Corporate, Finance

Councils plan to save millions by joining forces to bolster buying power

Surrey and East Sussex plan to join forces to bolster buying power and save millions of pounds between the county councils.

The two local authorities are finalising a proposal to work together to drive harder bargains with suppliers they both use.

It is expected that their collective purchasing power will drive down shared costs by millions of pounds each year. That is on top of the savings each council makes from renegotiating deals with other contractors.

In the past two financial years, Surrey’s procurement team has saved nearly £56m through doing better deals, with £34m of that figure secured in 2011/12. A target of £25m has been set for 2012/13.

In East Sussex, the county council has also saved millions through its procurement activities and boosted the local economy with initiatives to help small and medium-sized businesses. 

The initiatives include Build East Sussex, which supports the local construction industry to gain new business, and the nationally recognised Contractors Top Up insurance scheme. The insurance scheme makes it easier for small firms to get the insurance cover they need to carry out public sector contracts, such as repair and maintenance work in schools. 

Surrey leader David Hodge said: “The public sector should be seen as a single team co-operating to save money wherever possible while continuing to provide excellent services.

“By bulk buying we will enjoy economies of scale that will allow us to do more for less and provide even greater value for money for the many millions of residents we represent.”

Peter Jones, Leader of East Sussex County Council, said: “This is a ground breaking partnership – by pooling our resources we will be able to drive better deals for both our communities, improving services, supporting the local economy and delivering the lowest possible council tax.”

Surrey and East Sussex both have a key role in the SE7 group of seven major South East councils formed to drive down costs and improve services.

Once the shared purchasing operation is up and running, other SE7 members will be given the opportunity to join.

The partnership will be considered at a meeting of East Sussex’s Cabinet on 24 July.

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