Public spending pressures: Getting more value for the public purse

Paul Bentley, Commercial Agreement Manager at the Crown Commercial Service (CCS) details their Spend Analysis and Recovery Services, or SARS II, Framework tool and how this is helping those who spend money to get more value for the public purse

January is a month when thoughts may turn to stretching our household budgets. Those with the duty of spending money on behalf of the public face such pressures throughout the year and so are always looking for new and innovative ways of getting more value for the public purse.

Crown Commercial Service’s (CCS) Spend Analysis and Recovery Services, or SARS II, Framework can do precisely that and at no extra cost to the customer. The “no win –no fee” principle that underpins the offer makes it a valuable weapon in the money-saving armoury. So how does it work?

First, we must accept that honest mistakes happen when handling large transactions. Such mistakes occur in both the public and private sectors but, until recently, the private sector has been more proactive in recovering the overspend.

Whether it be duplicate payments, overpayments, incorrect rates, missed discounts, incorrect VAT or contractual oversights, even the smallest of errors can lead to big figures when dealing with public sector budgets.

That’s why CCS is encouraging government departments and the wider public sector to look carefully at SARS II –part of the suite of financial service frameworks available to central government and the wider public sector through CCS.

Under SARS II, all the potential customer need do is provide the data, readily available in any “accounts payable” or “enterprise resource planning system” then sit back while it is scrutinised by experts. They will identify any errors and report these for your authorisation to recover from suppliers in a professional and courteous manner, ensuring your relationships are maintained.

Only when the cash is back in your bank account will the SARS II suppliers invoice for their fees –which amount to a percentage share of the recovery. If no recovery is identified, there’s no fee at all and, if a recovery is identified but the customer chooses not to take it any further, there’s also no fee to pay.

Spend recovery has been so successful in the private sector that many larger organisations now have their own dedicated departments carrying out these deep dive audits annually.
So, how might a public sector organisation go about this? CCS customers have two routes to market: either a direct award or a further competition.

The direct award route enables customers to quickly access the market. Select a supplier who is able to supply the service requirement and, if the price they have offered on the framework is acceptable and they have the needed expertise, then the award can be made.
Alternatively, if a customer feels that their opportunity is significant or offers a larger than usual scope, they may attempt additional savings via a further competition. CCS can provide guidance on both options.

It is the role of CCS to help organisations across the entire public sector save time and money on buying their everyday goods and services. Customers who have used our agreements have achieved commercial benefits worth over £600 million (compared to current market comparators) via some 1,260 procurements.

We see our role as helping our colleagues across the public and the third sector serve taxpayers even better than they already do, but this is not just about due diligence and prudent commercial management. We want to help change the way the public sector thinks about the way it works –whether it be adding social value to projects or spending public money more effectively.

We’re now working hard to educate and encourage our public sector colleagues to look afresh at the SARS model and discover what the private sector has known for some time –that this is not about blame, it’s about getting value for money. Clearly more and more departments and organisations are keen to identify ways of generating more income, and SARS II may have a role to play in stretching the budgets of many public bodies. It’s a tool which requires very little time and resources from the customer, but the returns can be worth hundreds of thousands of pounds.

For further information on SARS II please visit the agreement page on the CCS website.

Paul Bentley

Commercial Agreement Manager

The Crown Commercial Service (CCS)
Tel: +44 (0)345 410 2222
info@crowncommercial.gov.uk
www.gov.uk/government/organisations/crown-commercial-service www.twitter.com/gov_procurement