The Scottish Government

Advanced Procurement in Scotland's Universities and CollegesProject Name:

Current Stage

SRO:

Vision

PM:

Project Commissioning

Project Initiation

DA Lead

Assets

Design

KM Lead

Construct

Implement

SE lead officer

£15.2 million (total funding deficit)Estimated Project Cost

Operate

2007-2014 (per Business Plan)Estimated Start / End

What is the background to the project and the context in which it was established, what were the issues/drivers/opportunities which led to its inception- why?Background and context:

Realisation of this vision will deliver or set in train much of the work needed to respond to the recommendations in the McClelland Review. This will release resources to invest back into the core business of teaching and research. The planned scale of collaboration, across institutions and other publicly funded organisations, and of the implementation of eProcurement Scotl@nd (ePS), will deliver tangible benefits for all universities and colleges. This project, with the support of Efficient Government funding, provides an unprecedented opportunity to enhance procurement significantly across Scotland's universities and colleges, at both the strategic and operational levels.

Procurement expenditure on external goods and services amounts to over £750 million per year across Scotland's universities and colleges and although there has been a history of collaboration in procurement, it is recognised that there are potentially significant opportunities for further additional cost reductions and improved efficiencies through extended and advanced collaboration and better use of technology.

This EGF Stage 2 Bid aims to build on this platform of ongoing collaboration and elevate operational effectiveness to a level of advanced procurement and of best value to all universities and colleges in Scotland. The success of the programme will be measured through financial benefits, process efficiencies, supplier quality and business relationships through the development of excellence in procurement practice.

What are the aims/objectives/benefits & deliverables that the project is seeking to achieve, what improvements will there be as a result of this project - what?Objectives & Benefits -

The overall focus of the programme is to deliver advanced procurement performance in Scotland's universities and colleges, in line with the McClelland Review recommendations, by the establishment of a Centre of Expertise, the development of strengthened Collaborative procurement and comprehensive implementation of ePS with the aims of:

Reducing cost and increasing the quality of service from suppliers through initiatives which will include:·

- Process efficiency improvements;

- Compliance with contracts, including collaborative contracts;

- Improved planning, management and measurement of procurement performance;

- A shared approach to supplier engagement.

· Increasing the level of procurement expertise and capacity available to theuniversities and collegesby the establishment of an advanced procurement Centre of Expertise and further development of the skills already in place within the universities and colleges;

· Facilitating more effective dialogue between universities and colleges and other sectors in Scotland and with other bodies including the Proc-HE and wider UK HE and FE communities and the Office of Government Commerce;

· Implementing the ePS service using a best practice implementation approach for delivering the key recommendations of the McClelland Review;

· Delivering benefits in line with the McClelland Review recommendations by 2011, with a programme management team in place by January 2007.

The objectives of the programme are to:

· Set up a Centre of Expertise to secure value for money improvements by end 2011 in line with the McClelland Review timeframe and provide an infrastructure to support the procurement needs of all universities and colleges;

· Establish an advanced procurement strategy for the universities and colleges that includes national, sector and local responsibilities bythe end of the first phase of the programme in Summer 2007;

· Through collaborative procurement and the ePS implementation, contribute to the McClelland Review benefit target by at least £58 million by the end of 2010;

· Transform procurement in the universities and colleges so that at least 80% of procurement transactions are processed via the proven ePS service by the end of the ePS implementation programme; and.

· By the end of 2008 to have implemented ePS into all large and most medium size institutions, which, as a group, account for over 80% of the total procurement expenditure of all institutions.

The project is seeking to achieve the following savings

Total potential cashable and non-cashable benefits of £105 million over the first five years and £285 million over the first eight years.

Total net potential cashable and non-cashable benefits of £72 million over the first five years, increasing to £245 million over the first eight years.

As the implementation of the procurement reforms continues, these estimates and the timing of benefits will be re-assessed.

Improvements / Benefits as a result of this project will be:

The vision is to stimulate, lead and deliver advanced procurement within Scottish Higher and Further Education through the creation of a Centre of Expertise and by the implementation of ePS within Scotland's 62 universities and colleges.

Stakeholders and governance-Which organisations are involved in delivering the project, what are their roles and responsibilities, who is accountable? Who are the key stakeholders to whom the project is relevant?- who?

APUC, as the Centre of Expertise, is the main project delivery mechanism, however, to realise the maximum benefit, it requires the co-operation and partnership of universities and colleges.

APUC Ltd is a company limited by guarantee, accountable to the 62 university and college stakeholders through a Board that is representative of and elected by the stakeholder community. The APUC Chief Executive Officer, on behalf of the Board, provides regular progress reports to the Scottish Executive (Efficient Reform Fund), the Scottish Funding Council and the 62 universities and colleges as the funding partners in this project.

Progress and Issues-What specific progress has been achieved to date ? -Milestones met/achievements?

Have any issues arisen causing delays in the work plan? Is project delivery still on schedule?

A copy of APUC's EGF claim form dated 17 August 2007 was submitted with our original project summary and updated milestone reports were submitted with subsequent claims. It has been agreed with the Head of Unit, Shared Services and Funds that future milestone reports will monitor progress against the strategic plan.

Budget-What is the overall budget for the project and how is this to be released? What is the spend to date, is this as forecast?- how much?

Total costs of £38 million in the first five years and running at around £2 million thereafter.

The cash-flow forecast submitted with APUC's EGF Claim 9 in February 2008 shows the actual spend to date from January 2007 to January 2008 and the forecast spend for February 2008, along with the contribution necessary to match costs.

The budget for the academic year 2007-08 was presented to, and approved by, APUC's Board of Directors at its September meeting. The revised forecast out-turn for the year will be presented to the Board at its February 2008 meeting.

Risks-What are the main risks in terms of project management, stakeholder engagement and communications, delivery approach and benefits realisation? What can be done to mitigate against these risks?- what if?

Risks

Impact/Probability

Actions

Attachment supplied with original project summary - Appendix E of Stage 2 Bid EGF 1/1/012

Recommendation & Funding:

Would project Proceed in the Absence of Change Funding:

No

Financial Year

Revenue

Capital

Funding Period(s)

2006/07

2007 £8.7 million

0

2007/08

2008 £1.9 million

0

2008/09

2009 £0.8 million

0

Funding Not In Scope

SFC £1.5 million

Institutions £2.3 million

Consequences of further funding being unavailable: intention is that APUC will be self-financing once the EGF funding expires.

SE Only

Total funding Approved by NSSB:

Date:

Delegated Approved:

Date:

Ministerial Submission:

Date:

Ministerial Approved:

Date:

Grant Letter:

Date:

Key Documents Available:

Description

Obj Ref

Draft

Approved