Procurement key to hitting tough 2015/16 budgets

27 June 2013

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27 June 2013 | Adam Leach

The Cabinet Office is to buy some commodities and IT on behalf of the Ministry of Defence (MoD) to enable it to keep within to its 2015/16 budget, the defence secretary has announced.

In a video response to yesterday’s Spending Review, which revealed that the MoD resource budget will be frozen at £23.9 billion for the year, Philip Hammond said the department would pass on some purchasing duties. He revealed that the “innovative deal” would deliver millions of guaranteed savings.

In the video, he said: “£300 million will come from an innovative deal with the Cabinet Office Efficiency and Reform Group and the Government Procurement Service who will take over responsibility for some of our commodity and IT procurement and, in conjunction with the Treasury, guarantee the agreed level of savings.”

The Department of Health will see its budget increase by 0.01 per cent in 2015/16, but it has been set a target of delivering £1 billion of savings through procurement. Responding to the review, health secretary Jeremy Hunt highlighted the pressure to deliver efficiencies: “The NHS budget will continue to be protected but at a time when efficiencies are vital this settlement will help make sure we get maximum value out of every pound spent.”

Responding to the news that the policing budget is to be cut by just below 6.6 per cent, the Home Office pointed to “smarter procurement” as key to managing with less.  But the Association of Chief Police Officers (ACPO), cast doubt as to whether the savings target could be met without damaging front-line services. Chief constable Nick Gargan, national policing lead for finance and resources at ACPO, said: “Successive cuts do have a serious impact on police and if this continues, some forces will be left at the limit of their viability within a couple of years.”

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