Scottish councils admit using e-auctions to acquire services

South Lanarkshire and Edinburgh acknowlege it will not tender services through online auctions again, after coming under criticism.

The use of internet auctions to determine who provides some care services has been branded “morally repugnant”.

MSPs on Holyrood’s Local Government and Communities Committee criticised the practice, which has been used by two councils in Scotland.

South Lanarkshire Council and the City of Edinburgh Council have previously used e-auctions in their tendering process for care services. But the head of Community Care Providers Scotland, a group which represents many voluntary sector organisations that care for elderly and vulnerable people, said the purpose of such online auctions is to undercut competitors.

Group director Annie Logan told the committee: “One or two of our members participated in the South Lanarkshire one – only one or two because the starting price was such that most of our members wrote themselves out right at the beginning.

“What happens with the e-auction process is you then bid further down. The whole idea of the e-auction is to reduce the price.

“One of our members did participate in the process and it’s fair to say they found that quite an extraordinary process, particularly in the context of social care.”

Ms Logan said she believed the starting price for bids in the South Lanarkshire auction was £11.75 an hour. But she added that a “mid-range” price for home care services provided by the voluntary sector was between £14 and £18 an hour.

Committee convener Duncan McNeil said: “This is morally repugnant. Care services should not be traded like cheap jewellery.”

Ms Logan agreed, stating: “That would certainly be my view.”

And Nationalist MSP Alasdair Allan said the e-auctions sounded “a bit like eBay in reverse”.

Jim Wilson, the head of older people’s services at South Lanarkshire Council, told the committee: “At the time at which South Lanarkshire conducted its e-auction that was consistent with what was deemed to be the regulations and the guidance at that point in time.”

But he added: “Subsequent guidance came out which suggested that wasn’t the case.”

And when asked if the council will use the process again, Mr Wilson said: “I think it would be unlikely.”

Tricia Campbell, the joint programme manager for older people at the City of Edinburgh Council, said the authority had participated in an e-auction a couple of years ago as “part of a much wider tendering process”.

But she said: “The City of Edinburgh Council won’t be using e-auctions again as part of the tender process for social care.”

And Mr McNeil said: “It looks like the death of e-auctions for social care. I think everyone is relieved about that.”