LUPC ANNUAL REVIEW 2014-2015 Summary of Results

£204 million Average return on investment per Member £186 million Comparing every £1 of membership fee against every £1 of savings made

£171 million

100:1 96:1 77:1 2014-15 2013-14 2012-13

2014-15 2013-14 2012-13

£33 million

“It is always reassuring to have the support and guidance £30.5 million of LUPC’s professional team behind us. They continue to £28 million demonstrate a high level of knowledge in the complex area of procurement legislation and guide us through the maze with good humour and common sense.”

Helen Ward, Collections Manager, 2014-15 2013-14 2012-13 Consortium expenditure SUMMARY OF RESULTS Total Member spend through our agreements

£204 million

£186 million

£171 million

100:1 96:1 77:1 2014-15 2013-14 2012-13

2014-15 2013-14 2012-13 Member savings Collaborative savings figures

£33 million

£30.5 million £28 million

2014-15 2013-14 2012-13 I have very much enjoyed my Chair’s first full year as Chair of LUPC. It is a source of great personal Report satisfaction for me to see our genuinely Member-owned and led organisation progress as a direct result of the hard work and dedication of our Members, staff, suppliers and partners.

LUPC’s achievements this year have seen: • Success in our programme of activities designed to encourage greater take-up of our collaborative supply agreements, with benefits for Members both in quality and savings;

Through our programme of Member activities, I am pleased Director’s to report that we were able to sustain and build upon our Report very rapid rate of growth in the take-up of our collaborative supply agreements during the year.

Our Members spent £204m (13/14 £186m) through LUPC agreements, an increase of 10% year-on-year, saving £33m (13/14 £30.5m) in the process. Members have access to over 100 competitive supply agreements and with membership subscriptions substantially reduced once again for 2015-16, our Members’ average return on investment is now well in excess of 100:1 (13/14 96:1). CHAIR’S & DIRECTOR’S REPORTS • New supply agreements in Estates with the aim of becoming our Members’ most Maintenance and Office, Computer & Library valued commercial partner by 2018. We will work Supplies, both developed with the active even more closely with our sister purchasing involvement of our Members. consortia under the Procurement Ltd • Our emerging leadership in corporate social (PEL) umbrella. We will provide more support for responsibility, including publication of the first our Members through our growing procurement Slavery and Human Trafficking Statement by a consultancy business and we will become a leader purchasing consortium in UK public service; in ethical trading and sustainability. • Verification of our attainment of Level 4 of the Sustainable Procurement Flexible Framework; and As Chair, I relish these challenges in improving • Four new full Members joining LUPC ( further our value proposition for every Member Academy of Music & Dramatic Art; the Royal College through collaborative procurement and our of Anaesthetists; the Royal College of General other activities. Practitioners; and the Institute of Ismaili Studies). Dr Andrew Young This year our Board has devised and implemented a Chief Operating Officer brand new corporate strategy, Reaching New Heights, London School of Economics & Political Science

The year also saw LUPC take a leading role in the We now look forward to delivering our sector for corporate social responsibility. Not only ambitious new corporate strategy, Reaching New is LUPC now a very active member of Electronics Heights, and to seeking new ways of delivering Watch, the monitoring organisation for the global even better value for our Members in future years. electronics industry, but we also entered into a partnership with the Business, Human Rights & the Andy Davies Environment Research Group at the University of Director, LUPC Greenwich. In response to the Modern Slavery Act 2015, we also became the first UK public service consortium to publish a statement on how we plan to tackle slavery and human trafficking in our supply chains.

