Three Scottish councils combine forces on procurement to save £24m

Inverness - Image credit: Adrian Pink/Flickr

Three councils in the north of Scotland are to combine their buying power, in a move that is expected to deliver savings of more than £24m over the next five years.

Highland Council, Aberdeen City Council and Aberdeenshire Councils have agreed a shared procurement arrangement, with a single team working across the three councils.

The combined budget brings together total procurement spend of almost £1bn.

The effectiveness of the shared arrangement will be measured through a range of performance indicators, including percentage spend with local businesses, contracts with community benefits, cashable and non-cashable efficiency savings, and spend on and off contract.

Aberdeen and Aberdeenshire already share procurement services and the team has received a number of awards for its work, including Leadership of the Year Award at the Government Opportunities Excellence in Public Procurement Awards 2015/16.

Joint Head of Commercial and Procurement Services Craig Innes explained: “We identified an opportunity to develop a shared service between Aberdeen City and Aberdeenshire councils a few years ago and it immediately started generating savings through our combined buying power.

“We’ve drawn together a team of procurement and commercial experts who have a range of experience from commissioning multi-million pound care contracts, to purchasing day-to-day commodities.

“They work alongside services to procure and manage contracts which will meet the needs of local government, offer excellent value for money, and bring real added benefit to our work.

“But it’s more than that, we are working with suppliers to build in social benefits for our communities and ensure local companies understand our procurement processes so they are well placed to compete for work.”

Having seen the model set up between Aberdeen City and Aberdeenshire councils, Highland Council will now join the shared arrangements.

Highland Council will continue to be supported by a team in Inverness, but procurement staff will be part of the wider team based in Aberdeen, with the combined knowledge and expertise the wider team is able to provide.

According Innes the arrangement is also attracting interest from other partners and ultimately the ambition is to create a centre of excellence for procurement across the north of Scotland.

“We’re well on the way to achieving that,” he said.

Highland Council leader Margaret Davidson commented: “We welcome the significant opportunity to work with our adjoining councils to create a centre of expertise in the north of Scotland that will enhance the spending power of the three councils, allow us to compete with other councils on an equal basis, and deliver financial savings to the residents and businesses of Highland.

“It will also provide opportunities for local businesses to expand their business with the new opportunities this shared service initiative will provide.”