Public Accounts Committee publishes Police Procurement Report
17 September 2013
The Public Accounts Committee publishes its 21st Report of this Session which, on the basis of evidence from The Home Office examined Police Procurement.
The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said:
"Police forces pay widely varying prices for very similar items, which means money is being wasted. The price paid for such basic items as standard-issue boots can vary from £25 to £114, or £14 to £43 for handcuffs.
This is even the case where items are identical. It cannot be right that prices paid for the same type of high-visibility jacket varied by as much as 33%.
With central funding being cut, police forces must ensure they get best value for money from procurement so that they can focus resources on fighting crime.
Forces can make big savings through bulk-buying of items, but have been unable to agree on the most simple things, like how many pockets they should have on their uniforms.
The Department cannot persuade enough individual forces to cooperate with its attempts to introduce more centralised procurement, in part because forces are sceptical about the commercial competence of procurement officers working at the centre.
National contracts with suppliers are not used by enough forces and do not cover many basic goods and services.
Forces’ use of the new, online police procurement ‘hub’ is also woefully below the Home Office’s expectations. By 2013, a miniscule 2% of items were being bought through this central hub, against a target of 80% by the end of this Parliament.
We recognize that Police and Crime Commissioners have authority over local spending but, as the Department remains accountable for public money voted by Parliament, it cannot step back from value for money issues.
We welcome the new Accounting Officer’s willingness to get to grips with this problem."
Margaret Hodge was speaking as the Committee published its 21st Report of this Session which, on the basis of evidence from the Home Office, examined police procurement.
In 2010-11, the 43 police forces in England and Wales spent nearly £1.7 billion procuring a wide range of goods and services. The Department oversees the police service and central government provides most of its funding. The Department is responsible for providing Parliament with assurance on the value for money of police expenditure, but individual forces buy most goods and services independently. So there is an institutional tension between local autonomy and effective value for money in buying everything from uniforms to paper. The recently elected Police and Crime Commissioners are responsible for value for money locally. With reduced central government funding to police forces, both individual forces and the Department have recognised the need to make procurement savings, for example through more collaboration between forces.
Greater collaboration between forces, and more consistency in their approaches, would improve value for money. Despite some efforts by police forces to collaborate with each other, there remains an unacceptable variation in police forces’ approaches to procurement. For example, prices paid range from £14 to £43 for standard-issue handcuffs and £25 to £114 for standard-issue boots. Even where items are identical, prices paid vary substantially, for example, by 33% for one type of high-visibility jacket. We recognise the autonomy of the new Commissioners and their local accountability for value for money. However, as the Department provides around 80% of funding to police forces, it remains accountable for this expenditure, and it has levers available to drive improvements.
Recommendation: We welcome the commitment of the new Accounting Officer to secure better value for money, and urge him to use financial incentives with clear financial penalties to ensure police forces collaborate and purchase together so that they secure better prices and bigger savings through bulk buying.
The public’s ability to hold police forces and Commissioners to account for their procurement spending is undermined by the lack of good data. The data which individual police forces and the Department publish are usually produced late, to different standards, and presented in a fashion that makes it impenetrable to the public. Over one third of police forces failed to provide data on procurement savings to the Department. Even where national level data is produced by HM Inspectorate of Constabulary, it is difficult to compare the performance of individual police forces. It is of particular concern that Spikes Cavell, the specialist consultant collecting the data, was unable to collect unit cost data for procurement items. This information is a basic requirement if efficiencies and savings are to be secured. There is also scope for much greater transparency over the prices which individual forces pay for common police equipment, or for the cost of kitting out an average officer. The Department has pledged to carry out a consultation on what data is needed and how it can be published in a user-friendly way.
Recommendation: The Department’s consultation exercise should focus on making available to the public, in a timely fashion and force by force, spending data on standard items to enable comparison between forces, and to enable local electorates, the department and Parliament to hold the Police and Crime Commissioners to account for value for money.
Many police forces lack confidence in the Department’s procurement initiatives. The Department has taken steps to improve police procurement, including: the setting up of specialist teams to provide procurement support; developing a national police procurement hub through which police forces can buy items; and, in a few cases, it has mandated the use of national framework contracts with suppliers. However, the Department’s lack of good quality data on each force makes it difficult for the Department to target its support effectively and it has not developed compelling evidence to persuade forces of the benefits of using the police procurement hub or national procurement frameworks.
Recommendation: The Department should develop its evidence base to demonstrate to police forces and Commissioners the potential benefits and savings from more collaborative procurement and from using the police procurement hub.
National framework contracts with suppliers can lead to significant savings through standardisation and bulk-buying, but do not cover enough goods and services and are not used by enough forces. National framework contracts are managed in some instances by the Department and in others by individual forces. Where forces themselves take the lead on introducing framework contracts there is likely to greater acceptance and buy-in from other forces. But some items that would clearly suit national approaches, such as uniforms (the Prison Service saved 30% through moving to a national approach for uniforms) are not yet covered by national frameworks because forces have not been able to agree on simple items like shirts and uniforms. The Department has used its powers to compel forces to use national framework contracts on only three occasions so far.
Recommendation: The Department should determine where the greatest benefits can be achieved through either standardisation or national procurement approaches and set a clear timeframe for forces to come to agreement on these. Where forces fail to reach an agreement the Department should be prepared to enforce standard specifications.
Use of the national police procurement hub by police forces is woefully below the Department’s expectations, reducing the scope to make significant savings. By June 2012, the Department had expected all police forces would be using its national police procurement hub, a dedicated online marketplace to buy police products. However, by January 2013, fewer than half of forces were using it. Only 2% of items were being bought through the hub, compared to the Department’s target of 80% by the end of this parliament. The Department has promised to provide us with its plan, including milestones, for how it will turn round this current failure by police forces to procure collaboratively through the hub.
Recommendation: The Department must act to accelerate progress towards its target for items being bought through the national procurement hub. It should set out in its response actions to renew this strategy and publish comparative data showing improvement in performance over time by each force.
Whilst the cost savings that can be achieved through a much wider use of the hub should be prioritised, Police Forces should ensure that current suppliers and local SMEs are informed of the opportunities that could arise to businesses from being included as suppliers to the hub. We note that the current level of police force procurement from local SMEs stands at some 40% and efforts to improve the effectiveness of the Hub should not be at the expense of limiting opportunities for SMEs to be approved national suppliers to police forces.
Recommendation: Police Forces should actively promote the supply opportunities that exist to SMEs engaging with individual forces and supplying the Hub.
It is important that police forces recruit and train good procurement officers. There is already scepticism among police forces on the commercial competence of those working at the centre.
Recommendation: The Department should report back on how it will ensure an appropriate level of commercial expertise at both the centre and in individual police forces.
We welcome the Department’s commitment to improve value for money from police procurement spending and its acceptance of the Comptroller and Auditor General’s recommendations. We recognise that Commissioners have authority over local spending, but as the Department remains accountable for public money voted by Parliament it must take positive steps to achieve value for money and ensure good behaviours. We are also pleased to hear that the Accounting Officer has already written to Commissioners to establish relationships and set out his expectations on collaboration by forces, on timely submission of expenditure data, and to seek views on mandating the use of the national police procurement hub.
Recommendation: The Department should report back to the Committee in a year on progress in responding to the recommendations of both this report and the Comptroller and Auditor General’s report, the actions that have been taken locally, and the savings that have been achieved.