Procurement
Asset management
Business process improvement and new service models
Workforce flexibility
Procurement
Welsh public services spend around £5 billion every year procuring goods and services. This is around one in every three pounds of devolved spending. Since the inception of the Wales Audit Office, our work has looked at various aspects of procurement. Getting good value from procurement has potential to realise significant savings for public services. Value from procurement is not just about getting the cheapest price in the short term. Public services need to consider issues like quality and sustainability, and the possibility that higher short term costs can lead to longer term savings, as for example, the case studies on a whole life approach show. Public bodies’ procurement decisions can also have wider social, economic and environmental impacts.
Case Studies
Construction Procurement – public services spend around £1bn a year on construction
Value Engineering in the procurement of the Senedd Building
Use of whole life costing in the procurement of the Senedd
Cost reduction through energy efficiency in construction (Pembrokeshire)
Use of fixed price contract in the funding for the construction of the WMC
OGC Guidance on construction
The Operational Efficiency Programme
Energy Procurement
Energy procurement – this cost around £90 million in 2007-08
Swansea – using management information
Pembrokeshire – A consortium buying energy achieved below market prices
Fleet procurement
Fleet Procurement – Newport
Fleet procurement – South Wales Police
Fleet Procurement of maintenance in Merthyr Tydfil County Borough Council, with claimed efficiency savings
Whole life costing in fleet procurement, Pembrokeshire
Value Wales – Adding Value Report
Asset management
Public services own many assets, and there is scope to make better use of them. The range of public assets runs from the road network in Wales, large and small public buildings and the fleets of cars, trucks and other vehicles used to deliver services. In total public services in Wales spend around £1.2 billion a year acquiring and managing assets. The public estate in Wales (excluding central Government assets) is valued at around £9.4 billion. Our work over the past few years has looked in detail at management of vehicle fleets and buildings across the whole public service in Wales.
Case Studies
Buildings management
Fleet management
OGC Asset Management guidance
Links
OGC Asset Management guidance
The Operational Efficiency Programme
Business process improvement and new service models
Business process improvement is a systematic approach to improving the underlying processes of an organisation in order to make them more efficient and effective. Business process improvement involves reducing waste in order that the same, or better, outcomes can be achieved by making more effective use of resources. It is not, as the name might suggest, only about high-level corporate processes. It covers all elements of the way organisations go about their businesses, from the smallest administrative processes to the way patients are treated in the health and social care system. There are several different models and approaches, like Systems Thinking, Six Sigma and LEAN that can be used to develop better business processes.
Case Studies of the Application of Systems Thinking in the Public Sector
Blaenau Gwent CBC
Neath Port Talbot CBC
Portsmouth City Council
ICT
Information and Communications Technology (ICT) can help to ensure more efficient and effective delivery of services. Our Smarter Ways of Working case studies show how communications technology can enable staff to be more productive by working more flexibly outside of the office. This can reduce the cost of office space, support flexible working and increase productivity. There is also scope for more prudent investment in ICT systems to reduce reliance on paper based systems, and to integrate systems between organisations to enable better sharing of information. However, public services always need to be focused on the business need for any ICT projects and development, rather than letting the technology drive the business.
Case Studies
Smarter Ways of Working
Workforce flexibility
Staff costs make up the bulk of most public services’ spending. Even money spent on procurement often supports staff either in another part of the public services, voluntary sector or a private company. In considering disinvestment, public services will need to identify their staffing costs. One of the notable features of the current recession, compared to others, is that the rate of employment has fallen less sharply than might initially have been expected. This is in part because people have begun to work more flexibly, with reduced hours or moving from full-time to part-time work. Public services may need to adopt similar approaches in order to retain experienced staff while reducing overall costs. There is also scope to improve the management of sickness absence. Reducing the average number of days lost each year in the Welsh public sector by only one, is the equivalent of a cash injection of around £27 million to the public services in Wales.
Case Studies
Smarter Ways of Working
Managing Sickness absence
Occupational health
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