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Day1 sess1&2


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Day1 sess1&2

  1. 1. SESSION 1 DEFINING THE LANSCAPE Day 1 – Tuesday 8 March
  2. 2. CHAIR’S OPENING REMARKS Grahame Steed, Managing Editor, Government Opportunities (GO)
  3. 3. SESSION 1 DEFINING THE LANSCAPE Day 1 – Tuesday 8 March
  4. 4. FIXING THE PUBLIC FINANCES Bill Hill, Associate Partner, Deloitte
  5. 5. SESSION 1 DEFINING THE LANSCAPE Day 1 – Tuesday 8 March
  6. 6. Reshaping public sector procurement - the practitioner’s view David Thomas Commercial Director HM Revenue and Customs [email_address] 0161 827 0261
  7. 7. Overview of current position <ul><li>“ The stage” </li></ul><ul><li>“ The cast” </li></ul><ul><li>“ The script” </li></ul>Procurex National | 8 March 2011 |
  8. 8. “ The Stage” <ul><li>Efficiency Reform Group </li></ul><ul><li>Central Government Departments </li></ul><ul><li>Wider public sector </li></ul><ul><li>OGC </li></ul><ul><li>Buying Solutions </li></ul>Procurex National | 8 March 2011 |
  9. 9. “ The Cast” <ul><li>Francis Maude </li></ul><ul><li>Ian Watmore </li></ul><ul><li>John Collington </li></ul><ul><li>Adrian Kamellard </li></ul><ul><li>Katharine Davidson </li></ul><ul><li>PEB </li></ul>Procurex National | 8 March 2011 |
  10. 10. “ The Script” <ul><li>Austerity </li></ul><ul><li>Tight and loose </li></ul><ul><li>Renegotiate contracts </li></ul><ul><li>Aggregation </li></ul><ul><li>Centralise commodity procurement </li></ul><ul><li>‘ De chunk’ IT </li></ul><ul><li>SME development </li></ul><ul><li>Transparency </li></ul><ul><li>Crown Commercial representatives </li></ul>Procurex National | 8 March 2011 |
  11. 11. What are the practical challenges that arise? <ul><li>Roles and responsibilities </li></ul><ul><li>Separation of central government from wider public sector </li></ul><ul><li>Transformation of Buying Solutions </li></ul><ul><li>Balancing vfm and SME development </li></ul>Procurex National | 8 March 2011 |
  12. 12. Roles and responsibilities <ul><li>Centralising commodity procurement impacts Department organisations </li></ul><ul><li>Sourcing ownership changes </li></ul><ul><li>Contract management roles change </li></ul><ul><li>Departmental commercial teams retain a different but important role. </li></ul>Procurex National | 8 March 2011 |
  13. 13. Contract Management – a new model Procurex National | 8 March 2011 | Central Government leadership Joint Department and Central Government responsibility Departmental role
  14. 14. Transformation of Buying Solutions <ul><li>There is a problem – FACT </li></ul><ul><li>February strategic review </li></ul><ul><ul><li>Supplier views sought </li></ul></ul><ul><ul><li>Customer views sought </li></ul></ul><ul><ul><li>Employee consultation </li></ul></ul><ul><li>Proposed strategy declared in March </li></ul><ul><li>One thing is certain – this transformation will take time to work fully </li></ul>Procurex National | 8 March 2011 |
  15. 15. Central Government and the wider Public Sector <ul><li>Tight and loose is declared policy </li></ul><ul><li>MCO changes are for Central Government only now </li></ul><ul><li>There are practical implications from this: </li></ul><ul><ul><li>Is it a straight line or wavy? </li></ul></ul><ul><ul><li>Two market approaches? </li></ul></ul><ul><ul><li>Separate current contracts </li></ul></ul><ul><ul><li>BS – are they two teams? </li></ul></ul>Procurex National | 8 March 2011 |
  16. 16. Value for money and the development of SMEs <ul><li>Can all policies work in absolute harmony? </li></ul><ul><li>Fully understand and accept Government policy but again there are potential issues for buyers to work through: </li></ul><ul><ul><li>Some markets have few SMEs </li></ul></ul><ul><ul><li>SMEs may have below threshold financial capabilities </li></ul></ul><ul><ul><li>Resistance to change from major suppliers </li></ul></ul>Procurex National | 8 March 2011 |
  17. 17. Conclusion <ul><li>Public sector procurement is changing </li></ul><ul><li>Buyers have to recognise the changes and adapt </li></ul><ul><li>Change creates issues and it is our responsibility to manage them </li></ul>Procurex National | 8 March 2011 |
  18. 18. Thank you Any questions?
