Collington to slash £13 billion common spend by 25 per cent

25 November 2010
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Collington’s joint spend plan

25 November 2010 | Angeline Albert

John Collington has unveiled a plan that will see a quarter cut from £13 billion-a-year spending in nine areas.

Speaking at London’s Efficiency, Reform & Accountability conference ‘Delivering more for less’ yesterday, the head of procurement for the Cabinet Office’s Efficiency and Reform Group (ERG), revealed nine spend categories will be transformed over nine months.

He said the model would help transform the way central government buys common goods and services through centralised category management, standardisation of specification and aggregation of spend, to deliver significant sustainable cost reductions from the existing baseline of £13 billion, in the region of 25 per cent over four years.

The total procurement expenditure for the wider public sector is £236 billion.

Collington said energy, office supplies and professional services are the three categories to be tackled by March 2011. Travel, fleet and telecoms will be addressed by June next year and IT commodities, print management and advertising and media will be tackled by next September.

Of the deadlines, he said: “It’s tough but the prize is great.”

The procurement chief said all departments are committed to delivering the operating model, which has been signed off by the ERG’s chief operating officer Ian Watmore.

Referring to the government’s target to ensure 25 per cent of new contracts are awarded to SMEs, Collington said there will be “specific supply strategies” for the different categories identified in the model. He said: “Can we ensure 25 per cent of energy contracts go to SMEs? No”, but added that more than 25 per cent could be awarded to SMEs in other categories such as professional services for consultants.

On the subject of consultants, Collington described Buying Solutions’ 16 framework agreements in this area as “too many”. He said 75 per cent of consultancy spend did not go through a framework agreement.   

During his speech on the new operating model, Collington repeated the ERG’s aim of tighter control at the centre of spending on major suppliers, IT, property, and commodities. He said there was a need to make the buying process easier and quicker. Collington called it “unacceptable” that it takes, on average, 77 weeks for a government project to complete the OJEU procurement process, while in Germany it takes only 44 weeks.

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