Taxpayers set to reap massive savings from new contracts system
A ground-breaking system revolutionising the way council contracts are stored and managed could save taxpayers at least £15million a year. And Buckinghamshire County Council could also bring in large amounts of additional money by selling the new computer software to other local authorities who are already interested in buying it. The Council aims to go live with its Contract Management System on August 26 in a move that will radically change the way it runs its business.
The authority currently pays out around £300million annually to thousands of external organisations – amounting to 65 per cent of its total spend. These contractors cover the whole spectrum of council functions, from companies providing social care for vulnerable adults, to firms supplying computer network services. Until now all the various contracts were stored in a multitude of formats and sites.
“They were in a dozen different filing cabinets in a dozen different sites across the organisation,” said Jonathon Noble, the Council’s Category Manager for Major Projects. “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.”
But it will all change under the new software, which has cost £101,000 to create.
“The system will provide a single council-wide repository for all of our contracts,” said Mr Noble, who has led the project since February. “But this is not just about the storage; it’s how the contracts are then 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.”
“Previously, recording these details was done in many different ways – on spreadsheets or word documents – across lots of different systems. It was a very manual and time-consuming process.”
Serious research has shown that organisations that manage contracts well can save between five and 15 per cent of their total third party spend, says Mr Noble.
Even if the saving was five per cent, this would shave £15million off the annual bill.
Some of this will come in the reductions in the time needed by officers on dealing with contracts, but Mr Noble predicts there will be ‘cashable savings’ as a result of working more closely with suppliers. Contractors will also benefit from the system because they will be given their own log-ins, and this will mean efficiencies for them as well.
But the most novel innovation is that the Council has agreed a partnership deal with the software creator, Arcus Global, to sell the product on to other authorities.
Mr Noble will spearhead this and present to interested councils. If they buy it, Buckinghamshire will get a portion of the profits.
“We are talking to a number of local authorities in the region and once we have the system in place, we will be talking nationally to public sector customers,” he said. “If we sold the system to 11 local authorities the size of Bucks, we would recover all of the development costs.”
He added: “There are other products on the market, but they are more traditional and have a number of disadvantages. This system, which is cloud based, is very flexible in that you only have to buy licences at £30 per user per month and don’t have to run expensive servers. Contract managers can access it, on the go, from anywhere in the world with an internet or mobile data connection.
“Other systems also don’t have the same service specific functions such as the ability for adults' or children’s services to carry out a safeguarding assessment.”
But how does Mr Noble feel about diversifying from his normal job and delivering sales pitches?
“I’m very comfortable and excited about selling it on the basis that it’s a great system and we have had a lot of interest in it. We are pioneering,” he said. “This is all about the Council becoming more commercially-minded as an organisation. Not every local authority has responded to the financial pressures in this way but Buckinghamshire has.”
Peter Hardy, 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.
“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.”
Interested in the Arcus Global system?
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