Public sector organisations are under considerable pressure to collaborate with one another to drive efficiencies in the way services are delivered to improve the quality of services and to save money. Local authorities and the NHS have a lot of experience in collaborating to deliver more stream-lined services, notably in the area of health and social care services (see Practice note, Partnerships between local government and NHS bodies).
However, the Operational Efficiency Programme (OEP) report, published in April 2009, highlighted some key areas of potential savings which are yet to be fully exploited, as well as several impediments to realising those savings. Of the areas examined in the report, collaborative procurement was identified as potentially delivering the biggest savings (£6.1bn a year from 2007/8 to 2013/14 from spending of £89bn a year across the public sector).
However, many challenges must be addressed before such savings can be realised, particularly in relation to inadequate management information as to the value accruing from existing contracts. Collaborative procurement relies on systems to produce robust data which can then be shared between authorities so they can benchmark comparable services.
The OGC’s Markets and Collaborative Procurement Programme site seeks to help public sector organisations address some of these challenges by providing guidance on category management and access to framework agreements. Last month it introduced the Collaborative Procurement mark , which aims to signpost procurement professionals to information and agreements which support the government’s procurement programme leading to value for money savings.
What does the move towards collaborative procurement mean for lawyers in the public sector?
Collaborative procurement takes a number of forms, such as:
- A shared services arrangement in which two or more local authorities pool resources to create, for example, a joint HR or IT service.
- Two or more authorities joining together to procure anything from a major infrastructure project to low value services. This saves procurement costs and should maximise economies of scale.
- Partnerships between the NHS and local authorities, which are well-developed as far as the delivery of health and social care services are concerned but less so in relation to support services.
- Participation in professional buying consortia, such as the OGC.
A myriad of legal issues arise in relation to such projects, and these are comprehensively covered under the following PLC Public Sector topic headings:
- Powers, authority and governance arrangements (see Public and Administrative Law).
- Procurement (see Public Procurement).
- Risk allocation and contract terms (see Commercial).
- TUPE and Pensions (see Transfer of Undertakings and Pensions and Employment).
In addition to the materials published under those headings, PLC will be publishing standard clauses designed for use by public sector organisations working in partnerships as well as a more general public sector service contract to complement our existing contracts for goods and services. We will also be publishing materials on working with the third sector and the establishment of social enterprises.