Figures compiled by the Regional Centres of Excellence reveal that e-auctions can dramatically cut the cost of council goods and services, by an average of one quarter and by much more in some cases.

Results from the first wave of the national programme of e-auctions show that they delivered an average saving of 27% - the difference between the baseline cost and the final bid tendered in the auction.

The nine e-auctions held in 2005/06 generated savings of £12,886,000 from an outlay of £137,000 to set up and run, a gain of £94 on every £1 spent. Management of the e-auctions was made possible by funding from the National E-Procurement Project.

Two recent examples illustrate the extent of the savings made. London boroughs and Surrey County Council will benefit from long term savings on the predicted price of highways salt over the next four years. Led by the London Borough of Croydon on behalf of the London Supplies and Contracts Group, the e-auction slashed £240,000 from four lots weighing in at 122,000 tonnes.

While in the South West, six councils, spearheaded by Wiltshire County Council, collaborated on the provision of agency staff. In all, 11 lots were up for e-auction and the councils will benefit from a 25% saving over the life of the three year contract – equivalent to £5.7 million on the £22.8 million contract.

Salt and agency staff are just two of a wide range of local government commodities, goods and services that are subject to a national programme of e-auctions. This is being co-ordinated nationally by the Regional Centres of Excellence and is part of a wider programme of activity designed to secure millions of pounds in efficiencies to re-invest in better front line services.

Steve Holland, Director of the East of England Regional Centre of Excellence and lead on commodities, goods and services, said, “This is great news for councils and tax payers. At a time when councils are facing greater financial pressures and expectations of better services, e-auctions can deliver substantial savings which in turn can be re-invested in better services.”

The Regional Centres of Excellence predict that local government contracts worth some £250 million will be exposed to e-auctions over the coming year.

Mr Holland added, “Given the huge value of local government contracts that will be put out to e-auction, I’m of no doubt that councils and the tax payer will see substantial benefits. E-auctions, and e-procurement more generally, will play a key role in helping local government meet its efficiency targets.”

The 2006/07 national programme of e-auctions will be announced by the Regional Centres of Excellence in the coming months. Councils wanting more information should contact their Regional Centre of Excellence. Details of these can be found at www.rcoe.gov.uk

Posted: 04|12|06 at 10:55 am. Filed under: UK News.