Going green in HE, FE and elsewhere in the public and third sectors: revolving funds and useful advice

It was good to read last week that the Higher Education Funding Council is launching with Salix Finance a £30m Revolving Green Fund to support the introduction of carbon-saving projects. Earlier in the year the Learning and Skills Council launched similar funding (and I believe that there will be more finance in the future.)

Even when funding bodies are not providing financial support, the public and third sectors can do something. I have come across a useful source of information on Canny Buying. This site is aimed at organisations in Scotland but sustainability has relevance south of the border too.

Better Buys – housing association procurement and repairs

On Friday the Audit Commission published an enlightening and challenging study on housing association procurement. The Better Buys report (pdf available) includes the diagram above which presents the “low hanging fruit” and the less easy wins available diagrammatically.

The study found that a third of efficiency savings by housing associations in 2006/7 came from procurement. But significantly shows that further annual savings of about £100 per home could be made through the better procurement of housing maintenance services.

The report’s main recommendations for housing associations (but with relevance to other social landlords) are:

• identify gaps in procurement skills and take steps to fill those gaps, either by building in-house capacity or seeking external expertise;

• identify and collect information on the market before considering procurement options and ensure that performance monitoring and benchmarking is undertaken as part of the procurement cycle;

• consider and evaluate all models of collaboration for achieving greater efficiency, including shared services in groups and consortia;

• explore and evaluate a greater role for e-procurement tools; and

• ensure that residents are involved in, and have appropriate opportunities to influence, relevant procurement processes.

More than SPINning on sustainability and procurement?

On this website I have discussed the need for the efficiency and sustainability agendas to be linked. The Sustainable Procurement Information Network has launched a website that supports managers in doing this.

The SPIN website includes examples of good practice including environmental policies and strategies. Although the website is primarily aimed at central and local government, it should be helpful to other organisations in the public and not-for-profit sectors.

Efficiency, annual savings and the CSR07

Tucked away on the Treasury website among the pages about the 2007 Comprehensive Spending review (CSR07) there is the comment that:

Through this work the Government has identified scope to deliver annual savings of 3 per cent across departments over the CSR07 period, together with cuts to administration budgets of 5 per cent per year in real terms, thereby releasing resources for reallocation to frontline services.

Is that really possible?

I have my doubts. There is work throughout public services on leaner processes, smarter procurement, cost reduction, etc. But is there enough?

In February the National Audit Office cast doubt on the robustness of some of the existing efficiency claimed against current targets of 2.5% annual savings. The NAO could be certain of about a quarter (£3.5bn) of the savings claimed by the government. But queried the rest.

The Local Government Association has just issued various documents on the CSR07 including a factsheet on efficiency issues. It points out that the easy savings have been made and not all spending can be made more efficient due to long-term contracts. The LGA conclude that the 3% annual savings are “undeliverable”.

The new annual savings in the CSR07 will be vital for maintaining and improving public services in a more bracing environment for public finances. Unless public services can deliver on these savings and work a lot smarter, we could be faced with cuts rather than efficiencies over the rest of the decade.

Book of the year? The NAO on procurement in the FE sector?

At this time of the year the papers are full of articles surveying the literary output of the year. No one will listing any National Audit Office reports as among the best reads of 2006.

Sadly NAO reports are generally ignored - often overlooked by the people who can get most value out of them. I fear that the NAO's review of procurement in Further Education colleges published in October will fall into this category.

Each year the 384 English FE colleges in England spend £1.6 billion on goods and services from books and stationery to examination fees and energy bills. The NAO found that many colleges need to improve their processes substantially with big savings being generated.

The report recommended that colleges should:

- Raise the priority of improvements to procurement.

- Develop a professional approach to procurement.

- Review their procurement data and how it can be better analysed to provide useful management information.

- Assess their existing mix of procurement methods against good practice benchmarks.

- Improve their supplier management.

- Collaborate with other organisations and through consortia where they can offer procurement expertise, reduced transaction costs and better quality and/or price.

Of course, organisations in other sectors can also learn from this kind of thinking about buying.

While some organisations may not be big enough to have their own procurement specialists they can still buy in or share the expertise that is available.