Monday 21st Aug 2017 - Logistics & Supply Chain

Government targets procurement savings

The government is setting up an Efficiency and Reform Group to drive its £6.2bn austerity programme through Whitehall.

The group’s board will be chaired jointly by chief secretary to the treasury, David Laws, and the minister for the cabinet office and paymaster general, Francis Maude.

It will have the power to make sure departments work together to tackle waste and improve accountability across a range of areas, including procurement, ICT spend, advertising and marketing spend, and civil service expenses and recruitment.

Key tasks will be to conduct centralised procurement for commodity goods and services to drive down prices, and implement an immediate freeze on all new ICT spend above £1 million.

It will review the Government’s biggest projects, including ICT projects, to see where costs can be reduced or wasteful projects stopped altogether and start renegotiating contracts with major suppliers across Government to reduce costs.

The creation of the group was welcomed by David Noble, chief executive of The Chartered Institute of Purchasing & Supply.

“Better procurement has quite rightly been recognised as a key focus in reducing public spending but under the pressure to realise cost savings, it’s crucial government departments don’t make hasty and ill-thought out decisions as these could have disastrous, long-term implications.

“There have been numerous examples in the past where cost-cutting exercises have led to lower value and ultimately long-term higher costs. This is why the Efficiency and Reform Group must focus on getting better value as much as it does on reducing costs.”

* Chancellor George Osborne earlier this week announced a total of £6.2 billion in cuts including £683 million of savings at the Department for Transport. The following savings have been identified across the whole government.

• £1.15bn in discretionary areas like consultancy and travel costs

• £95m through savings in IT spending

• £1.7bn from delaying and stopping contracts and projects, including immediate negotiations to achieve cost reductions from the major suppliers to government

• £170m from reductions in property costs

• at least £120m from a recruitment freeze across the civil service for the rest of 2010-11

• £600m from cutting the cost of quangos

• £520m by reducing other lower value spend.

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