Evolving Councils Embrace a New Business model
Inspired by a New Contract Management System
According to an article in the MJ, last week the new Local Government Minister anticipates tough spending choices amid greater devolved funding. Given this austere climate, councils need to think outside the box in order to save money and simplify processes. And, unlikely as it sounds, a new contract management system has helped some of them to do exactly that.
The majority of Local Authorities in the UK fall into two categories of contract management: they either have a fully computerised system with information stored in silos, or they still use a physical document system, which is an enormously labour-intensive option for the contract Officer involved.
So how can technology help?
Not long ago, Buckinghamshire County Council made the move to a new Cloud based Contract Management System that radically changed the way it ran its business.
The authority used to pay out millions annually to thousands of external organisations – amounting to a massive 65% of its total spend. Jonathon Noble, the Council’s Category Manager for Major Projects said the contracts were stored “…in a dozen different filing cabinets in a dozen different sites across the organisation. Contracts ranged from physical documents to computerised files stored in other systems across the Council. Just finding a variation on a contract could often take up a large amount of officer time.”
Bucks moved to a Cloud solution and under their new software, they found an easier way of managing their contracts. “The system provides a single council- wide repository for all of our contracts,” said Mr Noble, going on to stress, “It’s not all about storage, but how the contracts are managed, especially in terms of checking that contractors are performing to the right standards, are financially stable and have quality processes in place for issues such as safeguarding and business continuity. Serious research has shown that organisations that manage contracts well can save between 5-15% of their total third party spend.” Even a conservative 5% reduction in costs would be a significant saving across a year.
But the real break from the norm was what happened next. Bucks didn’t just purchase a cost- and time-saving solution; they found a way to make money back too. By developing a partnership deal with the software creator, they were able to sell the product on to other Authorities. This was something really different – councils behaving like businesses, to become more self- sustaining. Could it really work? Mr Noble has spearheaded the initiative and is presenting to interested councils. If they buy it, Buckinghamshire will get a portion of the profits, representing a very real benefit.
Bucks is by no means the only Council to have taken this model on board. Tandridge District Council has developed a similar strategy for their Built Environment solutions, while Peterborough City Council has developed a line of business applications, cutting costs, creating efficiencies, and potentially driving incremental revenue in just the same way as Buckinghamshire.
With Local Government feeling the pinch, looking for innovative ways to keep services running has to be a priority. Peter Hardy, who at the time was the Cabinet Member for Finance and Resources, said: “We are looking forward to seeing how this new system improves the way we work. It has the potential to make huge savings for us, as well as making us far more efficient as an organisation.” Cllr Hardy continued “I’m proud that we are blazing a trail by trying to be so commercially-aware on behalf of our taxpayers. These are difficult economic times for all councils and we simply have to take these kinds of measures to plug the financial shortfall, mainly caused by a reduction in Government grants.”
Well said, Cllr Hardy – and as with Tandridge and Peterborough, I’ll be interested to see if more Councils find ways to adapt their model to fit in with the current austerity landscape.