☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily
August 2011 | Adam Leach
The amount of money spent by central
government has been cut by £3.75 billion in 10 months, an independent audit has revealed.
Through a combination of cutting services,
re-negotiating contracts and consolidating buying power to drive down costs,
the Cabinet Office was able to
reduce the amount it spent between May 2010 and March 2011 by £3.75 billion.
While some of the savings have previously been alluded to, the latest figures
have been confirmed by an independent audit from within the Cabinet Office.
Included in the overall cost reductions is
more than £1.5 billion savings from changes to government procurement.
Marketing spend through the Central Office of Information (COI), which the
Cabinet Office closed down, was reduced by 80 per cent over the period. This generated
savings of £400 million. A further £360 million savings were made by
centralising procurement for common goods and services, such as stationery, while
£800 million resulted from renegotiating existing deals with some of the
government’s largest suppliers.
Francis Maude, minister for the Cabinet
Office, said: “We promised to drive out inefficiency and unjustifiable costs in
central government. Following an independent audit, I can confirm that these
measures have saved central government departments £3.75 billion.”
He went on to say that were it not for this
action, the money would have been “frittered away” on unnecessary buildings and
government advertising projects
In December Maude said coalition government
spending policies would produce £3 billion in savings in less than a year.
The breakdown of reductions:
• Consultancy spend reduced by £870
• Temporary agency staff
expenditure cut by almost £500 million
• Marketing spend reduced by £400
• Common goods and services spend down
• Expenditure on suppliers cut by
£800 million through contract renegotiations
• Halting or curtailing of major
projects produced savings of £150 million
• Increased scrutiny on low value
ICT projects saved £300 million
• Better management of lease
renewals saw spending fall by £90 million
• Salary costs for 2010/11 reduced
by £300 million as a result of cutting 17,000 civil service roles.