1st Nov 2009
Colleges will soon be able to experience even greater savings as they are now the new owners of the largest FE purchasing consortium.
The College Finance Directors Group have brokered a deal with the University of Salford which gives ownership of the Crescent Purchasing Consortium (CPC) to the nation's colleges, ensuring that for the first time ever the FE sector are doing business through their own consortium.
The takeover of CPC offers colleges the opportunity to save even more money by refining their own contracts and frameworks, creating new tender areas and ultimately shaping their futures.
Since being founded 10 years ago, the CPC has become the leading purchasing consortium for colleges, they have attracted over 550 college and academy members and have seen the spend through its contracts increase dramatically from £20m to £80m.
They have broken several barriers in terms of new areas being tendered, including internal and external audit, legal services, cash management and their particularly competitive insurance contract which a large number of colleges have significantly benefited from.
The transfer of CPC to the FE sector was first discussed in 2007 when the joint heads of the FE sector held a series of discussions to decide how the Finance Directors Group could be more involved in CPC. After negotiations were held between all the relevant parties a deal was reached.
David Pullein, Chair of the College Finance Directors Group, summed up why the handover occurred saying, "Buying out CPC supports the Government's overall procurement agenda as it will make the sector leaner and more efficient. The deal also allows us to continue to work collaboratively with the University of Salford."
"The University of Salford had set up the CPC and through it they had very effectively supported the FE sector for many years as we have developed our procurement techniques. It is almost like they have brought up a child and now it is leaving home and looking after itself!" he added.
Peter Brewer, Managing Director of the CPC, also thinks that the takeover of the Consortium is an excellent achievement for the sector. He said, "We have known for a while that the general aim has been to give colleges their own buying consortium as by doing this, the FE sector is coming into line with other sectors like Higher Education. There should be a lot of benefits for the colleges as we hope that as Consortium owners their expected increase of contract usage will lead to ever improving contracts. Collaborative procurement is the way forward and the FE sector now owns the vehicle to drive this further."
The University of Salford's Director of Finance, Simon Attwell, who led the negotiations on behalf of the University, the ultimate owners of Crescent Purchasing Limited, stated "The University is delighted that the FE Colleges wish to take responsibility for their own Consortium and to build on the excellent work that CPC has achieved over the years on their behalf. We believe that this is an excellent model for other cooperation and collaboration between FE and HE and we shall take great pride in following the continued success of CPC and its staff."
As well as retaining the current staff the CPC will be managed by an 11 person board which will consist of four college Finance Directors, the Chair of the Finance Directors Group, Peter and Margaret Barrett-Alletson (Deputy Managing Director for the CPC), representatives from the procurement teams at the Learning and Skills Council and DCSF, an elected member of procurement staff from a college and a college principal.
The Finance Directors Group are looking forward to working through the CPC, as David explained, "We want to get more contracts on with keener terms and we want CPC to be the first point of call when a college needs to procure. The income generated from CPC collaboration will be invested into better procurement in colleges in partnership with the LSC Procurement Efficiency Team."