Use of E-procurement in Local Authorities' Purchasing and Its Effects on Local Economies: Evidence from Cumbria, UK

Abstract

In the past decade, there has been an increasing interest shown by the Government and Local Authorities in issues concerning the implementation of new technologies and means of communication in the public administration. Several operations have been moved online, including some significant purchasing functions and procedures. Electronic procurement, or e-procurement, indicates the use of electronic tools or practices during each stage of the purchasing process. E-procurement is seen as a powerful instrument to achieve efficiency and cash savings. While e-procurement helps public sector bodies to achieve their budget targets, it also increases the level of competition among public sector suppliers. This may influence the level of economic activity generated at local levels and potentially reduce the level of business provided to local firms. In the worst case, this situation could produce a knock-on effect especially in peripheral and remote areas, where the public sector is often the major purchaser. This paper focuses on the significance of e-procuring and e-tendering practices among Local Authorities in Cumbria, North-West England. The paper explores how the tendency to use e-procurement may vary among public sector suppliers with regard to business characteristics such as size, headquarter location and sector of activities. In addition, the author investigates the suppliers' ability to deal with e-procurement practices and procedure, and examines how e-buying and e-tendering in the public sector affects Local Authorities' patterns of spend.