Each year LUPC Members expect a busy programme “We became the first UK of LUPC events. This year we staged another successful Conference and Exhibition in the spring, public service consortium to a launch of our new framework agreement in Estates publish a Slavery and Human Maintenance and further workshops and seminars in the professional services category. Trafficking Statement ” New Agreements

“Our new Estates Maintenance agreement incorporates provision for minor works up to £500k, in direct response to requests from Members” NEW AGREEMENTS

and technology, but one which and technology, but one which they met with great efficiency and professionalism. To find out more about the Office Supplies, Computer Consumables and Library Supplies agreement, contact Darran Whatley at [email protected]. that tested the LUPC team’s skills that tested the LUPC team’s skills Works agreement, contact Suzanne Suzanne contact agreement, Works [email protected]. Stokes at incarnation the latest We also awarded multi-million of our ever-popular, agreement framework pound national and computer for office supplies year, this time with consumables this library supplies. extra provision for was overseen Once again, the project National Working by colleagues in the & Stationery Party for Computer Supplies (NWPCSS). in three lots, Suppliers are arranged more freedom to allowing Members choose, and we have continued our cost-plus pricing policy in this spend category, a practice we introduced with great success in 2011. Under this arrangement, our suppliers have priced every item in their catalogue, offering competitive not pricing in every product group and just those in a basket, or core list of products. This involved a monumental data management task during the competitive process, a challenge

of London, giving Members an of London, giving Members an opportunity to meet the approved suppliers and attend presentations on how to use the framework. For more information about the Estates Maintenance & Minor The year saw the award of the of the the award saw The year latest framework consortium’s for Estates Maintenance agreement first following LUPC’s Services, For deal in 2011. ground-breaking regional time, this mammoth the first LUPC Members and agreement, open to and colleges based other universities England, in London and south-east of minor incorporates the provision in value, in works up to £500,000 requests from direct response to our Members. framework The new five-year into six lots covering agreement is split estates maintenance and minor works (large and small); mechanical and electrical maintenance; water management services; and minor works (large and small). It was developed by a Member-led project team with expert input from both procurement and estates professionals at Goldsmiths, the Museum of Royal Holloway, Courtauld , London, Gardens, Royal Botanic Institute of Art, and Institute of Cancer Research Kew, Barnet & Southgate College. LUPC ran a free launch event for Members in October at the Museum

Reaching New Heights: LUPC’s Corporate Strategy 2015-18

“We’ll develop relationships with influencers in Member institutions to deliver agreements that best meet a wide range of requirements”

Royal Botanic Gardens, Kew NEW CORPORATE STRATEGY Our greatest success story has been Increase our support for Members’ getting better value from Members’ procurement activities. procurement spend. In the last five We’ll develop our procurement years alone, we’ve helped Members save consultancy beyond running £135m through our agreements. In our ‘mini-competitions’ to other short-term new strategy, we’ve set out six objectives assignments. We’ll support Members’ to deliver leadership for effective, “make-or-buy” decision-making by sustainable procurement over the bringing together those currently next three years: undertaking and considering outsourcing, to share outcomes and expertise. And we’ll Help Members get better value from establish a new shared service for Members their procurement by channelling more without in-house procurement teams. expenditure through our agreements. We’ll continue to support Members in Enhance our Members’ appeal to delivering their procurement strategies their students, service-users and visitors through effective collaborative through procurement. arrangements. This includes making In the HE sector, this will involve the drivers for agreement take-up more engaging with students to improve our attractive, increasing their breadth and sustainable procurement policy and the value for money they represent. strategy; helping spot and fill vacancies with our key suppliers for graduates; Find new ways to broaden take-up and recruiting new graduates to train as of our agreements. future commercial professionals . In partnership with procurement teams, we’ll develop relationships with Make ethical trading and sustainability influencers in Member institutions to available to our Members. deliver agreements that best meet Reflecting the values of our Members, a wide range of requirements. we will demonstrate leadership in ethical trading and sustainability by reaching Collaborate ever more closely with our Level Five of the sustainable procurement sister consortia. Flexible Framework; actively supporting As a member of Procurement England responsible outsourcing; partnering Ltd (PEL), LUPC is working towards with the Ethical Trading Initiative and a set of joint strategic aims across Electronics Watch; and enabling small England’s HE purchasing consortia. and medium-sized businesses to compete These include negotiating more for our agreements. collaborative agreements; making them easier to use; and moving from For more information about our contract to category management. corporate strategy, visit www.lupc.ac.uk

Shared Procurement Service Ensemble Purchasing

The is one of the first Members to sign up for LUPC’s Shared Procurement Service.

