Reducing the Cost of Procuring Fire and Rescue Service Vehicles and Specialist Equipment

Audited Entities

• Department for Communities and Local Government
• Firebuy Ltd.

Audit Scope and Objectives

• The review assessed the Department’s success in encouraging more collaborative procurement. The NAO examined whether Firebuy is helping to reduce the cost of Fire and Rescue Service procurement, in particular, by developing national framework contracts with suppliers.

Audit Criteria

• Not publicly available

Main Audit Findings

• The continued operation of Firebuy in its current form represents poor value for money. Firebuy has cost the taxpayer nearly twice as much to set up and run as the savings it claims to have helped local Fire and Rescue Services to deliver, and the cost of setting up and running the current frameworks are unlikely to be recouped over their lifetime.
• The Department and Firebuy’s agreed approach to setting up framework contracts acts against maximising savings in Fire and Rescue Service procurement. The contracts have no common specifications and involve many suppliers, so that they allow expensive bespoke equipment to be procured, while preventing suppliers offering lower prices through high volume orders. Firebuy’s weak methodology for measuring realised savings from its activities further undermines its credibility and effectiveness.
• A number of Fire and Rescue Services and suppliers said that Firebuy has contributed to bringing more discipline and professionalism to Fire and Rescue Service procurement activities. However, without the Department using its powers to make local Fire and Rescue Services use Firebuy’s national procurement contracts, Firebuy must rely on persuasion. This puts Firebuy in a difficult position and progress has been slow: only five out of the fifteen contracts it has developed are used by more than half of the 46 Fire and Rescue Services.
• The Department has not exercised sufficiently clear leadership, direction and oversight of Firebuy to ensure it achieved its original objectives. The Department’s irresolution over the future of the body in 2008 and 2009 created uncertainty, which further undermined Firebuy’s capacity to persuade Fire and Rescue Services to use its contracts. A strategic review by the Department, which concluded in 2009 that it was cost effective to continue to retain Firebuy, was based on incomplete savings and cost evidence.
• Firebuy’s running costs are relatively high compared with those in the commercial world, because of the top heavy nature of its staff grading mix.

Selected Audit Recommendations

• The Department should quickly assess whether continuing with a nationally directed central procurement body is sensible. If it concludes that it is, the Department should assess how best to change the way Firebuy works to enable delivery of maximum savings cost effectively. If not, it should transfer Firebuy’s operations to another Professional Buying Organisation, such as Buying Solutions, or to a Fire and Rescue Service with sufficient capacity.
• If it decides to continue with a nationally directed central procurement arrangement, the Department should ensure the procurement follows best practice, by:
  • establishing new contracts with limited numbers of suppliers and common specifications for each equipment type
  • mandating Fire and Rescue Services to use the contracts; and
  • putting in place a robust, auditable and comprehensive mechanism for identifying and measuring savings generated and introducing arrangements to independently validate measurements made.

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