Changes to the Public Procurement Rules in Scotland Consultation - Analysis of the Responses

Central purchasing bodies

Organisations which purchase things on behalf of more than one public body are called central purchasing bodies. In Scotland there are four of these and together, they are known as Centres of Expertise.

Central purchasing bodies in Scotland

The consultation paper noted that three decisions need to be taken in relation to central purchasing bodies, which apply to public contracts and utilities contracts, but not to concession contracts. The first decision is whether or not to allow public bodies to ask central purchasing bodies to buy goods and services for them. The second decision is whether or not to allow public bodies to buy goods, services and works using dynamic purchasing systems or framework agreements put in place by central purchasing bodies.

Q55 Do you agree or disagree that we should continue to allow public bodies in Scotland to use central purchasing bodies as described in this section?

There were 85 responses to this question, almost all (84) of which agreed that public bodies in Scotland should be allowed to use central purchasing bodies as described in this section of the consultation paper. Only one organisation disagreed with this.

The greatest number of organisations commented that this allows flexibility for organisations to decide whether to use a central purchasing body or not. As noted by one executive agency / NDPB: "There are marked differences of organisational activity within the Central Government sector which perhaps do not lend themselves as readily to central purchasing body activity. Central purchasing bodies also do not have the organisational understanding, responsiveness, or resource model to flexibly meet local objectives across the spectrum of procurement conducted".

Nine organisations, primarily local authorities noted that central purchasing bodies are an important part of strategic procurement improvement and offer best value in terms of efficiencies and savings, to the public bodies using them. A further nine organisations - mostly local authorities and executive agency / NDPBs - commented that central purchasing bodies can offer savings for public bodies and are a useful resource. In the words of one local authority: "The Council strongly agree that public bodies must be able to purchase from central purchasing bodies (Scotland Excel, APUC, ESPO and Scottish Procurement in particular) in order to continue to benefit from economies of scale. Centralised expertise allows for development of "fit for purpose" contracts and central purchasing bodies provide invaluable assistance to public bodies in terms of contract management".

Once again, there were a small number of requests for guidance on usage of central purchasing bodies or access to information about who can use the frameworks.

A similar number of respondents made reference to the use of specific sectoral central purchasing bodies, pointing out that some sectors are very different and need central purchasing bodies with expertise and experience in that specific sector.

The third decision faced by the Scottish Government is whether or not to force public bodies to use central purchasing bodies in some situations and allow public bodies to choose whether or not to use them on a case-by-case basis. There is some concern that forcing public bodies to use central purchasing bodies might not allow sufficient flexibility to meet their own local objectives or to deliver value for money in all instances.

Q56 Do you agree or disagree that we should not require the use of central purchasing bodies for particular types of procurement, thereby allowing public bodies to exercise discretion as to when, and which, central purchasing body to use?

Eighty respondents agreed that public bodies should be allowed to exercise discretion as to when and which central purchasing body to use, six disagreed. Sixty-two respondents provided further commentary.

A majority of those providing comments noted that it is sensible to offer discretion to public bodies or that decisions should be based on a case-by-case basis based on best value. Several respondents - primarily local authorities - also made reference to the need for local arrangements for specific contracts. A small number of respondents also commented that central purchasing bodies do not always have the necessary procurement expertise in specific sectors or that they do not always offer value for money. A small number simply noted that the current system works well.

A few respondents also noted their support for discretion to be offered but felt that a public body should also be required to demonstrate it has achieved best value for money when not using a central purchasing body.

Other comments, each made by small numbers of respondents were that:

• The central purchasing body should be informed when they are not used so that they can consider including the necessary specific expertise in further frameworks.
• Guidelines will be required to note when it is appropriate or otherwise to use central purchasing bodies.
• There is a need to ensure inclusion of a wide range of larger and smaller suppliers in frameworks.

Of those disagreeing, only three (private sector organisations or representative bodies of private sector organisations) provided any additional commentary. Two of these noted that the use of central purchasing bodies should be required unless a public body can demonstrate it can get better value for money elsewhere; the other commented that a mandatory system ensures consistency in standards and a centralised knowledge base that is accessible to all.

Central purchasing bodies in other countries

The consultation paper noted that the new Public Procurement Directive at Article 39(2) allows public bodies to use central purchasing bodies in other EU countries. The Scottish Government is keen to make the European market as open as possible to allow Scottish businesses to win work in other countries. There may also be occasions when a Scottish public body could obtain best value for money by procuring from a foreign central purchasing body. Question 57 asked;

Q57 Do you agree or disagree that we should not restrict access by Scottish public bodies to European centralised purchasing activities? Please explain your answer.

Sixty-six respondents agreed that the Scottish Government should not restrict access by Scottish public bodies to European centralised purchasing activities. Nine respondents disagreed with this proposal. Sixty-one respondents went on to provide additional commentary in support of their response.

Many of those in support of this proposal and providing further commentary noted that this widens options, choice and opportunities and allows more competition, with the aim of achieving best value for money. A small number also noted that this would allow Scottish companies to bid for and / or win European contracts.

A small number of respondents also made specific reference to this offering greater flexibility to gain value for money or that it increases flexibility in procurement options that are available.

Some respondents also noted that this is in line with the principles of the European Union. Three local authorities commented that in reality this may have little impact in Scotland as European centralised purchasing bodies are relatively unknown to Scottish purchasing bodies and thus are not likely to be widely used.

There were a small number of qualifying comments or concerns noted by a few respondents. These included:

• The potential for Scottish firms to be disadvantaged by this move.
• The potential for adverse impacts and the need for monitoring to ensure there are no adverse impacts.
• The need to demonstrate the benefits of this approach.

From the nine respondents who disagreed with this proposal, there was one key concern; namely, that there is no assurance that public bodies will apply best practice or that activities will promote community benefits within Scotland.

There were suggestions from three organisations in the private sector (a representative body and two businesses) that the Scottish Government should undertake consultation with business representatives prior to any decision being taken.

There were also a small number of comments that this could disadvantage some Scottish businesses, particularly SMEs; and a perception that only large UK and Scottish businesses would be appointed to European frameworks.

Summary : Central purchasing bodies

A majority of respondents agreed that:

• The Scottish Government should continue to allow public bodies in Scotland to use central purchasing bodies as described in the consultation paper.
• The Scottish Government should not require the use of central purchasing bodies for particular types of procurement, thereby allowing public bodies to exercise discretion as to when, and which, central purchasing body to use.
• The Scottish Government should allow for Scottish public bodies procuring from a foreign central purchasing body.

A key theme raised by respondents to these questions was the need for flexibility to meet local objectives and achieve value for money, although the potential for central purchasing bodies to achieve efficiencies and savings was noted.

There were some concerns that SMEs could be disadvantaged.