“LUPC’s proposals for the Shared Procurement Service struck a chord with us right from the outset. Our spend may be modest compared to larger higher education institutions, but in fact our needs are really quite complex. We have important commercial and supplier relationships that are vital to our operations and require careful, professional management, while our international reputation means that we need our suppliers and contractors to perform at their utmost.

“It would be difficult for the Royal Academy of Music to employ a dedicated procurement resource on its own, let alone worry about training, development and so on, so it makes a great deal of sense to come together with other London-based, like-minded institutions. And because they are operating out of LUPC’s central London headquarters, our professionals will never be too far away when we need them.

“As a Member of LUPC, we’ve come to expect excellent value and high quality, so we will demand nothing less from this service.”

Judith Barber, Director of Finance, Royal Academy of Music SHARED PROCUREMENT SERVICE Regular spend and benefits reporting; and benefits spend Regular profile; sustainability An improved managers in procurement, to up-skill The opportunity commercial disciplines; and other contract management and freedom from of service Assured continuity managing a stand-alone of staffing and the burden at a fraction of the cost; and procurement function solution. A tax-efficient partnership • • • • • as a non-profit company The Service will operate who – control of its Members under the complete believe the We on the Board. will each have a seat client and professional will relationship between a but with operate, be akin to how consultancies model where the Members pay a different business on the amount of regular support ‘flat’ fee depending will treat their Members Our professionals they need. preparing instructions, working under their as clients, approval according plans and work for their clients’ to their needs. believe that the Service will be of particular We LUPC will provide interest to smaller institutions. – at low cost management services to the Service fledglingleadership and management of the team; - and HR; payroll; training; budgetary management; After set-up accommodation. office – initially at least for LUPC. the Service will be cost-neutral costs, on envisage that the Service would be established We with the commitment a small scale in the first year, of up to of up to four Members and the recruitment out of LUPC’s two procurement professionals working a regular basis. visiting the Members on offices, established as a company – group The cost-sharing will allow new Members – limited by guarantee financing growth and to join from time-to-time, increasing capability.

Professional procurement management for areas of for areas of Professional procurement management with spend selected by each Member, commensurate organisation; a “superior” specialist procurement Improved supplier relationship management, contract management and risk management; Demand management and cost reduction programmes; In January 2016, our brand new partnership solution solution new partnership our brand 2016, In January procurement shared longer-term, complete, offering a for will open participating Members service to institutions for other with the opportunity business, “first-in-sector” This will be a a later date. to join at non- low-cost, a genuinely – education for higher and owned shared service, professional profit, controlled by its Members. smaller higher education institutions Collectively, in London spend around £200m a year on goods around £200m a year on goods in London spend the selecting Meeting these needs, andservices. right commercial partners and managing key partners and managing key right commercial until professional help but, relationships requires Members haven’t been able to justify smaller now, quality support with this getting enough high challenges. or to navigate the recruitment activity, the business case however, When acting in concert, becomes far more compelling. Members of the Shared the founding Between them, to acquire – Procurement Service share a joint aim at a price they can professional procurement support people are in short Good quality procurement afford. Our aim is that the Service even in London. supply, professional high-quality, will supply a sustainable, in the city at and economical procurement service it’ll be a cost And because less than £350 a day. controlled by its Members owned and – sharing group to pay. VAT there won’t be any – Ensemble Our Shared Procurement Service, will offer: Purchasing, • • •

