Scottish review maps out £1.5 billion savings plan

29 March 2006
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30 March 2006 | Anusha Bradley

A radical overhaul of public-sector procurement in Scotland could result in £1.3 billion more savings than the £200 million currently planned.

That was the conclusion of a review by leading business figure John McClelland.

The Rangers FC board director and chairman of capital investment firm Technology Ventures Scotland, also warned "urgent action" was needed or the drive to save £200 million through procurement by 2007-08 would fail.

The target was set in the Scottish Executive's efficient government initiative launched back in June 2004. McClelland was made head of the review in December 2004.

In his findings, published this month, he said Scotland could save £400 million in 2008-09 and £600 million in 2009-10 if changes are made. Taking into account the 05/06 figure of £83 million and 06/07 target of £140m, this would result in a total £1.5 billion savings overall in the next five years, he said.

"Organisations need to raise their performance and improve procurement processes. At the moment, not every organisation is meeting minimum governance and accountability standards," he said.

He recommended that every public-sector organisation should have a head of procurement and staff with "appropriate seniority and influence". Where skills are scarce, resources should be "optimised" through the use of national contracts for goods and services.

He suggested the setting up of centres of procurement expertise and proposed the creation of a single set of supplier guidelines, business conduct rules and a procurement policy manual for the public sector.

Ashley Gould, Scotland representative for the Society of Procurement Officers in Local Government, said the targets were achievable if resources are put into "getting the basics right".

"Procurement has been in the background in terms of investment, while there have been great expectations of what is required from it. You don't get a return without some kind of investment," he added.

In response to the report, Tom McCabe, finance and public service reform minister, appointed McClelland as chair of a new organisation - the Public Procurement Reform Board - to implement his recommendations. A Public Procurement Advisory Group will also be established.


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