Bulk purchasing means big savings for London councils

Six councils in London are using an online marketplace to streamline their purchasing processes.

Tower Hamlets, Lewisham, Barnet, Redbridge and Newham Councils, and the Greater London Authority, have teamed up to streamline their purchasing processes as part of the government-backed Pathfinder project.

The online marketplace is used to purchase low-value, high-volume transactions such as stationary, furniture and janatorial supplies.

The organisations are taking advantage of combined economies of scale and making massive savings. By teaming up they were able to cut the price they were paying for photocopying paper, for example, by 20 pence a ream, translating to an annual saving of almost £70,000.

Tower Hamlets council wanted to use eprocurement to underpin its delivery of public services, according to acting procurement and contracts manager Sue Chappell.

'Benefits we have seen from using the system include reduced expense, improved management information, a streamlined supplier-base because we are only working with our preferred suppliers, increased visibility of procurement function, and economies of scale in negotiating prices,' she said.

Working with other councils allows the bulk purchase of goods, which in turn means suppliers can offer lower prices.

'We can get lower prices of from the suppliers because of the efficiencies the system gives them as well,' Chappell said. 'So in the same way we see savings for us, the supplier sees them as well.'

The marketplace was developed by consultants Best Value Procurement, and uses technology from Lloyds TSB on an Oracle platform.

The councils just need a browser to access the marketplace.