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Collaborative Procurement Board (CPB)
Date of meeting:
30 November 2016
Title of paper:
GLA Group – Wider Collaboration
To be presented by:
Andrew Mayes, Lead Commercial Manager
Classification:
Public
1
Executive Summary
1.1
This report is a continuation of the discussions at the GLA Collaborative
Board on 28 September 2016 concerning the potential for wider
collaboration across the GLA Group. This report highlights the objectives
and challenges to this approach and recommends a dedicated team is
implemented to construct a formal proposal.
2
Recommendation
2.1
That the Board note the report and agree that a dedicated team is required
to examine opportunities to deliver wider collaboration across the GLA
Group.
3
Introduction and Background
3.1
This report is an extension of the discussion at the meeting held on 28
September 2016. The position is that while the collaborative procurement
agenda has delivered benefit to the GLA Group, this work has plateaued
and there are other activities where working together more closely could
deliver beneficial change. In essence this could be achieved in two ways:

Expanding the remit of the existing CPB to look at more spend
categories than those covered to date. This will move the activity
away from simple common goods & services and will focus on more
complex procurement. These tend to lack standardisation and
therefore require significant business change to implement
effectively.

Setting up a wider Collaborative Agenda within the GLA Group to
look at opportunities outside the sphere of procurement
4
Objectives & Expected Outcomes
4.1
It is proposed to investigate developing a collaborative body for the GLA
Group [with mandatory attendance and engagement] to seek out
opportunities to reduce total costs by working together. Initial objectives
would be:

To initiate, oversee and co-ordinate activities between members of
the GLA Group to enable the delivery of the Mayor’s priorities
(excluding specific activities managed through existing
arrangements).

To enable joint working and mutual support, so that each functional
body and the Group overall can work as effectively and efficiently as
possible to best serve Londoners.

To establish sub-groups to lead and report on collaborative activities
in particular areas
Collaborative Procurement Board
4.2
The purpose of the existing Collaborative Procurement Board (CPB) is to:

Oversee the effective procurement of common and low complexity
category contracts on behalf of the GLA Functional Bodies.

Provide governance to support the effective operation of the
Collaborative Procurement Team (CPT) hosted by TfL on behalf of
the wider GLA.

Hold strategic responsibility for the oversight of common and low
complexity spend by all parties.

Lead the exploration of an increased scope to more complex
procurement categories, to maximise the potential benefits to be
delivered by the CPT.

To review and approve / challenge commercial sourcing strategies
and award recommendations.
4.3
The value added by these activities is significant [net £6.5m to date] but is
limited as there is only a limited number of simple spend categories where
beneficial change can be made by commercial staff acting alone. If the GLA
has a wider ambition to collaborate, wider engagement from technical and
sponsoring teams will be required to implement change. For example,
replacing utility, stationery or document management suppliers requires
very little support from business units. Completely re-engineering the
supply chain and supporting process for IT or back office shared services
are more about business change activities than a pure re-contracting
exercise.
4.4
If the GLA Group has the ambition to really challenge the status quo for
bought in services, or indeed to change the sourcing approach to those that
might be considered to be contentious, these are activities that go beyond
the current capability and remit of the CPB.
Policy
4.5
There are clear benefits in using the experience of the commercial
community across the GLA Group to develop and implement procurement
policy. The recent work on Responsible Procurement is an example of
sharing best practice and it would be sensible to continue this work under a
more formal structure. It is suggested that a [RP working group] sits
under a reconstituted CPB to ensure that policy objectives are addressed
and the appropriate actions are implemented.
Wider collaboration
4.6
4.7
5
It has been suggested that in addition to wider and more complex cooperation on procurement, the GLA might want to consider collaboration
in the following areas:

Information and communications technology

Estates and facilities

Commercial trading

Shared services

Equality, Diversity and Inclusion
Initial discussions have started in these category areas; however there is
currently no formal process to work up opportunities and quantify potential
benefits. The development of a Collaboration Board has therefore been
suggested. This would need to have a very different role, remit and
composition to the CPB as the decisions that could potentially flow from a
willingness to collaborate more fully would be significantly more wideranging than a simple agreement to buy common goods and services
together. Using a couple of examples to illustrate the point, a systemic
decision to collaborate could mean:

