN OVERVIEW OF ISSUES TO DO WITH WEBDESPIX (WDP) This is only a start look at your booklets and notes! WebDesPix.
Budgeting for Systems Administrators Adam S. Moskowitz LION Bioscience Research Gregory H. Hamm GPC AG.
EURELECTRIC WG Retail Markets Presentation for ERGEG Customer Focus Group Helsinki, 11 October 2005.
A Publication of Bridgemark Solutions Six Keys to Generating More Sales Leads AND WINNING MORE MARKET RESEARCH PROJECTS.
Copyright, Starting Your Own Business Joan Sanger, Presenter.
CBR 301: Using Community-Based Research to Affect Public Policy.
Routes to access: what affects the decisions that ONS makes about research data access Paul J Jackson, Office for National Statistics.
1 Schools financial value standard Welcome. 2 Aims The aims of the day are to: provide guidance on the requirements of the Schools Financial Value standard.
Forecasting Future Skill Needs in NI Overview of Final Report Graeme Harrison, Head All-Island Consultancy Karen Barklie, Economist Lunchtime Seminar 3.
Academy Status Proposal Summerhill Primary School.
North East London Association Working in Partnership.
Insert Local Authority Transformation Strategy Workshop Insert date This document is part of the personalisation toolkit
TAKING THE NEXT BIG STEP: Fresh approaches to aligning skills, economic strategies and economic development in England, Wales and Scotland Ewart Keep ESRC.
Finance at Les Maisonettes. Financial issues to revise Downward pressure on profit margins The concerns highlighted in the balance sheet Line 152 – Sophie.
Prepaid cards – a solution for the financially excluded? The National Prepaid Cards Network Colin Whitehouse Independent Govt. Advisor Chair – National.
Customer Acquisition – Energy. Customer Sources 1.Yourself 2.Prospects who do not get involved with the opportunity 3.Everyone Else – Warm Market.
AD and AS Tragakes 2012, chapter 9. Aggregate Demand Aggregate Demand (AD): The total quantity of aggregate output, or real GDP, that all buyers in an.
BUSINESS & MANAGEMENT Unit 3.1 Sources of Finance 1/31.
PUBLIC-PRIVATE PARTNERSHIPS: IN PURSUIT OF RISK SHARING AND VALUE FOR MONEY Philippe Burger University of the Free State OECD Workshop Amman – April 2008.
Teacher instructions: 1.Print the lesson, 2.Display slides 2 through 4 with Procedure step 1 in the lesson. 3.Display slide 5 with Procedure step 3. 4.Display.
Learning Objectives 14.1 Describe the importance of accounting and financial information Differentiate between managerial and financial accounting.
Learning Unit 3. Discuss the steps that may be followed to analyse the industry Identify and discuss the elements of an industry analysis Identify and.
Six Countries Programme – Innovation and Procurement Wednesday 16 November 2005 Margaret Horton Head of Research and Innovation The UK Approach to Procurement.
The. of and a to in is you that it he for.
© 2016 SlidePlayer.com Inc. All rights reserved.