Conclusions and recommendations
1. Despite the scope to make savings which
could be deployed to front-line services for learners, procurement
remains a 'Cinderella service'.
Many further education colleges have not given sufficient priority
to procurement to make real improvements. Available technology
has made efficient, electronic procurement more accessible and
is enabling organisations to make savings by changing how they
buy goods and services. College principals and governing bodies
should identify in their business strategies the opportunities
for achieving better value for money in procurement, and freeing
up resources to be re-invested in frontline services for learners.
2. Poor management information and systems
are major barriers to improving procurement in many colleges.
Most colleges are not using their existing
accounting systems to generate basic analyses such as the volume
of business they do with a particular supplier. The Learning and
Skills Council should work with colleges to improve their systems
and management information to a point where all can, as a minimum,
easily identify expenditure patterns, suppliers and prices for
basic items such as fuel, catering and stationery, so that they
can assess whether alternative suppliers would offer better value.
3. The Department's and the Learning and Skills
Council's small support teams have to reach 384 colleges with
widely varying capacities for procurement.
The support has taken a number of forms, ranging from guidance
and a dedicated website (the Further Education Library of Procurement)[3]
to visits to colleges to help identify directly where savings
can be made. The Department and the Learning and Skills Council
should develop ways of getting more expertise into colleges, for
example by encouraging more 'self help' such as sharing experience
of particular systems or consortia, and sharing lessons via the
website, where colleges may add their own materials to develop
a resource for the whole sector.
4. Some colleges' reluctance to share good
practice is another main barrier to improving procurement.
Colleges are most persuaded that procurement savings are worth
the effort where they see evidence of other colleges making savings,
but have been hesitant to publicise savings. The Learning
and Skills Council should encourage colleges to recognise how
they can strengthen their reputation as well managed organisations
by demonstrating innovation and achievement. It should reaffirm
its commitment that the savings colleges make will be available
for them to spend on their learners.
5. There is a risk that colleges may not fully
exploit the opportunities that consortia provide.
As at April 2007, some 300 colleges had joined the Crescent Purchasing
Consortium, the main consortium operating in the further education
sector. The Learning and Skills Council should establish a dialogue
with the main consortia to ascertain progress and trends in colleges'
expenditure routed through them. It should expect the consortia
to develop cost-effective arrangements for joint purchasing beyond
straightforward items such as paper and standard items of stationery,
for example by making available framework contracts.
6. Though most colleges have joined procurement
card schemes, 65 colleges have still not taken up this relatively
simple, cost-effective form of procurement.
At present, 60 colleges are members of the Government Procurement
Card scheme, while a further 192 are members of commercial schemes.
All colleges should use procurement cards for relevant purchases,
and the Council should develop clear guidance on using the cards
including how, by using them appropriately, colleges can strengthen
expenditure controls and reduce the risk of improper purchasing
and fraud.
7. The target of £75 million savings
from procurement efficiencies may prove to be unambitious. The
Learning and Skills Council acknowledges that colleges could achieve
this target easily if they made simple improvements to procurement
methods. When colleges report progress in March 2008, the Council
should consider setting a new target to reflect the large potential
for procurement savings in further education colleges.
3 http://www.dfes.gov.uk/cpp/buyingguidance_currentoffers_14.shtml Back
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