Savings of 10–25 per cent are possible in public sector purchasing through better supplier management, a conference was told.
Sally Collier, chief executive of the Crown Commercial Service (CCS), said savings of up 30 per cent were possible through improved procurement, and “supplier innovation and management” was the area of this that yielded the biggest potential results. “That’s where we in the CCS are focusing our time,” she said.
Speaking at The Public Sector Show in London, Collier said the CCS needed more commercial expertise and market knowledge. “There is no reason why suppliers can’t make a healthy profit. What we have to agree is what the optimum profit is in any deal,” she said.
“I accept we may not be an intelligent client but we are getting better at being an intelligent client.”
Collier said they were reducing the number of frameworks used to channel some of the £230 billion spent on goods and services across the public sector each year, because of issues such as SME access and supplier innovation. “Framework agreements are great when they are great but not when they are used inappropriately and don’t produce the best outcome,” she said.
She added commercial roles were becoming more attractive in the CCS, which spends £15 billion a year. “For many, if you are a young fast streamer you perhaps wanted to be in the diplomatic service or other departments,” she said. “I am absolutely delighted to say the tide is turning. For the first time we have a commercial fast stream. We see people who want to come into commercial. Where else could you do something exciting with £15 billion?”
Collier said they were working hard to become a “customer-led” organisation. “I’m not interested in buying tanks and trains: I’m interested in taking the pain away of buying and managing common goods and services,” she said.