18 October 2007 | Paul Snell
The public sector must make £30 billion efficiency savings over the next three years, the chancellor has confirmed.
Announcing the long-awaited Comprehensive Spending Review (CSR) together with the Pre-Budget Report last week, Alistair Darling said 3 per cent a year must be saved up to 2010-2011 to release £30 billion to frontline services.
Whitehall departments charged with finding much of the money include the Department for Children, Schools and Families (£4.5 billion), the Department for Transport (£1.8 billion) and the Department for Work and Pensions (£1.2 billion). Local councils have been assigned a target of £4.9 billion.
How organisations hope to achieve the efficiencies, and consequent aims for procurement, will not be published until "the end of the year". However, the report did state that the DWP has identified £500 million, and the NHS £1 billion, that can be made from improved procurement processes.
Darling also announced that £20 billion of the £21.5 billion Gershon efficiencies had been accomplished by June. This is in excess of £6 billion more than claims checked by the National Audit Office earlier this year. And even the £13.3 billion savings claimed then were queried last week by the Committee of Public Accounts (PAC). It said there was a "question mark" over £10 billion of the £13.3 billion. "Too much of the data on which claims of efficiency gains are founded is unreliable," said MP Edward Leigh, chairman of the PAC.
The government promised in the CSR that a new monitoring framework would be introduced with common reporting requirements "to ensure rigour and consistency".
Buyers told SM the new targets are tough but doable, particularly if collaborative and shared services work increases.
Colin Cram, director of the North West Centre of Excellence, said: "I expect procurement to deliver 60 per cent of the £4.9 billion, it has to do so."
David Pointon, chairman of the Society of Procurement Officers in Local Government, said it would be a "huge challenge" and meant the profession would have to enter new buying areas.
Roy Ayliffe, director of professional practice at CIPS, said purchasers must play a "leading part" to achieve the "ambitious targets" while also working on the sustainability agenda.