Councils and contractors could save millions by collective deals

Some of the biggest names in grounds-maintenance contracting are featured in a report that says councils could save almost £3bn by buying services across sectors collectively.

Veolia, which works with 21 London councils, rakes in nearly £142m for work in all sectors, the biggest chunk received by any private company across the capital, says the report from procurement consultant Lowendalmasai.

Veolia handles waste management and other services on top of grounds upkeep.

Another big name in groundscare, Serco, racks up over £28m from work with 21 local authorities. Report compilers could not break down data on individual sectors.

"There is a large amount of consolidation in the supplier market, with some suppliers being very dominant across London," said the report, called How collaborative buying across London Councils could save hundreds of millions for the public purse.

"Are these suppliers being managed strategically?" it asked. "Is their performance being monitored, managed and benchmarked across councils to drive continuous improvement? We have seen little evidence that such activity is being undertaken."

About the report

The report looked at 29 of the 33 councils to find they spent more than £8.2bn on services from over 53,000 suppliers from across all sectors. Extending the findings across the UK suggested savings of at least £2.9bn could be eked by more effective supplier control.

A spokesman said: "For landscape suppliers this isn’t just about councils getting a big stick to drive down costs. It is possible for the supplier to reduce costs of supplying the service and build a more productive long-term relationship."

For example the report said: "Agreeing a single deal to represent multiple authorities eliminates the need for supplier marketing targeted at each council, thus lowering Veolia’s marketing spend.

"If spend was amalgamated across councils costs could be cut due to economies of scale" in areas such purchase of overalls and composting.

Lowendalmasaï managing director Assaf Lennon said: "With services like landscaping and park maintenance, a group of councils could benefit by aggregating their spending, rationalising suppliers, challenging their specifications and working with a key supplier or suppliers to share cost savings."

Veolia’s grounds division has won awards from the British Association of Landscape Industries, while several landscapes in looks after have won Green Flags. Earlier this year it planted 100 trees and shrubs near the Old Kent Road for Southwark council. It also works for two of the largest councils, Westminster and Camden.

 


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