Commercial Services Review

The Context

In June 2017 Merton Council’s Corporate Management Team (CMT) agreed to move to a category management approach to procurement. The aim was to deliver savings of £14m over a three year period. CMT also agreed to partially replace the distributed procurement arrangements with a centre-led model, which would better support the move to category management. Additional funding was provided by the Merton Improvement Board (MIB) to expand capacity and skills in the central procurement team and it was agreed that the structure would be revisited towards the end of the funding period in 2022.

The Requirement

Whilst internal peer reviews were favourable towards the revised Commercial Services offering, ongoing findings from the Council’s audit team indicated that issues persisted within departments, including:

An inconsistent use of best procurement practice across the council
A failure to consistently follow Contract Standing Orders (CSOs)
A lack of contract management capacity and capability

This posed a significant risk to the Council with regards to its ability to demonstrate sustained value for money, as well as jeopardising delivery against its MTFS and its social and equality commitments.

Human Engine was engaged to ensure Commercial Services, and the Council as a whole, will be in the best possible position to deliver:

An even better service, greater value for money, increased savings and efficiencies
The Council’s social and equality agendas
In line with the National Procurement Policy Statement

The Programme

Our team led a wide-ranging review using a mixed methods approach to assess qualitative and quantitative data about commercial activity at the Council.

Define and Discover - we worked with key personnel to define the scope and reviewed previous iterations of strategy and relevant background information: council plan, recovery plan and relevant policies.

Engage and Explore - we facilitated workshops with the Council procurement team, held 1:1 interviews and focus groups with wider stakeholders, and created a skills assessment for those in relevant commercial roles across the Council.

Documents and Data Review - this included a review of relevant Council Strategy and Commercial Policy and process documentation as well as audit reports. The review of available data included procurement pipeline, contracts register, spend by category, waivers, performance data, organisational structures, roles and pay data. The information was then benchmarked against geographical and statistical neighbours, and external insight into good practice nationally and locally, from both public and private sectors.

Synthesise Findings – an interim report brought together internal findings (qualitative feedback and quantitative analysis), external research and benchmarking; assessment of current operating model, recommendations for new operating model (including quick wins). This provided an opportunity to test and develop the proposed vision, objectives and supporting workstreams/activities with the Senior Leadership Team (SLT) and Corporate Management Team (CMT).

The Outcomes

We provided a series of recommendations, all agreed and accepted by the Council CMT, that will see:

A strengthening of the centre-led operating model to overcome a lack of understanding about the benefits that effective procurement can provide for the organisation.
More investment in capacity and skills training for the Central Procurement team, which has some good skills and positively-minded officers who want to make a difference but is under resourced and needs investment.
Better collaboration across the Council, to link what Commercial Services plans to do, with enabling Merton to achieve its own strategic intent.
A more strategic view of procurement activity and a change to the way procurement processes are communicated in the organisation.
A redesign of contract management policy, processes and oversight to mitigate a lack of consistency, knowledge-sharing and review
A shift in culture to Merton becoming a learning organisation, driven by Senior Leaders.

About Us

Human Engine is a Financial Times top-ranked management consultancy with specialisms in strategy, change, digital, commercial and projects.

It was founded in 2018 with a belief that the public sector deserves better than it gets from traditional consulting firms – more human, more personal and more knowledgeable of the reality of delivering modern public services.

We have worked with dozens of public sector organisations to help transform their strategies, operations and cultures to be more agile, commercial and entrepreneurial in order to achieve financial sustainability and improved outcomes for customers and communities.

Our mission is to help individuals and organisations to do the best work of their lives.  We do this by blending first-hand experience of the problems we help our clients solve with award-winning consulting expertise and an approach based on trust, collaboration and partnership.