Public sector procurement must improve

23 July 2009

24 July 2009 | Jake Kanter

UK public sector buyers must up their game to make greater savings, two separate reports published yesterday concluded.

One study, by the Centre for Economic and Business Research (CEBR) and consultancy the Gap Partnership, found the public sector could save up to £11.3 billion on education, health and defence costs.

It found better negotiation, risk management and collaborative purchasing could contribute to substantial savings.

Ben Read, managing economist at CEBR, said: "It will be politically difficult for the Government to cut spending in education and health, but a tighter approach to procurement could go some way to plug the £60 billion of public spending cuts we estimate will be required to stabilise Britain's debt GDP ratio by 2016."

Meanwhile, a report by public-spending watchdog Audit Scotland (AS) found the Scottish Government's progress on improving purchasing operations had been "variable and slower than expected".

The Scottish public sector has saved more than £300 million in the past two years, but AS said more could be achieved through greater collaboration and better management.

"Because of the public sector's size and combined purchasing power, there is potential for it to buy goods and services more efficiently and deliver more significant savings," said Caroline Gardner, deputy auditor general for Scotland.

The criticisms come amid huge pressure on public sector buyers to cut costs. In April, the UK government's year-long Operational Efficiency Programme set out a 2014 efficiency savings target of £15 billion (news, 22 April 2009).


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