However they deliver their services, local councils need to understand their supply chains to secure better value for taxpayers
Local councils have faced a lot of pressure over the past few years, with restrictions on revenue and capital finances. At the same time, they've seen an increased volume and complexity of demand, particularly in social care and affordable housing, while altering the balance of how they commission and deliver services. And more recently, they've been subject to the same supply chain pressures as the rest of us. High inflation (especially for energy costs), suppliers unable to meet contractual requirements, and the climate crisis all affect the way that councils approach procurement. In the latest of our sectoral blog series, we focus on how local councils can improve supplier management, whatever their model of service delivery.
How local councils commission and deliver services is changing
After nearly 40 years of outsourcing to the private sector, the trend in more recent years has been for local councils to bring services back in-house. There are several routes to exerting greater control, whether by bringing services fully in-house or by establishing a wholly- or jointly-owned organisation to manage them. Good examples of local government insourcing have been cleaning, housing, repair, highways maintenance, waste collection, IT, and social care.
There is also a new framework for local councils' procurement to operate within. The Local Government Association published its new National Procurement Strategy for Local Government in England in 2022 [>>https://www.local.gov.uk/publications/national-procurement-strategy-local-government-england-2022]. More than ever, it's about getting value for public money, with a particular focus on enhancing social value. This move away from a narrow focus on cost reduction mirrors trends in procurement across the economy. Local government bodies are now more interested in improving quality and gaining greater flexibility to change the design of services. Whether they're directly providing services or they've outsourced to third parties, they still need to ensure all their suppliers are compliant with relevant legislation.
Ways to improve local council supplier management
Critically, local councils need to be on top of supplier management across their supply chains. Indeed, the strategy notes the importance of understanding data and insights in order to develop innovative solutions to various issues, including price increases and potential market failure. And it calls for continuously improving end-to-end contract management to fully realise the benefits from contracts.
Third-party spend on procured goods and services is increasing across the sector, with local councils remaining a significant commissioner and purchaser at both a place and aggregate level across all key spend categories. This has increased the importance of engaging strategic suppliers to improve performance, reduce cost, mitigate risk, and harness innovation. But to do that they need the intelligence to be able to manage every aspect of contracts.
That's where a comprehensive supplier management platform comes into play. Here are three key benefits of Canopy that are particularly relevant for local government procurement professionals to improve their approach to supplier management:
1. Canopy makes supplier selection easier
With Canopy, strategic supplier selection defaults to those who are already engaging with a local council and have demonstrated reliable performance. This removes the administrative burden of endlessly bringing new suppliers on board. By defining governance rules centrally, operations teams on the ground can have complete autonomy to make their own supplier selection decisions that meet their individual needs. Canopy categorises suppliers by the selection criterion which local councils choose, for instance suppliers that are already onboarded, those where contracts are in place, and where there is excellent project feedback.
2. Canopy provides ongoing risk monitoring with instant alerts and notifications
For many organisations with manual processes, it can be difficult to update risk information on their suppliers. With Canopy, local councils' supplier certifications, training, qualifications, insurances, and sustainability credentials are hosted and managed centrally on the supplier profile. In-built automation ensures continuous monitoring of these credentials, providing an ongoing assessment of risk and compliance beyond the initial onboarding stage. For instance, when workmen show up at a resident's home to perform maintenance, local councils are going to need to demonstrate they've mitigated all the risks. Canopy can flag if it's time for a supplier to prove they've updated insurance cover or completed mandated annual training. And where suppliers face elevated risk or have breached compliance, such as HSE incidents, the platform triggers notifications immediately.
3. Canopy monitors ESG and diversity goals to deliver social value
Canopy facilitates the process of monitoring local councils' ESG and diversity goals, linking all data to a central interface between them and their suppliers. It delivers ongoing reporting and monitoring against ESG commitments. From carbon reduction and emissions information through to diversity in local supply chains, this can help to achieve compliant supply chain management. And in the effort to deliver social value, this can be critical.
To find out more about how Canopy's award-winning supplier management platform can help local councils with procurement, contact one of the team today.
Post by Nick Verkroost
Nick is an experienced business leader and the CEO for Canopy (OCG Software), the rules-based Supplier Management platform. Nick's focus is on commercial and operational excellence and ensuring our clients maximise the opportunities that Canopy offers.