Treasury admits 90% target missed

8 August 2001
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09 August 2001 | Jon Hoeksma

The government has been forced to admit that it has missed its target of making 90 per cent of low-value, high-volume purchases electronically by the end of March.

Andrew Smith, chief secretary to the Treasury, made the admission recently in response to a parliamentary question by Barbara Follett MP.

By the end of March, only 50 per cent of low-value transactions were electronic. Fax and telephone transactions were excluded from the figure, although they had been included in previous definitions.

The Office of Government Commerce (OGC) told SM there were no plans to revise the overall target, but stressed that every permanent secretary had e-procurement targets they needed to meet and that departments could now keep their savings.

"A key stumbling block is the number of the legacy systems around the country in government departments. There is only so far you can go regarding upgrading the system," an OGC spokesperson said. "There is also a training issue, as the people aspect is inseparable from IT."

Smith said there would be additional benefits with "the replacement of antiquated IT systems with more modern ones".

The 90 per cent target, which was originally set in the September 1999 Cabinet Office report, was intended to spur central civil government to be an example for e-commerce.

Smith said moves to e-procurement had already saved an estimated £100 million "as a result of applying modern electronic techniques to central civil government procurement". He added: "Doing business electronically makes practical sense and demonstrates the high level of efficiency gains that can be achieved by encouraging departments to the new way of doing business, the electronic way."

About £25 million of the savings are from greater use of the government procurement card (GPC), which the Treasury predicts will bring £45 million more in "value for money improvements" over the next 18 months.

Smith's announcement came in the same week the OGC announced it had issued the first electronic invitation to tender through OGC TenderTrust, the Royal Bank of Scotland-led electronic tendering system it is piloting, which is seen as a key step towards eliminating paper-based procurement.

Ten government departments are taking part in the OGC electronic tendering pilot, that is projected to deliver public savings of £13 million over the next four years.


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