The Public Procurement Reform Programme 2006-2016: achievements and impacts

This report reflects on the overall progress of the Public Procurement Reform Programme from 2006 to 2016.

Delivering Savings And Benefits

Good public procurement is about spending money wisely. That includes demand management, as well as cash and non-cashable benefits. The Scottish Model looks beyond a simple "dash to the bottom on price" to deliver the broader benefits of public sector purchasing.

In addition to the wider benefits achieved throughout the reform programme, reported elsewhere in this report, there have been substantial savings made. Each Centre of Expertise is responsible for recording collaborative cash savings, using a standard method.

Savings and efficiencies 2006-2016

The reform programme generated around £2 billion of savings and efficiencies between 2006 and 2016
(see below table):

Public Sector Breakdown of Procurement Savings Reporting 2006-16
(Cash and Non-cash)**

Year Cash and Non-Cash Savings (All sectors) £m Cash Savings Only (All sectors) £m Running Total £m
Savings efficiencies and benefits from Scottish Government Efficiency reporting 2006/07 127
2007/08 200
2008/09 160
2009/10 312
2010/11 375 115.8* 1,174
Savings only, aggregated from sector specific reporting 2011/12 122.6
2012/13 138.1
2013/14 161.3
2014/15 157.6
2015/16 159.7
Total combined savings, efficiencies and benefits 2006-16 1913.3

Source: Figures provided by each Centre of Expertise

* First year of cash only savings recorded. Figure not included in total for this table, as included as part of cash and non-cash savings figure
**Sectors - Central Government, HE/FE, local authority, NHS

Collaborative savings (Cash only)

Using available data, the below table highlights the (cash) savings made throughout the programme year on year since 2010.

(Cash) savings have risen gradually, levelling out in 2014. The programme has recorded a total of £855.1 million (cash) savings in the past 6 years across the public sector.

Collaborative Savings (£m)

Collaborative Savings (£m)

Source: Figures provided by each of the Centres of Expertise

Scott Bell, Head of Procurement Reform Integration Division, Scottish Procurement and Commercial Directorate

"Procurement today has a purpose well beyond making contract savings. There has been a cultural shift in how we use public procurement, that can be seen in legislation. What was a charter for suppliers, now requires a strategy by public bodies that will be publicly measured against on an annual basis.

"Future public services in Scotland will be delivered by well managed supply chains that are focused on delivering better outcomes for our people. Our information systems will be exemplars in openness and transparency. The people of Scotland
will be directly connected to the supply chains of public services as we leverage some of the best practice that exists today."

Review of Scottish Public Sector Procurement in Construction

The public sector in Scotland spends in the region of £4 billion every year on construction or construction related contracts, representing somewhere in the region of 40% of all public sector procurement spend. Construction procurement is, in some respects, no different to any other procurement. It is subject to the same procurement law, whether that originates in Scotland, in the UK or from Europe and at its heart that means it must be procured in an open, fair and transparent manner.

It does though have some significant aspects which require different handling measures. Some of these are legislative; for example, the provisions of the Housing Grants, Construction and Regeneration Act 1996 sets out rules for payments within construction contracts. The project lifecycle associated with construction of public assets also requires some specific procurement and commercial practices to be developed for construction.

Construction Procurement Reform

John McClelland recognised that Construction was sufficiently different as to require a bespoke review of the way in which it was procured for the public sector and in 2013 Robin Crawford and Ken Lewandowski presented their Report on Scottish Public Sector Procurement in Construction. This made 67 recommendations, 66 of which were accepted by Ministers. In 2014 a team was set up to implement these recommendations within the public procurement reform landscape, with oversight provided by a new body, the Construction Review Delivery Group.

Output and Implementation

Implementation of the recommendations is being delivered alongside and consistent with current procurement legislation and will complete in early 2017.


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