Central spend channel

27 March 2009

27 March 2009 | Martha McKenzie-Minifie

The government is considering plans to channel more of its goods and services spend through a central purchasing service, in response to findings of the Operational Efficiency Programme (OEP) -due to be released with this month's Budget.

The programme, led by Invensys chairman Martin Jay, is is to recommend a goal to increase central spend to 80 per cent by 2010-11.

A report in The Times last month said Yvette Cooper, the chief secretary to the Treasury, had written to Cabinet ministers in all Whitehall departments to demand cutbacks in various services including finance, IT and human resources, to save at least £5 billion by 2010-11. Bigger savings were expected in subsequent years.

The report gave the annual costs of IT ranging from £800 to £3,000 for a desktop computer, including hardware, software and back up support.

The cost of hiring employees varied by 300 per cent and the costof electricity contracts could differ by as much as 50 per cent through different providers or contract type, it said.

A Treasury spokesman said under the OEP programme, four private sector experts examined the potential for efficiency savings in five areas: back office and IT services, collaborative procurement,asset management, property and "local incentives and empowerment".

"In particular, they identified variations in the costs of back office functions and prices paid by the public sector for goods and services, such as energy, where savings could be made.

"The final conclusions of these experts will be reported in the Budget on 22 April

SMmar2009

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