Purchasing job cuts 'could backfire on savings plans'

7 July 2004
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08 July 2004

CIPS has warned that any cut in the number of public-sector purchasers could backfire on the government's savings targets.

The warning comes as the government prepares its annual spending review, used by Whitehall to set out buying strategies and due to be published next Monday (12 July).

It will be based in part on the controversial efficiency review by Sir Peter Gershon, leaked to the media in February. Gershon, who until April was the first chief executive of the Office of Government Commerce (OGC), said that up to 80,000 civil service jobs could be lost with no effect.

He also suggested replacing 400 local authority purchasing departments with as few as 10 regional buying agencies.

Ken James, chief executive of CIPS, said simply cutting jobs was not the way forward.

"Taking cost out by just cutting procurement jobs is much too simplistic," he said. "Government needs the right people with the right skills at the right level.

James called for purchasers at grade three level to run procurement functions and to sell permanent secretaries the benefits of procurement. Government also needed up-to-date systems to capture spending data, he said.

John Oughton, chief executive of the OGC, told delegates at the annual Procurement Solutions for the Public Sector conference in London he had asked departments to rapidly give him delivery plans based on the spending review announcements.

But Oughton agreed there was concern over what amalgamation and greater cross-departmental co-operation would mean for purchasers, including job losses.

He called for greater collaboration among Whitehall purchasers, as well as among central and local government authorities, to show that procurement holds the key for hitting the spending review targets.

"Neither Peter Gershon nor I are advocating aggregated national procurement of everything built into one mega-contract negotiated in one deal with our suppliers," he said. "But we do believe there must be a dialogue about what is best bought and at what level."



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