Procurement England Limited

“Over £568m of efficiency cost savings from procurement have been made between 2011/12 and 2014/15” PROCUREMENT ENGLAND LTD (PEL)

wake. It is these strategies that that It is these strategies wake. trees and national category strategies trees and national category strategies in being formulated with Members STEMed and Estates categories, ICT, with more following in their will inform our co-ordinated, national contracting plan and return from maximise our Members’ consortia resources. mechanisms – well on the way the way well on – mechanisms Great target by 2016. to the 30% from these have resulted successes exercises: procurement collaborative cost savings of efficiency over £568m been made have from procurement and 2014/15. between 2011/12 the Procurement In addition, programme has Maturity Assessment improvement of shown continuous scores in each category sector-wide and 2010/11, of assessment since benefits to LUPC has brought about the HE sector. Members outside an PEL is now moving forward with ambitious plan to meet key objectives are We that support the sector. aligning consortium data analysis to provide better information which will inform consortia decisions to embarked PEL has support Members. on a systematic category analysis based on consortia Member spend data to identify possible additional areas that would benefit from collaborative agreements. This has resulted in category

Procurement England Ltd (PEL) Ltd (PEL) England Procurement to support higher was created England, procurement in education that the value and to maximise consortia purchasing England’s to the sector. provide body without PEL acts as a virtual budget or other any of its own staff, important to And it’s resources. PEL is a vehicle for understand that efficiency within achieving greater the hard always, procurement; as PEL, our Members. work is done by is a formalised commitment however, to support by sector leaders institutions in developing the power of collaborative procurement. PEL is working to strengthen collaborative procurement in the sector by transitioning from contract at looking to category management, ways to make our agreements easier and exploring partnerships to use, PEL with the wider public sector. consortia have supported the sector in making considerable progress towards our collaborative procurement goals and delivering savings since the 2011 Diamond Report was published. Efficiency, The follow-up report, for Money, Value Effectiveness and published in February 2015 estimated that 25.7% of non-pay spend is currently being run through collaborative procurement

Modern Slavery Act 2015

LUPC is committed to acquiring goods Although, as a business, LUPC turns over and services for its Members without far less than the threshold for businesses causing harm to others. In so doing, LUPC required to publish a statement under the Act, supports the UK Government’s action plan LUPC’s Board considers that our Members’ to implement the UN Guiding Principles on collective agreement spend (around £200m Business and Human Rights. annually) warrants a statement on the risks “LUPC is committed inherent in our supply chains and the steps Our Slavery and Human Rights Statement we are taking to address them, in line with to acquiring is designed to satisfy the requirements LUPC’s pioneering practices in sustainable goods and services of Part 6 of the Modern Slavery Act 2015, and responsible procurement. by informing our Members, students, staff, for its Members campaigners and the public about LUPC Our categories and its policy with respect to modern The principal categories that carry material without causing slavery, human trafficking, forced and risks for LUPC are office supplies, laboratory bonded labour and labour rights violations consumables, ICT equipment and some estates harm to others” in its supply chains. services, such as cleaning and security services. MODERN SLAVERY ACT 2015 In December 2015, LUPC and the BHRE BHRE and the LUPC 2015, In December Responsible the Socially jointly organised Goods of Electronics Public Procurement of Greenwich. at the University Symposium for the future Our plans to better understanding LUPC is committed and improving conditions its supply chains will We working in them. for those people to encourage more work with our suppliers to the ETI Base Code. of them to commit Electronics Watch with groups like Working plan to map we also & Planet, and People chains which represent out all those supply to high-risk of modern slavery, a medium- forced and bonded labour human trafficking, and labour rights violations. Cleaning and security services security and Cleaning for a regional agreement LUPC offers a category and security services, cleaning among the are traditionally where operatives a medium-level LUPC perceives lower paid. chains. in these supply risk to workers due to be re-tendered in Our agreement is new clauses to be introduced under 2016 and, suppliers will be required into our contracts, ongoing commitment to demonstrate their the International to the ETI Base Code, for Private Security Code of Conduct (ICOC) and to ensuring Service Providers on our behalf to guard that they take steps human trafficking, against modern slavery, rights forced and bonded labour and labour violations in this supply chain. Our partnership with the BHRE LUPC has partnered with academics & Human Rights at the Business, the Environment Research Group (BHRE) in the School of Law at the by Dr led , who was elected Olga Martin-Ortega, Together to the LUPC Board in 2015. we are organising stakeholder and initially to sensitise events, the promote awareness of the risks of electronics supply chain among public procurement professionals. the LUPC and In November 2015, BHRE together attended the UN Annual Forum on Business and Human Rights in Geneva and the first Learning Lab on Public Procurement and Human Rights. With Electronics Watch, LUPC is seeking LUPC is seeking With Electronics Watch, to to work with suppliers of ICT equipment commit to new effective and transparent the new This includes monitoring regimes. to be consortia Apple products agreement and the next iteration awarded in 2016, of the National Desktop and Notebook to be tendered by LUPC in 2017. Agreement, ICT equipment member LUPC became a founding In 2014, an independent of Electronics Watch, to monitoring organisation working the achieve respect for labour rights in socially global electronics industry through Europe. responsible public purchasing in Many of our suppliers in these higher-risk in these higher-risk Many of our suppliers to the Base Code categories have committed Initiative (ETI) and of the Ethical Trading persuade our remaining we are working to categories to join them. suppliers in these the The ETI Base Code is founded on Labour conventions of the International Organisation (ILO) and is an internationally requiring recognised code of labour practice, (amongst other principles) that employment are paid. is freely chosen and living wages Office consumables and laboratory supplies of in the procurement LUPC leads education for UK higher office supplies A wide and other Members. institutions of many products are supplied, range of distributors from sourced by our which are countries in south producers in low-cost Africa and South and south-east Asia, where modern forms of countries America, slavery are prevalent.

