How smarter procurement is helping local authorities deliver

The financial challenges facing local authorities and councils are well-documented, with many struggling to make ends meet and some in danger of bankruptcy. But for those working in local authority procurement teams, this provides an opportunity to demonstrate the value they can bring to the business, in terms of both financial savings and broader measures such as enhancing local communities and working towards net-zero targets.

 

Local authorities have significant spending in core areas such as social care, SEND provision and maintenance of roads and other facilities. But they are also complicated businesses, often with multiple bases, and need to purchase items that are essential to their successful operation. Examples include furniture, IT equipment, stationery, consumables and toiletries, and it’s these categories where there is real potential for procurement teams to reduce spend and deliver wider value to local communities.

 

These relatively low-value but high-volume products have often gone under the radar, ordered from a range of suppliers by those who need particular items or office managers who have been tasked with purchasing. The priority is typically to get hold of the items as quickly as possible, meaning little attention is paid to price or any wider societal value.

 

This type of ad hoc approach can cause other issues, too. For procurement teams, a haphazard approach means there’s little in the way of researching the market, or data around how much is being spent over a period of time and on what. This makes it hard for them to analyse whether there are more cost-effective options, or to put in place strategies that could see them avoid some purchases altogether.

 

Accounts teams, meanwhile, are often faced with purchases made by individuals on their own cards who then claim back items through expenses, making it difficult to control who is buying items in the first place or how much they are spending.

 

The rise of digital procurement marketplace services such as Amazon Business is providing companies with the means to take control of such spend categories. The familiar Amazon environment means users can easily compare prices from suppliers and make multiple purchases from one location. Through its Guided Buying feature, organisations can control who can make purchases, impose spend limits and easily monitor compliance against these.

 

Organisations can also put in place other metrics, such as mandating the use of local suppliers to help boost businesses from the immediate area and support communities, as well as reducing carbon emissions associated with delivery.

 

They can also prioritise suppliers that meet certain CSR criteria, which can help local authorities and councils with their net-zero aspirations by reducing their Scope 3 emissions. Progress towards the use of such suppliers can be recorded and tracked over time, enabling procurement teams to demonstrate how they are having a tangible impact on wider organisational priorities.

 

Crucially, procurement teams have access to accurate and up-to-date spend information, so they can monitor trends over time, assess what they are spending and when and identify if they may be overspending in certain areas. Armed with this information, they can reduce risk by ensuring they have the right equipment at the right time, avoiding the potential to run out of items or end up with surplus.

 

Artificial intelligence can help here, too. By identifying previous spend levels, organisations can assess what they are likely to need, helping to plan purchases and identify the best suppliers. Organisations can choose to buy in bulk to obtain better pricing and even group items into fewer deliveries.

 

Walsall Council turned to Amazon Business when it looked to consolidate a large number of users who would buy items through Amazon using purchasing cards. “This meant we were able to get all the separate Amazon accounts consolidated into one for reporting and monitoring purposes,” says Danielle Russell, Purchasing Cards Manager at Walsall Council. The new system means users can easily find what they need, while making administration easier for accounts teams and freeing up time for procurement.

 

Partnering with Amazon Business can even help procurement teams meet wider public sector mandates through membership of Yorkshire Purchasing Organisation (YPO). Owned by local authorities, YPO provides ready-made frameworks for the public sector, so they can easily demonstrate compliance with public sector spending regulations while still benefiting from the cost efficiencies gained from buying through Amazon.

 

South Ayrshire Council is one organisation that has taken advantage of this. “We were looking for added compliance while purchasing on Amazon Business,” says Andrew Kerr, Procurement Manager. “We activated the YPO framework as it gives us the peace of mind that we are getting the best offer and value on the marketplace. We have also consolidated our suppliers, as Amazon has become the single supplier of invoices for all our orders.” 

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