Reducing the cost of procuring Fire and Rescue Service vehicles and specialist equipment
Firebuy, a specialist body established by the Department for Communities and Local Government to support procurement of kit by Fire and Rescue Services, has cost nearly twice as much to set up and run as the total savings it claims to have delivered. In a report to Parliament today, the National Audit Office recommends that the Department quickly assess whether to continue with a nationally directed central procurement body and, if so, to change the way Firebuy operates, or to transfer its operations to another professional buying body or a Fire and Rescue Service.
Without the power to make local Fire and Rescue Services use its national procurement contracts, Firebuy has had to rely on persuasion. Progress has therefore been slow with only five out of the 14 framework contracts it has set up being used by more than half Fire and Rescue Services to purchase equipment. Most of the contracts allow suppliers to offer many variations of the same types of equipment, allowing Fire and Rescue Services to procure expensive bespoke equipment, and preventing suppliers offering lower prices through high volume orders. For example, the Firebuy contract for fire engines allows for 54 possible combinations of supplier, chassis, water pump and body type and a possible one million different specifications.
The approach to measuring savings achieved by Firebuy is inadequate and the information that the estimated savings are based on is mostly unreliable.
The Department expected Firebuy to be self-financing by its third year of operation (2008-09) but it is still heavily reliant on grants from the Department. Firebuy is expensive to run, with overheads between five per cent and 10 per cent higher than the industry norm. The Department has not shown enough leadership, direction or oversight of Firebuy to ensure it achieved its original objectives, most of which were not monitored (only 29 of 66 targets were monitored) and many were not met.
"The Department must quickly make a decision about whether it is sensible to continue with a nationally directed central procurement body. If it concludes that it is, it must change the way Firebuy operates. If not, it should transfer its operations to another professional buying organisation.
"To deliver value for money for the taxpayer, public sector bodies should prevent the procurement of unnecessarily expensive bespoke equipment and collaborate successfully to build higher volume orders which reduce supplier prices."
Amyas Morse, head of the National Audit Office
Notes for Editors
- Since 2006, the cost to the taxpayer of setting up and running Firebuy's procurement contracts has been £16.8 million, against claimed savings of £8.5 million and an income of £1 million.
- The 46 local Fire and Rescue Services in England spend between them about £120 million each year on specialist equipment, such as fire engines, protective clothing and breathing apparatus.
- The Department for Communities and Local Government is responsible for encouraging better procurement practice within the Fire and Rescue Service including greater collaboration. Firebuy is a specialist procurement agency established as an arms-length body by CLG.
- Firebuy has developed 14 national framework agreements, which specify the conditions and prices under which Fire and Rescue Services can purchase items from a shortlist of chosen suppliers. These central agreements aim to reduce duplication of effort across Fire and Rescue Services, reduce prices and improve consistency of service.
- Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 900 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.