Income and Expenditure Account Accounts for the Year Ended 31 July 2015

2014-2015 2015 2014 £ £ £ £

Turnover 1,024,872 1,004,637

Staff costs 512,815 492,248

Depreciation 11,897 1,740

Other operating charges 426,878 360,362

951,590 854,350

Operating surplus 73,282 150,287

Interest Receivable and similar income 3,335 3,530

Surplus on ordinary activities 76,617 153,817 before taxation

Tax On surplus on ordinary activities 16,089 31,491

Surplus for the financial year 60,528 122,326

Directors’ Statement The Income and Expenditure Account and Balance Sheet set out on these pages are extracts from the full statutory accounts which were approved by the Directors on 8 December 2015 and on which the auditors have given an unqualified opinion. The statutory accounts, which should be consulted for a full understanding of the financial affairs of the company, will be submitted to the Registrar of Companies.

ACCOUNTS 2014-15 Balance Sheet 31 July 2015

2015 2014 £ £ £ £

Fixed assets

Tangible assets 37,572 47,107

Current assets

Debtors 395,747 395,747

Cash at bank and in hand 564,682 532,549

961,889 928,296

Creditors

Amounts falling due within one year 102,868 138,080

Net current assets 859,031 790,216

Total assets less current liabilities 896,603 837,323

Provisions for liabilities 4,994 6,242 Auditors’ Statement We have examined the Income and Net assets 891,609 831,081 Expenditure Account and Balance Sheet set out on these pages and confirm that these statements have Reserves been accurately extracted from the full statutory accounts for the year Income and Expenditure account 891,609 831,081 ended 31 July 2015.

