Introduction

View the latest news and case studies at: www.efficiencynetwork.co.uk

Tuesday, 30 November 2010

Big savings are possible - with a change in provider, and change in attitude

As each week passes, more and more local authorities are re-letting their contracts with providers of highways maintenance, highways design and transport consultancy.
Dissatisfied with the savings that have been made under the arrangements with their current contractors, many are re-tendering rather than re-negotiating the deals they have. Others are poised to do the same over the next few weeks.
This has born fruit, in Surrey County Council's case, with a full 22% in efficiency savings on current costs to be made following procurement.
Surrey is to replaced arrangements that it found unsatisfactory on performance as well as cost with three levels of contract. A core deal, for day-to-day maintenance; specialist deals for drainage grass-cutting; and two regional deals for major highways schemes.
However, it is important to note that the savings are not being delivered solely by the market.
The re-tendering and competitive dialogue with bidders has resulted in Surrey questioning its own practices, and to a stark admission: the authority acknowledged its "failure to transform the council's internal highways structures and culture".
Its exertion of control over its contractors had "created unnecessary interference and conflict with the supply chain and prevented the council from delivering its strategic management role".
The challenge for councils is to craft slimmer contracts with fewer performance indicators and less duplication, contracts that entail a degree of trust. If the prize is cutting waste by 22%, that has to be what highways managers are aiming for.