NAO wants clarity on benefits of police procurement hub

A National Audit Office (NAO) report into Home Office police procurement says the online police procurement hub has “considerable potential” but the Home Office must identify implementation barriers and then support forces to overcome them.

With the volume of transactions going through the ‘Amazon-style’ online marketplace in 2012 well below target, the Home Office is considering plans to make it a legal requirement for forces to use it instead of alternative procurement services.

All forces were due to be using the hub by June 2012, but by January 2013 only 43 per cent of forces were doing so. The levels of spending and savings recorded through the hub were below predicted levels.

Forces had spent £21 million through the hub by February 2013 and the Home Office estimated potential savings of just £580,000, well short of the £4.8 million projected by the end of 2012-13.

The report says: “While the hub has considerable potential, implementation has not proceeded according to the initial plans. Some police forces told us they believed the potential savings were overestimated; that integration costs were too high; and that they found it hard to integrate the hub into their existing financial systems.”

The NAO report explains that in 2011, the National Policing Improvement Agency (NPIA), on behalf of the Home Office and with the support of the Association of Chief Police Officers, set up the national police procurement hub with procurement and e-marketplaces specialist Procserve.

The hub provides a range of functions, including:
•supplier catalogues that forces can view, some with pre-approved specifications and agreed terms and conditions;
•a system that enables integrated back-office procurement transactions between forces and suppliers;
•consolidated procurement management information from forces; and
•a ‘request for quotation’ system for framework contracts or non-contracted goods and services.
The report points out that the NPIA predicted the following benefits:
•faster and more streamlined procurement and payment processes, with self-service purchasing if force finance systems are integrated;
•easier access to approved suppliers, which would maintain and update electronic catalogues on the hub;
•improved take-up of nationally-approved framework contracts, with central control on what contracts would be available;
•provision of accurate and timely data on force expenditure;
•improved contract compliance; and
•standardisation of approach and increased interoperability of equipment across police forces.

Implementation costs were estimated at £7.5 million, with forces paying £25,000 a year for the duration of the initial contract (to 2016-17).

Potential benefits over that period were estimated at just over £50 million.

The low level of take-up means that the hub is not yet producing useful information on what police forces are procuring and the Home Office has had to undertake another round of expenditure data collection.

The Home Office, which is now responsible for managing the hub following the abolition of the NPIA, has not set out what level or type of usage it will require from forces compelled to use the hub, or how it will monitor this and deal with non-compliance.

“Forces may use the hub in different ways – from purchasing any available items exclusively through the hub to just browsing the online catalogues – and the Home Office has not stated what mandation of the hub will involve,” says the report.

Furthermore, it is unclear how the Home Office will decide whether forces can make such purchases given their circumstances, or whether they have complied with this policy.

The NAO pointed out that there had been significant changes to the procurement landscape, including the creation of a police-owned company to support force ICT functions. The NAO says it has yet to be decided if this will support police procurement.