Improving public sector purchasing – podcast transcript
What’s this report about?
It is a high level assessment of what the public sector in Scotland has been doing to improve the way it buys goods and services basically to make savings from better purchasing. In the report we explain that public bodies have estimated that they have saved already more than £300 million from better purchasing since 2006. Progress so far has been a little variable and slower than expected in some areas so we’re saying that there’s still plenty of scope for the public sector to save more by further improvements in this area.

You’ve mentioned the £300 million in savings so far. What are some of the other things that you have found? 
To get the context, the public sector in Scotland – councils, NHS bodies, central government bodies and so forth - spend about £8 billion a year in total on goods and services. Back in 2006 the Scottish Government set a target that the public sector would get savings of about £700 million over a three year period; that’s about three per cent of annual spending on goods and services. 
The public sector has made some good savings in this area, more than £300 million savings in two years through buying goods and services better. But the current economic climate means that it’s really important that the public sector continues that effort, continues to find cash savings without cutting services or quality.
One of the reasons we’re talking about this is that the public sector has got huge collective buying power and it’s got combined purchasing power which means that there’s still lots of potential for it to buy goods and services more efficiently and deliver more significant savings. 

What is the impact and the importance of this on the public?
The impact for the public is to do with the scale of spending, £8 billion a year. If we can spend that money more efficiently then that can mean really significant savings for the public. That means better services or more services in other areas.
The spending we’re talking about covers the whole gamut of the public sector; it’s everything from buying new schools or maintaining hospitals to quite ordinary day-to-day like buying books and IT equipment for schools or buying syringes and so forth for hospitals.
If we can get better at buying these core goods and services, there’s quite a lot of potential for more savings.

What is it that you think needs to happen now?
Most of all we want to see more savings from increasing collaboration. There are three areas that we want the public sector to think about particularly:
-	firstly, we want to see public bodies getting better information and sharing better information about savings. We’ve seen some good savings and some good practice in some areas but the performance isn’t uniformly good and so sharing information about where savings have been made is very important for getting more savings
-	secondly, we want to make sure that control over purchasing practices is as good as it needs to be. So, there is good practice defined out there, we need public bodies to aspire to ensure they achieve that
-	and thirdly, we want to see public bodies make purchasing more efficient by increasing the amount of collaborative purchasing.

You’ve mentioned just then and you’ve mentioned a couple of times collaborative purchasing. Could you explain what you mean by that?
Collaborative purchasing is where public bodies combine together to buy together things that they all have a common requirement for. Sometimes that’s quite challenging to do, because although bodies may have similar requirements, they’re not exactly the same and there’s quite a lot of complexity in standardising requirements.  But the evidence is that if you can standardise requirements then that makes the contracts a lot more attractive to the private sector and that means you can get better prices.
The NHS has been good in this area. One of the things we say in the report is that in the two years since 2006 the NHS introduced 150 new collaborative contracts for really common things like rubber gloves and other items like that and so far they’ve reported savings from those contracts of more than £54 million. That’s a good record; the whole of the rest of the public sector has only managed to introduce 45 contracts in the same period of time and the savings figures from those contracts are much less clear cut. 
So, the NHS has made some good progress in this area and we want to see other public bodies do the same.