Thursday 3rd January, 2013

As reported in The Guardian, local authorities have yet again been given a tough financial settlement, a further reduction of 1.7%. Rather than looking at a reduction in frontline services, much of the savings could be made by taking a closer look at operational efficiencies - such as an improved procurement process and making better use of shared services for example.

Communities secretary Eric Pickles' list of 50 ways to make savings is a mixture of big opportunities - and interestingly - outsourcing does not feature on the list at all. The list does provide plenty of examples to justify the suggestions made, though some of the sources Pickles uses are questionable, including the local government fraud strategy, which asserts that procurement fraud could cost as much as £890m a year. While procurement fraud and corruption certainly do exist (this figure came from a report by the National Fraud Authority), there is virtually no reliable data to support it and is based on a risk assessment for the Ministry of Defence and some wide ranging estimates from procurement staff.

Meanwhile, evidence from Cheshire West and Chester council shows what can be achieved by joined up waste collection and disposal: the authority has made cash savings of more than 30%. This is the third biggest area of local authority procurement spend. Imagine the percentage saving that could be achieved through a national approach in this area.

The argument for a single coherent local government procurement structure, perhaps with regional and local hubs, is looking stronger than ever. In powerful metropolitan areas such as Manchester there is no excuse for councils retaining their own procurement organisations.

Eick Pickles' report provides an excellent checklist that local authorities should act upon in 2013, and which allows local taxpayers to hold their councils to account.