Redesigned IT organisations and supporting supply chain for the
GLA Group

Multiple occupancy buildings within a corporate Landlord model
across the entire GLA estate, irrespective of owning organisation,
supported by a pay for use office / charging model

A common Commercial Development capability designed to leverage
all GLA’s opportunities in advertising, data networks, retail, car
parking and any other relevant commercial opportunities, aimed at
delivering the maximum possible commercial value.

All shared services co-located on common platforms outside expensive
areas of London, or indeed the UK, providing back office services to
the GLA Group or other public sector bodies.

Greater collaboration with other public sector bodies. E.g. London
Boroughs or other members of the wider GLA family.
Equality comments
5.1
None at present.
6
Key Risks and Issues
6.1
There are two broad groups of issues that would need to be addressed in
repositioning the collaborative agenda across the GLA Group:
Collaborative Procurement Board

The remit of this group is set out in the Working Arrangement
Document (WAD) and the Joint Arrangement Agreement (JAA)
which together specify those spend categories that will be addressed
on a collaborative basis. The logic for this approach is to avoid
governance issues. Each member of the GLA Group has its own
approval processes and procuring jointly potentially cuts across these
independent management structures. The work to establish the CPB
structure is complete and it would be straight forward from a
procurement perspective to expand the remit to a wider set of
categories.

As mentioned above the CPB has addressed most of the simple
common goods and services. The next sets of categories are more
complex, potentially offer higher reward, but absolutely require
additional resources to implement change. Some of these would be
commercial, but operational, technical or finance colleagues could also
be required. This brings three issues:
i.
Agreement of a revised CPB funding model for commercial
staff in the context of tightening budgets and resource
reductions in some functional bodies. There is already some
debate about the relative merits of collaboration and this
should be closed out as part of a funding review aligned to a
wider remit. Benefits must exceed costs significantly.
ii.
Agreement to deploy non-commercial resources would
require the support of a range of other stakeholders,
depending up on the category of spend. For example IT
would need CIO / CTO and recruitment could require input
from the HR Director’s team. In the bigger functional bodies
these resources do not respond to the Finance or Commercial
Directorates and therefore need a wider stakeholder
management activity. This would need support at executive
level and a very clear commitment to identify benefits and
drive through collaboration.
iii.
The collaborative work to date already has some examples of
bodies opting out of arrangements for their own domestic
reasons. The more complex the spend category, the more
work and cost is required to agree a commercial solution. It
is also true that the solution for a really complicated spend
category is open to more interpretation. It is therefore
imperative that a clear remit is agreed prior to any work
commencing and that compliance to any resulting deal is
driven across the functional bodies to avoid prejudicing the
business case.
Wider Collaboration

For the GLA Group to collaborate on wider activities outside the
procurement agenda will require a significant broadening of the remit
of the board, the attendees and a very different approach to managing
in scope activities.

Testing with non-commercial colleagues in property and IT, there are
examples of sharing best practice, market intelligence and informal
provision of services. In no way are these activities formally agreed,
clearly set out and bought into at executive level.

If the GLA Group wishes to formally collaborate across non
procurement activities it would need agreement at executive level
across the functional bodies that there was merit in the approach.
Some of the potential new areas for collaboration, for example
property and IM could require decisions that need endorsement at
Board level and choreographing this across the GLA Group would
require significant effort to develop appropriate business cases.
7
Financial comments
7.1
None at present.
8
Legal Comments
8.1
None at present.
9
Next steps
9.1
Experience from the CPB confirms that the GLA Group can collaborate in
areas of common interest and opportunity. This is has not been without
issues, however generally the case is proven. Collaborating on a wider scale
would potentially cut across more complex relationships and require more,
and more senior, resource to mange implementation and delivery. In order
for this to be well considered and implemented a dedicated team is required
to work up proposals.