Agency changes could secure over £1/2 billion savings

15 December 2006
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15 December 2006 | Antony Barton (OGCbs), the trading arm of the OGC, could push public sector savings beyond £1 billion a year, according to the National Audit Office (NAO).

It found that saved £412 million last year but claimed that the figure could be increased by up to £660 million. To meet this aim OGCbs would need to develop a more co-ordinated procurement "landscape", double its current market penetration and maintain existing savings, according to the report.

Despite raising its value for money savings by 71 per cent from 2003-04 to £412 million in 2005-06, "will require a step change in its performance" to secure further returns, the NAO said.

The report, by the comptroller and auditor general of the NAO, Sir John Bourn, highlights that OGCbs procurement represents only 5 per cent of central government procurement spending and less than 1 per cent of wider public sector spending.

Among the NAO recommendations for greater savings are a reduction in costs for customers through framework agreements, by benchmarking prices against the lowest 25 per cent of prices paid by public sector organisations. Other suggestions include securing greater volume commitment from customers and reviewing framework prices regularly to ensure they stay competitive.


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