Knox Cropper, Chartered Accountants 831,081 708,755 8/9 Well Court London EC4M 9DN

Full Members Imperial War Museum London South Bank University Members Aga Khan Foundation UK (part of IIS) Institute of Cancer Research Medicines & Healthcare products Birkbeck College Institute for the Study of Muslim Regulatory Agency (MHRA) Museum of London 2015 British Academy of Management Civilisations (part of IIS) NatCen Social Research British Council Institute of Zoology National Archives British Film Institute International Students House iQ Student Accommodation (part National Institute for Biological British Library of Wellcome Trust) Standards & Control (NIBSC - British Museum part of MHRA) Jisc Centre for Applied Science & National Portrait Gallery Kingston University Technology (CAST) National Theatre London Academy of Music & CITB - ConstructionSkills Dramatic Art Natural History Museum Clinical Practice Research Datalink London Ambulance Service NHS Trust NHS Blood & Transplant (CPRD - part of MHRA) Public Health England (incl HPA) Equality Challenge Unit Queen Mary London Metropolitan University Francis Crick Institute Ravensbourne London School of Economics & Goldsmiths, University of London Political Science Regent’s University London Heythrop College London School of Hygiene Richmond University Horniman Museum & Gardens & Tropical Medicine Royal Academy of Music

Board & Board Members Dr Andrew Young (Chair) Andy Davies Habte Hagos Chief Operating Officer Director (until 5 March 2015) Executive London School of Economics LUPC Director of Finance & Estates & Political Science Institute of Education Committee Andy Farrell Azim Sachedina (Deputy Chair) Chief Financial Officer John Headley Head of Financial Operations (until 30 September 2015) (from 12 June 2015) Members & Systems London School of Economics & Director of Finance Kingston University Political Science University of East London

Emma Bull Neil Greenwood Dr Olga Martin-Ortega Acting Chief Operating Officer Director of Finance (from 8 July 2015) Queen Mary University of London Natural History Museum Reader in Public International Law University of Greenwich CURRENT MEMBERS/BOARD & EXECUTIVE COMMITTEE

Lambeth College incorp (LeSoCo) Southwark Education College of Further Newham Technology Surrey College of North East (NESCOT) Redbridge College College Richmond Adult Community College Richmond upon Thames School St Paul’s South Thames College Hamlets College Tower University Engineering South Bank Academy Service Adult Education Westminster Kingsway College Westminster College Men’s Working

Joanna McKelvey (from August 2015) Head of Procurement & Contract Management Kew Royal Botanic Gardens, Chris Philpott Purchasing Manager University of East London Sue Weston Head of Procurement Unit Jisc Bromley College Bromley College Carshalton College City & Islington Institute City Literary College City of Westminster Creative Process Hammersmith & Ealing, & Higher Education KCollege & Chelsea College Kensington Kingston College West Guildford College College Hackney Community Further Havering College of

Penny Green Head of Procurement London South Bank University Caroline Heckscher (from August 2015) Procurement Director University of London Alan Hill Head of Procurement Institute of Cancer Research Colette McArdle Head of Strategic Procurement Unit London Metropolitan University The The National College London Trinity of Laban Conservatoire Trinity Music & Dance Ltd Business Services UK Shared UK Universities London University of East University of Greenwich University of London London University of the Arts University of Westminster Victoria & Albert Museum Trust Wellcome Further Education Associate Members Barking & Dagenham College Barnet & Southgate College

Rob Godfrey (until July 2015) Head of Purchasing Queen Mary University of London Alan Glover Head of Procurement Kingston University Andy Davies Director LUPC Mitch Dalgleish Head of Procurement University of Westminster Executive Committee Members Royal Botanic Gardens, Kew Gardens, Botanic Royal School of Speech Royal Central & Drama of Anaesthetists Royal College of Art Royal College of Music Royal College Practitioners Royal College of General of England Royal College of Surgeons University of London Royal Holloway, College Royal Veterinary & African Studies School of Oriental Science Museum Group London & St George’s South West Trust Mental Health NHS University of London St George’s, Tate The Courtauld Institute of Art The Institute of Ismaili Studies (IIS) LUPC Shropshire House, 179 Tottenham Court Road, London W1T 7NZ

020 7307 2760 [email protected] www.lupc.ac.uk