  19. 19. SESSION 1 DEFINING THE LANSCAPE Day 1 – Tuesday 8 March
  20. 20. David Clark Director General SOLACE Presentation to Procurex National 2011 – The Procurement Exhibition Birmingham National Exhibition Centre, 8-9 March 2011
  21. 21. <ul><li>Permanent hit to public finances from financial crisis estimated at £86 billion a year (in today’s terms) </li></ul><ul><li>Response is a £98 billion fiscal tightening by 2015–16, comprising a £24 billion tax rise and a £74 billion spending cut (in today’s terms) </li></ul><ul><ul><li>OBR estimates 60% chance of hitting fiscal mandate on current policies </li></ul></ul><ul><li>Overall post crisis tax and benefit reforms regressive across most of the income distribution. </li></ul><ul><ul><li>cuts to welfare payments for working-age individuals </li></ul></ul><ul><li>Four years from next April will be the tightest sustained squeeze to public service spending since April 1976 to March 1980 </li></ul><ul><ul><li>total DELs cut by 11% in real terms </li></ul></ul><ul><ul><li>overseas aid budget increased sharply </li></ul></ul><ul><ul><li>in England: NHS and schools relatively protected; largest cuts to: Communities and Local Government, DEFRA and BIS </li></ul></ul>© Institute for Fiscal Studies Data: Institute for Fiscal Studies
  22. 22. Impact of cuts to spending on public services <ul><li>Total spending on public services to be cut in real terms for six years </li></ul><ul><ul><li>since WW2 cuts have only been achieved for two consecutive years </li></ul></ul><ul><ul><li>deepest sustained cuts since April 1975 to March 1980 </li></ul></ul><ul><li>Central government spending on public services (DELs) </li></ul><ul><ul><li>to be cut as a share of national income back to the late 1990s levels </li></ul></ul><ul><ul><li>in real terms spending in 2014–15 to be 11.2% lower than in 2010–11 or 13% below the level Labour planned for 2010–11 </li></ul></ul>© Institute for Fiscal Studies Data: Institute for Fiscal Studies
  23. 23. ‘ Winners’ © Institute for Fiscal Studies Data: Institute for Fiscal Studies Note: Figures show real change in total (resource + capital) DEL
  24. 24. ‘ Losers’ © Institute for Fiscal Studies Data: Institute for Fiscal Studies Note: Figures show real change in total (resource + capital) DEL
  25. 25. Record breakers? <ul><ul><li>total spending: tightest since World War II </li></ul></ul><ul><ul><li>spending on public services: tightest since April 1975 to March 1980 </li></ul></ul><ul><ul><li>NHS: tightest since April 1951 to March 1956 </li></ul></ul>© Institute for Fiscal Studies Data: Institute for Fiscal Studies
  26. 26. Issues for local government Budgets A time limited council tax freeze; followed by below inflation rises? A pay freeze for public sector workers, not necessarily in local government, but practically it will happen
  27. 27. Three Lines of attack: People Plant and Capital Contracts Locally?
  28. 28. Public and private sectors working together to deliver services “ Cuts will fuel a ‘surge’ in public sector outsourcing ” National Outsourcing Association
  29. 29. Outsource What? BPO - Facilities Management - Fleet Management Variously defined back office activities Domiciliary and Elderly care
  30. 30. Models Straight outsource Joint venture, some hubbing but more likely to be looking at place based alternatives. Talk of mutuals, but little understanding as to what this might mean
  31. 31. Third Sector Risk Management relatively underdeveloped 76% dependant on local government or national government money
  32. 32. Some services lend themselves to community involvement Centre for learning difficulties in Sussex Volunteer dust crews, street sweepers and physics teachers are harder to come by
  33. 33. More likely that some services will disappear or become only available to those that can pay Borough Engineer Student Grants Officer
  34. 34. A smaller less supporting state Greater use of contractors Different use of third sector (where there will undoubtedly be consolidation) Driven by new combines of authorities    
  35. 35. Q&A SESSION
  36. 36. SESSION 2 DELIVERING SAVINGS – LIVE DEBATE Day 1 – Tuesday 8 March
  37. 37. DISCUSSION ON HOW TO FACE THE CHALLENGE OF MEETING THE EFFICIENCY TARGETS Grahame Steed, Managing Editor, Government Opportunities (GO) Panellists: Ken Cole , Commercial and Procurement Advisor, Capital Ambition Nigel Kletz , Assistant Director, Corporate Procurement Services, Birmingham City Council David Loseby , Ex-Chief Procurement Officer and Head of SRM,Westminster City Council Eddie Regan , Senior PASS Consultant, BiP Solutions Jack Salter , Head of Commercial Policy Team, Department for Education
  38. 38. SESSION 2 DELIVERING SAVINGS Day 1 – Tuesday 8 March