YPO aims for cutting edge with national role

Simon Hill, the former executive director of business at Yorkshire Forward, which is being scrapped as part of the Government’s austerity measures, has become the managing director of Wakefield-based YPO.

Mr Hill, from Huddersfield, also spent 10 years as managing director of Kostal UK, the supplier of electrical switchgear for cars. He now heads up the UK’s largest not-for-profit local authority buying organisation.

YPO, which dates from 1974, uses its buying power to try and get the best price for councils, schools and other public sector bodies. Despite the spending squeeze, public sector organisations still need to buy items such as office supplies, cleaning materials and school books.

Mr Hill said: “We will try to negotiate the most efficient purchasing prices. The way we do that is by using as much demand from as many local authorities (as we can).

“If, for example, Wakefield city council goes out to buy office supplies, or exercise books for schools, they will have a certain amount of purchasing power.

“If you have a body like YPO, that can go and do that for Wakefield and Leeds and Bradford and North Yorkshire and all the member authorities, then your ability to wield the big purchasing stick and get lower prices on behalf of everybody is much greater.”

According to an audit commission report, which has been seen by the Yorkshire Post, YPO’s invoiced turnover in 2010 was £105.4m, an increase of £3.4m when compared with 2009.

YPO, which employs 400 staff, had net assets of £15m on December 31 2010, an increase on the £6.2m recorded the year before.

Mr Hill said: “The core of the business going back to 1974 was educational supplies. Most people who went to school in Yorkshire will have had a YPO exercise book on their desk at some point, but the business has grown dramatically. One exciting development for the future is things like energy supply. Imagine you are negotiating with the big utility companies on behalf of a range of local authorities. You’re talking big numbers here. The most important thing to do at the moment is look at managing demand and look at using alternative forms of energy.”

Mr Hill said YPO aimed to provide local councils with data on their energy usage, so that they can carry out their own analysis.

He added: “Intelligence that you get back from a central body that’s doing the purchasing on your behalf is one of the most powerful weapons that a local authority department can use to become more efficient.”

Mr Hill added: “However much Government expenditure is being squeezed, you’ve got to keep basic services going.

“You’ve still got to run the hospitals, you still expect a fire engine to turn up if you’re house is on fire. You’ve still got to make sure that you’re investing in that stock and using the fleet in the most effective way you can.” Mr Hill said he wanted to increase turnover by persuading more local authorities and public bodies to use YPO.

He also aimed to grow the contract services side of the business, where YPO carries out procurement on behalf of public sector bodies.

He added: “It is this second area where I see the step change growth coming from, as we capitalise on the challenges facing the public sector as a result of budget cuts.

“We are collaborating closely with an organisation called GPS (The Government Procurement Service, previously called Buying Solutions).

“I am keen that we are seen as instruments to deliver national policy in this area which would give Yorkshire a competitive advantage compared to the rest of the country.

“There is also an initiative under discussion with Eric Pickles (the Secretary of State for Communities and Local Government) to create a National Procurement Agency to develop policy in this area.

“It is only at an early stage, but I’m also making sure that we’re at the table so that we can help to shape the national agenda wherever possible.”

There are 13 founder member authorities and five associate member authorities of YPO, although the organisation trades extensively outside the membership area.

The founder member authorities include Barnsley, Bradford, Kirklees, Doncaster, Wakefield and Calderdale councils. The associate members include South Yorkshire Police Authority, and West Yorkshire Fire and Civil Defence Authority.

A means of efficiency

YPO procures goods and services for local government, education and other public sector services across more than 100 local authority areas.

It was formed in 1974 to aggregate demand and generate buying efficiencies in the public sector.

It was established as a joint committee of local authorities.

The 1988 Education Reform Act devolved control of budgets to schools, which provided a huge opportunity for YPO.

As a result, schools were able to source the vast majority of books and other essential items from a single source.

Earlier this year, it was also announced that Ian Knowles had taken on the role of corporate director of YPO, and supply chain director, Paul Smith, will support YPO’s planned development, by developing its “core procurement capability”.

Mr Smith will increase the range of goods and services offered by YPO.