Regulators gear up for joint cost-cutting deals

17 February 2005
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17 February 2005 | Cara Whitehouse

Government regulators are set to use collaborative purchasing in order to meet their efficiency savings targets.

Rosalyn Payne, head of procurement at the Office of Fair Trading (OFT), said the process is already underway.

"There are common areas among the regulatory bodies and combined purchasing is an obvious way to drive savings," she told SM.

"We have a real opportunity for significant efficiency gains by sharing some of the burdens as well as the benefits, and it will also save some suppliers from repeat tendering."

Payne said the efficiency targets are a catalyst for agencies to work together and she urged purchasers in other regulatory bodies to work with the OFT.

The OFT has a £55.5 million annual budget and is working towards 3 per cent annual savings in 2005-06, rising to 5 per cent in each of the following two years.

Travel and hotel contracts as well as office supplies are on her list of areas to explore with other regulators. This could pave the way for joint e-auctions.

Last month, the OFT set up a deal to procure research and statistical services and is hoping to get other agencies, such as energy regulator Ofgem, to use the contract.

Roy Field, chief operating officer at Ofgem, confirmed it is in close contact with other regulators and working towards some form of collaborative buying.

"It makes sense to co-ordinate some purchasing to gain advantage in aggregated spend," he said.

But Ofgem is driving towards a self-imposed target of 3 per cent savings over five years.

This will total £5.2 million over the next five years, based on an annual spend of £34 million. It is on top of a budget reduction of 8 per cent this year.

Roger Dunshea, director of operations at water regulator Ofwat, confirmed that he is hoping to establish collaborative purchasing deals.

"Nothing has been put in place yet but there is definitely scope for collaboration among the regulators," he said.

SMfeb2005

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