The most worrying aspect of the spending review for the procurement profession came early in the hour-long address when the chancellor announced “administration costs” would be cut by a third. But as George Osborne didn’t refer directly to purchasing or procurement we don’t know how much of that 33 per cent will fall on this profession.
It also looks depressingly likely that some of the 490,000 job losses over four years he announced will come in procurement. But, again, we don’t know how many. But we will soon know. I will be interviewing John Collington, head of procurement of the Efficiency and Reform Group, tomorrow afternoon and will be putting these points to him. I will also be asking him how the “staggering” level of wasteful spending identified by Sir Philip Green will be tackled.
During the announcement I was struck by an interesting recasting of the “ring fencing” claim for health. The chancellor said that by 2014 health reform will bring £20 billion of savings by better value. But, he added, this money would be re-invested in the sector. This does support the views of health procurement practitioners who scoffed at the assertion they would be unaffected by the review.
So now we know broadly what we are looking at. Next we will need the detail of how and with how many. Watch this space.