How effective procurement can deliver value across the public sector

It’s no secret that public finances are under significant pressure, in both central and local government. But while steps may be needed to both increase tax revenue and reduce spending on public services, there is also considerable potential for government departments, local councils and other public sector organisations to drive efficiencies in their own spending. This is where effective procurement comes in, presenting opportunities for those working in the sector to demonstrate the value they can bring while helping reduce risk.

 

For many public sector organisations, the focus for procurement professionals has been on large contracts, related to the delivery of core services. This could be multi-million-pound defence contracts to build new aircraft or investment in major infrastructure projects such as HS2. In local councils, major costs are social care, education provision and highway maintenance. 

 

But in many organisations, less prominent spend accounts for large sums, and this is where the real opportunity for savings exists. Spend on indirect materials – those which do not directly impact public services but which are essential to the smooth running of any organisation – is notoriously difficult to control, as it often comprises large numbers of relatively low-value purchases across multiple suppliers.

 

But taken together, spend in areas such as IT equipment, office furniture, cleaning equipment, stationery or washroom facilities can amount to sizeable sums, and many procurement teams are failing to address this as they focus on larger projects. Often such items are bought by office managers or facilities teams, from different suppliers, as and when required.

 

Not only does this mean public sector organisations are failing to get the best value for money by not researching the market, it also means there’s little in the way of information about what they are spending and on what.

In turn, this makes it difficult to identify opportunities where items could be bought at a lower cost or even avoided altogether, or to make sure that suppliers meet standards in areas such as corporate social responsibility or environmental, social and governance guidelines. 

 

Digital procurement platforms, though, are helping to change this, providing procurement professionals with an opportunity to get more control over tail-end spend while also freeing up time for both their own teams and those who need to buy items.

 

Market places such as Amazon Business allow procurement teams to set parameters in who can make purchases, introducing spend limits and mandating the use of suppliers that meet specific criteria. An example could be those which have achieved sustainability certifications, or which are from the local area or small businesses, and progress in these measures can be recorded and tracked over time.

 

Crucially, procurement professionals can gain transparency in what they are spending, allowing them to identify opportunities for efficiencies. They can also ensure they have optimum levels of stock, reducing the risk of having to pay over the odds for items that are in short supply or have the potential to run out of stock. Accounts teams also benefit from having clear invoices stored in one location, making it easier to reconcile payments and moving teams away from claiming back costs on expenses.

 

Councils and government departments using Amazon Business can also join the Yorkshire Purchasing Organisation (YPO). Owned by local authorities, this helps public sector organisations achieve economies of scale by using collective purchasing power across a wide range of categories, and provides access to ready-made procurement frameworks. The body uses Amazon Business as its digital marketplace, providing access to a wide range of products.

 

One public sector organisation that has benefited from rolling out Amazon Business to its employees is Walsall Council. The organisation has used Amazon since 2019 but recently moved from employees buying items through purchasing cards on their own accounts to one account using Amazon Business, which has made it much easier to monitor and report on spend.

 

“Amazon Business supports us greatly because we have more time to spend on our strategic work,” says Julie Birch, business support team leader at Walsall Council. “Our low-value items are delivered to people who really need them much quicker and more efficiently.”

 

Telford & Wrekin Council has also seen the benefits of consolidating purchasing through one platform. “Using Amazon Business has enabled us to easily purchase nearly 200 Kindle Fires for reading, using the library eBook service and connecting to loved ones,” says Andrew Woodall, library service and digital inclusion manager. “The ability to get VAT invoices and line-item detail reconciliation have made the purchasing process compliant with our systems, and the speed of delivery meant that we could get the tablets quickly.”

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To find out more about how Amazon Business could help your public sector organisation get better value through more effective procurement, visit business.amazon.co.uk/en/work-with-us/government