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2 March 2011 | Paul Snell
Joint purchasing of nine different commodities will be in place by October 2011, according to the Cabinet Office.
The announcement was made amid a raft of new spending restrictions on central government purchasing, which the government believes will contribute to more than £3 billion in efficiency savings expected by the end of this financial year. These controls will remain in place until 2015.
As SM has previously reported the nine areas of spend that will be bought centrally on behalf of all government departments will be energy, office supplies, professional services, travel, fleet, telecoms, IT commodities, print and advertising and media. The goal of centralised buying is to secure better deals from suppliers through larger spending power, and presenting a united front to vendors in negotiations.
Under the new controls that take effect from today, IT contracts worth more than £5 million, leases worth more than £100,000 and the purchase of any new property will now have to be approved centrally.
In addition, the Cabinet Office will establish a “major projects authority” which will examine how major government projects are paid for and conducted. A spokeswoman said the group would work with departments, the Treasury and Infrastructure UK - the Treasury unit that supports large public sector capital projects - to improve their success, increase accountability and report on their progress to ministers.
It was also announced freezes on recruitment and consultancy would continue and only “essential” spending on advertising would be allowed.
“As well as immediate savings, some of the new measures introduced today will enable us in the future to get rid of previous inefficiencies in the way we have bought goods and services and reinforce that as one of the country’s biggest customers, government expects to receive a scale discount,” said Cabinet Office minister Francis Maude.
Danny Alexander, chief secretary to the treasury, said the controls were part of creating a “seismic shift in Whitehall’s spending culture”.
The government claims to have already saved £800 million through supplier renegotiation, spent 50 per cent less on consultancy compared to the previous year and £48 million by not buying new property.