Savings are in the post!
Many public sector organisations – including local authorities - are already benefiting from these changes. In the first 12 months after deregulation £38 million worth of savings were made across the public sector.{mosimage}
One of the most advantageous routes for local authorities to follow to capitalise on potential savings is the OGC buying solutions Postal Services Framework Agreement. LGE spoke to Buying Solutions’ Head of Postal Services Peter Gollop to find out more.
LGE: Just how much do local authorities spend on postal services?
PG: They are a major player, spending about £200 million each year. In all the public sector spends approximately £650 million annually, or more than 10% of all UK post. Central government and the health and education sectors are the other big spenders, £250 million and £80 million respectively.
Of course councils are constantly sending material to citizens through the post, both in bulk and individually. You only have to think of Council Tax bills, voter registrations, housing rent bills – the list is very long indeed. So the potential for savings and efficiencies is very high.
LGE: What does the Buying Solutions service include?
PG: Our Postal Services framework agreements were specifically formulated to help the public sector make the most of the new access to competition.
We work closely with a wide variety of potential customers across the public sector to understand their requirements in detail and to maintain a mix of products and services to meet a broad range of requirements.
The National Audit Office says that more efficient management of mailing operations and more considered purchasing of postal services can bring substantial savings. It recommends that organisations take action in four main areas:
Increase the use of price discounted work share products, where the customer performs some preliminary preparing or sorting before the mail is collected by the supplier.
Use more second class mail and less expensive services with longer delivery timescales. Increase the use of competitive tendering.
Reduce the amount of mail that is returned as undeliverable, for example by improving the accuracy of customer data and keeping mailing lists clean.
Buying Solutions established its Postal Services framework agreements with all this in mind and awarded contracts to suppliers in 11 service categories.
These categories are:
• End to End – collection from the customer and delivery to the addressee
• Down Stream Access – collection from the customer and despatch to Royal Mail for onward delivery to the addressee
• Consolidation
• Collection of unsorted mail for End to End
• Collection of unsorted mail for Down Stream Access
• Collection of unsorted mail for collection by Royal Mail or another operator
• Secure Mail – collection from customer and delivery to addressee of secure mail
• Track and Trace – provision of track and trace facility as part of End to End and Down Stream Access services
• Response Services – a business reply service
• Presortation for inbound delivery – a sorting service into categories such as job titles or departments
• PO Boxes – provision of numbered boxes for customers
• Undeliverables – services dealing with undeliverable mail
• Redirection – redirection of mail on change of address
• Bespoke Services – including consultancy, mail audits, data cleansing and document exchange and specimen delivery
LGE: How do the frameworks operate?
PG: They exist as multi-source options to ensure choice and competition.
They were originally established until end March 2008, but we have recently extended them for an additional 12 month period, until 31st March 2009.
They provide easy access to the market, EU compliance, greater procurement efficiency, competitive rates and standard terms and conditions. Using the Postal Services framework agreements is also a very easy way to embrace the principles – and enjoy the benefits - of collaborative procurement.
Both Buying Solutions and customersmonitor both the performance of service providers and developments within the marketplace. Flexibility is built into the framework agreement to allow new products and services to be incorporated as they become available and for an individual customer to negotiate a price to reflect its own operational mail volumes and circumstances, using the further competition approach.
LGE: How have local authorities been benefiting from these arrangements so far?
PG: It’s been very encouraging so far. A total of 67 authorities from across England, Scotland and Wales are using these services both in rural and metropolitan areas.
We have recently begun a collaboration with Value Wales, which is promoting our arrangements, at first to the health sector but ultimately to the entirety of the Welsh public sector including local authorities.
We are also working closely with the NHS procurement hubs and with the FE sector. And the North West Regional Improvement and Efficiency Partnership has embraced our postal services frameworks into its work with public sector organisations.
In all, the public sector has saved a total of £82.5 million since our services were introduced.
LGE: Are there any new services coming down the tracks?
PG: Yes, we’re currently working on a pan government project to introduce a range of Logistics and Courier Service framework agreements covering
• Same Day/Next Day
• International
• Hazardous Goods (both UK and International)
• Valuable Goods, Cash, Seized Goods, Secure Transit, Storage and Destruction of Bulk Goods (both EU and EU)
• Bespoke Services
These are expected to be available to customers from 1 September 2008. LGE: What would your advice be to a local authority thinking about what to do next?
PG: There’s no doubt that the postal market can be complicated and sometimes difficult to fathom. Our team includes industry experts who can take the mystery out of the mail marketplace.
They can explain the main principles to customers, help them to establish what their current situation, diagnose the most appropriate way forward and guide them to the most suitable products and services.
We also provide advice and guidance about implementation and change management issues, about best practice and benchmarking, about trends and developments within the market and how best to forge productive relationships with suppliers.
And we can help organisations to develop the business case necessary to secure support at board level. Step 1 is easy, simply call our Customer Service Desk on 0845 410 2222 and ask for the Postal Service or go to www.ogcbuyingsolutions.gov.uk
