31 March 2006 | Rebecca Ellinor
More joint buying and improved negotiating could shave more than 10 per cent off the £2 billion annual public-sector food procurement bill.
That is the conclusion of a report published yesterday by the National Audit Office (NAO).Smarter food procurement in the public sector
said more than £220 million could be saved by 2010-11 if changes are made.
The NAO added that better procurement could also help raise nutritional standards and increase sustainability.
"The principal lesson is that gains in efficiency need not be at the expense of, indeed can go along with, improvements to the quality of food and sustainability," said Sir John Bourn, comptroller and auditor general at the NAO.
The report said some progress has been made in improving the efficiency, quality and sustainability in food procurement. It cited as examples the centralisation of purchasing for the armed forces through the MoD's defence catering group and a series of national contracts developed by the NHS Purchasing and Supply Agency.
However, the report concluded further improvements are needed and said the following, among other things, must be addressed:
- Price variations: It found the price of a loaf of wholemeal bread varied between 32p and £1.10 and estimated £40 million could be saved by getting lower prices for the same or better quality food ingredients.
- Lack of joint purchasing: A survey conducted as part of the study found that more than half of public-sector organisations don't engage in joint buying despite 44 per cent using at least two of the same major suppliers. It estimated joint buying could save around £80 million.
- Lack of transparency in contract caterers' charges: Firms routinely obtain hidden discounts and rebates and don't pass these back to the public sector. It estimated a share of these could result in savings of £30 million a year.
The NAO has produced a guide to help public-sector organisations which is available at www.nao.org.uk