Public procurement ‘could improve’

A failure by public bodies to collaborate when buying goods and services is squandering millions of pounds in potential savings each year, auditors have found.

If Northern Ireland attained the level of joined-up purchasing that is planned in Scotland over the next three years, £140 million would be saved, rather than the £30 million target set locally, the region’s Audit Office claimed.

Around £2.7 billion is spent on procurement in the public sector in Northern Ireland every year. Of that, around £880 million is for what are considered “common goods and services”. These include costs for energy, fleet and transport, office solutions, computer technology, food and construction.

The NI Audit Office examined this area of procurement spend to establish how different public bodies are working together to maximise savings. Its findings, published by Comptroller and Auditor General Kieran Donnelly, found much room for improvement.

Issuing the report to the Assembly, Mr Donnelly said: “There is scope to increase aggregated demand and collaboration for common goods and services. If used properly, this can lever significant savings for the public sector.”

Auditors examined the Department of Finance’s Central Procurement Directorate (CPD) and the Centres of Procurement Expertise (CoPE) in bodies such as NI Water, the Roads Service, Translink, the health estates, education boards and the Housing Executive. They also looked across government departments and the procurement departments of the police and prison services. The overseeing Procurement Board, which is chaired by Finance Minister Sammy Wilson, is responsible for the development of policy and practice.

The report said bodies responsible for procurement did not possess basic management information. The auditors found that while there was a long-stated goal of fostering more collaborative work, there had been “little progress” in achieving it. They said only 4.3% of common goods and services were bought through collaborative arrangements last year.

The report said the £35 million the CPD stated had been saved through collaborative working since 2005 was a “very modest achievement” and said future targets were much lower than other parts of the UK, citing the Scottish example to demonstrate the potential sums that could be saved.

They said procurement organisations also had a lack of experienced professionally qualified staff. The auditors found that certain bodies paid different prices for the same goods and there was no benchmarking of prices.

As many services are procured from small and medium-sized businesses (SMEs) in Northern Ireland, the auditors assessed whether greater efficiencies would have an adverse impact on this part of the region’s private sector. They also claimed there was no empirical evidence to suggest greater collaboration would disadvantage local businesses but said it was important to strike a balance between achieving savings and supporting SMEs through procurement.

Article Belfast Telegraph