Government departments to buy more centrally

23 March 2009

23 March 2009 | Martha McKenzie-Minifie

The government is tipped to channel more of its goods and services spend through a central purchasing service, in response to the findings of the operational efficiency programme - due to be released with next month's Budget.

The programme - led by Invensys chairman Martin Jay - is believed to have found just 10 per cent on goods and services spend went through a central purchasing service. A goal was to increase it to 80 per cent by 2010-11.

A range of other initiatives would stem from the programme.

A report on Friday in The Times 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 Times article reported 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 human resources employees varied by 300 per cent and the cost of 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 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."


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