Billions of public sector savings missed

22 October 2009

23 October 2009 | Jake Kanter

The UK government is yet to exploit potential savings opportunities amounting to at least £9 billion, an influential MP has argued in an open letter to the chancellor received by SM.

Edward Leigh, chairman of the House of Commons Public Accounts Committee (PAC) said the public sector must take advantage of its buying power, improve financial management and reduce complexity to make critical cost reductions.

In yesterday's letter to Alistair Darling, Leigh expressed his frustration that a number of opportunities identified by the PAC are yet to be taken up.

"Slow progress in realising the savings the committee set out shows that the biggest challenge to the government is translating aspiration into action. Our work has consistently shown over a number of years how efficiencies can be achieved in practice. We are therefore convinced that much more can be done," he wrote.

He argued that government departments could save £143.6 million through improved collaborative procurement on large contracts and £220 million through better food purchasing. "As the UK's biggest customers, government has considerable scope to exploit its purchasing power and to improve how it finances and handles commercial contracts," Leigh said.

Improving "skills and staff incentives" at Buying Solutions, the Office of Government Commerce's commercial arm, could save £520 million. Cutting spend on consultants would reduce costs by £408 million. And lowering staff numbers and government running costs would also yield efficiencies.

Meanwhile, a report published this week by the Confederation of British Industry said that improving public sector purchasing is crucial to cutting waste and easing pressure on government finances (Web news, 19 October).

SMoct2009

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