22 October 2010 | Lindsay Clark
Central government buyers will not know the full effects of
the spending review – including job losses – for a few weeks.
departments are producing business plans which will include the shape of their
procurement teams, and until these are finalised uncertainty remains.
Speaking to SM, John Collington, head of procurement for the
Efficiency and Reform Group (ERG), said he could not comment on job losses
within the profession as it was up to individual departments to set out their
plans in line with the budgets they have been set by Treasury.
“Each department will have business plans, within those I
would assume we will start to see the head count reduction numbers and how they
are going to work within the financial settlement with the next four years.”
Last week (20 October) Chancellor George Osborne revealed
that central government administration budgets would be cut by a third over the
next four years, as part of a public sector-wide push to reduce spending
and the deficit.
During his spending review speech to UK Parliament, Osborne
confirmed that job losses would result from the cuts. “That is unavoidable when
the country has run out of money.”
Collington said his analysis on government buyers suggests,
on average, each was in control of around £14 million spending. As the sector
moves towards greater sharing of categories between departments and other
government bodies, he expected that figure to increase.
“I believe it can be improved as a consequence of the
changes we have embarked upon.”
The cross-government procurement initiative had moved
forward on three broad fronts.
minister Francis Maude has led on contract renegotiations with the largest
government suppliers, which a department statement said is expected to save
The ERG is identifying categories for centralised
procurement based on aggregated demand across departments, such as ICT, and
categories for spot buying such as professional services, Collington said.
“The minister has said that centralisation of category
procurement is going to happen and we are not going to make that happen through
collaboration in the hope that people will come along and participate. It will
be done through mandatory policies.”
This would allow savings of £400 million per annum for the
next four years, he said.
“We have identified of £12 billion of commonly used goods
and services that currently today are predominantly bought in departments. Lets
start sourcing and making those categories on a pan government basis.”
Collington said more detail
of the new model for central government buying would be revealed in the next
few weeks. It will be fully operational in April next year.