ERG hindered by existing public procurement problems

25 March 2011

25 March 2011 | Angeline Albert

It is “too early to judge” the effectiveness of the Efficiency and Reform Group (ERG) according to the National Audit Office.

A report published today by the public spending watchdog examining the ERG’s role in improving public sector value for money found procurement problems that existed before the organisation was established “limited the value for money improvements delivered to date”.

These issues included a lack sufficiently skilled purchasing professionals within government and poor spend information which prevents evidence-based buying decisions.

The report also highlighted the duplication of administrative effort across the public service with nearly 50 professional buying organisations purchasing similar goods and services. It said “unnecessary” tendering exercises were conducted at significant cost and public bodies are paying a wide range of prices for the same commodities, even within existing collaborative arrangements.

The study added the current quality of data on public sector efficiency and basic information on public spending in common areas is often very poor. It said improvements were needed to support robust decision-making.

The ERG said its review of major projects has reduced expenditure by £402 million in the past financial year. More than 300 IT projects have been reviewed, but the report said costs may be transferred to other projects or are “not cash releasing” because cancelled projects may not have agreed funding to begin with. It also said key initiatives “may have been delayed or harmed” by freezing spending on consultants.

Responding to the report, Cabinet Office minister Francis Maude, said: “The Cabinet Office is playing a leading role in managing this agenda, and while it will take time for all the government’s efficiency plans to come to fruition, we have already made good progress. Early indications already suggest that our work this year alone will deliver more than £3 billion savings off departmental spend.”

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